Equity markets trade with minor gains

Indian equity markets erased their losses and traded near neutral line with positive bias in late afternoon session. Traders were seen piling up positions in Auto, Basic Materials and FMCG sectors while selling was witnessed in Healthcare, TECK and Oil & Gas sector stocks. Traders took support, as government approved the 15th tranche of electoral bonds which will be open for sale between January 1 and January 10. Electoral bonds have been pitched as an alternative to cash donations made to political parties as part of efforts to bring transparency in political funding. On the sectoral front, auto sector remained in focus, as ratings agency ICRA has said it has revised its outlook on the auto component industry from negative to stable, on the back of demand revival across original equipment manufacturers (OEMs), replacements and exports. ICRA expects the domestic auto component industry's revenue to grow 16-18 per cent in the financial year starting April 2021, supported by factors such as increasing content per vehicle, low base effect, and higher realisations.

On the global front, Asian markets were trading mostly in green as investors are looking ahead to the new year with optimism after a turbulent 2020. European markets were trading higher as Britain approved a COVID-19 vaccine developed by AstraZeneca and Oxford University, while bets of more U.S. fiscal aid and massive vaccination efforts spurred hopes of a strong global economic recovery next year.

The BSE Sensex is currently trading at 47663.58, up by 50.50 points or 0.11% after trading in a range of 47358.36 and 47807.85. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.07%, while Small cap index was up by 0.09%.

The top gaining sectoral indices on the BSE were Auto up by 0.71%, Basic Materials up by 0.62%, Consumer Discretionary up by 0.49%, FMCG up by 0.39% and Metal was up by 0.29%, while Telecom down by 0.74%, Healthcare down by 0.37%, PSU down by 0.29%, TECK down by 0.24% and Oil & Gas was down by 0.23% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 2.61%, Maruti Suzuki up by 1.63%, Ultratech Cement up by 1.60%, Tech Mahindra up by 1.43% and Hindustan Unilever up by 1.17%. On the flip side, Indusind Bank down by 1.28%, Sun Pharma down by 1.13%, Axis Bank down by 0.98%, Bharti Airtel down by 0.95% and TCS down by 0.74% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its Report on Trend and Progress of Banking in India 2019-20 has said that going forward, the profitability of non-banking finance companies (NBFCs) may be dampened due to loan impairment, lower credit demand and a tendency to preserve cash. However, it said many NBFCs have made additional provisioning as per expected credit loss (ECL) norm; and bolstered their capital position by ploughing back dividends.

According to the report, overall, the percentage of customers availing the moratorium has been relatively lower for NBFCs, while loans outstanding under moratorium were higher than those extended by scheduled commercial banks (SCBs) indicative of incipient stress. It noted that as on August 31, 2020, around 26.6 percent of the total customers of NBFCs availed moratorium and close to 44.9 percent of their total loan outstanding was under moratorium. It added that the consolidated balance sheet of NBFCs decelerated in 2019-20 due to stagnant growth in loans and advances beset with a challenging macroeconomic environment and weak demand compounded by risk aversion.

However, the report said in the first half of FY21, balance sheet growth of NBFCs gained traction. It said although asset quality deteriorated marginally, the NBFC sector remains resilient with strong capital buffers. It further said though economic activity is expected to remain muted in FY20-21, strong NBFCs maintain a ‘cautiously optimistic’ view and are expected to perform well as many have reported strong revival, almost to pre-COVID levels, in disbursements and collections.

The CNX Nifty is currently trading at 13949.95, up by 17.35 points or 0.12% after trading in a range of 13864.95 and 13982.90. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.01%, Bajaj Finance up by 2.41%, Ultratech Cement up by 2.32%, Eicher Motors up by 2.12% and Grasim Industries up by 1.59%. On the flip side, Indusind Bank down by 1.41%, Sun Pharma down by 1.21%, Axis Bank down by 1.06%, GAIL India down by 1.05% and Bharti Airtel down by 0.94% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 578.62 points or 2.18% to 27,147.11, Taiwan Weighted strengthened 215.65 points or 1.49% to 14,687.70, KOSPI rose 52.96 points or 1.88% to 2,873.47, Shanghai Composite gained 35.41 points or 1.05% to 3,414.45 and Straits Times was up by 26.79 points or 0.94% to 2,874.93. On the flip side, Jakarta Composite lost 57.10 points or 0.95% to 5,979.07 and Nikkei 225 was down by123.98 points or 0.45% to 27,444.17.

European markets were trading higher, UK’s FTSE 100 increased 13.71 points or 0.21% to 6,616.36, France’s CAC increased 8.28 points or 0.15% to 5,620.07 and Germany’s DAX was up by 8.16 points or 0.06% to 13,769.54.