Domestic markets trade tad higher in early deals

Indian equity benchmarks made cautious start on Wednesday amid concerns about a new faster-spreading variant of the coronavirus. With 19,174 fresh Covid-19 cases, India's caseload now stands at 10,099,303. At least 20 passengers from the UK tested positive for Covid-19 on Tuesday. Now, markets are trading higher with marginal gains in early deals on the back of buying in Realty, IT and TECK stocks. Investors took some solace from a private report that India is likely to approve Oxford/AstraZeneca’s coronavirus vaccine for emergency use by next week after its local manufacturer submitted additional data sought by authorities. Traders also took encouragement with PHD Chamber of Commerce and Industry’s EBM Index showing that the continuous improvement in the key economic and business indicators signals that the worst is behind us and expectations of positive GDP growth at 0.1 per cent to 2 per cent in Q3 and 2 per cent to 4 per cent in Q4 FY 2020-21 are becoming strong with a higher growth trajectory in FY 2021-22 at 7.7 per cent.

Global cues remained supportive with most of the Asian markets trading higher despite the mixed cues overnight from Wall Street. Concerns about a new coronavirus strain in the UK was offset by optimism that a new $900 billion relief package will help boost the US economy. Nevertheless, investors turned cautious after U.S. President Donald Trump urged lawmakers to make changes to the relief package, including an increase in the stimulus checks for individuals to $2,000 from $600.

Back home, NBFCs and HFCs stocks will be in focus with ICRA’s report that after witnessing a sharp contraction in the current fiscal so far, the domestic securitisation volumes of retail pools originated by non-banking financial companies (NBFC) and housing finance companies (HFC) are likely to witness a healthy bounce back in FY2022. In scrip specific development, Infosys rallied after announcing a long-term strategic partnership with Daimler.

The BSE Sensex is currently trading at 46087.33, up by 80.64 points or 0.18% after trading in a range of 45899.10 and 46191.41. There were 16 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.76%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Realty up by 2.41%, IT up by 1.78%, TECK up by 1.43%, Consumer Durables up by 0.92%, Consumer discretionary up by 0.83%, while Energy down by 0.45%, Oil & Gas down by 0.44%, Bankex down by 0.29%, PSU down by 0.12%, Metal down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 2.01%, HCL Technologies up by 1.75%, Maruti Suzuki up by 1.43%, TCS up by 1.40% and Mahindra & Mahindra up by 0.99%. On the flip side, ONGC down by 1.71%, ICICI Bank down by 0.62%, HDFC Bank down by 0.55%, Axis Bank down by 0.51% and Reliance Industries down by 0.51% were the top losers.

Meanwhile, Rating agency ICRA in its latest report has said that the domestic securitization volumes of retail pools originated by non-banking financial companies (NBFC) and housing finance companies (HFC)) are likely to witness a healthy bounce back in FY2022, after witnessing a sharp contraction in the current fiscal so far. It noted that the rise in volumes for the remainder of the current fiscal and for FY22 would be driven by growing investor confidence in asset quality due to improving collections; higher funding requirement of originators on account of increasing disbursements and improving business activities post the end of lockdown and moratorium period.

According to the report, the collections across all asset classes have bounced back sharply since the dip seen in April 2020 following the nationwide lockdown. It also said the resumption of businesses, as the lockdown has gradually eased, has supported the ability of the retail borrowers to meet their EMI payments. It added that this has reduced investor wariness towards purchase of retail pools that has led to a healthy momentum in fresh securitisation from September 2020 onwards.

The report further said the financing requirements for NBFCs and HFCs are also expected to increase in FY22 as disbursements would be closer to the pre-Covid levels which in turn would support the securitisation market as a tool to diversify funding sources. It said sppetite for securitisation of unsecured loans though still remains relatively weak and would only improve if the collection efficiency for such asset classes continues to increase in a sustainable manner.

The CNX Nifty is currently trading at 13496.70, up by 30.40 points or 0.23% after trading in a range of 13432.20 and 13517.20. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Wipro up by 2.73%, Infosys up by 1.93%, HCL Technologies up by 1.61%, Cipla up by 1.46% and Maruti Suzuki up by 1.44%. On the flip side, ONGC down by 1.38%, Divis Lab down by 0.83%, HDFC Life Insurance down by 0.66%, HDFC down by 0.66% and NTPC down by 0.51% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 79.27 points or 0.30% to 26,515.66, Hang Seng jumped 116.02 points or 0.44% to 26,235.27, Taiwan Weighted gained 23.42 points or 0.17% to 14,200.88, KOSPI soared 29.36 points or 1.07% to 2,763.04, Jakarta Composite added 0.43 points or 0.01% to 6,023.72 and Shanghai Composite was up by 28.57 points or 0.85% to 3,385.35, while Straits Times lost 0.22 points or 0.01% to 2,827.10.