Domestic indices trade in fine-fettle in early deals; Nifty above 15,650 mark

Indian equity benchmarks made optimistic start on Thursday amid positive global cues and ahead of the RBI monetary policy decision due Friday. Markets are trading in fine-fettle with gains of over half a percent each in early deals on account of buying in Consumer Durables, Realty and Energy stocks. Fall in daily coronavirus cases also aided the sentiments in markets. Fresh infections continued to fall as it has been seven days since cases have not breached 200,000-mark. India reported 134,105 fresh Covid-19 infections, taking the caseload to 28,440,988. Also, the Union health ministry said India has achieved a significant milestone as the cumulative Covid-19 vaccination coverage has crossed the 22 crore-mark. Some support came in as Minister of State for Finance Anurag Thakur said the Indian economy is resilient, and will rebound based on reforms that have ensured strong fundamentals. Investors are eyeing the services PMI data to be out later in the day.

Firm global cues also supported the markets, with most of the Asian markets trading in green following the positive cues overnight from Wall Street, on higher crude oil prices and continued economic optimism as the country continues to reopen following increased Covid-19 vaccination rates and relaxed social distancing measures.

Back home, banking stocks were in focus as S&P stated that the second Covid wave may push credit costs of the Indian banking system to 2.4 per cent by March 2022, compared to base case of 2.2 per cent. In scrip specific developments, Wipro gained after selling its entire stake in Denim Group. Muthoot Finance surged on reporting a 22 percent rise in fourth-quarter standalone net profit.

The BSE Sensex is currently trading at 52185.84, up by 336.36 points or 0.65% after trading in a range of 52087.60 and 52240.61. There were 22 stocks advancing against 8 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 1.00%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 2.21%, Realty up by 2.00%, Energy up by 1.46%, Utilities up by 1.16%, Power up by 1.01%, while Auto down by 0.06% was the sole losing indices on BSE.

The top gainers on the Sensex were Titan Company up by 4.73%, Kotak Mahindra Bank up by 1.74%, ONGC up by 1.61%, HDFC up by 1.34% and Reliance Industries up by 1.29%. On the flip side, Bajaj Auto down by 0.46%, SBI down by 0.34%, Bajaj Finance down by 0.21%, Dr. Reddy’s Lab down by 0.17% and Nestle down by 0.16% were the top losers.

Meanwhile, Standard and Poor (S&P), in its report Intervention Worked: Credit Losses Set To Decline For Most Asia-Pacific Banks, has said that the second Covid wave may push credit costs of the Indian banking system to 2.4 per cent by March 2022, compared to base case of 2.2 per cent. The pandemic may stall a strong recovery in the economy and credit conditions.

In a severe downside scenario, the Indian banking system’s weak loans should rise to about 12 per cent of gross loans. It may thwart banking system profitability. In India and Indonesia, banks have suffered higher asset distress in recent years. The credit losses are set to trend closer to our expected long-term average in the coming years.

It mentioned the credit losses will remain well below expected long-term average in most countries (in Asia-Pacific) despite last year’s economic hardship. Sturdy provisioning so far during the health crisis helps. In addition, the region’s banking asset stress was at historical low levels just before the pandemic struck.

The CNX Nifty is currently trading at 15665.90, up by 89.70 points or 0.58% after trading in a range of 15646.05 and 15693.15. There were 39 stocks advancing against 11 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 4.13%, ONGC up by 1.87%, Kotak Mahindra Bank up by 1.77%, Reliance Industries up by 1.33% and HDFC up by 1.27%. On the flip side, UPL down by 0.53%, Cipla down by 0.46%, Bajaj Auto down by 0.45%, SBI down by 0.40% and Tata Steel down by 0.23% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 surged 124.94 points or 0.43% to 29,071.08, Straits Times rose 2.97 points or 0.09% to 3,164.01, Taiwan Weighted jumped 80.19 points or 0.47% to 17,245.23, KOSPI added 31.03 points or 0.96% to 3,255.26, Jakarta Composite gained 8.90 points or 0.15% to 6,040.48 and Shanghai Composite was down by 13.76 points or 0.38% to 3,610.90, while Hang Seng slipped 125.55 points or 0.43% to 29,172.07.