Sensex, Nifty trade higher with marginal gains

Indian equity bourses erased most of their gains in late morning session, however both Sensex and Nifty are now managing to trade in green terrain with marginal gains. Positive cues from other Asian markets helped key indices to trade in green. Traders got some relief, after India’s manufacturing sector continued to strengthen in December with companies stepping up production and input buying amid efforts to rebuild their inventories following pandemic-driven business closures earlier in 2020. Data released by analytics firm IHS Markit showed Purchasing Managers’ Index (PMI) for manufacturing sector picked up marginally in December to 56.4 from 56.3 a month ago. A figure above 50 indicates expansion, while sub-50 signals contraction.

On the global front, Asian markets were trading mostly in green, after the manufacturing sector in Japan improved in December to a level of stability, the latest survey from Jibun Bank showed on Monday with a manufacturing PMI score of 50.0. That's up from 49.0 in November and it now sits right on the line that separates expansion from contraction. Individually, output stabilized for the first time in 23 months and employment rose for the first time since February.

The BSE Sensex is currently trading at 47891.27, up by 22.29 points or 0.05% after trading in a range of 47594.47 and 48168.22. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.68%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Metal up by 3.27%, Basic Materials up by 1.67%, Capital Goods up by 0.99%, Industrials up by 0.94% and PSU up by 0.90%, while Realty down by 1.00%, Consumer Durables down by 0.47%, Bankex down by 0.28% and Energy down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.15%, Hindustan Unilever up by 1.62%, Sun Pharma up by 1.35%, TCS up by 1.31% and Larsen & Toubro up by 1.01%. On the flip side, Kotak Mahindra Bank down by 1.19%, Titan Company down by 1.05%, Bajaj Finance down by 0.72%, HDFC Bank down by 0.66% and Reliance Industries down by 0.64% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest report ‘Quarterly Basic Statistical Returns (BSR)-1: Outstanding Credit of Scheduled Commercial Banks (SCBs), September 2020’ has showed that bank credit growth on a year-on-year basis stood at 5.4 per cent in September quarter of the current fiscal year compared to 5.7 per cent growth in the previous quarter. Credit growth for metropolitan branches, which have major share in bank credit, decelerated to 3.3 per cent year-on-year in September 2020 quarter as compared to 4.7 per cent in April-June. It however improved for the bank branches in rural, semi-urban and urban areas.

The report captures various characteristics of bank credit such as occupation/activity and organisational sector of the borrower, type of account, and interest rates. Data covering 1,26,580 branches of 89 scheduled commercial banks (excluding Regional Rural Banks) are presented for bank groups, population groups and states. Personal loans, which accounted for one-fourth of bank credit, continued to maintain double-digit growth during September quarter.

On the other hand, industrial credit contracted by 1.7 per cent (year-on-year) and its share in total credit stood at nearly 30 per cent in September quarter 2020. The data showed bank loans to private non-financial companies continue to contract year-on-year for the fourth successive quarter and stood at (-) 6.7 per cent in September quarter reflecting tepid demand conditions. Weighted average lending rate (WALR) for outstanding credit declined by 21 basis points during July-September 2020.

The CNX Nifty is currently trading at 14042.10, up by 23.60 points or 0.17% after trading in a range of 13953.75 and 14114.15. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Hindalco up by 4.05%, Tata Steel up by 3.91%, Eicher Motors up by 2.91%, GAIL India up by 2.22% and BPCL up by 2.13%. On the flip side, Hero MotoCorp down by 1.31%, Kotak Mahindra Bank down by 1.21%, Titan Company down by 1.07%, Adani Ports & SEZ down by 0.76% and Bajaj Finance down by 0.72% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 203.48 points or 0.75% to 27,434.61, Taiwan Weighted strengthened 190.13 points or 1.29% to 14,922.66, KOSPI rose 66.67 points or 2.32% to 2,940.14, Shanghai Composite gained 31.50 points or 0.91% to 3,504.57, Straits Times advanced 5.11 points or 0.18% to 2,848.92 and Jakarta Composite soared 59.73 points or 1% to 6,038.80. On the flip side, Nikkei 225 slipped 186.84 points or 0.68% to 27,257.33.