Benchmarks continue to trade flat in morning deals

Indian equity benchmarks continued to trade flat in morning deals as traders remained on sidelines ahead of the GST council meeting to be held later in the day. The GST Council is likely to deliberate on a host of issues, including taxation of insurance premium, GoM's suggestions on rate rationalisation, and a status report on online gaming. However, traders took some support with RBI data showing that India's forex reserves jumped by $2.299 billion to a new high of $683.987 billion for the week ended on August 30. In the previous reporting week, the forex reserves had jumped by $7.023 billion to a high of $681.688 billion. Meanwhile, Union Minister of Commerce and Industry, Piyush Goyal has suggested that the government should have a working group on tourism between the nations of the Mediterranean and India, as there is a huge potential for cooperation and mutual benefit. He said that India offers a large market for Mediterranean goods and services given the close connection both nations have shared over the decades. On the global front, Asian markets are trading mostly in red as weaker-than-expected U.S. job growth signaled an economic slowdown and fueled worries that the Federal Reserve may have waited too long to cut interest rates.

The BSE Sensex is currently trading at 81158.41, down by 25.52 points or 0.03% after trading in a range of 80895.05 and 81245.57. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.70%, while Small cap index was down by 1.07%.

The lone gaining sectoral index on the BSE was FMCG up by 0.47%, while, PSU down by 1.49%, Oil & Gas down by 1.30%, Metal down by 1.10%, Energy down by 1.06% and Telecom down by 0.96% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.01%, ITC up by 0.84%, Kotak Mahindra Bank up by 0.57%, ICICI Bank up by 0.53% and Asian Paints up by 0.37%. On the flip side, Tata Motors down by 1.38%, Tata Steel down by 1.26%, Adani Ports &SEZ down by 1.03%, NTPC down by 0.82% and Power Grid Corporation down by 0.82% were the top losers.

Meanwhile, Crisil Ratings in its latest report has said that education loans, primarily those to fund courses overseas, will continue to be among the fastest-growing segments for non-banking financial companies (NBFCs) because of rising demand for higher education. Their assets under management (AUM) is expected to grow at a healthy clip of 40-45 per cent to cross Rs 60,000 crore this fiscal.

It stated after robust growth of over 80 per cent and 70 per cent in fiscals 2023 and 2024, respectively, NBFCs’ education loan assets under management (AUM) rose to Rs 43,000 crore as on March 31, 2024. On the asset quality front, it said metrics should remain stable despite country-specific concerns.

Ajit Velonie, Senior Director, CRISIL Ratings, said ‘The number of Indian students studying abroad is estimated to have doubled in the past five years to around 13.4 lakh as of last fiscal. Only a tenth are being funded by these NBFCs, and even including education loans by banks, the financed quantum is not much higher. What that indicates is that a large portion of overseas education is being funded through alternative means - informal financing, self-funding, or perhaps other forms of loans’.

He added ‘That shows education loan companies have significant headroom for growth. Rising ticket sizes because of ascending tuition fees, inflation and living expenses are also tailwinds. Strong micro-market intelligence and fast turnaround times have allowed NBFCs to carve out a niche in the education loans space. Their specialised business model–backed by strong understanding of relevant geographies, courses, universities, tenures and profiles of students and their families–affords customisation of products, enabling better assessment of employability and risk-adjusted pricing.’

The CNX Nifty is currently trading at 24837.75, down by 14.40 points or 0.06% after trading in a range of 24753.15 and 24868.45. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Product up by 1.62%, Hindustan Unilever up by 1.05%, Britannia Industries up by 0.86%, Cipla up by 0.82% and ITC up by 0.82%. On the flip side, ONGC down by 3.27%, Tata Motors down by 1.44%, Hindalco down by 1.42%, Tata Steel down by 1.23% and Coal India down by 1.22% were the top losers.

Asian markets are trading mostly in red; Hang Seng declined 349.92 points or 2.05% to 17,094.38, Jakarta Composite plunged 64.47 points or 0.83% to 7,657.38, Shanghai Composite weakened 25.44 points or 0.93% to 2,740.37, KOSPI dropped 1.37 points or 0.05% to 2,542.91, Nikkei 225 slipped 177.93 points or 0.49% to 36,213.54 and Taiwan Weighted lost 349.9 points or 1.63% to 21,085.29.

On the flip side, Straits Times rose 31.02 points or 0.9% to 3,485.49.