Indian equities trade marginally in red in morning deals

Oscillating between gains and losses, Indian equity benchmarks were now trading marginally in red in morning deals, amid a weak trend in Asian markets and sustained foreign fund outflow. Traders turned cautious with Rating agency Crisil’s latest report stated that higher diesel prices will shave off the overall profitability of transporters despite an improvement in freight rates since last month following the withdrawal of the monsoons, consumption recovery and higher infrastructure activity. However, losses remain capped as traders found some support with SBI report stating that India is now ahead of China in financial inclusion metrics, with mobile and internet banking transactions rising to 13,615 per 1,000 adults in 2020 from 183 in 2015 and the number of bank branches inching up to 14.7 per 1 lakh adults in 2020 from 13.6 in 2015, which is higher than Germany, China and South Africa. Meanwhile, Markets regulator SEBI allowed foreign portfolio investors (FPIs) to write off all debt securities that they are unable to sell. This will be applicable only to such FPIs who wish to surrender their registration.

On the global front, Asian markets were trading mostly in red despite the passage of a U.S. infrastructure bill while oil prices gained on the outlook for energy demand in an expansive global economy. Back home, on the sectoral front, stocks related to pharmaceutical sector remained in focus as the Competition Commission of India (CCI) chief Ashok Kumar Gupta said that the CCI will identify measures to enhance competition in the country's pharmaceutical sector for ensuring affordability of drugs after analysing findings of its market study, which is likely to be concluded within a month.

The BSE Sensex is currently trading at 60406.25, down by 139.36 points or 0.23% after trading in a range of 60384.35 and 60670.47. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.81%, while Small cap index was up by 0.68%.

The top gaining sectoral indices on the BSE were Auto up by 1.41%, Industrials up by 1.16%, Capital Goods up by 0.71%, Utilities up by 0.67% and Consumer discretionary up by 0.60%, while FMCG down by 0.46%, Metal down by 0.45%, Energy down by 0.24% and Bankex down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.73%, Bajaj Auto up by 1.06%, Sun Pharma up by 1.04%, SBI up by 0.78% and Larsen & Toubro up by 0.75%. On the flip side, HDFC Bank down by 1.13%, Nestle down by 1.05%, HDFC down by 1.01%, Maruti Suzuki down by 0.73% and Power Grid Corp down by 0.58% were the top losers.

Meanwhile, Icra Ratings in its latest report has said housing finance companies (HFCs) may witness a growth of 8-10 per cent in current financial year (FY22) helped by rise in economic and higher demand. It mentioned in the first quarter of the current fiscal, HFCs registered nil sequential growth in the on-book portfolio as the second wave of COVID-19 impacted their disbursements and collection efficiency (CE). However, it said the collection efficiency started bouncing back by the end of June 2021 and improved further in the second quarter of the financial year 2022.

It stated the healthy demand in the industry, increasing level of economic activity, and increasing vaccination in the country are expected to result in a steady growth in disbursements and improvement in CE in FY2022. Further, it said HFCs asset quality metrics weakened quite sharply in Q1 FY2022 because of the localised lockdowns imposed by various states/union territories (UTs) on account of the second wave, which impacted the borrowers' cash flows and hence the collection efficiency.

It said the jump in overdue was the sharpest in the recent past, as borrower level liquidity got stretched in the absence of loan moratorium. Besides, it stated the gross non-performing assets (GNPAs) of HFCs increased to 3.6 per cent as of June 30, 2021, from 2.9 per cent as on March 31, 2021 (2.3 per cent as on March 31, 2020). Though the asset quality deteriorated across segments, construction finance was the worst hit followed by LAP and HL.

The CNX Nifty is currently trading at 18039.65, down by 28.90 points or 0.16% after trading in a range of 18032.35 and 18112.60. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.79%, Mahindra & Mahindra up by 1.72%, Grasim Industries up by 1.45%, Hero MotoCorp up by 1.23% and Bajaj Auto up by 1.19%. On the flip side, Britannia Industries down by 2.96%, HDFC Bank down by 1.12%, HDFC down by 1.01%, Nestle down by 0.98% and Indian Oil Corporation down by 0.82% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 17.85 points or 0.07% to 24,745.92, Nikkei 225 slipped 197.00 points or 0.67% to 29,310.05, KOSPI fell 4.53 points or 0.15% to 2,955.67, Shanghai Composite declined 0.73 points or 0.02% to 3,497.90 and Straits Times trembled 9.52 points or 0.29% to 3,254.38.
ON the flip side, Jakarta Composite soared 18.28 points or 0.28% to 6,650.58 and Taiwan Weighted strengthened 122.21 points or 0.7% to 17,537.51.