Benchmarks continue to trade flat in morning deals

Moving between gains and losses, Indian equity benchmarks continued to trade flat in morning deals, despite strength across global markets. Traders remain concerned with a private report stating that rising global commodity prices, led by crude, coal and metals, will shave a lot off the current account leading to higher imports and a rise in current account deficit, which is likely to print at 1.3 per cent of the GDP or $40 billion, up from 0.9 per cent surplus last fiscal. Traders also took a note of rating agency Crisil’s report stated that gross non-performing assets (NPAs) of Indian banks may rise to 8-9 percent in the current financial year (FY22) but this will be much below the FY18 levels when NPAs reached a peak of 11.2 percent. However, traders found some support with Minister of State for Electronics and IT Rajeev Chandrasekhar’s statement that the government is looking at rolling out a five-year strategic perspective plan to make India a significant tech player. Sectorally, stocks related to aviation industry remained in action as the data from the Director General Civil Aviation (DGCA) said it seems that the Indian aviation industry is moving towards pre-COVID days as with the domestic air passengers footfall is up by about 80 per cent in September compared to the same month last year. On the global front, Asian markets traded mostly in green on rising optimism about the global economy and corporate earnings while the yen slipped to a four-year low on the dollar.

The BSE Sensex is currently trading at 61749.20, up by 33.15 points or 0.05% after trading in a range of 61489.69 and 61880.36. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.51%, while Small cap index was down by 1.09%.

The top gaining sectoral indices on the BSE were Telecom up by 3.35%, TECK up by 0.52%, Bankex up by 0.29% and PSU up by 0.08%, while Metal down by 1.37%, Consumer Durables down by 1.15%, Basic Materials down by 1.03%, Utilities down by 0.98% and Power down by 0.78% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.07%, SBI up by 3.12%, HCL Tech. up by 1.84%, Tech Mahindra up by 1.29% and Ultratech Cement up by 1.10%. On the flip side, Bajaj Finserv down by 1.36%, Nestle down by 1.21%, Kotak Mahindra Bank down by 1.17%, Bajaj Auto down by 0.99% and HDFC Bank down by 0.74% were the top losers.

Meanwhile, rating agency Crisil in its latest report has said that gross non-performing assets (NPAs) of Indian banks may rise to 8-9 percent in the current financial year (FY22) but this will be much below the FY18 levels when NPAs reached a peak of 11.2 percent. However, it said the Covid-19 relief measures such as the restructuring dispensation, and the Emergency Credit Line Guarantee Scheme (ECLGS) will help limit the rise in banks gross NPAs.

According to the agency, with around 2 percent of bank credit expected under restructuring by the end of this fiscal, stressed assets-comprising gross NPAs and loan book under restructuring-should touch 10-11 percent this fiscal.  It stated that the retail and MSME segments, which together form close to 40 percent of bank credit, are expected to see higher accretion of NPAs and stressed assets this time around. It also noted that stressed assets in these two segments are seen rising to 4-5 percent and 17-18 percent, respectively, by this fiscal end.

The report expects the corporate segment to be far more resilient. It said a large part of the stress in the corporate portfolio had already been recognised during the asset quality review initiated five years ago. It said that, coupled with the secular deleveraging trend, has strengthened the balance sheets of corporates, and enabled them to tide over the pandemic relatively unscathed compared with retail and MSME borrowers.

The CNX Nifty is currently trading at 18416.75, down by 2.00 points or 0.01% after trading in a range of 18326.95 and 18458.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 4.10%, SBI up by 3.19%, HCL Technologies up by 1.81%, Tata Motors up by 1.36% and Tech Mahindra up by 1.33%. On the flip side, Hindalco down by 2.89%, Coal India down by 1.76%, Eicher Motors down by 1.62%, Bajaj Finserv down by 1.45% and Hero MotoCorp down by 1.26% were the top losers.

Asian markets traded mostly in green; Hang Seng increased 338.75 points or 1.31% to 26,125.96, Nikkei 225 surged 60.64 points or 0.21% to 29,276.16, Shanghai Composite gained 1.23 points or 0.03% to 3,594.38 and Straits Times advanced 0.29 points or 0.01% to 3,199.30.

On the flip side, KOSPI fell 7.59 points or 0.25% to 3,021.45 and Taiwan Weighted dropped 18.62 points or 0.11% to 16,882.05.