Benchmarks continue lackluster trade slightly in red

Indian equity benchmarks continued their lackluster trade slightly in red in morning session, amid weakness across global markets. Investors awaited the latest batch of earnings as well as industrial output and CPI inflation figures for directional cues. However, losses remain capped as traders found some support with the Finance Ministry's Monthly Economic Review stating that strategic reforms and the rapid vaccination drive have placed the country on the path to swift recovery by enabling the economy to ‘navigate the ravaging waves’ of the COVID-19 pandemic. It also said sustained and robust growth in agriculture, a sharp rebound in manufacturing and industry, resumption of services activity, and buoyant revenues suggest that the economy is progressing well. Besides, the Finance Ministry has released Rs 9,871 crore of revenue deficit grant to 17 states. With the release of this installment, a total amount of Rs 69,097.00 crore has been released to eligible states as Post Devolution Revenue Deficit Grant (PDRD) in the current financial year. 

On the global front, Asian markets were trading mostly in red as investors grew increasingly concerned about a growing energy crisis, spiking inflation, signs of a slowdown in the global economy and an end to central bank financial support. Back home, on the sectoral front, stocks related to auto components industry remained in focus as rating agency Icra has revised downwards by 300 basis points the growth forecast for the auto components industry for the ongoing fiscal year citing the impact of semiconductor shortage on domestic vehicle manufacturers as well as on exports revenues.

The BSE Sensex is currently trading at 60053.94, down by 81.84 points or 0.14% after trading in a range of 59991.59 and 60263.61. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.27%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.41%, Auto up by 0.96%, Consumer Disc up by 0.77%, Realty up by 0.66% and FMCG up by 0.55%, while IT down by 1.02%, TECK down by 0.98%, Telecom down by 0.43%, Utilities down by 0.38% and Power down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.57%, Titan Co up by 3.16%, ITC up by 1.37%, Bajaj Finserv up by 1.25% and SBI up by 1.12%. On the flip side, HCL Technologies down by 4.07%, Tech Mahindra down by 1.59%, Infosys down by 0.98%, Mahindra & Mahindra down by 0.84% and ICICI Bank down by 0.82% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that securitisation volumes, originated largely by non-banking financial companies (NBFCs) and housing finance companies (HFCs), have likely grown by 45 percent to around Rs 25,000 crore in the second quarter of the current fiscal (Q2FY22). In the first quarter of fiscal 2022, the volumes stood at Rs 17,200 crore and were at Rs 15,200 crore in the second quarter of the previous fiscal.

As per to the report, after reaching close to pre-Covid levels in the last quarter of the financial year 2020-21, securitisation volumes had again dipped in the first quarter in this fiscal on account of the second wave of the pandemic. It noted that as the country opened, June saw a resurgence in securitisation, and the momentum continued into Q2. The volumes for the quarter were marginally impacted due to new securitisation guidelines introduced by the Reserve Bank of India on September 24, 2021, as some market participants preferred to put transactions on hold until they were well-versed with the new regulations.

The agency further said the new guidelines will have a positive impact in the long term in terms of widening the securitisation market. Despite the second wave of the pandemic, it said the securitisation volumes in the current fiscal have been higher than the corresponding period of last year, i.e. around Rs 42,200 crore in H1 of the financial year 2021-22 versus Rs 22,700 crore in H1 the financial year 2020-21. It also estimates the annual securitisation volumes to reach about Rs 1.2 lakh crore for the financial year 2021-22, which would imply at around 40 per cent increase from the volumes seen in the financial year 2020-21.

The CNX Nifty is currently trading at 17924.10, down by 21.85 points or 0.12% after trading in a range of 17906.80 and 17995.75. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Titan Company up by 3.28%, Bajaj Auto up by 3.11%, Tata Motors up by 1.74%, Hero MotoCorp up by 1.69% and Eicher Motors up by 1.60%. On the flip side, HCL Technologies down by 4.23%, Tech Mahindra down by 1.81%, Infosys down by 1.32%, Coal India down by 1.24% and Adani Ports &SEZ down by 0.98% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 259.04 points or 1.02% to 25,066.05, Nikkei 225 slipped 253.23 points or 0.89% to 28,244.97, Taiwan Weighted dropped 241.30 points or 1.45% to 16,399.13, KOSPI fell 38.17 points or 1.29% to 2,918.13, Shanghai Composite declined 37.33 points or 1.04% to 3,554.38 and Straits Times trembled 17.98 points or 0.58% to 3,095.51.

On the flip side, Jakarta Composite soared 34.89 points or 0.54% to 6,494.59.