Sensex, Nifty stage recovery in late morning session

Cutting most of their losses, Indian equity benchmarks staged recovery in late morning session but still trading in red, amid negative cues from other Asian markets. Traders were getting relief, as India Ratings and Research (Ind-Ra) in its latest report has said that after years of enduring challenges, the non-banking finance companies (NBFCs) are finally set to witness a normalisation in FY23. The NBFCs will start FY23 with sufficient capital buffers, stable margins and sizable on-balance sheet provisioning, while adequate system liquidity would aid funding. The agency, which maintained a 'neutral' sector outlook and 'stable' rating outlook for the NBFCs, said its expectations will hold true in the absence of any negative event.

Besides, with an aim to enhance the ease of accessibility and usability of data disseminated in public by various data sources in securities market, Sebi has asked market intermediaries to make available such data to users, 'free of charge' both for 'viewing' and for download.

On the global front, Asian markets were trading mostly in red, after industrial output in Japan fell a seasonally adjusted 1.3 percent on month in January. The Ministry of Economy, Trade and Industry said that missed expectations for a decline of 0.7 percent following the 1.0 percent drop in December. On a yearly basis, industrial production sank 0.9 percent - again shy of expectations for a fall of 0.5 percent following the 2.7 percent increase in the previous month.

The BSE Sensex is currently trading at 55673.34, down by 185.18 points or 0.33% after trading in a range of 54833.50 and 55754.39. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.32%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Metal up by 3.26%, Utilities up by 1.77%, Power up by 1.35%, Oil & Gas up by 1.21% and Basic Materials up by 1.18%, while Bankex down by 1.31%, Auto down by 0.99%, FMCG down by 0.76%, Telecom down by 0.76% and Consumer Discretionary down by 0.69% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.13%, Power Grid up by 2.71%, NTPC up by 2.23%, Tech Mahindra up by 1.13% and Larsen & Toubro up by 0.69%. On the flip side, Dr. Reddy's Lab down by 2.47%, Axis Bank down by 2.45%, HDFC Bank down by 1.98%, Nestle down by 1.52% and Maruti Suzuki down by 1.49% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that after years of enduring challenges, the non-banking finance companies (NBFCs) are finally set to witness a normalisation in FY23. The NBFCs will start FY23 with sufficient capital buffers, stable margins and sizable on-balance sheet provisioning, while adequate system liquidity would aid funding. The agency, which maintained a 'neutral' sector outlook and 'stable' rating outlook for the NBFCs, said its expectations will hold true in the absence of any negative event.

According to the report, credit growth for entities it rates will rise to 14 per cent in FY23 from 8 per cent in FY22. Since the default by IL&FS in 2017, NBFCs have faced difficulties which only aggravated with the outbreak of the pandemic, which affected liquidity. The agency said an expected increase in systemic interest rates and asset quality issues in some segments due to the lagged impact of pandemic would be a drag on the operating performance of NBFCs in the new fiscal year. The sector has been facing increased regulatory oversight and push towards convergence with banks through various measures such as scale-based regulation, realignment in asset quality classification and Prompt Corrective Action (PCA) norm. The secured asset business for NBFCs may see a revival in FY23 with credit growth of 14 per cent, up from 7-8 per cent in FY22.

The report further said the products such as loans against property, housing loans and vehicle finance could witness a higher demand than personal and unsecured business loans which saw a higher demand during the pandemic. Growth in the vehicle finance segment could revive depending on the availability of vehicles which are facing component shortage due to the pandemic, along with an increase in borrower confidence towards an economic recovery.

The CNX Nifty is currently trading at 16606.45, down by 51.95 points or 0.31% after trading in a range of 16356.30 and 16642.85. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.29%, Tata Steel up by 4.26%, JSW Steel up by 3.90%, BPCL up by 2.87% and Power Grid up by 2.74%. On the flip side, HDFC Life Insurance down by 2.58%, Dr. Reddy's Lab down by 2.55%, Axis Bank down by 2.48%, Eicher Motors down by 2.39% and HDFC Bank down by 2.11% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 4.97 points or 0.14% to 3,446.44, Straits Times trembled 69.51 points or 2.11% to 3,224.96, Nikkei 225 slipped 80.89 points or 0.31% to 26,395.61 and Hang Seng decreased 315.02 points or 1.38% to 22,452.16. On the flip side, KOSPI rose 2.97 points or 0.11% to 2,679.73.