Key gauges remain in red in morning deals

Indian equity benchmarks continued to trade with a negative bias in morning deals owing to selling pressure in TECK, IT and Realty stocks. Traders remained cautious ahead of the expiry of February month derivative contracts. Some concern also came as Ministry of Statistics and Programme Implementation (Mospi) stated that as many as 431 infrastructure projects, each entailing an investment of Rs 150 crore or above, were hit by cost overrun of more than Rs 4.80 trillion in January 2024. However, losses remain capped as some support came with Global Trade Research Initiative (GTRI) stating that successful conclusion of India's proposed trade agreements with the UK, Oman and four European nation bloc EFTA will reflect its commitment to trade liberalisation and economic integration at a time when the whole world is turning protectionist.  On the global front, Asian markets are trading mostly in red as investors awaited inflation data from the United States, Japan and Europe that will help refine expectations for future rate moves.

The BSE Sensex is currently trading at 72887.22, down by 255.58 points or 0.35% after trading in a range of 72803.52 and 73092.26. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.33%, while Small cap index was up by 0.21%.

The top gaining sectoral indices on the BSE were Utilities up by 1.10%, Capital Goods up by 0.88%, Power up by 0.73% and Industrials up by 0.58%, while TECK down by 1.11%, IT down by 1.06%, Realty down by 1.03%, Consumer Durables down by 0.65% and Metal down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Larsen & Toubro up by 2.45%, Power Grid Corporation up by 2.04%, Tata Motors up by 0.44%, Mahindra & Mahindra up by 0.25% and HDFC Bank up by 0.18%. On the flip side, Asian Paints down by 3.92%, Bharti Airtel down by 1.56%, Wipro down by 1.32%, Titan Company down by 1.20% and Tech Mahindra down by 1.16% were the top losers.

Meanwhile, the report by Crisil Ratings, which was released at an Assocham seminar on ARCs/stressed assets, the Asset Reconstruction Companies (ARCs) sector is expecting to notch up reasonable growth in Assets Under Management (AUM) and may cross the Rs 10 lakh-crore-mark this fiscal (FY24), up from Rs 8.48 lakh crore a year ago. According to the report, the sector must now look to consolidate as the Non-Performing Assets (NPA) problem has been ‘well contained’.

It said the book value of bad loan sales to ARCs is likely to cross the Rs 10 lakh crore-mark by next month from Rs 8.48 lakh crore in March 2023. The sector's growth rate is likely to moderate further to 5-6 per cent next fiscal due to the cyclically low NPAs in banks and NBFCs. But despite the rapid decline in NPAs, there are opportunities for ARCs as the bad assets in retail books of banks and non-banks spike.

The report further noted that the growing stress in retail loans/small and medium enterprise segments provides opportunity for ARCs to diversify their business from the corporate segment to retail and SMEs. ARCs came into the picture in 2003 with a handful of players but there are 27 players in the industry now.

The CNX Nifty is currently trading at 22141.65, down by 71.05 points or 0.32% after trading in a range of 22111.80 and 22202.15. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Larsen & Toubro up by 2.51%, Power Grid Corporation up by 2.16%, Adani Enterprises up by 1.39%, Adani Ports &SEZ up by 1.11% and Bajaj Auto up by 0.96%. On the flip side, Asian Paints down by 3.90%, BPCL down by 1.72%, Bharti Airtel down by 1.55%, Hindalco down by 1.54% and Wipro down by 1.36% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 55.87 points or 0.33% to 16,687.08, Straits Times fell 40.79 points or 1.27% to 3,182.15, Jakarta Composite plunged 64.4 points or 0.89% to 7,275.24 and Shanghai Composite weakened 1.2 points or 0.04% to 2,987.16.

On the flip side, Nikkei 225 surged 836.52 points or 2.14% to 39,098.68, Taiwan Weighted added 70.72 points or 0.38% to 18,923.50 and KOSPI increased 4.67 points or 0.18% to 2,668.94.