Sensex, Nifty cut some of gains in late morning session

Indian equity benchmarks cut some of their gains in late morning session but managed to remain in green terrain, on the back of positive cues from other Asian markets. Traders were getting relief, after a senior government official said that the Omicron wave of coronavirus is unlikely to have much impact on India's economic growth, not more than of 5-10 basis points. However, gains got trimmed, as Nabard Chief General Manager Goverdhan Rawat said that most people are still out of financial inclusion due to the lack of consistent income and there is a need to spread financial awareness and generate income for them to include more people in the formal financial system.

Besides, amid a massive surge in COVID infections across the country, especially in the metro, a domestic rating agency -- India Ratings and Research in its latest report has said that the Omicron variant spread will impact the January-March quarter (Q4) Gross Domestic Product (GDP) by 0.40 per cent and shave off 0.10 per cent from the FY22 growth, as many states resort to restrictions to limit infections.

On the global front, Asian markets were trading mostly in green, even after overall consumer prices for the Tokyo region of Japan were up 0.8 percent on year in December. The Ministry of Internal Affairs and Communication said that was in line with expectations and up from the 0.5 percent gain in November. Core CPI, which excludes volatile food prices, climbed an annual 0.5 percent - again matching forecasts and up from 0.3 percent in the previous month.

The BSE Sensex is currently trading at 59871.40, up by 269.56 points or 0.45% after trading in a range of 59727.25 and 60130.18. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.63%, while Small cap index was up by 0.46%.

The top gaining sectoral indices on the BSE were Energy up by 1.14%, Bankex up by 1.05%, Oil & Gas up by 0.86%, PSU up by 0.85% and Basic Materials up by 0.76%, while Capital Goods down by 0.55%, Auto down by 0.19%, Industrials down by 0.16% and Telecom down by 0.10% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.75%, Tech Mahindra up by 1.39%, ICICI Bank up by 1.27%, Wipro up by 1.25% and Reliance Industries up by 1.16%. On the flip side, Bajaj Finserv down by 1.51%, Bajaj Finance down by 1.23%, HDFC down by 1.14%, Larsen & Toubro down by 0.89% and Mahindra & Mahindra down by 0.62% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that the threat of third wave of COVID-19 poses a high risk to the performance of the borrowers that were impacted by the previous waves and hence poses a risk to the improving trend of banks asset quality, profitability and solvency.

Rating agency also sees a 15-20-basis point uptick in restructuring requests from the borrowers. It said that banks restructured most of the loans with a moratorium of up to 12 months. Hence, the restructured book is likely to start exiting the moratorium from Q4 FY2022 and Q1 FY2023.  With incremental restructuring under Covid 2.0 scheme, it said the overall standard restructured loan book for banks increased to 2.9 per cent of standard advances as on September 30, 2021, (two per cent as on June 30, 2021). Most of this restructuring includes borrowers impacted by Covid 1.0 and 2.0.

The report further said the restructuring under Covid 1.0 scheme is estimated at 34 per cent (or Rs 1 lakh crore) of the total standard restructured loan book of Rs 2.85 lakh crore for banks as on September 30, 2021. And, under Covid 2.0, it is estimated to be at 42 per cent or Rs 1.2 lakh crore. The balance comprised micro, small and medium enterprises (MSMEs) and other restructuring. The report added that banks have implemented about 83 per cent of the total requests received under Covid 2.0, leading to an overall restructuring of Rs 1.2 lakh crore of loans till September 30, 2021.

The CNX Nifty is currently trading at 17833.75, up by 87.85 points or 0.50% after trading in a range of 17787.70 and 17905.00. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 3.46%, ONGC up by 2.82%, Asian Paints up by 1.73%, Britannia up by 1.36% and Tech Mahindra up by 1.31%. On the flip side, Bajaj Finserv down by 1.47%, Bajaj Finance down by 1.34%, HDFC down by 1.04%, Larsen & Toubro down by 0.86% and Bajaj Auto down by 0.63% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 265.10 points or 1.15% to 23,337.96, Jakarta Composite soared 44.39 points or 0.67% to 6,697.74, KOSPI rose 35.09 points or 1.2% to 2,955.62, Straits Times advanced 16.07 points or 0.5% to 3,200.37 and Shanghai Composite gained 12.54 points or 0.35% to 3,598.62. On the flip side, Nikkei 225 slipped 55.80 points or 0.2% to 28,432.07 and Taiwan Weighted dropped 215.94 points or 1.18% to 18,151.98.