Sensex, Nifty trade near neutral lines

Indian equity benchmarks continued their sluggish trade in late morning deals, with both Sensex and Nifty trading near their neutral lines. Negative cues from other Asian markets impacted trade over the Dalal Street in late morning session. Domestic sentiments were negative, after the Federation of Indian Chambers of Commerce and Industry (Ficci) said the recent rise in smuggling in the northeast can be attributed to economic distress caused by COVID-19 pandemic. The FICCI's Committee Against Smuggling and Counterfeiting Activities Destroying the Economy (CASCADE) lauded the efforts of paramilitary force Assam Rifles and congratulated its Director General along with other officers for their anti-smuggling operations.

On the global front, Asian markets were trading mostly in red, even after China's exports grew more than expected in August mainly due to base effects, while imports dropped unexpectedly from last year. The data from the General Administration of Customs showed that exports grew 9.5 percent on a yearly basis in August, faster than the expected increase of 7.1 percent. At the same time, imports were down 2.1 percent annually, in contrast to the expected rise of 0.1 percent. Imports had dropped 1.4 percent in July.

The BSE Sensex is currently trading at 38347.57, down by 9.61 points or 0.03% after trading in a range of 38060.74 and 38454.58. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.67%, while Small cap index was down by 0.34%.

The top gaining sectoral indices on the BSE were IT up by 0.69%, TECK up by 0.53%, FMCG up by 0.51%, Consumer Durables up by 0.36% and Metal up by 0.05%, while Power down by 1.54%, Utilities down by 1.19%, Capital Goods down by 1.09%, Auto down by 0.87% and Realty down by 0.82% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 2.14%, TCS up by 1.78%, Titan Company up by 1.12%, Axis Bank up by 1.08% and Nestle up by 1.01%. On the flip side, Mahindra & Mahindra down by 3.77%, NTPC down by 2.22%, Ultratech Cement down by 2.14%, Bajaj Finance down by 1.63% and ONGC down by 1.48% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has expanded the scope of priority sector lending (PSL) to include start-ups funding up to Rs 50 crore, and loans to farmers for installation of solar plants and compressed biogas plants. The PSL guidelines have been comprehensively reviewed and revised to align it with emerging national priorities and bring sharper focus on inclusive development. Revised PSL guidelines will enable better credit penetration to credit deficient areas; increase the lending to small and marginal farmers and weaker sections; boost credit to renewable energy, and health infrastructure.

As per the revised guidelines, the PSL will include bank finance to start-ups for up to Rs 50 crore. Also, loans to farmers for installation of solar power plants for solarisation of grid-connected agriculture pumps and loans for setting up Compressed Bio Gas (CBG) plants have been included as fresh categories eligible for finance under priority sector. The RBI said the revised guidelines also seek to address the issues concerning regional disparities in the flow of priority sector credit. Further, it said that higher weightage have been assigned to incremental priority sector credit in ‘identified districts’ where priority sector credit flow is comparatively low.

The central bank said the targets prescribed for ‘small and marginal farmers’ and ‘weaker sections’ will be increased in a phased manner, and added that ‘higher credit limit has been specified for Farmers Producers Organisations (FPOs)/ Farmers Producers Companies (FPCs) undertaking farming with assured marketing of their produce at a pre-determined price’. Under the new norms, the loan limits for renewable energy, health infrastructure, including the projects under ‘Ayushman Bharat’, have been doubled.

The CNX Nifty is currently trading at 11332.90, down by 0.95 points or 0.01% after trading in a range of 11251.70 and 11373.30. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.84%, Hindustan Unilever up by 2.12%, HDFC Life Insurance up by 2.07%, TCS up by 1.76% and Axis Bank up by 1.19%. On the flip side, Mahindra & Mahindra down by 3.65%, GAIL India down by 2.75%, UPL down by 2.63%, NTPC down by 2.11% and Cipla down by 2.01% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 83.95 points or 0.36% to 23,121.48, Taiwan Weighted dropped 18.37 points or 0.15% to 12,619.58, Jakarta Composite lost 6.90 points or 0.13% to 5,232.95 and Shanghai Composite declined 5.34 points or 0.16% to 3,350.03. On the flip side, Straits Times advanced 2.97 points or 0.12% to 2,512.61, Hang Seng increased 13.34 points or 0.05% to 24,708.79 and KOSPI rose 17.68 points or 0.75% to 2,385.93.