Key indices keep head above water in afternoon deals

Erasing initial losses, local equity benchmarks managed to keep their head above water in afternoon deals with both Sensex and Nifty were trading above 49,200 and 14,500 marks, respectively. Stocks from consumer durables, healthcare and FMCG counters were trading lower, while realty, telecom and auto counters were supporting the markets. Traders took some solace as ICRA Ratings in its latest report has said it expects India’s real gross domestic product (GDP) to grow by 10.1 per cent in FY2022. However, it said the value of GDP in the next financial year will only mildly surpass the level that had been recorded in FY2020. On the sectoral front, coal stock were in focus as Union Home Minister Amit Shah stated that coal sector will play a very important role in achieving the target of $5 trillion economy by 2022.

On the global front, Asian markets were trading mixed as investors watched for details of President-elect Joe Biden's promised economic stimulus plan. Back on street, in scrip specific developments, GAIL jumped as board set to mull buyback on Jan 15, while FSL tumbled after ace investor Rakesh Jhunjhunwala more-than-halved his stake in the company during the October-December quarter (Q3FY21).

The BSE Sensex is currently trading at 49296.42, up by 27.10 points or 0.06% after trading in a range of 49079.57 and 49328.50. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.83%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Realty up by 2.66%, Telecom up by 2.36%, Auto up by 2.09%, Oil & Gas up by 1.90% and Energy was up by 1.73%, while Consumer Durables down by 0.75%, Healthcare down by 0.48%, FMCG down by 0.45%, Capital Goods down by 0.27% and IT was down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.01%, Reliance Industries up by 1.71%, SBI up by 1.70%, Axis Bank up by 1.57% and ONGC was up by 1.32%. On the flip side, Asian Paints down by 2.06%, Titan Company down by 1.80%, Kotak Mahindra Bank down by 1.69%, Tech Mahindra down by 1.44% and Sun Pharma was down by 1.42% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its Financial Stability Report (FSR) has said that Banks’ gross non-performing assets may rise to 13.5 per cent by September 2021, from 7.5 per cent in September 2020 under the baseline scenario. The report said If the macroeconomic environment worsens into a severe stress scenario, the GNPA ratio may escalate to 14.8 per cent.

It noted among the bank groups, public sector banks’ (PSBs) GNPA ratio of 9.7 per cent in September 2020 may rise to 16.2 per cent by September 2021 under the baseline scenario. The gross non-performing asset (GNPA) ratio of private sector banks (PVBs) and foreign banks (FBs) may increase from 4.6 per cent and 2.5 per cent to 7.9 per cent and 5.4 per cent, respectively, over the same period.

In the severe stress scenario, it said the GNPA ratios of PSBs, PVBs and FBs may rise to 17.6 per cent, 8.8 per cent and 6.5 per cent, respectively, by September 2021. It added these GNPA projections are indicative of the possible economic impairment latent in banks’ portfolios, with implications for capital planning.

The CNX Nifty is currently trading at 14516.60, up by 31.85 points or 0.22% after trading in a range of 14432.85 and 14525.80. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 10.20%, GAIL India up by 4.27%, Eicher Motors up by 4.06%, Coal India up by 3.67% and Bharti Airtel was up by 2.97%. On the flip side, Asian Paints down by 2.07%, Divis Lab down by 1.96%, Titan Company down by 1.81%, Kotak Mahindra Bank down by 1.69% and Tech Mahindra was down by 1.49% were the top losers.

Asian markets were trading mixed; Jakarta Composite soared 21.47 points or 0.34% to 6,404.41, Nikkei 225 surged 25.31 points or 0.09% to 28,164.34, Hang Seng increased 263.16 points or 0.94% to 28,171.38 and Shanghai Composite was up by 53.21 points or 1.51% to 3,584.71.

On the other hand; Taiwan Weighted dropped 56.60 points or 0.36% to 15,500.70, KOSPI fell 22.50 points or 0.71% to 3,125.95 and Straits Times was down by 2.46 points or 0.08% to 2,981.44.