Benchmarks trim losses to trade flat in morning deals

Indian equity benchmarks trimmed initial losses to trade flat in morning deals tracking weakness across global markets. Traders remain concerned with ICRA Ratings’ report stated that total infrastructure credit by banks and NBFC-Infrastructure Finance Companies (NBFC-IFCs) remained sluggish in the first quarter of the current fiscal (Q1FY22) due to the disruptions caused by the second wave of the COVID-19 pandemic. However, traders found some support with Economic Affairs Secretary Ajay Seth’s statement that India is on the path of economic recovery supported by various government reforms in the last seven years under Prime Minister Narendra Modi's leadership. Notwithstanding the COVID-19 pandemic, he said, the government continued with the reform process and many strategic reforms were announced even during pandemic. Meanwhile, the government has extended the Credit Guarantee Scheme for Subordinate Debt (CGSSD) for stressed MSMEs till March 31, 2022. The scheme was approved by the government on June 1, 2020. It was launched on June 24 the same year to provide credit facility through lending institutions to the promoters of stressed MSMEs.

On the global front, Asian markets were trading mostly in red following the firmly negative cues from Wall Street overnight, with investors concerned that the regulatory crackdowns and a collapse at China Evergrande could hurt an already fragile Chinese economy. Back home, on the sectoral front, stocks related to Aviation industry remained in action as industry’s main lobby IATA said airline losses from the coronavirus pandemic are set to surpass $200 billion as travel curbs weigh on corporate and long-haul demand well into 2022. Gold and jewelry related stocks too remained in focus as India’s gold imports in September soared 658% from last year’s lower base as a correction in local prices to the lowest level in nearly six months prompted jewellers to step up purchases for the upcoming festive season.

The BSE Sensex is currently trading at 59288.70, down by 10.62 points or 0.02% after trading in a range of 59127.04 and 59335.48. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index was up by 0.53%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 2.35%, Power up by 1.89%, Utilities up by 1.64%, Telecom up by 1.24% and PSU up by 1.07%, while Realty down by 1.11%, Healthcare down by 0.76%, IT down by 0.66%, TECK down by 0.43% and Bankex down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.36%, Asian Paints up by 1.16%, Bharti Airtel up by 1.14%, Maruti Suzuki up by 1.01% and Larsen & Toubro up by 0.83%. On the flip side, Sun Pharma down by 1.77%, Dr. Reddy's Lab down by 1.30%, HCL Technologies down by 0.88%, Tech Mahindra down by 0.80% and ICICI Bank down by 0.76% were the top losers.

Meanwhile, ICRA Ratings said in its latest report has stated that total infrastructure credit by banks and NBFC-Infrastructure Finance Companies (NBFC-IFCs) remained sluggish in the first quarter of the current fiscal (Q1FY22) due to the disruptions caused by the second wave of the COVID-19 pandemic. However, it said with the government's focus on the infrastructure sector, the demand for infrastructure credit is likely to improve over the medium term. It said ‘given the disruption caused by the second wave of the pandemic, total infrastructure credit (banks and NBFC-IFCs) remained sluggish in Q1 FY2022, with infrastructure focused loan books remaining flat on quarter-on-quarter (q-o-q) basis for both NBFC-IFCs as well as banks’.

The rating agency noted that the total infrastructure credit by banks and NBFC-IFCs is estimated at Rs 24.7 lakh crore as on March 31, 2021, registering a sluggish growth of 10 per cent, and added that given the disruption caused by the second wave of the pandemic, it has remained stable as on June 30, 2021. As per the report, the share of IFCs in the total infrastructure credit continues to increase and stood at 54 per cent as on March 31, 2021, while the share of banks slid to 46 per cent from about 61 per cent five years ago.

It said the stress in the infrastructure sector due to COVID-induced disruptions has been low, and NBFC-IFCs have also demonstrated relative resilience during the COVID-19 pandemic. The liquidity profiles of NBFC-IFCs have improved with reduced dependence upon short term borrowings and higher share of longer tenor borrowings in incremental fund raising. Overall, IFCs, especially public IFCs, have reverted to a healthy profitability trajectory with decline in share of non-performing loans and decline in cost of borrowings. The agency believes that the improving asset quality trajectory for NBFC-IFCs is likely to continue.

The CNX Nifty is currently trading at 17698.45, up by 7.20 points or 0.04% after trading in a range of 17640.90 and 17709.00. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were ONGC up by 7.08%, Coal India up by 3.13%, Indian Oil Corporation up by 2.81%, UPL up by 1.82% and Tata Motors up by 1.33%. On the flip side, Cipla down by 2.80%, Sun Pharma down by 1.73%, Dr. Reddy's Lab down by 1.28%, Shree Cement down by 1.09% and Divi's Lab down by 1.07% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 649.89 points or 2.28% to 27,795.00, Jakarta Composite lost 57.52 points or 0.91% to 6,285.17, KOSPI fell 53.77 points or 1.78% to 2,965.41, Straits Times trembled 23.72 points or 0.77% to 3,065.93 and Taiwan Weighted dropped 20.65 points or 0.13% to 16,387.70.

On the flip side, Hang Seng increased 76.27 points or 0.32% to 24,112.64.