Benchmarks continue to trade in negative zone

Indian bourses continue to trade in red terrain in noon deals as selling appeared in Realty, Metal and Healthcare stocks, with Sensex and Nifty tumbling by 98 and 30 points, respectively. Sentiments were downbeat as a private report stated that India's retail inflation accelerated to a five month high of 7.30% in September due to surging food prices, staying well above the Reserve Bank of India's (RBI) upper tolerance band for a ninth month. However, markets trimmed some of their losses with Prime Minister Narendra Modi’s statement that inflation in the country is much lower than that in developed countries. He said ‘Compared to developed countries, inflation is quite low, for example the British are witnessing the worst inflation in the last 50 years, Americans are facing highest inflation of the last 45 years, interest rates are very high... compared to those countries, the nation's inflation is low because buoyant economy, our country's economy is very vibrant’. On the global front, Asian markets were trading mostly lower.

The BSE Sensex is currently trading at 57892.89, down by 98.22 points or 0.17% after trading in a range of 57582.99 and 58027.52. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.26%, while Small cap index was down by 0.06%.

The few gaining sectoral indices on the BSE were Bankex up by 0.22%, Capital Goods up by 0.07%, Power up by 0.03%, while Realty down by 1.31%, Metal down by 1.24%, Healthcare down by 0.72%, Consumer Durables down by 0.66% and TECK was down by 0.63% were the losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.21%, Axis Bank up by 1.79%, Wipro up by 0.64%, Bajaj Finserv up by 0.62% and Ultratech Cement was up by 0.50%. On the flip side, Dr. Reddy's Lab down by 2.47%, Indusind Bank down by 1.96%, Titan Co down by 1.26%, TCS down by 1.25% and Tech Mahindra was down by 1.25% were the top losers.

Meanwhile, ICRA Ratings in its report has said that it carries a stable outlook for the non-banking financial companies-microfinance institutions (NBFC-MFIs), driven by the expected healthy growth in the assets under management (AUM) and the improvement in profitability. NBFC-MFIs reported a healthy rebound in the growth in their AUM in H2 FY2022 after having witnessed subdued growth in H1 FY2022. The industry saw accelerated disbursements in H2 FY2022, given the buoyant demand, healthy systemic liquidity, and the steady increase in economic activity. The disbursements are expected to remain healthy in the current year. It expects NBFC-MFIs and micro finance focused small finance banks (SFBs) to witness growth of 22-25% in their AUM in FY2023.

According to the report, the asset quality had weakened quite sharply in Q1 FY2022 because of the localised lockdowns imposed by various states on account of the second wave of the pandemic, which impacted the collection process of the entities. It also impacted the recovery in the cash flows of the affected borrowers. Therefore, the marginal borrowers slipped into the non-performing advances (NPA)/overdue category during this period as reflected in the increase in the 90+ days past due (dpd) in H1 FY2022. Nevertheless, the industry saw gradual improvement in H2 FY2022 and Q1 FY2023.

It stated that the improvement in collections helped the industry register an improvement in delinquencies in H2 FY2022 followed by a further recovery in Q1 FY2023. The 90+ dpd of 5.7% (for ICRA sample of NBFC-MFIs) as on March 31, 2022 was higher than rating agency’s estimate of 5% as slippages from the restructured book remained high. However, with further write-offs and recoveries, the 90+ dpd improved to around 5% by June 30, 2022. For FY2023, a significant decline in delinquencies is expected driven by some recoveries and write-offs by the entities. The ratings agency retains its estimate of 90+ dpd at around 2% by March 31, 2023. On the liquidity front, NBFC-MFIs and SFBs continued to maintain a healthy liquidity profile in FY2022 though a marginal decline was seen to reduce the negative carry.

The CNX Nifty is currently trading at 17210.65, down by 30.35 points or 0.18% after trading in a range of 17116.60 and 17261.80. There were 18 stocks advancing against 30 stocks declining, while 2 stocks remain unchanged on the index.

The top gainers on Nifty were Adani Enterprises up by 2.58%, Asian Paints up by 2.42%, Axis Bank up by 2.05%, Power Grid Corp up by 1.03% and Bajaj Finserv was up by 1.02%. On the flip side, Divi's Lab down by 3.40%, Dr. Reddy's Lab down by 2.53%, Indusind Bank down by 2.26%, ONGC down by 1.76% and Eicher Motors was down by 1.57% were the top losers.

Asian markets were trading mostly lower; Taiwan Weighted dropped 596.25 points or 4.35% to 13,106.03, KOSPI fell 40.77 points or 1.83% to 2,192.07, Jakarta Composite lost 14.24 points or 0.2% to 6,980.16, Nikkei 225 slipped 714.86 points or 2.64% to 26,401.25, Hang Seng was down by 300.99 points or 1.75% to 16,915.67. On the flip side, Straits Times advanced 1.19 points or 0.04% to 3,108.66 and Shanghai Composite was up by 3.57 points or 0.12% to 2,977.72.