Firm trade continues over Dalal Street

Firm trade continues over the Dalal Street in late morning session, with both Sensex and Nifty trading in green terrain. Positive cues from other Asian markets helped key indices to remain higher. Traders were positive, as Union Commerce and Industry Minister Piyush Goyal said that India has emerged as the world's third-largest startup ecosystem and the target is to acquire the number one position. Adding some relief among traders, Crisil Ratings in its latest report has said that Reserve Bank of India’s (RBI) new rules for microfinance institutions (MFIs), who have been deeply impacted in the Covid 19 pandemic because of loan losses, will help widen profits by giving such entities greater flexibility in operations.

On the global front, Asian markets were trading mostly in green, after the jobless rate in Japan came in at a seasonally adjusted 2.7 percent in March, the Ministry of Communications and Internal Affairs said on Tuesday. That was beneath expectations for 2.8 percent, which would have been unchanged from the January reading.

The BSE Sensex is currently trading at 57750.14, up by 156.65 points or 0.27% after trading in a range of 57644.85 and 57934.15. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.39%, while Small cap index was up by 0.43%.

The top gaining sectoral indices on the BSE were Telecom up by 0.87%, Consumer Durables up by 0.85%, Healthcare up by 0.75%, Basic Materials up by 0.66% and Realty up by 0.65%, while Energy down by 0.83%, Oil & Gas down by 0.80%, PSU down by 0.54%, Metal down by 0.49% and FMCG down by 0.06% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 3.22%, Ultratech Cement up by 2.11%, HDFC up by 1.67%, Sun Pharma up by 0.99% and Titan Co up by 0.78%. On the flip side, ITC down by 0.86%, Indusind Bank down by 0.74%, Infosys down by 0.53%, SBI down by 0.42% and Tata Steel down by 0.34% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that Reserve Bank of India’s (RBI) new rules for microfinance institutions (MFIs), who have been deeply impacted in the Covid 19 pandemic because of loan losses, will help widen profits by giving such entities greater flexibility in operations. It said removing the interest margin cap on loans, the biggest change in regulation, will help NBFC-MFIs (non-banking finance company-microfinance institutions) adopt a risk-based pricing approach and hence support profitability.

According to the report, specifically, this will benefit mid-sized entities, which were handicapped by the lending rate cap linked to the base rate, given their relatively higher borrowing cost, and those with rural focus, where competition is less and borrowers are relatively less sensitive to interest rates. It said the move to increase the permissible household income to Rs 3 lakh per annum and the increase in limit of non-microfinance loans to 25 per cent of total assets will help increase the addressable market for such entities.

The report further said that the last two years have been extremely challenging for microfinance lenders as they grappled with high credit costs. It stated that the changes announced will help NBFC-MFIs adopt risk-based pricing and improve their profitability, expand their addressable market and also address concerns on over-indebtedness of borrowers.

The CNX Nifty is currently trading at 17256.80, up by 34.80 points or 0.20% after trading in a range of 17241.60 and 17322.25. There were 31 stocks advancing against 18 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Bharti Airtel up by 3.32%, Divi's Lab up by 2.69%, Ultratech Cement up by 2.05%, Shree Cement up by 1.80% and Adani Ports & SEZ up by 1.69%. On the flip side, ONGC down by 2.64%, Coal India down by 2.59%, Indusind Bank down by 0.79%, ITC down by 0.76% and Infosys down by 0.51% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 202.67 points or 0.73% to 28,146.56, Hang Seng increased 98.59 points or 0.45% to 21,783.56, KOSPI rose 6.22 points or 0.23% to 2,735.78 and Taiwan Weighted strengthened 0.86 points to 17,520.87. On the flip side, Jakarta Composite lost 7.39 points or 0.1% to 7,042.21, Straits Times trembled 7.93 points or 0.23% to 3,424.06 and Shanghai Composite declined 13.85 points or 0.43% to 3,200.65.