Sensex, Nifty cut most of gains in late morning session

Indian equity benchmarks cut most of their gains in late morning session, however managed to trade in green terrain. Positive cues from other Asian markets helped key indices to remain in green terrain. But, gains got trimmed, as traders were cautious, after the Biden administration has told the US Congress that India's recent emphasis on import substitution through the ‘Make in India’ campaign has ‘epitomised’ the challenges facing the bilateral trade relationship. In its 2021 Trade Policy Agenda and 2020 Annual Report, the US Trade Representative (USTR) said that during 2020, the US continued its engagement with India to try to resolve longstanding market access impediments affecting US exporters.

On the global front, Asian markets were trading mostly in green, as the manufacturing sector in Taiwan continued to expand in February, and at a faster pace, the latest survey from Markit Economics revealed on Tuesday with a manufacturing PMI score of 60.4. That's up from 60.2 in January, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Individually, production spiked amid a steep increase in sales, while supply chain delays were among the worst seen in 17 years. Input costs continue to rise sharply, leading to higher selling prices.

The BSE Sensex is currently trading at 49900.27, up by 50.43 points or 0.10% after trading in a range of 49807.12 and 50424.65. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.62%, while Small cap index was up by 0.69%.

The top gaining sectoral indices on the BSE were IT up by 1.49%, TECK up by 1.33%, Auto up by 0.86%, Oil & Gas up by 0.79% and Utilities up by 0.77%, while Bankex down by 0.54% was the only losing index on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 3.07%, Tech Mahindra up by 2.19%, NTPC up by 2.07%, Infosys up by 1.91% and ITC up by 1.16%. On the flip side, ONGC down by 2.65%, HDFC down by 2.00%, Kotak Mahindra Bank down by 1.09%, Power Grid down by 1.08% and Dr. Reddy’s Lab down by 0.90% were the top losers.

Meanwhile, rating agency, Crisil in its latest report has said that bank credit is seen growing 400-500 bps to 9-10 per cent in the next financial year (FY22) on the back of timely government and regulatory measures this fiscal, which helped the economy to recover faster than expected. In the current fiscal, bank credit is expected to rise 4-5 per cent despite the sharpest contraction in the economy since Independence. It added that the economy is likely to grow at 11 per cent in FY22.

Crisil’s Krishnan Sitaraman said while bank credit growth had contracted 0.8 per cent in the first half of this fiscal, it recovered sharply in the third quarter by growing 3 per cent sequentially. In the fourth quarter, too, it should clock 3 per cent sequential growth. In June 2020, Crisil had pegged bank credit growth to be at 0-1 per cent this fiscal. He added that the government measures, including the Rs 3 lakh crore emergency credit line guarantee scheme (ECLGS), have been supportive.

In the first half of this fiscal, the pandemic forced borrowers and lenders to tread cautiously, leading to a contraction in credit pick up. But a faster-than-expected uptick in economic activity since the relaxation of lockdowns, and pent-up and festive season demand helped thereafter. In absolute terms, net credit rose to Rs 2.3 lakh crore in the first nine months of FY21, of which disbursements under ECLGS was Rs 1.6 lakh crore in this period. Banks also deployed Rs 1.4 lakh crore via targeted long-term repo operation and partial credit guarantee scheme, serving as credit substitutes.

The CNX Nifty is currently trading at 14808.65, up by 47.10 points or 0.32% after trading in a range of 14760.80 and 14933.65. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were BPCL up by 3.57%, Mahindra & Mahindra up by 3.06%, Hero MotoCorp up by 3.04%, Wipro up by 2.50% and Tech Mahindra up by 2.37%. On the flip side, ONGC down by 2.56%, HDFC down by 1.92%, Shree Cement down by 1.30%, Dr. Reddy’s Lab down by 0.87% and UPL down by 0.78% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 125.00 points or 0.78% to 16,078.80, KOSPI rose 22.98 points or 0.76% to 3,035.93, Straits Times advanced 7.80 points or 0.26% to 2,980.80 and Jakarta Composite soared 6.25 points or 0.1% to 6,344.76. On the flip side, Shanghai Composite declined 35.11 points or 0.99% to 3,516.29, Hang Seng decreased 193.94 points or 0.66% to 29,258.63 and Nikkei 225 slipped 290.87 points or 0.98% to 29,372.63.