Benchmarks trade in fine-fettle in early deals

Indian equity benchmarks made optimistic start on Thursday tracking firm cues from Asian peers. Markets are trading in fine-fettle with gains of over half a percent each in early deals on the back of healthy buying in Metal, Realty and Basic Materials stocks. Traders took note of report that the currency in circulation (CIC) expanded by 22.1 per cent in calendar year 2020, as people hoarded cash at a time when the nation went into a lockdown and uncertainty prevailed over how liquidity needs would be met. Data released by the Reserve Bank of India showed that in calendar year 2020, the currency in circulation growth was way higher than 2019’s 11.8 per cent growth rate. Meanwhile, with 20,460 fresh Covid-19 cases, India's caseload now stands at 10,395,938. The country's death toll has mounted to 150,372. The number of people who have tested positive for the new UK variant of SARS-CoV-2 in the country has climbed to 73.

Most of the Asian markets were trading higher following news that Democrats have taken control of the US Senate after winning two key runoff elections in Georgia. The election results raised expectations that a Democrat-controlled Senate would pave the way for a larger fiscal stimulus package in the world's largest economy. Back home, Realty stocks were ruling higher after the Maharashtra government approved the proposal to cut the premium on real estate projects by half till December 31, 2021. In scrip specific development, IDFC First Bank rallied after it reported a 41 percent increase in customer deposits in the third quarter of the fiscal. SpiceJet advanced after launching 21 new flights.

The BSE Sensex is currently trading at 48442.94, up by 268.88 points or 0.56% after trading in a range of 48359.43 and 48558.34. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index surged 1.17%, while Small cap index was up by 1.25%.

The top gaining sectoral indices on the BSE were Metal up by 2.95%, Realty up by 2.85%, Basic Materials up by 1.83%, Industrials up by 1.78%, Capital Goods up by 1.74%, while IT down by 0.37%, TECK down by 0.14% were the only losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.06%, Larsen & Toubro up by 2.05%, Power Grid up by 2.01%, SBI up by 1.86% and Bharti Airtel up by 1.79%. On the flip side, Titan Company down by 1.26%, TCS down by 0.82%, Hindustan Unilever down by 0.61%, Infosys down by 0.49% and Kotak Mahindra Bank down by 0.46% were the top losers.

Meanwhile, ICRA Ratings in its latest report has said that non-banking finance companies (NBFCs) are likely to see a 7-9 percent growth in their asset under management (AUM) in FY22 but access to funding would be crucial for them to have a sustained improvement. It said NBFCs would require an additional funding lines of about Rs 1.9-2.2 lakh crore, apart from the refinance of the existing lines, to achieve a 7-9 percent growth in AUM in FY22.

According to the report, the segment's AUM had registered a growth at a CAGR of 16 percent over the period March 2016-March 2020. Growth in FY22 is envisaged to be driven by the improvement in demand from all the key target segments vis a vis current fiscal, which was impacted by the COVID-19 lockdown. It noted that some of the key segments which would bolster growth include gold loans, home loans, personal credit, rural finance and microfinance. Growth in the vehicle finance (commercial vehicle, passenger vehicle), business loans including loan against property and other commercial lending segments, which are closely linked to the economic activities are expected to take longer to register a reasonable revival.

The report further said NBFCs exposures to the commercial real estate and other large corporate/ wholesales exposures are expected to register a decline even in FY22 after the decline of about 15 percent in FY20 and about 10 percent expected contraction in FY21. It also stated that majority (around 70 percent) of issuers and investors do not expect co-lending to account for less than 10 per cent of non-bank AUM over the next 2-3 years. Access to adequate funding, therefore, would remain critical for the sector to register a sustained improvement in growth.

The CNX Nifty is currently trading at 14230.95, up by 84.70 points or 0.60% after trading in a range of 14208.20 and 14256.25. There were 37 stocks advancing against 12 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Tata Steel up by 4.28%, Hindalco up by 3.57%, JSW Steel up by 2.17%, Indusind Bank up by 2.13% and Power Grid up by 2.04%. On the flip side, Titan Company down by 1.14%, TCS down by 0.75%, Hindustan Unilever down by 0.71%, HDFC Life Insurance down by 0.56% and Infosys down by 0.55% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 494.30 points or 1.83% to 27,550.24, Straits Times advanced 42.71 points or 1.49% to 2,905.72, Taiwan Weighted soared 212.79 points or 1.42% to 15,195.92, KOSPI jumped 76.49 points or 2.58% to 3,044.70, Jakarta Composite rose 65.23 points or 1.08% to 6,130.91 and Shanghai Composite was up by 12.97 points or 0.37% to 3,563.85, while Hang Seng fell 120.35 points or 0.43% to 27,571.95.