Benchmarks extend gains in morning deals

Indian equity benchmarks extended gains in morning deals, on the back of firm trend in the global markets coupled with sustained buying by domestic institutional investors. Sentiments remained upbeat with government data showing that India’s exports surged 37 percent on an annual basis to $37.29 billion in December 2021, the highest-ever monthly figure, on the back of healthy performance by sectors like engineering, textiles and chemicals, even as the trade deficit widened to $21.99 billion. Imports in December too rose by 38 per cent to $59.27 billion on account of an increase in oil imports, which soared 65.17 per cent to $15.9 billion. Some optimism also came with Union Commerce and Industry Minister Piyush Goyal’s statement that the Omicron variant of COVID-19 will be a short-term disruption on businesses, adding that supply chains and industrial activities will continue at full speed.  

On the global front, Asian markets were trading mostly in green following Wall Street's record highs on its first trading day of 2022, despite worries that the widespread Omicron COVID-19 variant could put the brakes on global economic recovery. Back home, on the sectoral front, insurance industry stocks remained in watch as Regulator Irdai proposed to modify the guidelines on remuneration of non-executive directors, managing directors, CEOs and whole-time directors of private insurance companies with a view to check excessive risk taking behaviour of top executives.

The BSE Sensex is currently trading at 59494.71, up by 311.49 points or 0.53% after trading in a range of 59084.40 and 59572.83. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.32%, while Small cap index was up by 0.41%.

The top gaining sectoral indices on the BSE were PSU up by 1.87%, Utilities up by 1.86%, Power up by 1.84%, Oil & Gas up by 1.24% and Bankex up by 1.22%, while IT down by 0.38%, TECK down by 0.32%, Healthcare down by 0.32% and Metal down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 4.44%, Power Grid Corporation up by 3.71%, SBI up by 2.07%, Axis Bank up by 1.82% and ICICI Bank up by 1.39%. On the flip side, HCL Technologies down by 0.96%, Infosys down by 0.85%, Wipro down by 0.61%, Ultratech Cement down by 0.51% and Sun Pharma down by 0.44% were the top losers.

Meanwhile, Rating agency ICRA Ratings in its latest report has said that the assets under management (AUM) of the small finance banks (SFBs) are expected to register a marginal improvement in the growth rate to around 20 per cent in FY2022 compared to the growth rate of 18 per cent witnessed in FY2021, though the same would be lower compared to the compound annual growth rate (CAGR) of around 30 per cent during FY2016-FY2020.

It stated growth in assets under management of Indian small finance banks is likely to show improvement in the current financial year although elevated credit costs may eat into profitability. It mentioned that amid the second wave of the pandemic, SFBs witnessed a decline in collections and, hence weakening of the quality metrics with reported gross non-performing assets (GNPAs) of 6.4 per cent as of September 30, 2021.

The agency's Vice-President and Sector Head (Financial Sector Ratings) Sachin Sachdeva said the AUM growth of SFBs declined during H1 FY 2022 after the disbursements got impacted in Q1 FY 2022 due to the second wave of the pandemic. The industry is estimated to have reported an annualised growth rate of 7-8 per cent in H1 FY2022. He added ‘Nevertheless, since disbursements have started picking up, we expect the pace of growth to improve in H2 FY 2022, pushing the full-year AUM growth to around 20 per cent, though the same would be subject to no major impact from the recent rise in coronavirus infections.’

The CNX Nifty is currently trading at 17711.75, up by 86.05 points or 0.49% after trading in a range of 17593.55 and 17733.65. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were NTPC up by 4.37%, Power Grid Corporation up by 3.90%, ONGC up by 3.64%, SBI up by 2.17% and Axis Bank up by 1.83%. On the flip side, Tata Consumer Product down by 1.22%, Tata Motors down by 1.07%, HCL Technologies down by 0.98%, Infosys down by 0.92% and Cipla down by 0.77% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 518.23 points or 1.8% to 29,309.94, Taiwan Weighted strengthened 197.64 points or 1.08% to 18,468.15, Straits Times advanced 38.34 points or 1.22% to 3,172.59 and Jakarta Composite soared 26.97 points or 0.4% to 6,692.28.

On the flip side, KOSPI fell 4.10 points or 0.14% to 2,984.67, Shanghai Composite declined 12.68 points or 0.35% to 3,627.10 and Hang Seng decreased 68.49 points or 0.29% to 23,206.26.