Indian equity markets maintain gains in late afternoon session

Indian equity benchmarks continued to trade in fine fettle in late afternoon session tracking strength across other Asian markets, after a better-than-expected inflation reading from the US eased growing concerns about steep hikes in COVID-era interest rates. Meanwhile, broader markets also strengthened, with the BSE Smallcap and Midcap indices rising in the range of 0.45-0.75%. Gains in IT, Bankex, Realty and Consumer Durables shares pushed the headline indices higher. Sentiment got boost as Reserve Bank of India (RBI) in its latest data has showed that bank credit rose 14.52 per cent to Rs 123.69 lakh crore and deposits increased 9.14 per cent to Rs 169.72 lakh crore in the fortnight ended July 29. On the global front, Asian markets were trading higher after a report showed US inflation cooled more than expected in July, reflecting lower energy prices. However, European markets were mostly trading in red as investors assessed their monetary policy expectations after a cooler-than-expected US inflation print, and digested a raft of corporate earnings. Back home, stock specific development, Kirloksar Pneumatic (KPCL) surged after domestic mutual funds bought more than 6 per cent stake in the company via open market.

The BSE Sensex is currently trading at 59329.93, up by 512.64 points or 0.87% after trading in a range of 59251.14 and 59484.99. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.72%, while Small cap index up by 0.48%.

The gaining sectoral indices on the BSE were IT up by 1.63%, Bankex up by 1.59%, Realty up by 1.32%, Consumer Durables up by 1.24% and TECK up by 1.18%, while FMCG down by 0.77%, Auto down by 0.35%, Utilities down by 0.10%, Basic Materials down by 0.09% and Telecom down by 0.09% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 2.63%, HDFC up by 2.57%, Tech Mahindra up by 2.53%, Wipro up by 2.22% and Bajaj Finance up by 1.99%. On the flip side, NTPC down by 1.54%, ITC down by 1.43%, Maruti Suzuki down by 1.40%, Hindustan Unilever down by 1.04% and Mahindra & Mahindra down by 0.86% were the top losers.

Meanwhile, amid the prevailing uncertain business environment, Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that the ongoing sharp drop in the banking system liquidity and the concurrent rise in the credit demand might lead to tightness in the financing system.

As per the report, a sudden spike in the short-term interest rate cannot be ruled out. The agency further expressed concerns that the liquidity condition could become even more challenging over the coming months, owing to an expected seasonal pick-up in cash-in-circulation caused by the festive season.

The rating agency further noted that the net balance of payment (BoP) could remain in deficit during the same period, which will drain out more liquidity from the banking system. The report also said that demand for credit is expected to stay strong, driven by higher working capital requirements (WCRs) as well as seasonal factors. Therefore, Ind-Ra said that reinvigorating the system liquidity has become necessary.

The CNX Nifty is currently trading at 17666.35, up by 131.60 points or 0.75% after trading in a range of 17631.95 and 17719.30. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 2.63%, HDFC up by 2.62%, Tech Mahindra up by 2.61%, Wipro up by 2.29% and TCS up by 2.08%. On the flip side, Tata Consumer Produc down by 2.10%, Apollo Hospital Ent. down by 1.70%, ITC down by 1.57%, NTPC down by 1.35% and Maruti Suzuki down by 1.31% were the top losers.

All Asian markets were trading higher; Shanghai Composite surged 51.65 points or 1.60% to 3,281.67, Jakarta Composite soared 74.14 points or 1.05% to 7,160.38, Hang Seng increased 471.59 points or 2.40% to 20,082.43, Taiwan Weighted strengthened 258.83 points or 1.73% to 15,197.85, KOSPI rose 42.90 points or 1.73% to 2,523.78 and Straits Times was up by 15.92 points or 0.48% to 3,302.25.

European markets were trading mostly lower, UK’s FTSE 100 fell 9.37 points or 0.13% to 7,497.55 and Germany’s DAX was down by 20.64 points or 0.16% to 13,679.45, France’s CAC rose 5.47 points or 0.07% to 6,528.33.