Indian markets maintain upward momentum

Indian equity markets maintained their upward momentum in the noon session and continued to trade in positive terrain, following gains in Realty, Consumer Durables and Consumer Discretionary stocks. Healthy buying was observed in blue-chip stocks like Titan, Kotak Mahindra Bank and Asian Paints. Traders took some solace as Western sanctions on Russia after Russian troop movements near Ukraine might soften Moscow’s defiant tone and leave some room to avoid a war. In another positive development, commerce ministry data showed that the country’s merchandise exports rose by 26.4 per cent to $25.33 billion this month till February 21 on account of healthy performance by sectors including gems and jewellery, engineering, textiles and chemicals. The exports during February 1-21 last year stood at $20.04 billion. On the global front, Asian markets were trading higher as global investors regrouped a day after the Ukraine crisis sparked a sell-off, and as Chinese state media sought to reassure investors over regulation concerns.

Back home, Finance Minister Nirmala Sitharaman stated the government is looking into the governance lapses that had happened at the National Stock Exchange (NSE). Earlier this month, markets watchdog Sebi penalised NSE and its former MDs and CEOs, Chitra Ramkrishna and Ravi Narain, and others for various violations in a case related to the appointment of Anand Subramanian as Group Operating Officer and Advisor to then MD Ramkrishna.

The BSE Sensex is currently trading at 57614.97, up by 314.29 points or 0.55% after trading in a range of 57398.74 and 57733.37. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 1.27%, while Small cap index was up by 1.70%.

The top gaining sectoral indices on the BSE were Realty up by 3.06%, Consumer Durables up by 2.29%, Consumer Discretionary up by 1.56%, Utilities up by 1.34%, Industrials up by 1.11%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Titan Co up by 3.07%, Kotak Mahindra Bank up by 2.97%, Asian Paints up by 1.72%, Maruti Suzuki up by 1.53% and Bajaj Finance was up by 1.27%. On the flip side, NTPC down by 0.34%, Hindustan Unilever down by 0.24%, Larsen & Toubro down by 0.12%, Nestle down by 0.09% and ICICI Bank was down by 0.07% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has revised upwards its outlook on the microfinance sector to 'neutral' from 'negative' for the next financial year (FY23), on the back of a revival in growth that could clip at 30 per cent. It expects the sector to grow 20-30 per cent in both FY22 and FY23 in comparison to the below 10 per cent AUM (assets under management) growth in the previous two years. Given the yield limitations, mid- and small-MFIs have not seen comparable growth.

According to the report, while large MFIs will continue with their normal disbursement trends and new customer acquisitions as normalisation happens in FY22 and FY23, small- and mid-ones will ramp up their activities once the harmonisation guidelines are implemented. The agency see that the impact of the pandemic on credit cost has been largely absorbed by now, and there is a likelihood of normalised growth for these small lenders. Also, their collections, especially those disbursed after the pandemic, have recovered and refinance has become relatively easy now.

The report further said another booster is the increased viability expectations for small-mid MFIs after the implementation of harmonisation guidelines, as they can now revise their lending rates, which will improve pre-provision operating profit margins and provide higher tolerance to withstand credit cost, the report said. It expects the credit cost to decline to a median of 1.5-5 per cent in FY23 from 4-7 per cent in FY22 as collections are better since December and it will be lower than FY22. It noted that the decline would largely be a function of growth, provision coverage and recovery from restructured loans.

The CNX Nifty is currently trading at 17180.15, up by 87.95 points or 0.51% after trading in a range of 17120.00 and 17220.70. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 2.89%, Titan Co up by 2.85%, Asian Paints up by 1.73%, Maruti Suzuki up by 1.64% and Adani Ports was up by 1.50%. On the flip side, ONGC down by 2.15%, JSW Steel down by 0.75%, Hero MotoCorp down by 0.68%, NTPC down by 0.34% and Shree Cement was down by 0.31% were the top losers.

Asian markets were mostly higher; Taiwan Weighted strengthened 86.44 points or 0.48% to 18,055.73, Hang Seng increased 160.02 points or 0.68% to 23,680.02, Shanghai Composite gained 28.44 points or 0.82% to 3,485.59, KOSPI rose 16.21 points or 0.6% to 2,723.00 and Jakarta Composite was up by 23.79 points or 0.35% to 6,885.78.

On the other hand, Straits Times was down by 1.53 points or 0.04% to 3,399.05.