Markets remain firm on sustained buying support

Mirroring their Asian peers, Indian equity markets were trading in fine fettle, with Sensex and Nifty crossing 60500 and 18050 levels, in the noon session due to buying in basic materials, metal and consumer durables stocks. Gains in frontline blue chip stocks such as Bajaj Finserv, Bharti Airtel and Titan Company also helped to lift the markets. Continuous buying activity by FIIs supported traders’ sentiments. Foreign Institutional Investors (FIIs) were stood as net buyers in the capital markets, as they purchased shares worth Rs 2,049.65 crore on Monday, exchange data showed. Traders overlooked report stating that India industrial output growth weakens in July. Industrial production logged an annual growth of 2.4 percent in July, much weaker than June's 12.7 percent expansion and the 4.3 percent expected increase. Meanwhile, country's chief economic adviser, V. Anantha Nageswaran stated that ‘India does not need to defend the rupee because its economic fundamentals are such that the currency can take care of itself’. On the global front, all Asian markets were trading higher ahead of U.S. inflation data which is expected to show ease in August, reducing pressure for more interest rate hikes.

The BSE Sensex is currently trading at 60559.29, up by 444.16 points or 0.74% after trading in a range of 60381.02 and 60599.10. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.45%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Basic Materials up by 1.04%, Metal up by 1.01%, Consumer Durables up by 0.83%, FMCG up by 0.76% and Consumer Discretionary up by 0.51%, while Oil & Gas was down by 0.09% was the only losing index on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 4.26%, Bharti Airtel up by 1.88%, Titan Co up by 1.64%, Power Grid up by 1.47% and HDFC was up by 1.27%. On the flip side, HCL Tech down by 0.39%, Dr. Reddy's Lab down by 0.29%, TCS down by 0.22%, Mahindra & Mahindra down by 0.19% and Tech Mahindra was down by 0.07% were the top losers.

Meanwhile, ratings agency Crisil in its latest report has said that non-bank finance companies’ (NBFCs) asset growth will jump to a four-year high of 11-12 per cent this fiscal (FY23). It noted that the NBFCs segment has witnessed three consecutive years of constrained asset growth due to the COVID-19 pandemic, with the growth coming at 5 per cent in FY22. It said intense competition from banks and the rising interest rate scenario will limit the competitiveness of NBFCs in certain segments, leading them to focus on higher-yield segments for growth.

According to the report, vehicle finance, which constitutes nearly half of the assets for NBFCs, will grow at 11-13 per cent in FY23, as against 3-4 per cent in FY22 and FY21. Used vehicle financing, with its higher yields, will see higher growth and will drive the NBFC volume in vehicle finance. Other trends which will help asset growth will be improvements in vehicle sales, strong demand from infra sector and need for fleet replacements, it said, adding that new launches will drive car and utility vehicle sales. Competition from banks and the rising interest rate scenario will take the edge off NBFCs in the new vehicle finance segment and allow banks to gain market share in this space.

The report further said unsecured loans comprise consumer loans (personal loans and consumer durable loans) and business loans to small and medium enterprises (SMEs). Consumer loans will be supported by rising retail spend across consumer durables, travel, and other personal consumption activities, while business loans will benefit from macroeconomic tailwinds given the expected growth of 7.3 per cent in gross domestic product (GDP) this fiscal. Loans against property are also expected to touch 10-12 per cent growth, though competition will keep higher growth at bay in this space, too.

The CNX Nifty is currently trading at 18070.85, up by 134.50 points or 0.75% after trading in a range of 18015.45 and 18079.10. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 4.35%, HDFC Life Insurance up by 2.32%, Grasim Industries up by 1.87%, Bharti Airtel up by 1.81% and Titan Co up by 1.70%. On the flip side, Cipla down by 0.71%, HCL Tech. down by 0.36%, Dr. Reddy's Lab down by 0.30%, TCS down by 0.24% and Mahindra & Mahindra down by 0.20% were the top losers.

All Asian markets were trading higher; Nikkei 225 surged 72.52 points or 0.25% to 28,614.63, Taiwan Weighted strengthened 86.98 points or 0.59% to 14,894.41, KOSPI rose 68.41 points or 2.87% to 2,452.69, Straits Times advanced 16.25 points or 0.5% to 3,290.97, Shanghai Composite gained 3.36 points or 0.1% to 3,265.41, Hang Seng increased 77.74 points or 0.4% to 19,439.99 and Jakarta Composite was up by 66.10 points or 0.91% to 7,320.56.