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Indian stock markets continued to trade in positive terrain in afternoon session amid positive global cues as reopening of economies in western countries and encouraging data points towards a fast global recovery. Continued decline in daily caseload in the second wave and improvement in recovery rates have bolstered investors' confidence. Sentiments also got a boost with private report that India is preparing an economic stimulus package for the sectors worst affected by COVID-19. The finance ministry is working on proposals to bolster the tourism, aviation and hospitality industries, along with small and medium-sized companies. Meanwhile, foreign institutional investors (FIIs) were net buyers in the capital market as they purchased shares worth Rs 585.36 crore on May 24.

On the global front, Asian shares were trading higher as inflation fears eased and investors regained an appetite for risk. Bach home, in scrip specific developments, Everest Organics touched roof on launching Posaconazole API to treat Black Fungus, while Amara Raja Batteries tumbled after nearly 30 million equity shares of the battery maker changed hands on the counter.

The BSE Sensex is currently trading at 50762.56, up by 110.66 points or 0.22% after trading in a range of 50666.00 and 50961.35. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.08%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Metal up by 1.79%, Consumer Durables up by 1.46%, IT up by 1.16%, Consumer Discretionary up by 1.09% and TECK was up by 1.05%, while Bankex down by 0.81%, Power down by 0.50%, Energy down by 0.28% and Capital Goods was down by 0.21% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.95%, Titan Company up by 2.72%, ONGC up by 2.43%, Bajaj Finserv up by 1.92% and Nestle was up by 1.81%. On the flip side, HDFC Bank down by 1.67%, Axis Bank down by 1.09%, Indusind Bank down by 0.72%, SBI down by 0.52% and ICICI Bank was down by 0.41% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report has said that microfinance institutions (MFIs) may see their credit cost in the 3-6 percent range in the current fiscal (FY22), with their collection efficiency getting impacted amid disruptions caused by the second wave of COVID-19 pandemic. It also said that collections of micro lenders and small finance banks (SFBs) are likely to have declined 3-5 percent in April 2021 and additional 5 -7 percent May 2021 (first fortnight of the month), both on a month-on-month basis.

According to the report, May 2021 could see a higher drop in collections (5-7 per cent) than even April 2021 (cumulative 10-15 per cent drop in collections compared to March 21), as states implement stricter measures to manage the second COVID wave. It noted that the variation among MFIs could be wider, depending on their level of concentration in regions where lifting of restrictions could be slow.

The report further said the that incidence of most of the relevant provision will also fall in FY22, given that the bulk of the second wave portfolio deterioration would happen at the beginning of FY22. As a consequence, the impact of the credit costs on account of the second wave would be higher in the annual financials for FY22 than FY21 and possibly even the demonetisation crisis. During demonetisation, MFIs credit costs were spread over three years as the event occurred at end of the third quarter of FY17 and the regulator provided forbearance for NPA (non-performing assets) recognition.

The CNX Nifty is currently trading at 15248.00, up by 50.30 points or 0.33% after trading in a range of 15223.05 and 15293.85. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 3.76%, Asian Paints up by 2.83%, Titan Company up by 2.78%, ONGC up by 2.34% and Nestle was up by 1.94%. On the flip side, HDFC Bank down by 1.74%, Axis Bank down by 1.13%, Indusind Bank down by 0.85%, SBI down by 0.52% and Reliance Industries was down by 0.44% were the top losers.

All Asian markets were trading firm; Shanghai Composite gained 81.93 points or 2.34% to 3,579.21, Jakarta Composite soared 66.97 points or 1.16% to 5,830.60, Taiwan Weighted strengthened 257.38 points or 1.58% to 16,595.67, Nikkei 225 surged 189.37 points or 0.67% to 28,553.98, Straits Times advanced 19.38 points or 0.62% to 3,142.99, KOSPI rose 27.02 points or 0.86% to 3,171.32 and Hang Seng was up by 438.01 points or 1.54% to 28,850.27.

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