Benchmarks add gains in morning deals

Indian equity benchmarks added gains in morning deals, helped by across the board buying tracking positive global cues. Sentiments remained up-beat with Crisil Ratings’ report that non-Banking Financial Company-Microfinance Institutions (NBFC-MFIs) are likely to see revival in their profitability in the current fiscal, helped by the flexibility to set lending rates under the new regulatory framework for MFIs and lower credit cost. Some support also came with report that India's macroeconomic fundamentals are strong to deal with global challenges and the central government is committed to sticking to the fiscal deficit target of 6.4 per cent of the GDP for the current fiscal. Traders overlooked the preliminary data released by the commerce ministry showing that India’s merchandise trade deficit surged to a new high of $25.6 billion in June amid slowing demand for Indian exports and rising imports of gold, coal and crude oil. Exports grew 16.8 per cent year-on-year to $38 billion in June while imports jumped 51 per cent to $63.6 billion.  On the global front, Asian markets are trading mostly in green on growing speculation US President Joe Biden is about to roll back some of the Trump-era tariffs on Chinese goods as he looks for ways to rein in inflation, though sentiment remains at a premium owing to fears of a recession.

The BSE Sensex is currently trading at 53754.23, up by 519.46 points or 0.98% after trading in a range of 53437.98 and 53754.93. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.65%, while Small cap index was up by 1.13%.

The top gaining sectoral indices on the BSE were Metal up by 1.69%, Power up by 1.64%, Utilities up by 1.56%, Capital Goods up by 1.16% and Healthcare up by 1.15%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.79%, Power Grid Corporation up by 2.09%, Bajaj Finance up by 2.04%, NTPC up by 1.98% and Tech Mahindra up by 1.90%. On the flip side, ITC down by 0.91% and Mahindra & Mahindra down by 0.38% were the top losers.

Meanwhile, the Department of Financial Services under the Ministry of Finance has urged other ministries not to include solvency ratio criteria to government owned non-life insurers to participate in the tenders for general insurance needs. This will enhance competition in the bidding process without compromising on the quality of services.

According to the Department of Financial Services, three government owned non-life insurers - National Insurance Company, Oriental Insurance Company and United India Insurance Company - do not have the stipulated solvency ratio of 1.5 of the liabilities. Some central public sector companies and government departments include the required solvency ratio as an eligibility condition in their tenders.

Pointing out that the insurance sector regulator has allowed forbearance to the three companies from maintaining the solvency ratio and allowed them to underwrite business. It mentioned ‘It is pertinent to note that the reinsured liability is not factored into calculation of Solvency Ratio, specified by IRDAI (Insurance Regulatory and Development Authority of India), as a result of which solvency ratio of 1.5 is very high from a risk perspective.’

The CNX Nifty is currently trading at 15990.50, up by 155.15 points or 0.98% after trading in a range of 15891.55 and 15991.70. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 3.01%, Hindalco up by 3.00%, UPL up by 2.37%, Power Grid Corp up by 2.16% and Dr. Reddy's Lab up by 2.13%. On the flip side, ITC down by 1.01%, Britannia Industries down by 0.78%, HDFC Life Insurance down by 0.34%, Hero MotoCorp down by 0.26% and Mahindra & Mahindra down by 0.24% were the top losers

Asian markets are trading mostly in green; Nikkei 225 surged 259.41 points or 0.99% to 26,413.22, Hang Seng increased 122.42 points or 0.56% to 21,952.77, Jakarta Composite soared 101.40 points or 1.53% to 6,740.57, Taiwan Weighted strengthened 58.86 points or 0.41% to 14,275.92 and KOSPI rose 34.87 points or 1.52% to 2,335.21.

On the flip side, Shanghai Composite declined 3.32 points or 0.1% to 3,402.11 and Straits Times trembled 12.57 points or 0.4% to 3,107.67.