Key gauges remain in green in morning deals

Indian equity benchmarks continued to trade in green in morning deals led by gains in index heavyweight HCL Technologies, Axis Bank and Kotak Mahindra Bank.  Sentiments remained positive with India Ratings and Research’s report stated that inflation rates are expected to decline till at least November this year. The retail inflation in August 2021 declined both sequentially and on a year-over-year basis to 5.30 per cent. The strong base effect resulted in the decline in retail inflation. It is the seventh consecutive month of retail inflation remaining in excess of 5 per cent and the 23rd consecutive month of retail inflation remaining in excess of RBI's targeted inflation rate of 4 per cent. Meanwhile, Union Minister for Commerce and Industry Piyush Goyal held a discussion with British Secretary of State for International Trade Liz Truss on enhancing the India-UK trade partnership. Goyal said that India and UK are strengthening trade ties by moving towards an early harvest deal, followed by a comprehensive Free trade agreement (FTA). On the global front, Asian markets were trading mostly higher with investors awaiting U.S inflation data for more clues on when the Federal Reserve will taper stimulus.

The BSE Sensex is currently trading at 58396.05, up by 218.29 points or 0.38% after trading in a range of 58310.27 and 58482.62. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.00%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Utilities up by 1.21%, Consumer Discretionary up by 1.15%, Auto up by 0.99%, Realty up by 0.83% and Power up by 0.83%, while Telecom down by 0.51% was the lone losing index on BSE.

The top gainers on the Sensex were HCL Technologies up by 1.57%, Axis Bank up by 1.56%, Kotak Mahindra Bank up by 1.24%, Bajaj Auto up by 1.21% and ITC up by 0.96%. On the flip side, Bharti Airtel down by 0.82%, Hindustan Unilever down by 0.57%, Ultratech Cement down by 0.39%, HDFC down by 0.25% and Bajaj Finance down by 0.12% were the top losers.

Meanwhile, ICRA Ratings in its latest report has said that the asset under management of the non-banking financial company (NBFC) segment declined in the first quarter of 2021-22 due to lower disbursements and portfolio rundown. After witnessing an uptick in Q3 and Q4 FY2021, disbursements for NBFCs and housing finance companies (HFCs) declined again in Q1 FY22, and was down by about 55 per cent on a sequential basis. Given this subdued disbursements and portfolio rundown in the absence of any moratorium like in Q1 FY2021, the (AUM) for NBFC-segment shrunk in Q1 FY2022, while the HFC AUM remained flat.

According to the report, while the disbursements of the sector revived quite sharply in July 2021 on the back of the pent-up demand, sustainability of the same would depend on the broader macro-economic indicators. It also said that the second wave has temporarily pushed back the revival for the sector. Icra expects overall disbursements for FY2022 to be higher by about 6-8 per cent on a year-on-year basis, on the back of the two consecutive years of year-on-year contraction. From an AUM perspective, the sector is expected to grow at 8-10 per cent in FY2022. Growth would be driven by the improvement in demand from all key target segments vis-a-vis FY2021, on the back of a low base.

The report further said the headline asset quality numbers are expected to moderate, as the trend in the collection efficiencies (CE) continues to remain encouraging. The agency holds its expectation of a 50-100 basis points (bps) rise (net of recoveries and written offs) in the overdues in FY2022, assuming there are no further COVID-19 induced lockdowns. 

The CNX Nifty is currently trading at 17427.80, up by 72.50 points or 0.42% after trading in a range of 17389.10 and 17438.55. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.62%, HCL Technologies up by 1.50%, Axis Bank up by 1.44%, Eicher Motors up by 1.38% and Britannia Inds up by 1.37%. On the flip side, Hindustan Unilever down by 0.73%, Bharti Airtel down by 0.50%, Hindalco down by 0.45%, Coal India down by 0.45% and Ultratech Cement down by 0.39% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 surged 171.71 points or 0.56% to 30,619.08, KOSPI rose 35.63 points or 1.14% to 3,163.49, Jakarta Composite soared 29.24 points or 0.48% to 6,117.40, Taiwan Weighted strengthened 14.95 points or 0.09% to 17,461.26, Straits Times advanced 14.88 points or 0.48% to 3,089.19 and Shanghai Composite gained 1.89 points or 0.05% to 3,717.26.

On the flip side, Hang Seng decreased 12.94 points or 0.05% to 25,800.87.