Benchmarks continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, mainly dragged down by selling in index majors Sun Pharma, Titan Company and HDFC. Traders remained on sidelines ahead of the gross domestic product (GDP) numbers for the quarter ending March 31, 2022. Some concern also came in as domestic ratings agency India Ratings said the GST has not helped states achieve the key objective of boosting their tax revenue. The rating agency said that the data does not point to any benefits to the states in the last five years since the implementation of GST (Goods and Services Tax). However, losses remained capped as some support came with Ajay Seth, secretary at the department of economic affairs, stating that India's inflation should ease in the coming months following steps taken by the Union government and as global prices coming off in May will have a salutary impact.

On the global front, Asian markets are trading mostly in green after Wall Street rebounded from a seven-week string of declines and China eased anti-virus curbs on business activity in Shanghai and Beijing. Back home, sugar industry stocks remained in focus as Ind-Ra said the country’s sugar exports are expected to increase to around 9-10 million tonnes in sugar season 2022, beginning October, following lower production in Brazil due to adverse weather conditions.

The BSE Sensex is currently trading at 55605.17, down by 320.57 points or 0.57% after trading in a range of 55386.50 and 55659.58. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.89%.

The top gaining sectoral indices on the BSE were Realty up by 1.99%, Auto up by 1.32%, Metal up by 1.22%, Industrials up by 1.00% and Consumer discretionary up by 0.97%, while TECK down by 0.86%, IT down by 0.80%, Power down by 0.79%, Utilities down by 0.63% and FMCG down by 0.57% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.36%, Tata Steel up by 1.81%, Power Grid Corporation up by 1.53%, NTPC up by 1.13% and Asian Paints up by 0.99%. On the flip side, Sun Pharma down by 3.31%, Titan Company down by 2.27%, HDFC down by 1.99%, Hindustan Unilever down by 1.83% and Infosys down by 1.77% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that stressed assets of non-banking financial companies- microfinance institutions (NBFC-MFIs) are estimated to have declined to around 14 per cent as of March 2022 from close to 22 per cent in September 2021, helped by revival in the economy and limited impact of the omicron variant. It, however, said stressed assets of NBFC-MFIs, which comprise of 30 Portfolio at Risk (PAR) and loan book restructuring remains well above the pre-pandemic level of around 3 per cent.

It mentioned the reduction in stressed assets, along with improved collection efficiencies mark a recovery in the asset quality of NBFC-MFIs, supported by economic revival, limited impact of the omicron variant, and acclimatisation to the post pandemic 'new normal. The newly originated book (loans disbursed after July 2021) of NBFC-MFIs has demonstrated a steady performance, with 30 PAR estimated at just 1-2 per cent. Overall monthly collection efficiency was healthy at an average 97-100 per cent in the fourth quarter of last fiscal.

However, it stated foreclosures were higher in the last quarter of last fiscal. That, and the trend in the restructured book need close monitoring to assess incremental slippages. It also stated the microfinance sector restructured around 10 per cent of its loan book under the Resolution Framework 2.0 announced by the Reserve Bank of India (RBI) in the wake of the second Covid-19 wave, compared with a mere 1-2 per cent in the first. The extent of this varied between entities from 2 per cent to 17 per cent and had a strong correlation with the regional impact of the second wave, which had affected the informal economy and rural India more drastically than the first.

The CNX Nifty is currently trading at 16605.30, down by 56.10 points or 0.34% after trading in a range of 16521.90 and 16608.05. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 3.13%, ONGC up by 2.88%, Bajaj Auto up by 2.10%, Coal India up by 1.98% and Power Grid Corporation up by 1.69%. On the flip side, Sun Pharma down by 3.19%, Titan Company down by 2.26%, HDFC down by 1.85%, Infosys down by 1.76% and Hindustan Unilever down by 1.58% were the top losers.

Asian markets are trading mostly in green; Hang Seng increased 91.33 points or 0.43% to 21,215.26, Jakarta Composite soared 45.53 points or 0.65% to 7,083.10, Shanghai Composite gained 23.67 points or 0.75% to 3,172.73, Taiwan Weighted strengthened 16.97 points or 0.1% to 16,627.59, Straits Times advanced 13.29 points or 0.41% to 3,252.21 and KOSPI rose 9.64 points or 0.36% to 2,679.30.

On the flip side, Nikkei 225 slipped 68.12 points or 0.25% to 27,301.31.