Benchmarks cut some of their gains during late morning session

Indian equity benchmarks cut some of their gains during late morning session but remained higher, with both Sensex and Nifty trading in green terrain. Positive cues from other Asian markets helped key indices to remain higher. However, some gains got trimmed, after India's services sector activities slumped into contraction territory for the first time in eight months, amid renewed decline in new work intakes due to the escalation of the pandemic and the reintroduction of restrictions. The seasonally adjusted India Services Business Activity Index fell to 46.4 in May, down from 54.0 in April, as the intensification of the COVID-19 crisis caused renewed declines in new business and output.

On the global front, Asian markets were trading mostly higher, after the private sector in Singapore continued to expand in May, and at a faster pace, the latest survey from Markit Economics showed on Thursday with a services PMI score of 54.4. That's up from 51.8 in April and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Both manufacturing and services registered stronger performances in May, but the construction sector saw a sharp downturn. The finance and insurance sub-sector registered another rapid rate of expansion in activity.

The BSE Sensex is currently trading at 52053.77, up by 204.29 points or 0.39% after trading in a range of 52039.18 and 52240.61. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.83%, while Small cap index was up by 1.17%.

The top gaining sectoral indices on the BSE were Realty up by 3.64%, Consumer Durables up by 3.10%, Industrials up by 1.17%, Oil & Gas up by 1.07% and Consumer discretionary up by 0.94%, while Auto down by 0.19% was the only losing index on BSE.

The top gainers on the Sensex were Titan Co up by 5.57%, ONGC up by 3.10%, Kotak Mahindra Bank up by 2.12%, Axis Bank up by 1.15% and Bajaj Finance up by 0.76%. On the flip side, Indusind Bank down by 2.46%, Bajaj Auto down by 0.94%, SBI down by 0.45%, HCL Tech down by 0.26% and Tech Mahindra down by 0.21% were the top losers.

Meanwhile, credit ratings agency Crisil in its latest report has said that the expanded Emergency Credit Line Guarantee Scheme (ECLGS) will help businesses like hotels, civil aviation and tour operators, which are the hardest hit by the second wave of COVID-19. It will also support build-up of healthcare infrastructure, mainly oxygen availability, in tier-2 and beyond cities and the hinterland. The scheme was first announced in May last year, when the deep economic impact of the pandemic was becoming evident. The latest version of the scheme is valid till end September 2021 or till the Rs 3 lakh crore outlay gets exhausted.

It said more sectors have been brought under the scheme's ambit, some eligibility criteria have been relaxed, and micro, small and medium enterprises (MSMEs) have been allowed to avail of loans for longer tenures, and it also pointed out that loans of Rs 2.54 lakh crore have been sanctioned under the scheme as of May. The revised scheme has included the civil aviation sector -- airlines and airport operators -- and also eased the eligibility criteria for companies in the hospitality, travel and tourism, and leisure and sports sectors, the agency said, adding that these segments are set to show a 30 per cent sequential demand contraction in the June quarter.

Pointing out that the revised schemes includes funding of up to Rs 2 crore for oxygen generating plants for capacity enhancement at 7.5 per cent interest, the agency said it will benefit mid-sized and small hospitals, especially in tier-2 and beyond cities, and the hinterland, which have a constrained credit profile. The agency warned while the terms of the scheme are attractive, hospital companies will have to carefully evaluate spending, keeping in mind the sustainability of demand and overall viability of investments. The revised scheme will also benefit MSME borrowers that availed of the ECLGS 1.0 scheme, provided they are eligible under the Reserve Bank of India''s restructuring 2.0 framework.

The CNX Nifty is currently trading at 15655.85, up by 79.65 points or 0.51% after trading in a range of 15635.30 and 15693.15. There were 41 stocks advancing against 9 stocks declining on the index.

The top gainers on Nifty were Titan Co up by 5.61%, Adani Ports & SEZ up by 4.36%, ONGC up by 3.23%, Kotak Mahindra Bank up by 2.12% and Eicher Motors up by 1.61%. On the flip side, Indusind Bank down by 2.43%, Bajaj Auto down by 0.88%, UPL down by 0.52%, SBI down by 0.47% and HCL Tech down by 0.32% were the top losers.

Asian markets were trading mostly higher; Jakarta Composite soared 9.18 points or 0.15% to 6,040.76, Taiwan Weighted strengthened 90.26 points or 0.53% to 17,255.30, KOSPI rose 29.89 points or 0.93% to 3,254.12, Straits Times advanced 4.19 points or 0.13% to 3,165.23, Shanghai Composite gained 13.76 points or 0.38% to 3,610.90 and Nikkei 225 surged 133.40 points or 0.46% to 29,079.54. On the flip side, Hang Seng decreased 117.69 points or 0.4% to 29,179.93.