Benchmarks continue to trade in red in morning deals

Indian equity benchmarks continued to trade in red in morning deals, amid weakness across global markets. Traders remained cautious as former deputy chairman of the erstwhile Planning Commission Montek Singh Ahluwalia said it would be unrealistic to assume that India would record a sustained growth of 8 per cent, which is needed to become a developed nation by 2047. However, losses remain capped as some support came with report stated that with RBI hiking the lending rate, the Union Cabinet earmarked Rs 34,856 crore towards the interest subvention scheme to help banks provide short term agriculture loans of up to Rs 3 lakh at a rate of 7 per cent. Information and Broadcasting Minister Anurag Singh Thakur said the Cabinet has decided to restore interest subvention on short term agriculture loans to 1.5 per cent for all financial institutions.

On the global front, Asian markets are trading mostly in red after the July FOMC meeting minutes suggested continuation of the hawkish stance to bring inflation under control. Back home, some of the stocks related to aviation sector were down as Credit ratings agency ICRA in its latest report said that elevated Aviation Turbine Fuel (ATF) prices and rupee depreciation are likely to pose a serious threat to the recovery process for domestic carriers.

The BSE Sensex is currently trading at 60169.13, down by 91.00 points or 0.15% after trading in a range of 59969.08 and 60287.13. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.50%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Realty up by 1.00%, FMCG up by 0.63%, Utilities up by 0.58%, Telecom up by 0.55% and Power up by 0.48%, while Oil & Gas down by 0.69%, IT down by 0.67%, TECK down by 0.58%, Energy down by 0.57% and Healthcare down by 0.51% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.51%, Hindustan Unilever up by 0.90%, SBI up by 0.83%, Bharti Airtel up by 0.77% and Power Grid Corporation up by 0.63%. On the flip side, Dr. Reddy's Lab down by 2.70%, Sun Pharma down by 1.43%, Wipro down by 1.34%, Infosys down by 0.96% and Nestle down by 0.81% were the top losers.

Meanwhile, with Reserve Bank of India (RBI) hiking the lending rate, Information and Broadcasting Minister Anurag Singh Thakur has said the Union Cabinet earmarked Rs 34,856 crore towards the interest subvention scheme to help banks provide short term agriculture loans of up to Rs 3 lakh at a rate of 7 per cent. Thakur said the Cabinet has decided to restore interest subvention on short term agriculture loans to 1.5 per cent for all financial institutions. 

The interest subvention of 1.5 per cent will be provided to lending institutions for financial years 2022-23 to 2024-25 for short term loans of up to Rs 3 lakh to the farmers. The interest subvention support requires additional budgetary provisions of Rs 34,856 crore for the period of 2022-23 to 2024-25 under the scheme. He said the government's support to banks for the interest subvention scheme was stopped in May 2020 as lenders were themselves able to provide short term agriculture loan at 7 per cent.

However, with the RBI increasing the repo rate or short-term lending rate thrice by 140 basis points in recent months, it became necessary to compensate banks so that they can continue providing agriculture loans at 7 per cent. Besides, he said the government has not let the fertiliser prices to rise despite the increase in global prices. He also said the fertiliser subsidy in the current fiscal year is likely to be more than Rs 2 lakh crore.

The CNX Nifty is currently trading at 17898.70, down by 45.55 points or 0.25% after trading in a range of 17863.45 and 17954.65. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were SBI Life Insurance up by 1.51%, Kotak Mahindra Bank up by 1.45%, Tata Consumer Product up by 1.15%, Hindustan Unilever up by 0.91% and SBI up by 0.80%. On the flip side, Dr. Reddy's Lab down by 2.69%, ONGC down by 2.61%, Sun Pharma down by 1.63%, Wipro down by 1.47% and Cipla down by 1.22% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 270.22 points or 0.92% to 28,952.55, Hang Seng decreased 124.74 points or 0.63% to 19,797.71, Taiwan Weighted dropped 101.32 points or 0.66% to 15,364.13, Shanghai Composite declined 15.91 points or 0.48% to 3,276.62 and KOSPI fell 15.13 points or 0.6% to 2,501.34.

On the flip side, Jakarta Composite soared 6.63 points or 0.09% to 7,140.08 and Straits Times advanced 18.19 points or 0.56% to 3,280.95.