Key indices remain in green in morning deals

Indian equity benchmarks trimmed some gains but continued to trade in green in morning deals, tracking gains in index majors Bajaj Finserv, Mahindra & Mahindra and Titan Company. Sentiments remained positive with India Inc stating that the Reserve Bank of India's decision to keep key interest rates unchanged and maintain an accommodative monetary policy stance will boost the confidence of businesses and consumers. Besides, after taking the bold decision to scrap all retrospective tax demands and refund money collected, Prime Minister Narendra Modi said the move shows his government's commitment to providing businesses stability of investment climate and policy consistency. On the sectoral front, stocks related to textiles sector remain in focus as Minister of State for Textiles Darshana Jardosh said India has received $298.67 million foreign direct investment (FDI) in the textiles sector in FY21, as against $323.52 million in FY20. On the global front, Asian markets were trading mostly in red amid concerns the Fed may raise interest rates sooner than expected.

The BSE Sensex is currently trading at 54482.83, up by 205.11 points or 0.38% after trading in a range of 54336.86 and 54584.73. There were 24 stocks advancing against 6 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.25%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Bankex up by 0.59%, Consumer Durables up by 0.51%, Realty up by 0.46%, Consumer discretionary up by 0.37% and Auto up by 0.36%, while Oil & Gas down by 0.48%, Energy down by 0.47%, Utilities down by 0.41%, Power down by 0.27% and Telecom down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.61%, Mahindra & Mahindra up by 2.11%, Titan Company up by 1.95%, Indusind Bank up by 1.24% and Bajaj Auto up by 1.18%. On the flip side, Reliance Industries down by 0.55%, Bharti Airtel down by 0.38%, HCL Technologies down by 0.38%, Dr. Reddy's Lab down by 0.32% and Maruti Suzuki down by 0.10% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has allayed the fears of lenders about the rising delinquency levels among small business loan borrowers, who are hit hard by the COVID-19 second wave, saying the numbers are not alarming yet. The government and the central bank push to support MSMEs during the pandemic through credit measures like the emergency credit line guarantee scheme (ESLGS) saw lending to them jumping to Rs 9.5 lakh crore in the pandemic-hit FY21 from Rs 6.8 lakh crore in FY20, while the asset quality deteriorated to 12.6 per cent as of March 2021 from 12 per cent in December 2020.

RBI Deputy Governor Mukesh Jain said there is no crisis now on this front, as the stress level among small business borrowers are not very high, even though slippages and loan restructuring are rising of late. He noted that the situation is not very bad as many accounts are going in for restructuring under the COVID package version 2 announced in May, which allowed crisis-ridden borrowers to opt for up to two years of the moratorium. He said ‘yes, there is a visible increase in slippages among MSME borrowers, but the quantum of slippages has not reached an alarming level.’

Jain has stated that after the first wave, the RBI had asked all banks and systematically important NBFCs to take the stress tests, and their pre-COVID and March 2021 numbers show that there is an all-round improvement on all parameters, be it capital adequacy ratio, NPAs/slippages or the provision coverage ratio -- all have improved and are better than the pre-pandemic levels and added that there is also an improvement on their profitability numbers.

The CNX Nifty is currently trading at 16289.40, up by 51.20 points or 0.32% after trading in a range of 16246.45 and 16320.75. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.61%, Mahindra & Mahindra up by 2.12%, Titan Co up by 2.00%, Asian Paints up by 1.26% and Bajaj Auto up by 1.21%. On the flip side, Hindalco down by 1.37%, Tata Consumer Product down by 0.97%, Divi's Lab down by 0.61%, Reliance Industries down by 0.56% and Bharti Airtel down by 0.36% were the top losers.

Asian markets were trading mostly in red; KOSPI fell 5.67 points or 0.17% to 3,264.69, Jakarta Composite lost 8.87 points or 0.14% to 6,194.56 and Taiwan Weighted dropped 75.51 points or 0.43% to 17,450.77. On the flip side, Hang Seng increased 245.01 points or 0.94% to 26,424.41 and Shanghai Composite gained 32.68 points or 0.94% to 3,490.91.