Benchmarks extend losses in morning deals

Indian equity benchmarks extended their losses in morning deals, amid a weak trend across Asian counterparts. Traders remained cautious as the International Monetary Fund (IMF) said India may only become a $5-trillion economy in FY29. According to data from the IMF's World Economic Outlook Database, updated last month, India's nominal GDP is seen rising to $4.92 trillion in FY28. As such, it will only be in the following year, or FY29, that the GDP will cross the $5-trillion mark. Traders also took a note of rating agency ICRA’s statement that the state government borrowings through the bond market could be lower by Rs 50,000 crore in Q1FY23 at Rs 1.4 trillion. Traders overlooked SBI research in its latest Ecowrap report stated that the share of incremental bank credit in incremental nominal Gross Domestic Product (GDP) is likely to cross the 50 per cent mark in the current financial year (FY23), from a decade low of 27 per cent in FY2022. 

On the global front, Asian markets are trading mostly in red as investors gear up for the biggest Federal Reserve interest rate-hike since 2000. Markets have already priced in a 50-bps rate hike later today, with additional 50-bps increases expected in June, July and September meetings. Back home, coal industry stocks remained in watch as India’s coal output soared by 28 per cent to 66.1 million tonnes (mt) in April amid high demand from thermal power plants as several parts of the country grappled with power shortage.

The BSE Sensex is currently trading at 56753.70, down by 222.29 points or 0.39% after trading in a range of 56730.17 and 57184.21. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.21%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were PSU up by 1.11%, Oil & Gas up by 0.90%, Energy up by 0.63%, Realty up by 0.40% and IT up by 0.26%, while Consumer Durables down by 2.29%, Healthcare down by 1.62%, Consumer Discretionary down by 0.88%, Capital Goods down by 0.45% and Industrials down by 0.31% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corporation up by 3.42%, NTPC up by 2.35%, Infosys up by 0.85%, ITC up by 0.68% and Wipro up by 0.54%. On the flip side, Titan Company down by 3.17%, Asian Paints down by 2.38%, Dr. Reddy's Lab down by 2.35%, Sun Pharma down by 2.11% and Hindustan Unilever down by 1.14% were the top losers.

Meanwhile, Icra Ratings in its latest report has said that affordable housing finance companies' (AHFCs) loan book is likely to expand by 17-20 per cent in the current financial year (FY23), supported by the government's higher focus on housing and a favourable tax regime. As on December 31, 2021, the total loan book of AHFCs stood at Rs 66,221 crore and constituted about 6 per cent of the overall housing finance companies (HFCs) loan book.

It stated after witnessing a moderation in the loan book growth in Q1 of FY2022, the growth for AHFCs picked up again in Q2 and Q3 FY2022, with their disbursements reaching 85-90 per cent of the peak levels seen in the fourth quarter of FY2021. As a result, the AHFCs reported a 14 per cent (year-on-year) growth as on December 31, 2021. Overall, while the growth has moderated over the long-term average, it continues to remain higher than the overall housing finance industry average.

Besides, it said the second wave of the Covid-19 pandemic exerted pressure on the asset quality indicators of AHFCs and delinquencies, especially in the softer buckets (0-30, 30-60 and 60-90 days past due, i.e. dpd) shot up significantly. However, with improvement in collection efficiency in Q2 and Q3 FY2022, the delinquencies in the softer buckets moderated. At the same time, the reported gross NPAs/stage 3 percentage increased as entities aligned their reporting with the clarification issued by the RBI on Income Recognition, Asset Classification and Provisioning (IRACP) norms.

The CNX Nifty is currently trading at 16998.65, down by 70.45 points or 0.41% after trading in a range of 16993.10 and 17132.85. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were ONGC up by 3.61%, Britannia Industries up by 3.24%, Power Grid Corporation up by 3.09%, NTPC up by 2.32% and UPL up by 1.16%.

On the flip side, Apollo Hospital down by 4.47%, Titan Company down by 3.19%, Dr. Reddy's Lab down by 2.66%, Asian Paints down by 2.28% and Cipla down by 2.21% were the top losers.

Asian markets are trading mostly in red; Straits Times trembled 2.68 points or 0.08% to 3,354.22, KOSPI fell 4.66 points or 0.17% to 2,675.80 and Hang Seng decreased 281.57 points or 1.33% to 20,820.32.

On the flip side, Taiwan Weighted strengthened 40.14 points or 0.24% to 16,539.04.