Indian markets hold positive trade in early afternoon deals

Indian equity markets held their positive trade in early afternoon deals, with both Sensex and Nifty trading notably higher, despite negative cues from other Asian markets. Investors were reacting to the early results of the assembly elections in Haryana and Jammu & Kashmir. Domestic sentiments were positive, amid reports that India has relaxed certain provisions in its bilateral investment treaty (BIT) with the UAE, which include a reduction in the period for investors to exhaust local remedies for any dispute to three years from the usual five years and bringing in the typically short-term portfolio investments under its ambit.

On the global front, Asian markets were trading mostly in red, as Japan's leading index decreased more-than-expected in August to the lowest level in nearly four years. The preliminary data from the Cabinet Office showed that the leading index, which measures future economic activity, dropped to 106.7 in August from 109.3 in the previous month. The expected score was 107.2. Further, this was the lowest reading since October 2020, when it was 106.5.

The BSE Sensex is currently trading at 81409.44, up by 359.44 points or 0.44% after trading in a range of 80813.07 and 81617.06. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained by 0.91%, while Small cap index was up by 1.30%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.52%, Utilities up by 1.43%, Power up by 1.43%, Industrials up by 1.40% and Healthcare up by 1.32%, while Metal down by 1.74%, IT down by 0.37%, TECK down by 0.28% and Basic Materials down by 0.18% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 3.07%, Mahindra & Mahindra up by 2.14%, HDFC Bank up by 1.99%, Axis Bank up by 1.49% and Ultratech Cement up by 1.47%. On the flip side, Tata Steel down by 3.32%, JSW Steel down by 2.24%, Tata Motors down by 1.76%, Titan down by 1.61% and TCS down by 1.13% were the top losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that securitisation volumes are estimated to have surged to Rs 60,000 crore in the July-September quarter (Q2FY25), and are likely to cross Rs 2.1 lakh crore in the current financial year (FY25). The Rs 60,000 crore expected to be achieved in the second quarter is 36 per cent higher than the preceding June quarter and a 31 per cent jump over the volumes in the same period year-ago. Lenders had raised over Rs 45,000 crore through securitisation of loans in the first quarter of the fiscal and Rs 1.9 lakh crore in FY24. Typically, lenders bundle up future receivables on a set of loans they have made and sell it to other entities at a discount, which helps them meet their liquidity needs. 

Without naming HDFC Bank which has guided towards adopting this route, ICRA said large private sector lenders are driving the volumes to improve their credit-to-deposit ratio amid the low deposit growth. The securitisation volumes in the current year would benefit from participation of private sector banks as originators, given the challenges being faced to raise deposits while the credit demand remains strong. It said the September quarter saw 35 per cent of the volumes originating from private sector banks, which is a huge jump given the past experience where such lenders used to be non-existent as originators. 

According to the report, driven by the need to tackle the asset quality mismatches, non-bank finance companies continue to raise funding through securitisation route. Securitisation is largely being done through the issuance of pass-through certificates (PTCs) in the current fiscal while the proportion of direct sell-down or direct assignments (DA) has reduced. Vehicle loan receivables continue to form the highest market share among the various asset classes being securitised, given the presence of large-size NBFCs in this space in the market as well as the moderate tenure of the product. Mortgage-backed loans such as home loans or loan against property continue to face challenges in the PTC market, given their longer tenure as well as interest rate risks, which act as a deterrent for investors.

The CNX Nifty is currently trading at 24915.50, up by 119.75 points or 0.48% after trading in a range of 24756.80 and 24989.85. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Trent up by 6.10%, Adani Ports & SEZ up by 3.15%, Bharat Electronics up by 3.09%, Adani Enterprises up by 3.06% and Mahindra & Mahindra up by 2.33%. On the flip side, Tata Steel down by 3.10%, SBI Life Insurance down by 2.69%, JSW Steel down by 1.88%, Hindalco down by 1.82% and Titan Co down by 1.76% were the top losers.

Asian markets were trading mostly in red; Hang Seng declined 1637.99 points or 7.63% to 21,461.79, Straits Times fell 10.16 points or 0.28% to 3,589.03, KOSPI dropped 16.02 points or 0.62% to 2,594.36, Nikkei 225 slipped 395.2 points or 1.01% to 38,937.54 and Taiwan Weighted lost 91.17 points or 0.4% to 22,611.39, while Jakarta Composite gained 62.14 points or 0.82% to 7,566.28 and Shanghai Composite strengthened 146.24 points or 4.2% to 3,482.74.