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Indian equity benchmarks recovered partially from day’s lows but failed to erase all the losses and ended with around a percent lower on Thursday, amid weakness in the global market that declined as the US Federal Reserve’s signal to steadily tighten policy soured global investor sentiment. The benchmark indices opened on a sharply lower note, as traders got anxious with the International Monetary Fund (IMF) in its latest update of World Economic Outlook has cut India's economic growth forecast to 9 per cent for the current fiscal year ending March 31 (FY22) from its earlier projection of a 9.5 per cent GDP growth, on concerns over the impact of a spread of new variant of corona virus on business activity and mobility.
The Indian economy had contracted by 7.3 per cent in the 2020-21 fiscal year. Continues selling in FIIs also weighed on the markets. As per provisional data available on the NSE, foreign institutional investors (FIIs) net sold shares worth Rs 7,094.48 crore on January 25.
Key gauges extended losses in afternoon deals, as sentiments remain dampened with Icra Ratings’ statement that the securitization volumes in microfinance loans, which saw improvement in the first nine months of FY22, may witness some impact in the fourth quarter (Q4FY22) due to concerns around the third wave of COVID infections that may affect the repayment capabilities of the borrowers who have a marginal financial profile.
Nifty futures opened at 16995.00 points against the previous close of 17283.45 and opened at a low of 16862.00 points. Nifty Future closed with an average movement of 312.00 points and a decline of around 173.45 points and 17110.00 points...!!
On the NSE, the midcap 100 index will decline 1.05% and smallcap 100 index is closing decline 0.73%. Speaking of various sectoral indices, the NSE saw gains in PSU Bank, Bank, Media, PVT Bank and Auto stocks, while all other sectoral indices closed lower.
At the start of intra-day trading, February gold opened at Rs.48550, fell from a high of Rs.48550 points to a low of Rs.48186 with a decline of 571 points, a trend of around Rs.48280 and March Silver opened at Rs.63500, fell from a high of Rs.63500 points to a low of Rs.62725, with a decline of 1112 points, a trend of around Rs.62959.
Meanwhile, ICRA Ratings in its latest report has said that the securitization volumes in microfinance loans, which saw improvement in the first nine months of FY22, may witness some impact in the fourth quarter (Q4FY22) due to concerns around the third wave of COVID infections that may affect the repayment capabilities of the borrowers who have a marginal financial profile. In the first nine months of the current fiscal, there was a recovery in absolute terms with micro-loan securitization volumes at around Rs 6,200 crore as compared to around Rs 1,900 crore in the year-ago period.
According to the report, microfinance entities would continue to see challenges in terms of raising funds through securitization in the near term as investors remain wary of the performance of the borrowers given the unsecured nature of the loan. It said securitization, which prior to the pandemic contributed between 30-40 per cent of the disbursements for NBFC-MFIs, has seen its share drop to sub-20 per cent post-pandemic with fewer entities able to tap the securitization market.
Technically, the important key resistances are placed in Nifty future are at 17202 levels, which could offer for the market on the higher side. Sustainability above this zone would signal opens the door for a directional up move with immediate resistances seen at 17232 – 17272 levels. Immediate support is placed at 17007 – 16808 levels.
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