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Domestic indices maintain gains in late morning deals
Jan-07-2025

Indian equity markets maintained their gains in late morning deals on account of buying in Reliance Industries, Titan, Indusind Bank, Asian Paints and Tata Motors companies’ stocks. Meanwhile, broader indices outperformed their large peers with BSE Mid cap index and Small cap index gaining in the range of 1.00-1.50%.  There was some encouragement in markets as private report said India's Consumer Price Index (CPI) inflation is expected to moderate to 5 per cent in December 2024 from 5.5 per cent in November. The report highlighted a positive outlook on inflation, driven by significant corrections in the prices of key vegetables such as tomatoes, onions, and potatoes. On the BSE sectoral front, traders were seen pilling up position in Oil & Gas, Energy, Healthcare, Basic Materials and Industrials, while selling was witnessed only in TECK and IT. 

On the global front, Asian markets were trading mostly higher as some investors hoped incoming US President-elect Donald Trump could adopt a less aggressive tariff stance than promised when he takes office. Back home, in the stock specific development, Arkade Developers rose after the company added three new redevelopment projects in Mumbai.

The BSE Sensex is currently trading at 78241.33, up by 276.34 points or 0.35% after trading in a range of 77925.09 and 78452.74. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.01%, while Small cap index up by 1.44%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.86%, Energy up by 1.64%, Healthcare up by 1.52%, Basic Materials up by 1.34% and Industrials up by 1.13%, while TECK down by 0.25% and IT down by 0.15% were the only losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.76%, Titan up by 1.73%, Indusind Bank up by 1.64%, Asian Paints up by 1.45% and Tata Motors up by 1.41%. On the flip side, Zomato down by 4.44%, TCS down by 1.47%, HCL Technologies down by 1.30% and Tech Mahindra down by 0.95% were the few losers.

Meanwhile, domestic rating agency ICRA in its latest report has said that securitization volumes jumped 80 per cent on-year to Rs 68,000 crore in the December quarter (Q3FY25), and has also upped its estimates on total volumes for this financial year (FY25). The financial system is estimated to witness securitization deals, where a lender passes on future receivables to another stakeholder against upfront cash, of around Rs 2.4 lakh crore, up from the previously estimated Rs 2.1 lakh crore. The new estimate represents a 25 per cent increase over the Rs 1.92 lakh crore in FY24.

According to the report, the October-December volumes were similar to the ones observed in July-September (Q2), and participation of private sector banks is helping the volumes and typically it is the non-bank lenders who raise resources through this route. It can be noted that a 'war for deposits' has ensued in the banking system which even led to concerns surrounding the system's ability to find sufficient resources to cater to credit demand, while the merger impact has led HDFC Bank to adopt the securitization route. It said personal loan and unsecured business loans are also facing asset quality stress in the recent quarters and hence, its volumes have been sliding in Q3FY25, adding that it does not expect any material impact on the credit quality of the rated PTC (pass through certificate) transactions. Of the overall securitisation volumes, up to 60 per cent volumes are through the PTC issuances, whereas the remaining share is through direct sell-downs.

The report said the investor preference for the mode of securitisation has remained consistent with public sector banks preferring the direct assignment (DA) route while private sector banks opting more for the PTCs, and added that among the asset classes that are securitised, vehicle loans still dominate the market, given that large banks and NBFCs in this space have been securitising their car loans and commercial vehicle loans portfolio. The growth momentum displayed by the microfinance loans in the first quarter has reduced in subsequent quarters due to the apparent asset quality stress being seen in the industry, leading to lower disbursements and thus lower funding requirements.

The CNX Nifty is currently trading at 23741.20, up by 125.15 points or 0.53% after trading in a range of 23637.80 and 23795.20. There were 44 stocks advancing against 6 stocks declining on the index.

The top gainers on Nifty were ONGC up by 4.43%, Tata Consumer up by 2.12%, Reliance Industries up by 1.79%, Titan up by 1.76% and SBI Life up by 1.62%. On the flip side, TCS down by 1.53%, HCL Technologies down by 1.30%, Tech Mahindra down by 0.98%, Wipro down by 0.61% and Eicher Motors down by 0.51% were the top losers.

Asian markets were trading mostly in green; Straits Times rose 6.54 points or 0.17% to 3,828.38, KOSPI increased 7.62 points or 0.31% to 2,496.26 Nikkei 225 surged 770.77 points or 1.96% to 40,077.82 and Taiwan Weighted added 199.51 points or 0.85% to 23,747.22. However, Hang Seng declined 368.71 points or 1.87% to 19,319.58, Jakarta Composite plunged 6.71 points or 0.09% to 7,073.76, Shanghai Composite weakened 1.22 points or 0.04% to 3,205.70.
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