Benchmarks continue to trade in red in morning deals

Indian equity benchmarks erased some initial losses but continued to trade in red in morning deals, tracking negative cues from Asian and global markets. Traders remained cautious with exchange data showing that Foreign Portfolio Investors were net sellers, offloading shares worth Rs 144.73 crore. Investors also remained on sidelines ahead of the index of industrial production (IIP) or industrial growth data to be out later in the day and India's retail inflation data for January, due on Monday.  However, losses remain capped as traders took some support with a domestic ratings agency -- Icra Ratings stating that the RBI's rate hike will not impact collection efficiencies for non-bank lenders. It said this is so primarily because of the collaterals given by borrowers and the priority they accord to repayments. On the global front, Asian markets are trading mostly in red amid nagging concerns about the U.S. economy and the future pace of Fed rate hikes.

The BSE Sensex is currently trading at 60605.36, down by 200.86 points or 0.33% after trading in a range of 60501.74 and 60774.14. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.02%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Industrials up by 0.57%, Capital Goods up by 0.53%, Telecom up by 0.46%, PSU up by 0.30% and Bankex up by 0.12%, while Utilities down by 1.33%, Metal down by 1.19%, Power down by 0.93%, Energy down by 0.86% and Oil & Gas down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 0.88%, Bajaj Finance up by 0.87%, SBI up by 0.87%, Larsen & Toubro up by 0.39% and Mahindra & Mahindra up by 0.38%. On the flip side, HCL Technologies down by 2.37%, Tata Steel down by 1.57%, Reliance Industries down by 1.09%, Sun Pharma down by 0.94% and Wipro down by 0.89% were the top losers.

Meanwhile, a day after the Reserve Bank delivered another rate hike, a domestic ratings agency -- Icra Ratings has said the increases will not impact collection efficiencies for non-bank lenders. It said this is so primarily because of the collaterals given by borrowers and the priority they accord to repayments.

The RBI has hiked rates in five consecutive policy reviews since May 2022 in order to curb inflation, which has led to an overall jump in the interest rates in the system. It said typically housing loans and loans against property pools carry interest rate risks. It added that the collection efficiency is expected to remain robust on the back of strong outlook for majority of the sectors though impact of the uncertain global environment is difficult to ascertain at present.

Besides, it said non-bank finance companies (NBFCs) and housing finance companies are reporting collection efficiencies of 97-105 per cent for the first nine months of the fiscal, as per an analysis of retail pools securitised by such lenders. Securitisation is the bunching together of retail loans to form a pool which is passed on to another entity for upfront payments. The healthy collections are on improved economic activity, a favourable operating environment and non-banks returning to normalcy after two years of interrupted operations during the pandemic.

The CNX Nifty is currently trading at 17829.25, down by 64.20 points or 0.36% after trading in a range of 17801.00 and 17871.55. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Adani Ports &SEZ up by 1.78%, HDFC Life Insurance up by 1.43%, UPL up by 1.10%, Bajaj Finserv up by 0.93% and Bajaj Finance up by 0.89%. On the flip side, HCL Technologies down by 2.41%, Adani Enterprises down by 2.39%, Hindalco down by 1.87%, Tata Steel down by 1.57% and JSW Steel down by 1.15% were the top losers.

Asian markets are trading mostly in red; Taiwan Weighted lost 12.84 points or 0.08% to 15,585.87, Hang Seng declined 387.11 points or 1.82% to 21,237.25, Shanghai Composite weakened 19.53 points or 0.6% to 3,250.85, KOSPI dropped 13.5 points or 0.54% to 2,468.02, Jakarta Composite plunged 91.79 points or 1.35% to 6,805.58 and Straits Times fell 9.33 points or 0.28% to 3,350.15, while Nikkei 225 surged 65.08 points or 0.24% to 27,649.43.