Bourses continue lackluster trade in late afternoon session

Indian equity markets continued their lackluster trade in late afternoon session. Traders were seen piling up positions in Metal sector, while selling was witnessed in IT and TECK sectors. As for broader indices, Small cap index remained in green, while BSE Mid cap index continued to trade in red. Traders remained concerned after Bank of England raised interest rates to 3% on Thursday from 2.25%, its biggest rate rise since 1989 as it warned of a “very challenging” outlook for the economy. The central bank forecasts inflation will hit a 40-year high of around 11% during the current quarter, but that Britain has already entered a recession that could potentially last two years - longer than during the 2008-09 financial crisis. Traders took note of report that Finance minister Nirmala Sitharaman called on businesses to step up investment in energy resources, asserting that the country offers policy stability, transparency and a consultative mode of governance to promote investment.

On the global front, Asian markets were trading mostly in green, as Chinese stocks logged a strong rally on renewed speculation over the potential lifting of COVID restrictions. European markets were trading higher following strong gains in Asia and as traders looked ahead to key US jobs data later in the session.

Back home, the BSE Sensex is currently trading at 60733.93, down by 102.48 points or 0.17% after trading in a range of 60666.01 and 60989.41. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.06%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Metal up by 2.38%, Capital Goods up by 0.42%, Industrials up by 0.41%, Energy up by 0.39% and Power was up by 0.33%, while IT down by 0.84%, TECK down by 0.83%, Healthcare down by 0.61%, Bankex down by 0.38% and FMCG was down by 0.35% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 3.91%, Ultratech Cement up by 1.99%, Tata Steel up by 1.81%, Reliance Industries up by 1.14% and Asian Paints up by 0.83%. On the flip side, Infosys down by 1.64%, Dr. Reddy's Lab down by 1.58%, Hindustan Unilever down by 1.05%, Power Grid down by 1.05% and HDFC Bank down by 0.92% were the top losers.

Meanwhile, credit rating agency ICRA in its latest report has said that the non-banking financial companies-housing finance companies (NBFC-HFC) sector has registered a year-on-year on-book portfolio growth of 15% to Rs 12.7 crore as on June 30, 2022. The on-book portfolio growth in Q1 FY2023 was high as the last two fiscals witnessed moderate growth in the first quarter. In its recent research report, ICRA expects the overall on-book portfolio growth for FY2023 to be lower than that seen in Q1 FY2023. Moreover, the rising interest rate scenario may moderate the growth to some extent

According to the report, the asset quality recovery continued in Q1 FY2023 and the gross non-performing assets (GNPAs) declined by 6 basis points (bps) to 3.1% as on June 30, 2022, from 3.2% as on March 31, 2022, due to increase in the on-book portfolio and recovery in the non-housing segment of some large HFCs. This is against the general trend of an increase in the GNPAs in the first quarter of any fiscal. It noted that the industry also continued to witness good recoveries from the restructured book and with growth in the assets under management (AUM), the standard restructured book declined to 1.3% of AUM as on June 30, 2022, from 1.7% as on March 31, 2022.

The report further said the HFCs have been maintaining healthy on-balance sheet liquidity for the last few quarters and have gradually reduced their reliance on short-term funding sources like CP, which has helped improve asset-liability mismatches in the near-term buckets. With the reduced uncertainties and increasing interest rate scenario, it said HFCs are expected to reduce on-balance sheet liquidity from the current high level, nevertheless, the same is expected to remain comfortable.

The CNX Nifty is currently trading at 18050.60, down by 2.10 points or 0.01% after trading in a range of 18017.15 and 18108.00. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 6.03%, Hindalco up by 4.00%, Bajaj Finserv up by 3.94%, Adani Ports up by 3.13% and JSW Steel up by 2.32%. On the flip side, Hero MotoCorp down by 2.32%, Infosys down by 1.67%, BPCL down by 1.54%, Dr. Reddy's Lab down by 1.53% and HDFC Life Insurance down by 1.50% were the top losers.

Asian markets were trading mostly in green, Hang Seng increased 821.65 points or 5.36% to 16,161.14, Shanghai Composite gained 72.99 points or 2.43% to 3,070.80, Taiwan Weighted strengthened 40.11 points or 0.31% to 13,026.71, Straits Times advanced 28.13 points or 0.91% to 3,130.64, KOSPI rose 19.26 points or 0.83% to 2,348.43 and Jakarta Composite was up by 10.96 points or 0.16% to 7,045.53. On the flip side, Nikkei 225 was down by 463.65 points or 1.68% to 27,199.74.

European markets were trading higher, UK’s FTSE 100 increased 47.16 points or 0.66% to 7,235.79, France’s CAC increased 50.97 points or 0.82% to 6,294.25 and Germany’s DAX was up by 86.28 points or 0.66% to 13,216.47.