Benchmarks continue to trade higher in morning deals

Indian equity benchmarks trimmed some gains but continued to trade higher in morning deals, led by gains in IT, TECK and Realty stocks amid strong global sentiments. Increased buying by foreign institutional investors also supported the markets. Foreign institutional investors extended their buying streak in Indian equities for the fourth consecutive session on Wednesday. Over the past four sessions, FIIs have bought a net Rs 4,517 crore worth of equities. Sentiments remained positive with Finance minister Nirmala Sitharaman’s statement that the effort of the government over the years has been to increase public expenditure with a view to promote growth. However, gains remain capped as some concern came with the commerce ministry in its latest data showing that contracting for the second month in a row, India's Merchandise exports dipped by 6.58 per cent to $32.91 billion in January 2023 as against $ 35.23 billion in the same month last year due to slowdown in global demand, even as the trade deficit touched a 12-month low of $17.75 billion during the month.

On the global front, Asian markets are trading mostly in green following the broadly positive cues from global markets overnight, as traders shrugged off concerns over the outlook for interest rates following the release of US inflation data and upbeat US retail sales data. These data will encourage the US Fed to continue aggressively raising interest rates in an effort to combat inflation.

The BSE Sensex is currently trading at 61554.74, up by 279.65 points or 0.46% after trading in a range of 61445.41 and 61682.25. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.56%, while Small cap index was up by 0.64%.

The top gaining sectoral indices on the BSE were IT up by 1.36%, TECK up by 0.89%, Realty up by 0.79%, Industrials up by 0.72% and Healthcare up by 0.72%, while there was no loser on the BSE sectoral front.

The top gainers on the Sensex were Tech Mahindra up by 3.75%, Wipro up by 1.07%, Asian Paints up by 1.04%, TCS up by 1.03% and Sun Pharma up by 0.95%. On the flip side, Hindustan Unilever down by 0.34%, Bajaj Finance down by 0.32%, Maruti Suzuki down by 0.23%, Bharti Airtel down by 0.15% and Indusind Bank down by 0.10% were the top losers.

Meanwhile, India Ratings in its latest report has said that microfinance players have already come out of the massive hit they took during the pandemic and are likely to report lower credit cost by the end of this fiscal, as growth momentum is on an upswing. It has revised the outlook on the microfinance sector to 'improving' from 'neutral' and has also maintained the stable rating outlook for FY24.

It expects the sector to notch up high double-digit growth of 20-30 per cent, on improved collections and disbursals. It sees the credit cost to improve to 1-3 per cent from 1.5-5 per cent this fiscal. It also said Microfinance institutions (MFIs) have already absorbed the impact of the pandemic by the December quarter. It expects the growth momentum to continue in FY24, as disbursements are picking up, which in turn will lead to higher growth.

According to India Ratings, there are two key risks for the microfinance sector over the next 12-18 months -- inflation and elections. These may impact cash-flows of borrowers in FY24 and in the first half of financial year 2024-25. It mentioned MFIs have incurred cumulative credit costs (credit cost to average AUM) of 11.1 per cent over FY21-H1FY23, as nearly 9 million borrowers were in default through the pandemic. However, it expects delinquencies and credit costs to normalise, as bulk of the portfolio now is based on post-pandemic disbursements and collection efficiencies at consolidated levels are steadily improving.

The CNX Nifty is currently trading at 18094.20, up by 78.35 points or 0.43% after trading in a range of 18061.15 and 18134.75. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 3.83%, ONGC up by 3.05%, Adani Enterprises up by 2.75%, Apollo Hospital up by 2.46% and Adani Ports &SEZ up by 2.32%. On the flip side, Hero MotoCorp down by 0.56%, BPCL down by 0.44%, Bajaj Finance down by 0.35%, SBI Life Insurance down by 0.34% and Hindustan Unilever down by 0.33% were the top losers.

Asian markets are trading mostly in green; Taiwan Weighted added 147.19 points or 0.95% to 15,580.08, Hang Seng advanced 479.97 points or 2.25% to 21,292.14, Shanghai Composite strengthened 25.36 points or 0.77% to 3,305.85, KOSPI increased 45.27 points or 1.86% to 2,473.17, Straits Times rose 38.99 points or 1.19% to 3,319.81 and Nikkei 225 surged 211.39 points or 0.77% to 27,713.25.

On the flip side, Jakarta Composite plunged 13.57 points or 0.2% to 6,900.97.