Local equities wipe out gains in late afternoon session

Local equities wiped out all their gains and traded near neutral line with negative bias in late afternoon session. Traders were seen piling up positions in Bankex, Industrials and Capital Goods sectors, while selling was witnessed in Realty, Healthcare and Basic Materials sectors’ stocks. Sentiments were weak after SBI's research report- Ecowrap stated that country's gross domestic product (GDP) is likely to grow at 5.8 per cent in the third quarter of fiscal 2022. It stated ‘As per SBI Nowcasting Model, the forecasted GDP growth for Q3 FY22 would be 5.8%, with a downward bias. The full year (FY22) GDP growth is now revised downwards to 8.8% from our earlier estimate of 9.3%.’ Sector wise, aviation sector remained in focused amid tense situation in Ukraine, the Ministry of Civil Aviation has removed the curbs on the number of flights that can be operated between India and the Eastern European nation under the bilateral air bubble arrangement to facilitate travel of Indians from that country.

On the global front, Asian markets were trading mixed following a steep drop on Wall Street fuelled by renewed fears that Russia will soon invade Ukraine, adding to long-running angst about the Federal Reserve’s plans to hike interest rates. European markets were trading higher after UK retail sales recovered at a faster than expected pace in January. Retail sales volume grew 1.9 percent month-on-month, in contrast to the revised 4 percent decline in December. This was also faster than the expected growth of 1.0 percent.

The BSE Sensex is currently trading at 57835.36, down by 56.65 points or 0.10% after trading in a range of 57488.39 and 58175.35. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.41%, while Small cap index was down by 0.35%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.74%, Bankex up by 0.55%, Industrials up by 0.13%, PSU up by 0.10% and Metal was up by 0.06%, while Realty down by 0.75%, Healthcare down by 0.61%, Basic Materials down by 0.61%, Oil & Gas down by 0.59% and Telecom was down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were HDFC up by 1.22%, Larsen & Toubro up by 1.16%, SBI up by 0.98%, Dr. Reddy's Lab up by 0.70% and Hindustan Unilever up by 0.62%. On the flip side, Ultratech Cement down by 1.61%, Mahindra & Mahindra down by 0.86%, Nestle down by 0.84%, Wipro down by 0.56% and Infosys down by 0.47% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that since the introduction of tighter asset quality reporting norms last November, which brought in housing financiers and non-banking financial companies (NBFCs) on par with commercial banks, housing finance companies' gross bad loans have gone up by 70 basis points (bps) even as their portfolio quality has improved.

According to the report, while affordable housing companies have seen a 140-bp spike in gross non-performing assets, other housing finance companies saw their gross NPAs rising to 3.3 per cent by December 31, 2021, up from three per cent in September 2021. This is primarily because of the November 12, 2021, circular on recognition and calculation of NPAs, rather than any real mark-down in asset quality. Had it not been for this, their gross NPAs would have been at 2.6 per cent in December, which means the new norms have delivered a 70-bp impact on their overall asset quality.

The report said the two RBI clarifications, on daily stamping of accounts and NPA upgrades on interest payback, have impacted HFCs. However, it said the extent of the impact is diverged based on asset class and borrower segment. It pointed out that those with relatively more-vulnerable customer profiles, a higher proportion of affordable home loans, self-employed borrowers, and/or loans against property have been impacted more.

The CNX Nifty is currently trading at 17263.25, down by 41.35 points or 0.24% after trading in a range of 17219.20 and 17380.80. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Coal India up by 2.61%, SBI Life up by 2.44%, HDFC up by 1.09%, Larsen & Toubro up by 0.97% and Bajaj Auto up by 0.87%. On the flip side, ONGC down by 2.39%, Cipla down by 2.21%, Divi's Lab down by 2.00%, Ultratech Cement down by 1.89% and Shree Cement down by 1.81% were the top losers.

Asian markets were trading mixed, Hang Seng decreased 465.06 points or 1.88% to 24,327.71, Nikkei 225 slipped 110.80 points or 0.41% to 27,122.07, Taiwan Weighted dropped 36.22 points or 0.2% to 18,232.35and Straits Times was down by 9.26 points or 0.27% to 3,432.31. On the flip side, KOSPI rose 0.43 points or 0.02% to 2,744.52, Shanghai Composite gained 22.72 points or 0.66% to 3,490.76 and Jakarta Composite was up by 57.70 points or 0.84% to 6,892.82.

European markets were trading higher, UK’s FTSE 100 increased 15.59 points or 0.21% to 7,552.96, France’s CAC increased 33.48 points or 0.48% to 6,980.30 and Germany’s DAX was up by 33.06 points or 0.22% to 15,300.69.