Benchmarks remain in green in morning deals

Indian equity benchmarks remained in green in morning deals, led by gains in Healthcare, FMCG and Consumer Durables stocks. Traders took support with private report stated that Indian economy is projected to grow 7.1-7.6 per cent in the current financial year despite shifting geopolitical realities across the world. Traders also took a note of Commerce and Industry Minister Piyush Goyal’s statement that the new Australian government supports the trade pact signed with India, and they are expected to soon approach their parliament for approval of the agreement. However, gains remain capped as some concern came with India Ratings and Research’s report stated that Non-bank finance companies (NBFCs) may rely more on banks for their funding requirements as interest rates are hardening in the capital market. On the global front, Asian markets are trading mostly in green even as a highly anticipated report on US inflation turned out to be even worse than expected boosting bets the Federal Reserve could get more aggressive with its rate tightening move.

The BSE Sensex is currently trading at 53701.74, up by 187.59 points or 0.35% after trading in a range of 53600.83 and 53861.28. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 0.14%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.34%, FMCG up by 0.45%, Consumer Durables up by 0.44%, Auto up by 0.39% and Capital Goods up by 0.31%, while Power down by 1.33%, Utilities down by 1.22%, Metal down by 0.12%, IT down by 0.10% and PSU down by 0.05% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma Inds. up by 1.87%, Bajaj Finserv up by 1.45%, Dr. Reddy's Lab up by 1.37%, Kotak Mahindra Bank up by 0.99% and Nestle up by 0.87%. On the flip side, NTPC down by 0.64%, Axis Bank down by 0.52%, SBI down by 0.18%, TCS down by 0.14% and Tata Steel down by 0.11% were the top losers.

Meanwhile, India Ratings and Research in its latest report has said Non-bank finance companies (NBFCs) may rely more on banks for their funding requirements as interest rates are hardening in the capital market. It stated as the sector moves towards banks for meeting its funding requirements, smaller NBFCs could witness a sharp increase in their funding costs. It mentioned ‘The borrowings of non-bank finance companies (NBFCs) could get skewed to banks in FY23, given the hardening of rates in the capital markets.’

It stated the shift in the NBFCs' funding mix in FY23 will be driven by a rise in the proportion of short-term funding by way of commercial papers and debenture funding getting replaced by bank funding to a certain extent. A huge quantum of borrowings to be raised by large NBFCs would lead to a further increase in the banks' exposure to the sector, and small NBFCs thus could face crowding out.

It further said with the rise in interest rates, following a 90 basis points (bps) increase in repo rate by RBI in two tranches, NBFCs would see a faster increase in the incremental funding cost than that for banks on account of their institutional funding. It noted around one-third of the NBFCs' borrowings would come up for refinancing in FY23. Furthermore, bank funding on the NBFC balance sheet is mostly floating in nature and would also witness upward repricing.

The CNX Nifty is currently trading at 16022.30, up by 55.65 points or 0.35% after trading in a range of 15993.70 and 16070.85. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Apollo Hospital up by 2.37%, Sun Pharma Inds. up by 1.78%, Dr. Reddy's Lab up by 1.42%, Tata Consumer Product up by 1.29% and Kotak Mahindra Bank up by 1.28%. On the flip side, JSW Steel down by 0.94%, NTPC down by 0.71%, UPL down by 0.60%, Axis Bank down by 0.52% and BPCL down by 0.18% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 216.64 points or 0.82% to 26,695.41, Taiwan Weighted strengthened 76.14 points or 0.53% to 14,400.82, Hang Seng increased 50.33 points or 0.24% to 20,848.28, Jakarta Composite soared 28.80 points or 0.43% to 6,669.79, Shanghai Composite gained 10.21 points or 0.31% to 3,294.50 and KOSPI rose 6.92 points or 0.3% to 2,335.53.

On the flip side, Straits Times trembled 25.80 points or 0.82% to 3,102.89.