Indices cut losses in late morning deals

Indian equity benchmarks cut all of their losses in late morning deals to turn positive, with both Sensex and Nifty trading marginally higher. Positive cues from other Asian markets helped key indices to stage recovery. However, gains were limited, as Fitch Ratings said that the Indian economy will suffer lasting damage from the coronavirus crisis and after an initial strong rebound in FY22 (fiscal year ending March 2022) growth will slow to around 6.5 per cent a year over FY23-FY26. Fitch said India’s coronavirus-induced recession has been among the most severe in the world, amid a stringent lockdown and limited direct fiscal support.

On the global front, Asian markets were trading mostly in green, after China's exports continued to log robust growth in December driven by higher global demand for pandemic-induced goods. The official data revealed that exports grew 18.1 percent on a yearly basis in December, faster than the expected growth of 15.0 percent, data from the General Administration of Customs, showed. Nonetheless, the rate of increase slowed from 21.1 percent posted in November. Driven by domestic demand, imports growth advanced to 6.5 percent from 4.5 percent a month ago.

The BSE Sensex is currently trading at 49517.57, up by 25.25 points or 0.05% after trading in a range of 49182.37 and 49576.46. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.30%, while Small cap index was up by 0.11%.

The top gaining sectoral indices on the BSE were Capital Goods up by 1.90%, Industrials up by 1.00%, Energy up by 0.95%, Oil & Gas up by 0.83% and FMCG up by 0.79%, while IT down by 0.94%, TECK down by 0.86%, Metal down by 0.69%, Consumer Durables down by 0.42% and Basic Materials down by 0.36% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 3.15%, Larsen & Toubro up by 2.29%, Mahindra & Mahindra up by 1.67%, TCS up by 1.46% and ITC up by 1.23%. On the flip side, HCL Tech down by 3.10%, Infosys down by 2.00%, Tech Mahindra down by 1.76%, Ultratech Cement down by 1.32% and Asian Paints down by 1.09% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has constituted a working group to study digital lending, including lending through online platforms and mobile apps. The RBI said that the working group will study all aspects of digital lending activities in the regulated financial sector as well as by unregulated players so that an appropriate regulatory approach can be put in place.

This move assumes significance in the context of recent reports of illegal app-based lenders thriving across the country. It mentioned that while penetration of digital methods in the financial sector is a welcome development, the benefits and certain downside risks are often interwoven in such endeavours. A balanced approach needs to be followed so that the regulatory framework supports innovation while ensuring data security, privacy, confidentiality and consumer protection.

It also stated that digital lending has the potential to make access to financial products and services more fair, efficient and inclusive. From a peripheral supporting role a few years ago, fintech-led innovation is now at the core of the design, pricing and delivery of financial products and services.

The CNX Nifty is currently trading at 14573.75, up by 8.90 points or 0.06% after trading in a range of 14471.50 and 14587.25. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were UPL up by 4.20%, Indusind Bank up by 3.17%, GAIL India up by 2.62%, Larsen & Toubro up by 2.21% and Britannia up by 1.85%. On the flip side, HCL Tech down by 3.08%, Wipro down by 2.18%, Tech Mahindra down by 1.92%, Infosys down by 1.76% and JSW Steel down by 1.48% were the top losers.

Asian markets were trading mostly in green; Nikkei surged 509.89 points or 1.79% to 28,966.48, Straits Times rose 12.54 points or 0.42% to 2,990.05, Hang Seng gained 139.65 points or 0.49% to 28,375.25, KOSPI advanced 1.73 points or 0.05% to 3,150.02 and Jakarta Composite added 11.10 points or 0.17% to 6,446.31. On the other hand, Taiwan Weighted fell 37.36 points or 0.24% to 15,732.62 and Shanghai Composite was down by 10.37 points or 0.29% to 3,588.28.