Sensex, Nifty trade with marginal losses

Indian equity benchmarks cut most of their losses but remained lower in late morning session with both Sensex and Nifty trading with marginal losses. Negative cues from other Asian markets impacted sentiments over the Dalal Street. However, losses got trimmed, after the Apparel Export Promotion Council (AEPC) said the Reserve Bank of India's decision to extend the interest equalisation scheme for pre and post shipment rupee export credit for another three months till September 30 would help the sector deal with the impact of the pandemic.

On the global front, Asian markets were trading mostly in red, even after South Korea's consumer price inflation slowed in June but remained above the central bank's target for the third straight month. The data from Statistics Korea showed that consumer prices grew 2.4 percent year-on-year in June, slower than the 2.6 percent increase seen in May and the forecast of 2.5 percent. Nonetheless, the rate remained above the target of 2 percent since April. The 2.6 percent inflation rate posted in May was the highest since early 2012.

The BSE Sensex is currently trading at 52289.87, down by 28.73 points or 0.05% after trading in a range of 52177.68 and 52436.83. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.01%, while Small cap index was up by 0.86%.

The top gaining sectoral indices on the BSE were Realty up by 1.00%, Consumer Durables up by 0.95%, Healthcare up by 0.84%, Energy up by 0.61% and Telecom up by 0.60%, while Power down by 1.22%, Utilities down by 0.86%, Metal down by 0.66%, IT down by 0.56% and Capital Goods down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 0.91%, ICICI Bank up by 0.81%, Bajaj Finance up by 0.78%, SBI up by 0.61% and Titan Company up by 0.44%. On the flip side, TCS down by 1.22%, Bajaj Finserv down by 1.17%, Tata Steel down by 1.07%, Power Grid down by 1.04% and Tech Mahindra down by 0.83% were the top losers.

Meanwhile, in a move that will provide relief to exporters, the Reserve Bank of India (RBI) has said a scheme providing interest subsidy for post and pre-shipment export credit has been extended by three months till September. Exporters get the subsidy under the Interest Equalisation Scheme for pre and post-shipment Rupee Export Credit. Earlier in April, the scheme was extended till June 30.

The RBI said ‘Government of India has approved the extension of Interest Equalization Scheme for Pre and Post Shipment Rupee Export Credit, with the same scope and coverage, for a further period of three months, i.e., up to September 30, 2021’. The extension takes effect from July 1, 2021, and ends on September 30, 2021, covering three months. Consequently, the extant operational instructions issued by the Reserve Bank of India will continue to remain in force up to September 30, 2021.

In November 2018, the interest subsidy was increased to 5 per cent from 3 per cent to boost MSME sector exports. Later, the government included other merchant exporters too under the scheme and allowed them interest equalisation at the rate of 3 per cent on credit for the export of certain products.

Commenting on the extension of the scheme, the Federation of Indian Export Organisations (FIEO) President A Sakthivel said the timely extension will provide competitive rates for exports and bring it near international benchmarks particularly for MSMEs. FIEO also requested the government to provide stability of the scheme by extending it for 3 years. India's merchandise exports in May were $32.27 billion, as compared to $19.05 billion in the year-ago period, exhibiting a growth of 69.35 per cent.

The CNX Nifty is currently trading at 15663.70, down by 16.30 points or 0.10% after trading in a range of 15635.95 and 15711.20. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Adani Ports & SEZ up by 2.11%, Divi's Lab up by 1.90%, Indian Oil Corporation up by 0.93%, Coal India up by 0.89% and Reliance Industries up by 0.86%. On the flip side, TCS down by 1.23%, Bajaj Finserv down by 1.21%, Tata Steel down by 1.07%, JSW Steel down by 1.04% and Power Grid down by 1.04% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 462.59 points or 1.6% to 28,365.36, Shanghai Composite declined 56.55 points or 1.58% to 3,532.23, Taiwan Weighted dropped 10.01 points or 0.06% to 17,703.93 and KOSPI fell 1.46 points or 0.04% to 3,280.60. On the flip side, Straits Times advanced 1.16 points or 0.04% to 3,125.35, Jakarta Composite soared 26.70 points or 0.44% to 6,032.66 and Nikkei 225 surged 62.01 points or 0.22% to 28,769.05.