Bourses continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in the afternoon session due to buying in TECK and IT stocks. Buying in frontline stocks such as Bajaj Finserv, Kotak Mahindra and Bajaj Finance were aiding sentiment, while selling in Tata Steel, SBI and NTPC kept the gains in the markets in check. Sentiments were positive as controlled Covid cases domestically and strong pick up in vaccination drive has led to healthy pick-up in economic activities. Adding more support, Reserve Bank of India (RBI) states that the inflation trajectory is coming down faster than anticipated and the inflation print of 5.3 per cent in August has proven the monetary policy committee’s (MPC) move to look through May’s price shock as the right call. However, upside remain capped as traders were cautions as Finance Minister Nirmala Sitharaman is chairing the 45th meeting of the Goods and Service Tax Council Council today. The meeting will be the first in-person meeting between the Union Finance Minister and State Finance Ministers in two years. In the previous month, GST revenue collection stood at Rs 1.12 lakh crore this was lower than the Rs 1.16 lakh crore collected in July but was still better than the year-ago period. Further, the GST council may also discuss bringing petrol and diesel under the GST regime.

On the global front; Asian markets were trading mixed as concerns over the impact of prolonged outbreak of coronavirus across the word, China’s latest regulatory tightening on businesses and prospect of reduced US Federal Reserve stimulus also weighing on market sentiments. Back home, in scrip specifc development, shares of Zomato were in buzz as in today’s GST Council meeting, the finance ministers are expected to discuss the fitment committee’s recommendation to bring food delivery apps such as Zomato and Swiggy within the ambit of restaurant services and make them liable to pay the tax.

The BSE Sensex is currently trading at 59265.51, up by 124.35 points or 0.21% after trading in a range of 59091.73 and 59737.32. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index rose 1.39%, while Small cap index was down by 1.71%.

The few gaining sectoral indices on the BSE were Telecom up by 0.41%, TECK up by 0.18% and IT was up by 0.01%, while Metal down by 3.20%, Power down by 2.35%, Realty down by 2.34%, Basic Materials down by 2.21% and Utilities was down by 1.97% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finserv up by 2.83%, Kotak Mahindra Bank up by 2.30%, Bajaj Finance up by 1.98%, Bharti Airtel up by 1.07% and Nestle was up by 1.03%. On the flip side, Tata Steel down by 4.63%, SBI down by 2.04%, NTPC down by 1.49%, Indusind Bank down by 1.11% and Power Grid was down by 1.03% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest article has said that the uptick in the credit growth in the recent months notwithstanding the second COVID-19 wave augurs well for the economy. Bank credit growth has witnessed significant fluctuations in the past one and a half decades.

The article has noted that the period between 2007-08 and 2013-14 could be characterised as a bank credit boom period in the Indian economy, as non-food credit registered double-digit growth, primarily driven by robust credit growth to the industrial sector. Both dominant-group and other-group of banks lent aggressively to the industrial as well as other sectors and within industries, infrastructure, and basic metal and metal product industries accounted for a major portion of credit offtake from both the bank groups during the credit boom period. Thereafter, however, the credit cycle reversed along with a shift in the sectoral deployment of bank credit.

It further said that during 2014-15 to 2020-21, overall credit growth decelerated, primarily driven down by a reversal in credit growth to the industrial sector. The overall non-food credit growth during 2014-15 to 2020-21 was almost entirely driven by the expansion of credit to the non-industrial sectors, particularly lending to the retail segment in the form of personal loans. Active participation of both the dominant-group and the other-group of banks is driving credit growth to the non-industrial sectors.

The CNX Nifty is currently trading at 17657.80, up by 28.30 points or 0.16% after trading in a range of 17587.80 and 17792.95. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Bajaj Finserv up by 2.85%, Kotak Mahindra Bank up by 2.28%, Bajaj Finance up by 1.88%, Nestle up by 1.09% and Bharti Airtel was up by 1.07%. On the flip side, Tata Steel down by 4.80%, Coal India down by 3.67%, JSW Steel down by 2.45%, Hindalco down by 2.27% and ONGC was down by 2.18% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 176.71 points or 0.58% to 30,500.05, Shanghai Composite gained 1.08 points or 0.03 % to 3,608.17, Hang Seng increased 104.33 points or 0.42% to 24,772.18 and KOSPI was up by 10.42 points or 0.33% to 3,140.51.

On the other side; Taiwan Weighted dropped 1.91 points or 0.01% to 17,276.79, Jakarta Composite lost 5.55 points or 0.09% to 6,104.39 and Straits Times trembled was down by 9.54 points or 0.31% to 3,055.00.