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Key gauges remain in red in morning deals
Jul-16-2025

Indian equity benchmarks remained in red in morning deals, as tariff-related uncertainty made investors to stay on the sidelines. Traders remained cautious as ICRA in its latest report ‘July 2025 analysis on the Non-Banking Financial Company - Microfinance Institution (NBFC-MFI)’ stated that asset quality stress in the NBFC-MFI sector surged in 2024-25 amid borrower overleveraging as well as operational challenges, and the pressure is expected to persist in first half of the current fiscal (H1 FY26). However, losses remain capped as some support came with Economic Advisory Council to the Prime Minister (EAC-PM) Chairman S Mahendra Dev’s statement that the Indian economy is likely to grow at 6.5 per cent in the current financial year (FY26), despite geo-political tensions and trade policy uncertainties. On the global front, Asian markets are trading mostly in green after U.S. President Donald Trump said that he had reached a preliminary trade agreement with Indonesia, which includes a provision for a 19% tariff on the country’s exports to the US.

The BSE Sensex is currently trading at 82408.61, down by 162.30 points or 0.20% after trading in a range of 82371.52 and 82634.96. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.18%.

The top gaining sectoral indices on the BSE were Realty up by 0.33%, IT up by 0.24%, Healthcare up by 0.12%, TECK up by 0.10% and Utilities up by 0.10%, while Metal down by 0.79%, Auto down by 0.73%, Basic Materials down by 0.37%, Consumer Discretionary down by 0.33% and Consumer Durables down by 0.22% were the top losing indices on BSE

The top gainers on the Sensex were Adani Ports & SEZ up by 1.34%, HDFC Bank up by 0.63%, Infosys up by 0.60%, Tech Mahindra up by 0.37% and SBI up by 0.33%. On the flip side, Eternal down by 1.24%, Tata Steel down by 1.07%, Mahindra & Mahindra down by 0.95%, Kotak Mahindra Bank down by 0.94% and Tata Motors down by 0.93% were the top losers.

Meanwhile, ICRA, a credit rating agency, in its latest report ‘July 2025 analysis on the Non-Banking Financial Company - Microfinance Institution (NBFC-MFI)’ has said that asset quality stress in the NBFC-MFI sector surged in 2024-25 amid borrower overleveraging as well as operational challenges, and the pressure is expected to persist in first half of the current fiscal (H1 FY26).

As per the report, asset quality stress surged in FY25 largely due to borrower overleveraging, sociopolitical disruptions, and operational challenges. ICRA has a negative outlook on the sector, given the lingering asset quality stress and subdued profitability. Overall stress in FY25 surged to 15.3 per cent vis-a-vis opening stressed pool of 5.9 per cent as of March 2024 on account of significant deterioration in asset quality in the microfinance sector. 

Given the deterioration in asset quality, the report said the provision cover of NBFC-MFIs increased to about 4.8 per cent of on-book portfolio as on March 31, 2025, from 2.8 per cent as on March 31, 2024. The AUM of NBFC-MFIs declined by 12 per cent in FY25 (growth of 29 per cent in FY24) amid operational challenges and asset quality concerns. However, the rating agency said it anticipates growth to resume in FY26 to 10-15 per cent.

As per the recent RBI circular dated June 06, 2025, on review of qualifying assets criteria, NBFC-MFIs are now required to maintain qualifying assets of minimum 60 per cent of the total assets over the earlier requirement of 75 per cent. ICRA said this shall improve NBFC-MFIs' loan diversity, thereby augmenting their credit risk profile, and enabling them to meet other credit requirements of their end borrowers.

The CNX Nifty is currently trading at 25148.30, down by 47.50 points or 0.19% after trading in a range of 25127.75 and 25218.95. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 1.93%, HDFC Life Insurance up by 1.14%, Wipro up by 1.03%, Nestle up by 0.94% and HDFC Bank up by 0.85%. On the flip side, Shriram Finance down by 2.28%, Hero MotoCorp down by 1.44%, Eternal down by 1.44%, Kotak Mahindra Bank down by 1.21% and Tata Consumer Products down by 1.09% were the top losers.

Asian markets are trading mostly in green; Nikkei 225 surged 175.99 points or 0.44% to 39,854.01, Taiwan Weighted added 193.73 points or 0.85% to 23,029.67, Hang Seng advanced 68.43 points or 0.28% to 24,658.55, Straits Times rose 10.08 points or 0.24% to 4,129.90 and Jakarta Composite gained 45.83 points or 0.64% to 7,186.30.

On the flip side, Shanghai Composite weakened 4.38 points or 0.13% to 3,500.62 and KOSPI dropped 28.21 points or 0.88% to 3,187.07. 
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