Bears hold grip over Dalal Street

Bears were holding a tight grip over the Dalal Street in late morning session, with both Sensex and Nifty trading lower. Negative cues from other Asian markets impacted domestic sentiments. Traders got worried, after Stock brokers' association Anmi has flagged off concerns on the action being initiated by market regulator Sebi against a few broker entities for trading on paired contracts on the National Spot Exchange Ltd (NSEL) platform and classifying them as ''not fit and proper person''. Further, the Aluminium Association of India (AAI) has urged the central government to immediately restart supply of coal and rakes to the aluminium industry to normalise the precarious situation due to fuel shortage. It also said the current fuel shortage has threatened the very survival of the domestic aluminium sector with risk of loss of over one million livelihoods and 5,000 SMEs (Small and Medium Enterprises) in the downstream sector.

On the global front, Asian markets were trading mostly in red, after the Bank of Japan maintained its monetary stimulus and downgraded its growth outlook for the current fiscal year as supply-side constraints dampened production and exports amid weak consumption. The board, governed by Haruhiko Kuroda, on Thursday, voted 8-1, to hold the interest rate at -0.1 percent on current accounts that financial institutions maintain at the central bank.

The BSE Sensex is currently trading at 60579.61, down by 563.72 points or 0.92% after trading in a range of 60485.26 and 61081.00. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.72%, while Small cap index was down by 1.03%.

The only gaining sectoral index on the BSE was Capital Goods up by 0.70%, while Realty down by 2.68%, Oil & Gas down by 1.80%, Metal down by 1.77%, Bankex down by 1.64% and Telecom down by 1.61% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 4.60%, Larsen & Toubro up by 2.70%, Ultratech Cement up by 1.60%, Maruti Suzuki up by 1.60% and Asian Paints up by 0.57%. On the flip side, ITC down by 2.89%, ICICI Bank down by 2.17%, SBI down by 2.08%, Kotak Mahindra Bank down by 1.97% and Titan Co down by 1.64% were the top losers.

Meanwhile, Icra Ratings in its latest report said that gold loan securitisation volumes were about Rs 4,400 crore in the first half of the current fiscal (H1 FY2022) (similar to volumes seen in H1 FY2021) forming 10 per cent of the overall domestic securitisation volumes as compared to 6 per cent seen in FY2020 (pre-Covid period). It said during the Covid-19 pandemic, gold loans have been considered to be a safer asset class given the availability of a liquid collateral and rising gold prices.

It mentioned while direct assignment (DA) transactions have a dominant share, the share of PTCs in gold loan securitisation has been rising. Investors like HNIs and mutual funds have shown a higher appetite in investing in gold loan PTCs as compared to other asset classes. It stated while gold loan securitisation had seen some slowdown post 2012 due to the removal of priority sector lending classification and introduction of minimum holding period (MHP) requirements for securitisation, the volumes have again picked up since FY2019.

Besides, it expects the overall growth for gold loan NBFCs to remain robust in the near to medium term which would support healthy volumes of gold loan securitisation with its share in overall securitisation market being 8-10 per cent. Securitisation involves transactions where credit risks in assets are redistributed by repackaging them into tradable securities with different risk profiles. It may give investors of various classes an access to exposures which they otherwise might be unable to access directly.

The CNX Nifty is currently trading at 18037.15, down by 173.80 points or 0.95% after trading in a range of 18002.85 and 18190.70. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 4.56%, Larsen & Toubro up by 2.51%, Ultratech Cement up by 1.64%, Maruti Suzuki up by 1.48% and Divi's Lab up by 0.74%. On the flip side, Adani Ports & SEZ down by 4.97%, ONGC down by 4.21%, Coal India down by 3.05%, ITC down by 2.83% and ICICI Bank down by 2.20% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 227.83 points or 0.78% to 28,870.41, Jakarta Composite lost 67.13 points or 1.02% to 6,535.08, Taiwan Weighted dropped 46.44 points or 0.27% to 17,028.11, Shanghai Composite declined 33.31 points or 0.94% to 3,529.00, Hang Seng decreased 23.93 points or 0.09% to 25,604.81 and Straits Times trembled 12.60 points or 0.39% to 3,205.57. On the flip side, KOSPI rose 6.77 points or 0.22% to 3,032.26.