Weak trade continues over Dalal Street

Weak trade continued over the Dalal Street in late morning session, with both Sensex and Nifty trading in red terrain, on the back of negative cues from other Asian markets. Sentiments were negative, as the International Labour Organization said that the global job market will take longer to recover than previously thought, with unemployment levels set to remain above pre-COVID-19 levels until at least 2023 due to uncertainty about the pandemic's course and duration.

Besides, noting that the successive waves of the pandemic have severely dented consumer confidence that hit an all-time low of 48.5 in May 2021 at the peak of the second wave, an RBI bulletin released said even now the sentiment is yet to return to the pre-pandemic levels.

On the global front, Asian markets were trading mostly in red, after the Bank of Japan maintained its monetary policy stimulus unchanged and lifted its inflation forecast for the next fiscal year citing a rise in commodity prices. The board, governed by Haruhiko Kuroda, on Tuesday, 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 61160.90, down by 148.01 points or 0.24% after trading in a range of 60948.04 and 61475.15. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.45%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Bankex up by 0.66%, Realty up by 0.52%, Power up by 0.46%, Utilities up by 0.45% and Consumer Durables up by 0.45%, while Telecom down by 1.54%, Auto down by 0.93%, TECK down by 0.85%, Healthcare down by 0.80% and Basic Materials down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.85%, Titan Co up by 1.30%, HDFC Bank up by 1.09%, Kotak Mahindra Bank up by 0.70% and Bajaj Finance up by 0.31%. On the flip side, Maruti Suzuki down by 2.59%, Tech Mahindra down by 2.43%, Ultratech Cement down by 2.25%, HCL Tech. down by 1.42% and Bharti Airtel down by 1.26% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that securitisation volume growth slowed to around 8 percent on year to Rs 29,000 crore in the quarter ended December 31, 2021 (Q3FY22), on higher risk aversion amid the third wave of COVID-19. It noted that the uncertainty around Covid-19's third wave (including the omicron variant) resulted in many deals under active negotiation remaining unexecuted towards the end of the quarter. It also said the cumulative value of deals executed in the first nine months of this fiscal stood at approximately Rs 80,000 crore, or close to 65 per cent higher on-year basis.

According to the report, prominent investing segments such as public and private sector banks preferred the relatively more resilient mortgage asset class. This is reflected in mortgage-backed securitisation (MBS) assets comprising 43 per cent of the overall quarterly volume. In the asset-backed securitisation (ABS) category, commercial vehicle (CV)-backed loans were dominant, buoyed by past trends indicating a lower impact from short-term disruptions caused by restrictions on movement of goods and people. Transactions with underlying CV loans comprised 39 per cent of the overall quarterly volume.

The report further said securitisation has been a major tool of fund mobilization for non-banking financial companies (NBFCs) since the credit cliff event of September 2018. However, it said the pandemic brought about a benign regulatory environment in fiscal 2021, which provided alternatives to funding access for NBFCs, reducing the dependence of many entities in the securitization segment. Accordingly, the proportion of securitization flows for the entities fell back to around 23 per cent of the annual disbursement.

The CNX Nifty is currently trading at 18254.20, down by 53.90 points or 0.29% after trading in a range of 18186.20 and 18350.95. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 1.96%, Titan Co up by 1.25%, BPCL up by 1.22%, HDFC Bank up by 1.13% and Adani Ports & SEZ up by 0.93%. On the flip side, Eicher Motors down by 3.16%, Maruti Suzuki down by 2.50%, Tech Mahindra down by 2.35%, Ultratech Cement down by 2.28% and Tata Consumer Products down by 1.80% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite lost 93.45 points or 1.41% to 6,551.60, Taiwan Weighted dropped 92.29 points or 0.5% to 18,433.15, Nikkei 225 slipped 58.21 points or 0.21% to 28,275.31, Hang Seng decreased 34.49 points or 0.14% to 24,183.54 and KOSPI fell 24.45 points or 0.85% to 2,865.65. On the flip side, Straits Times advanced 6.88 points or 0.21% to 3,294.83 and Shanghai Composite gained 33.22 points or 0.94% to 3,574.89.