Domestic indices enlarge losses in late morning deals

Domestic equity indices added more losses in late morning deals as traders remained on sidelines ahead of India’s GDP data, and investors kept an eye on the federal debt ceiling debate in Washington ahead of the final trading day of May. Weak cues from other Asian markets too weighed on the domestic sentiments. Traders also remained concerned as private report flagged concerns regarding the achievement of the fiscal deficit target of 5.9 per cent of gross domestic product (GDP) for the financial year 2023-2024. It has identified several factors that contribute to the risk highlighted, which include- the potential shortfall in nominal GDP growth, lower tax buoyancy, a constrained budget for revenue expenditure, and ambitious goals for capital expenditure. On the sectoral front, traders were seen pilling up position in Consumer Durables, Healthcare, IT, Industrials and TECK, while selling was witnessed in Metal, Energy, Utilities, Bankex and Power. 

On the global front, Asian markets were trading in red as China’s manufacturing purchasing managers index slid for a second-straight month to 48.8, a steeper contraction than March’s 49.2. Back home, in the stock specific development,  Torrent Pharma hit a record high on the BSE after the company reported profit after tax of Rs 287 crore for the March quarter (Q4FY23), on back of healthy operational performance. 

The BSE Sensex is currently trading at 62575.93, down by 393.20 points or 0.62% after trading in a range of 62571.36 and 62876.77. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index up by 0.23%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.51%, Healthcare up by 0.44%, IT up by 0.42%, Industrials up by 0.23% and TECK up by 0.19%, while Metal down by 1.06%, Energy down by 0.85%, Utilities down by 0.77%, Bankex down by 0.76% and Power down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.38%, Tata Motors up by 1.34%, Sun Pharma up by 1.28%, Tech Mahindra up by 1.22% and HCL up by 0.82%. On the flip side, NTPC down by 1.64%, HDFC down by 1.57%, SBI down by 1.50%, Reliance Industries down by 1.41% and HDFC Bank down by 1.28% were the top losers.

Meanwhile, Credit Rating Agency ICRA in its latest report has said that the retail exposures of non-banking financial companies (NBFCs, excluding housing finance companies) are likely to expand by 12-14% in the current fiscal (FY24) with unsecured loans remaining the key driver; this follows the robust growth of 25% in FY23. The assets under management (AUM) exceeded Rs 14 trillion as of March 2023, with growth significantly surpassing expectations. 

According to the report, most asset segments had registered strong credit growth after the subdued performance during the Covid-19 pandemic years (FY2021-FY2022) with unsecured loans expanding the most, though on a lower base. NBFCs have been steadily improving their loan penetration by deepening and expanding/diversifying their target segments. The robust growth of 25% in AUM in FY2023 was on the back of the muted compound annual growth rate (CAGR) of 8% during the pandemic years (FY2021-FY2022); the AUM had increased at a CAGR of 19% during FY2019-FY2020. The growth revival witnessed since Q3 FY2022 continued sequentially, resulting in a strong overall growth in FY2023 as credit demand remained robust. 

The report further said NBFC retail exposure growth in FY2023 was powered by the unsecured segments (excluding microfinance) consisting of personal/consumer loans and unsecured business loans; this segment is estimated to have grown by about 45% in the last fiscal. The secured segment, consisting of vehicle loans, gold loans, mortgage-backed loans, etc., grew at a relatively moderate pace of about 17-18% during this period. Thus, the share of the unsecured segment of NBFCs increased to about 23% of the retail NBFC AUM from 17% in March 2021. Microfinance, which is also unsecured, is estimated at 11% of the retail AUM of NBFCs as of March 2023. 

The CNX Nifty is currently trading at 18526.40, down by 107.45 points or 0.58% after trading in a range of 18526.30 and 18603.90. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Adani Enterprises up by 2.29%, Asian Paints up by 2.22%, Apollo Hospital up by 1.84%, Adani Ports up by 1.61% and HDFC Life Insurance up by 1.56%. On the flip side, ONGC down by 2.01%, NTPC down by 1.67%, HDFC down by 1.65%, Coal India down by 1.56% and SBI down by 1.54% were the top losers.

All Asian markets were trading lower; Taiwan Weighted lost 1.77 points or 0.01% to 16,620.97, Hang Seng declined 534.08 points or 2.87% to 18,061.70, Shanghai Composite weakened 32.93 points or 1.02% to 3,191.28, KOSPI dropped 4.11 points or 0.16% to 2,581.41, Jakarta Composite plunged 49.38 points or 0.75% to 6,587.04, Straits Times fell 18.86 points or 0.59% to 3,168.70 and Nikkei 225 slipped 452.02 points or 1.44% to 30,876.14.