Domestic indices trade in fine fettle in late morning deals

Domestic equity indices continued to trade in fine fettle in late morning deals as market participants indulged in enlarging positions. Traders got support with strong quarterly updates from finance companies and banks. The sentiment got a boost as Commerce and Industry Minister Piyush Goyal said that the country's goods exports touched USD 447 billion till the last count for 2022-23 fiscal year as against USD 422 billion in 2021-22. Upstream oil companies rose after the government cut its windfall tax on crude oil to zero, and halved it on diesel.

On the global front, Asian markets were trading mostly higher despite broadly negative cues from Wall Street overnight. Back home, on the sectoral front, traders were seen pilling up position in Capital Goods, Realty, Consumer Durables, Industrials and FMCG, while selling was witnessed in  Utilities, Power, Auto, PSU and Oil & Gas. In stock specific development, Larsen & Toubro (L&T) moved higher after the company announced it won mega orders for its hydrocarbon business. 

The BSE Sensex is currently trading at 59459.41, up by 352.97 points or 0.60% after trading in a range of 59094.40 and 59562.78. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.03%, while Small cap index up by 0.76%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.47%, Realty up by 1.25%, Consumer Durables up by 1.15%, Industrials up by 1.15% and FMCG up by 0.84%, while Utilities down by 1.03%, Power down by 0.98%, Auto down by 0.45%, PSU down by 0.42% and Oil & Gas down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.72%, HDFC up by 2.24%, HDFC Bank up by 2.24%, ITC up by 1.81% and Titan up by 1.30%. On the flip side, Indusind Bank down by 1.34%, SBI down by 1.02%, NTPC down by 0.84%, Maruti Suzuki down by 0.73% and Reliance Industries down by 0.72% were the top losers.

Meanwhile, credit rating agency Crisil in its latest report said that banks' gross non-performing assets (NPAs) will reduce further to a decadal low of 3.8 per cent by end of FY2023-24. The agency estimates NPAs to reduce to 4.2 per cent by end of the just concluded FY23 as against 5.9 per cent in the year-ago period. It had earlier estimated NPAs to come at 4 per cent by end of FY24.

Crisil said a major factor influencing the bank NPAs is the improvement in the high-value corporate loanbooks, where the gross NPAs are slated to come below 2 per cent. Corporates have been reducing their leverage through a string of measures, including prepayment of loans as well. Additionally, strengthened risk management and underwriting is also helping the lenders towards lowering the NPAs.

The agency said the banking sector is better capitalised benefiting from recent capital infusion, but the ability to attract deposits to keep pace with an increasing credit growth will be a monitorable. It said the net interest margins, which have increased in FY23 amid a hiking interest rate cycles as the transmission to lending is faster than to deposits, will moderate in FY24. Amid global events, which include some banks in the US going down and frantic actions by regulators in Europe to prevent the contagion, the agency said the Indian banking sector will be able to handle the volatilities. Among other factors, India has had lower levels of interest rate hikes, healthier bank balance sheets with record low NPAs, depositor-funded liabilities and better regulations on asset and investment book management.

The CNX Nifty is currently trading at 17495.35, up by 97.30 points or 0.56% after trading in a range of 17402.70 and 17514.10. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.94%, HDFC Bank up by 2.32%, HDFC up by 2.19%, ITC up by 1.89% and Titan up by 1.22%. On the flip side, Adani Enterprises down by 1.84%, Eicher Motors down by 1.68%, Indusind Bank down by 1.49%, SBI down by 1.02% and Apollo Hospital down by 0.79% were the top losers.

Asian markets were trading mostly in green; KOSPI increased 13.19 points or 0.53% to 2,493.70, Jakarta Composite gained 3.32 points or 0.05% to 6,836.50 and Straits Times rose 15.94 points or 0.48% to 3,327.06. However, Nikkei 225 slipped 456.62 points or 1.61% to 27,830.80.