Indian equity benchmarks held on to their initial gains and were trading about half a percent higher in morning deals tracking gains in index majors NTPC, Sun Pharma and ICICI Bank amid a positive trend in global markets. Sentiments remained positive with India Ratings and Research’s (Ind-Ra) report that loan collections on securitized portfolios, which had taken a hit because of the second wave of COVID-19 pandemic, are set to recover. It also said the collection efficiency on those loans had dropped to 69.2 per cent in May from 82.8 per cent in March. Some support also came with private report stated that business activity has climbed back to the pre-second wave levels with the seventh consecutive week of surge in levels as new coronavirus infection cases decrease. However, gains remain capped as the government data showed retail inflation remained above the RBI's comfort level for the second consecutive month despite slipping slightly to 6.26 per cent in June while the factory output recorded a growth of 29.3 per cent in May, mainly on account of the base effect.
On the global front, Asian markets were trading mostly in green as investors awaited the second-quarter earnings season and a batch of economic data, including key U.S. inflation figures later in the day. Investors are bracing for an eventful week which will include the start of the U.S. earnings season, inflation data from several countries and a testimony by Federal Reserve Chair Jerome Powell. Back home, on the sectoral front, Media and entertainment (ME) industry stocks remained in focus with a private report that the country's ME sector will be the fastest growing globally in terms of both consumer and advertising spends, and will be an over-Rs 4-lakh-crore industry by 2025.
The BSE Sensex is currently trading at 52604.14, up by 231.45 points or 0.44% after trading in a range of 52559.16 and 52716.83. There were 24 stocks advancing against 6 stocks declining on the index.
The broader indices were trading mixed; the BSE Mid cap index fell 0.08%, while Small cap index was up by 0.39%.
The top gaining sectoral indices on the BSE were Realty up by 0.64%, Bankex up by 0.60%, Healthcare up by 0.59%, Metal up by 0.57% and PSU up by 0.50%, while TECK down by 0.12% and IT down by 0.12% were the top losing indices on BSE.
The top gainers on the Sensex were NTPC up by 2.55%, Sun Pharma up by 2.47%, ICICI Bank up by 1.85%, HDFC up by 1.70% and Bajaj Auto up by 1.23%. On the flip side, HCL Technologies down by 0.69%, Maruti Suzuki down by 0.60%, Infosys down by 0.35%, Indusind Bank down by 0.33% and Hindustan Unilever down by 0.29% were the top losers.
Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that loan collections on securitized portfolios, which had taken a hit because of the second wave of COVID-19 pandemic, are set to recover. It also said the collection efficiency on those loans had dropped to 69.2 per cent in May from 82.8 per cent in March.
According to the report, improving economic sentiments, along with fiscal and credit stimuli are expected to support loan performance in the medium term. It also said as businesses and consumer confidence continue to revitalise and stabilise, credit-fuelled consumption demand is expected to recover closer to 2HFY22. It noted that securitisation refers to an activity where a financier transfers future receivables on a loan or a bunch of loans to others which helps with immediate liquidity requirements.
The report further said with the coming of the second wave in April 2021 and renewed restrictions on mobility, collections in May 2021 were impacted among non-bank lenders. Asset classes such as microfinance, vehicle loans and tractor loans, where cash collections are significant for current and overdue collections, were largely impacted. With the wave of infections abating as rapidly as it had set in, the economic activity started to pick up in June 2021. The plateauing of infections in June 2021 and the consequent business confidence is expected to keep a check on the fall in collections to some extent in June 2021, across asset classes.
The CNX Nifty is currently trading at 15762.30, up by 69.70 points or 0.44% after trading in a range of 15747.90 and 15796.25. There were 42 stocks advancing against 8 stocks declining on the index.
The top gainers on Nifty were NTPC up by 2.55%, Sun Pharma up by 2.51%, ICICI Bank up by 1.82%, HDFC up by 1.80% and Bajaj Auto up by 1.26%. On the flip side, Adani Ports &SEZ down by 1.81%, HCL Technologies down by 0.67%, Maruti Suzuki down by 0.56%, Tata Consumer Product down by 0.52% and Indusind Bank down by 0.39% were the top losers.
Asian markets were trading mostly in green, Hang Seng increased 492.34 points or 1.79% to 28,007.58, Nikkei 225 surged 146.42 points or 0.51% to 28,715.44, KOSPI rose 21.99 points or 0.68% to 3,268.46, Shanghai Composite gained 6.08 points or 0.17% to 3,553.92, Straits Times advanced 23.69 points or 0.75% to 3,170.83 and Taiwan Weighted strengthened 36.88 points or 0.21% to 17,851.21.
On the flip side, Jakarta Composite lost 7.88 points or 0.13% to 6,070.69.