Domestic indices extend opening losses in early deals

Indian equity indices made flat-to-negative start amid mixed global cues. Markets tried to recover their losses but failed to do so and extended their losses in early deals. Domestic indices are trading lower with cut of around 0.40% each amid foreign fund outflows. Foreign institutional investors (FII) sold shares worth Rs 628.07 crore on January 3, as per provisional data available on the NSE. Traders took a note of report that Micro-Finance Institution Network (MFIN), a self-regulatory organisation (SRO) recognised by RBI, said that outstanding loan portfolio of the micro-finance institution (MFI) sector across India will increase around 20.3 per cent at Rs 3.25 lakh crore in 2022-23 compared to the previous fiscal. Besides, investors are eyeing the services PMI data to be out later in the day.

On the global front, Asian markets are trading mixed as investors keenly awaiting minutes from the Federal Reserve's most recent meeting to gauge the path forward for interest rates. Traders also reacted to data showing that the manufacturing sector in Japan continued to contract in December, and at a slightly faster rate, with manufacturing PMI score of 48.9.

Back home, road logistics sector stocks were in focus as rating agency Icra revised its growth estimates for the Indian road logistics sector to 11-13 per cent for the current fiscal against the previous estimate of 7-9 per cent. In stock specific development, Orient Cement surged amid reports that Adani Group is in talks to buy promoter stake in the company.

The BSE Sensex is currently trading at 61054.43, down by 239.77 points or 0.39% after trading in a range of 61026.73 and 61327.21. There were 5 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was fell 0.70%, while Small cap index was down by 0.63%.

The top losing sectoral indices on the BSE were Metal down by 1.87%, Realty down by 1.32%, Utilities down by 1.01%, Energy down by 0.86%, Oil & Gas down by 0.85%, while there was no gainer on BSE sectoral front.

The top gainers on the Sensex were Sun Pharma up by 1.08%, Axis Bank up by 0.35%, ICICI Bank up by 0.25%, Ultratech Cement up by 0.19% and Hindustan Unilever up by 0.14%. On the flip side, Tata Steel down by 1.52%, Tata Motors down by 1.42%, Wipro down by 1.17%, Reliance Industries down by 0.88% and Infosys down by 0.79% were the top losers.

Meanwhile, the Micro-Finance Institution Network (MFIN), a self-regulatory organisation (SRO) recognised by RBI, has said that outstanding loan portfolio of the micro-finance institution (MFI) sector across India will increase around 20.3 per cent at Rs 3.25 lakh crore in 2022-23 compared to the previous fiscal. During the last fiscal, the total outstanding of the MFI sector was Rs 2.7 lakh crore, and the sector had created around 1.32 crore jobs in the country since 2000.

MFIN CEO Alok Misra said ‘The MFI sector's outstanding for the current fiscal will be around Rs 3.25 lakh crore. There will be a 20.3 per cent rise over the previous fiscal year’. The collection efficiency ratio of the sector during the pandemic of 2021 and 2022 had been affected as group gatherings did not take place properly. He said ‘But the collection efficiency ratio at present has increased to 97 per cent for the sector from 70 per cent during the pandemic’.

According to an MFIN study, the total number of MFI beneficiaries in the country is 6.2 crore. Misra said as per a study conducted by NCAER, the MFI sector's contribution to the overall GDP is 2.7 per cent. He also said the share of West Bengal in terms of the outstanding loan portfolio is 17 per cent at Rs 38,000 crore. Referring to the RBI guidelines for the NBFC-MFI sector announced in March 2022, he said a level playing field had been created among the banks, NBFC-MFIs and NBFCs in terms of charging interest rates on loans as interest caps had been lifted by the apex bank.

MFIN said owing to the rise in the cost of funds, the average interest rate charged by NBFC-MFIs is around 24 per cent. Earlier, the average interest cost was 22.5 per cent, but it has increased now due to a rise in repo rates by RBI. The MFIN has 47 members in its network in West Bengal, which includes Bandhan Bank, Arohan Financial Services, Village Financial Services and Ujjivan Small Finance Bank among others.

The CNX Nifty is currently trading at 18159.55, down by 73.00 points or 0.40% after trading in a range of 18148.85 and 18243.00. There were 10 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were HDFC Life Insurance up by 2.00%, Sun Pharma up by 1.13%, SBI Life insurance up by 0.68%, Divi's Lab up by 0.40% and Axis Bank up by 0.38%. On the flip side, Hindalco down by 3.23%, JSW Steel down by 2.25%, Tata Motors down by 1.68%, ONGC down by 1.40% and Tata Steel down by 1.39% were the top losers.

Asian markets are trading mixed; Nikkei 225 slipped 327.13 points or 1.25% to 25,767.37, Straits Times fell 0.36 points or 0.01% to 3,245.44, Taiwan Weighted lost 2.61 points or 0.02% to 14,221.51 and Jakarta Composite was down by 15.41 points or 0.22% to 6,873.35. On the other hand, Hang Seng jumped 417.93 points or 2.07% to 20,563.22, KOSPI surged 32.23 points or 1.45% to 2,250.91 and Shanghai Composite was up by 10.01 points or 0.32% to 3,126.52.