Sensex, Nifty hold gains in late morning session

Indian equity benchmarks were holding notable gains in late morning session, despite negative cues from other Asian markets. Heavy buying at telecom and capital goods counters helped key indices to remain higher. Traders were getting relief, as Chief Economic Advisor (CEA) V Anantha Nageswaran said that the depreciation of the rupee against the US dollar has been lower than other major global currencies such as the Euro, the British pound and the Japanese yen. He attributed depreciation in rupee and other currencies against the US dollar to the aggressive monetary tightening by the US Federal Reserve.

However, gains were limited, amid a private report stating that India’s economic activity showed early signs of cooling off in June as acute price pressures, rising interest rates, and a falling rupee dampened sentiment after a strong showing the previous month.

On the global front, Asian markets were trading mostly in red, after the Bank of Japan maintained its negative interest rates and yield targets, as widely expected, and forecast inflation to breach the 2 percent target before falling back in the next fiscal year. The policy board, governed by Haruhiko Kuroda, on Thursday, voted 8-1, to maintain a negative interest rate of -0.1 percent on current accounts that financial institutions maintain at the central bank.

The BSE Sensex is currently trading at 55602.58, up by 205.05 points or 0.37% after trading in a range of 55270.75 and 55626.45. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.98%, while Small cap index was up by 0.73%.

The top gaining sectoral indices on the BSE were Telecom up by 2.16%, Capital Goods up by 1.28%, Industrials up by 1.03%, Realty up by 0.85% and Basic Materials up by 0.84%, while Consumer Durables down by 0.14% was the only losing index on BSE.

The top gainers on the Sensex were Indusind Bank up by 7.15%, Bharti Airtel up by 1.10%, Axis Bank up by 1.04%, Bajaj Finance up by 1.02% and Bajaj Finserv up by 0.94%. On the flip side, Tech Mahindra down by 1.22%, Reliance Industries down by 0.73%, Kotak Mahindra Bank down by 0.62% and NTPC down by 0.03% were the top losers.

Meanwhile, rating agency ICRA in its latest report has said that the growth in assets under management (AUM) of non-banking financial companies (NBFCs) and housing finance companies (HFCs) is likely to be at 9-11 per cent in FY23 compared to a rise of 9.5 per cent in the last fiscal. In fiscal 2022, the rise in AUM of NBFCs and HFCs was largely driven by the steep growth witnessed in Q4 FY22.

The report said while HFCs grew close to 10 per cent, the NBFC retail segment rose 8.5 per cent and the NBFC wholesale segment by about 12 per cent in the previous fiscal. It said the sharp growth in the NBFC wholesale segment was attributable to the low base and the uptick in credit by large and parent-backed NBFCs, which increased their supply chain, capital market and other corporate exposures.

On the sector funding resources, the agency said the non-convertible debenture (NCD) issuances by NBFCs and HFCs in Q1 FY2023 hit a multi-quarter low -- around 28 per cent lower than Q1 FY2022 and 65 per cent less than Q1 FY2021. The issuances were lower by approximately 22-28 per cent compared to Q1 FY2020 and Q1 FY2019. The hike in the repo rates by the Reserve Bank of India (RBI) in May and June 2022, along with the elevated inflation prints, have affected investor appetite.  While the overall issuances were affected by the sharp fall in the participation of public sector undertakings (PSUs) operating in this space, private entity issuances were also down in Q1 FY2023 on a year-on-year basis.

It said at the same time, commercial paper (CP) volumes remained range-bound for the sector over the last two fiscals. However, overall CP issuances saw some uptick in the last few months. Incrementally, in view of the increasing interest rate scenario and competitive pressures, entities may look to increase the share of short-term (ST) funding to support margin.

The CNX Nifty is currently trading at 16583.80, up by 62.95 points or 0.38% after trading in a range of 16483.90 and 16592.10. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 7.02%, UPL up by 2.46%, Hindalco up by 2.23%, Adani Ports & SEZ up by 1.61% and Tata Consumer Products up by 1.19%. On the flip side, Tech Mahindra down by 1.17%, SBI Life Insurance down by 0.96%, Reliance Industries down by 0.83%, Kotak Mahindra Bank down by 0.77% and ONGC down by 0.08% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 13.92 points or 0.42% to 3,290.80, Straits Times trembled 22.61 points or 0.71% to 3,147.68, Jakarta Composite lost 54.09 points or 0.79% to 6,820.65 and Hang Seng decreased 285.39 points or 1.37% to 20,604.83. On the flip side, Taiwan Weighted strengthened 136.23 points or 0.92% to 14,869.45, Nikkei 225 surged 41.83 points or 0.15% to 27,722.09 and KOSPI rose 17.72 points or 0.74% to 2,404.57.