Benchmarks extend gains in morning session

Indian equity benchmarks extended their gains in morning session, ahead of the presentation of Union Budget in the Parliament at 11.00 AM. Traders took some encouragement with newly appointed Chief Economic Advisor (CEA) V Anantha Nageswaran’s statement that abatement of the COVID-19 pandemic would kick in virtuous cycle investment leading to job creation. He also said the government has taken various steps to support lower income categories. Some support also came with data showing that the growth of eight core infrastructure industries grew 3.8 percent in December 2021 as against 0.4 percent contraction in same month last year, on better show by coal, cement and refinery products. Market participants overlooked a business survey showed growth in India's factory activity slowed to a four-month low in January as COVID-19 curbs hurt new orders and output, while high price pressures weighed on business confidence about the year ahead. The Manufacturing Purchasing Managers' Index, compiled and collected by IHS Markit from January 12-25, fell to 54.0 in January from December's 55.5. 

On the global front, the Japanese stock market is trading higher following the broadly positive cues from Wall Street overnight. Some support also came with the latest survey from Jibun Bank showed the manufacturing sector in Japan continued to expand in January, and at a faster pace, with a manufacturing PMI score of 55.4. That's up from 54.3 in December, and it moves further above the boom-or-bust line of 50 that separates expansion from contraction. Most of the markets in the region being closed for Lunar New Year holidays.  

The BSE Sensex is currently trading at 58861.66, up by 847.49 points or 1.46% after trading in a range of 58493.63 and 58929.52. There were 26 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.64%, while Small cap index was up by 0.78%.

The top gaining sectoral indices on the BSE were Bankex up by 2.05%, Realty up by 2.00%, Metal up by 1.73%, Capital Goods up by 1.55% and Basic Materials up by 1.24%, while Oil & Gas down by 0.23% was the lone losing index on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.17%, Indusind Bank up by 3.11%, ICICI Bank up by 2.67%, Axis Bank up by 2.44% and Kotak Mahindra Bank up by 2.37%. On the flip side, Dr. Reddy's Lab down by 0.50%, Bharti Airtel down by 0.03%, Power Grid Corporation down by 0.02% and ITC down by 0.02% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) in its latest data has said that banks' non-food credit growth accelerated to 9.3 percent in December 2021 from 6.6 per cent in the same period of the last year. Credit to agriculture and allied activities continued to perform well, registering a robust growth of 14.5 percent in December 2021 as compared to 7.7 percent in December 2020. Growth in loans to industry improved noticeably to 7.6 percent in December 2021 from 0.4 percent.

It stated size-wise, credit to medium industries registered high double-digit growth of 86.5 per cent in December 2021 as compared with 17.1 per cent last year. Growth in credit to micro and small industries accelerated to 20.5 per cent in December 2021 from 1.3 per cent a year ago. Credit to large industries recorded a growth of 1.3 per cent in December 2021 against a contraction of 0.5 per cent a year ago.

It mentioned within the industry, growth in credit to all engineering, beverage & tobacco, chemicals & chemical products, infrastructure, leather & leather products, mining & quarrying, petroleum, coal product & nuclear fuels, rubber plastic & their products, textiles and wood & wood products accelerated in December 2021 as compared to the corresponding month of the previous year. However, it stated credit growth to basic metal & metal products, cement & cement products, construction, food processing, gems & jewellery, glass & glassware, paper & paper products and vehicles, vehicles parts & transport equipment decelerated in the reporting month.

Besides, it stated the growth in loans to the services sector accelerated to 10.8 per cent in December 2021 from eight per cent a year ago, mainly due to a significant improvement in credit growth to non-banking financial companies (NBFCs). Credit to the personal loans segment continued to expand at a robust rate and grew 14.3 per cent in December 2021 as against 8.8 per cent a year ago. Housing remained the prime driver of overall growth in the segment.

The CNX Nifty is currently trading at 17579.85, up by 240.00 points or 1.38% after trading in a range of 17468.50 and 17596.10. There were 43 stocks advancing against 7 stocks declining on the index.

The top gainers on Nifty were Britannia Industries up by 4.18%, Sun Pharma up by 4.10%, Indusind Bank up by 3.10%, ICICI Bank up by 2.68% and HDFC Life Insurance up by 2.50%. On the flip side, Indian Oil Corp. down by 2.44%, BPCL down by 2.12%, Tata Motors down by 1.38%, ONGC down by 0.93% and Dr. Reddy's Lab down by 0.53% were the top losers.

In the Asian markets, Nikkei 225 surged 86.76 points or 0.32% to 27,088.74.