Markets continue to trade flat with negative bias

Key Indian benchmarks continue to trade flat in negative terrain in noon session, with Sensex and Nifty trading below their psychological levels of 57100 and 17000, respectively. Significant foreign fund outflows, concerns about aggressive interest rate hikes by global central banks, and potential global recession fears have impacted traders’ sentiments. Foreign Institutional Investors (FIIs) were stood net sellers in the capital market on Tuesday as they offloaded shares worth Rs 2,823.96 crore, exchange data showed. Depreciating rupee too added some pressure on the markets. However, downfall remain capped as Economic affairs secretary Ajay Seth dismissed the concerns over depletion of forex reserve as overblown and said India has fairly large reserve to tide over the current situation. On the global front, Asian markets were trading mostly lower as surging borrowing costs intensified fears of a global recession.

The BSE Sensex is currently trading at 57068.62, down by 38.90 points or 0.07% after trading in a range of 56498.72 and 57213.33. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.34%.

The top gaining sectoral indices on the BSE were Telecom up by 1.38%, Auto up by 0.99%, Healthcare up by 0.84%, TECK up by 0.78%, Consumer Durables was up by 0.68%, while Energy down by 0.66%, Metal down by 0.65%, Oil & Gas down by 0.61%, PSU down by 0.49% and Bankex was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.90%, Dr. Reddy's Lab up by 1.77%, Mahindra & Mahindra up by 1.74%, Asian Paints up by 1.57% and Nestle was up by 1.15%. On the flip side, ITC down by 2.03%, Reliance Industries down by 1.47%, Axis Bank down by 1.33%, NTPC down by 1.26% and Indusind Bank was down by 0.91% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) has upgraded its outlook on non-banking finance companies (NBFCs) and housing finance companies (HFCs) to ‘neutral’ from ‘improving’ on better collection efficiencies and asset growth in the sector. However, it said that liability management is key for managing margins and loan growth for NBFCs and HFCs. It also said with the onset of normalcy in lending, the on-balance sheet liquidity would also normalise, negating the impact of the rising cost of funds, thereby protecting margins to a certain extent.

In the mid-year outlook on the sector, Ind-Ra said that a lower credit cost for 2HFY23 would aid profitability during the fiscal. Higher inflationary pressure on borrowers and interest rates may deter demand normalisation in the near term but the festive season demand could support the baseline credit offtake. On the securitisation front, a major source of balance sheet management for lenders, the agency said it has witnessed a strong asset performance in the first half of FY23, which leads it to give a 'stable' rating outlook for outstanding transactions in the second half of the fiscal. It expects securitisation volumes to reach pre-COVID levels, subject to stabilised market sentiments.

It further said the non-bank regulatory framework has become increasingly aligned with that of banks with the introduction of the prompt corrective action framework and the revision of non-performing asset (NPA) recognition norms, and that this will further aid transparency in disclosure standards and reporting alignment with banks. The agency expects NBFCs (including HFCs) to report around 14 per cent growth in AUM (assets under management) in FY23.

The CNX Nifty is currently trading at 16996.65, down by 10.75 points or 0.06% after trading in a range of 16825.40 and 17037.60. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 2.90%, Eicher Motors up by 1.90%, Dr. Reddy's Lab up by 1.87%, Mahindra & Mahindra up by 1.79% and Asian Paints was up by 1.59%. On the flip side, ONGC down by 2.17%, ITC down by 1.93%, JSW Steel down by 1.66%, Reliance Industries down by 1.51% and Axis Bank was down by 1.31% were the top losers.

Asian markets were trading mostly lower; Nikkei 225 slipped 397.89 points or 1.5% to 26,173.98, Taiwan Weighted dropped 360.52 points or 2.61% to 13,466.07, KOSPI fell 54.57 points or 2.45% to 2,169.29, Shanghai Composite declined 30.13 points or 0.97% to 3,063.73, Hang Seng decreased 436.50 points or 2.44% to 17,423.81 and Straits Times was down by 35.65 points or 1.13% to 3,129.85.

On the flip side, Jakarta Composite was up by 18.51 points or 0.26% to 7,130.96.