Sensex, Nifty remain higher in late morning session

Indian equity benchmarks remained higher in late morning session, with both Sensex and Nifty trading in green terrain, on the back of positive cues from other Asian markets.  Domestic sentiments remained optimistic, after Reserve Bank Governor Shaktikanta Das said the rupee is holding up relatively well when compared to the currencies of emerging market peers and advanced economies. He said RBI has been supplying US dollars to the market to ensure an adequate supply of liquidity to the market and also clarified that the central bank does not target a particular level for the currency. Besides, the extension of government's flagship urban housing scheme, Prime Minister Awas Yojana (PMAY) Urban up to March 2024 is under consideration by the Ministry of Housing.

On the global front, Asian markets were trading mostly in green, after the manufacturing sector in Japan continued to expand in July, albeit at a slower pace, the latest survey from Jibun Bank said on Friday with a manufacturing PMI score of 52.2. That's down from 52.7 in June, although it remains above the boom-or-bust line of 50 that separates expansion from contraction.

Back home, auto ancillaries stocks were in focus, as rating agency ICRA in its latest report has said that annual revenue of around 49 auto ancillaries is expected to grow 8-10 percent in the current fiscal year (FY23) from Rs 3 lakh crore. It said the revenue increase is expected on the back of stable demand and gradual easing of supply-chain issues in FY23.

The BSE Sensex is currently trading at 55819.75, up by 137.80 points or 0.25% after trading in a range of 55685.45 and 56006.22. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.01%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Bankex up by 0.85%, Metal up by 0.70%, Basic Materials up by 0.61%, Auto up by 0.43% and Realty up by 0.37%, while TECK down by 1.01%, IT down by 0.94%, Power down by 0.68%, Oil & Gas down by 0.64% and Utilities down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.63%, Titan Co up by 1.36%, HDFC Bank up by 1.18%, HDFC up by 1.01% and Reliance Industries up by 0.84%. On the flip side, Infosys down by 2.01%, NTPC down by 1.13%, Tech Mahindra down by 0.97%, HCL Tech. down by 0.72% and Indusind Bank down by 0.70% were the top losers.

Meanwhile, S&P Global Ratings in its latest report has said that non-performing loans (NPLs) of banks are expected to decline to 5-5.5 per cent of the total advances by March 2024. Similarly, it forecast the credit costs to stabilise at 1.5 per cent for fiscal 2023 and further normalise to 1.3 per cent, making credit costs comparable to those of other emerging markets and India's 15-year average. The small and midsize enterprise sector and low-income households are vulnerable to rising interest rates and high inflation, but it expects these risks to be limited. With an economic pick-up, it said residual stress for these segments should start abating and NPL recoveries are likely to also gain momentum.

The rating agency said India's economic growth prospects should remain strong over the medium term, with GDP expanding 6.5-7 per cent annually in fiscal years 2024-2026. It said that the economy's long-term higher growth rate versus peers highlights its historical resilience. It also said India's wide range of structural trends, including healthy demographics and competitive unit labour costs, work in its favour. Additionally, it said the government is likely to remain supportive of the system and there is a very high likelihood the government will continue to support public-sector banks, notwithstanding plans to privatise two such banks.

According to the report, in the next few years, loan growth to stay somewhat in line with the trajectory of nominal GDP, and loan growth to the retail sector to continue to outperform the corporate sector. It pointed out that corporate borrowing is also picking up momentum, with both working-capital needs and capital expenditure-related growth driving demand. Still, it said if risk management does not improve, the coming growth cycle could produce a new crop of sour loans.

The CNX Nifty is currently trading at 16653.85, up by 48.60 points or 0.29% after trading in a range of 16610.90 and 16704.80. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were UPL up by 3.34%, Eicher Motors up by 2.51%, Kotak Mahindra Bank up by 1.70%, Hindalco up by 1.45% and Titan Co up by 1.34%. On the flip side, Infosys down by 2.05%, NTPC down by 1.23%, BPCL down by 1.10%, Tata Consumer Products down by 1.01% and Apollo Hospital Ent. down by 0.92% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 119.34 points or 0.43% to 27,922.34, Hang Seng increased 34.01 points or 0.17% to 20,608.64, Jakarta Composite soared 28.45 points or 0.41% to 6,892.58 and Straits Times advanced 22.82 points or 0.72% to 3,175.12. On the flip side, Shanghai Composite declined 7.61 points or 0.23% to 3,264.39, KOSPI fell 13.32 points or 0.55% to 2,395.84 and Taiwan Weighted dropped 19.50 points or 0.13% to 14,918.20.