Benchmarks garner notable gains on Wednesday

In a range bound trading session, Indian equity benchmarks garnered notable gains on Wednesday, with Sensex and Nifty closing higher by over 0.30% each, as investors eagerly awaited the Federal Reserve's monetary policy decision later in the day for direction. The Fed is widely expected to leave interest rates unchanged, but the accompanying statement might provide hints on the timing and pace of interest-rate cuts in the next few months. Markets made an optimistic start of the day, tracking firm cues from other Asian markets on expectations for more stimulus from Beijing to bolster its struggling economy. Sentiments got boost as the government has garnered Rs 98,681 crore from long term capital gains tax on listed equities in 2022-23, a 15 per cent growth over the previous year. 

Firm trade persisted over the Dalal Street during the whole day, supported by heavy buying at Utilities and Power counters. Traders got encouragement as India Ratings & Research (Ind-Ra) upped India's GDP growth forecast for the current fiscal to 7.5 per cent from 7.1 per cent projected earlier on expectation of improved consumption demand. It said ongoing growth momentum led by government capex, deleveraged balance sheets of corporates/banks, and incipient private corporate capex cycle has now found support from the union government budget. Sentiments remained optimistic, after Commerce and Industry Minister Piyush Goyal has said that incentives worth Rs 9,721 crore have been claimed under the PLI scheme for nine sectors, including large scale electronics manufacturing and pharmaceuticals. 

On the global front, European markets were trading higher, even as Eurozone inflation rose slightly in July, while core inflation remained stable. The flash data from Eurostat showed that the harmonized index of consumer prices advanced 2.6 percent year-on-year in July, faster than the 2.5 percent increase in June. Asian markets settled mostly higher, as Japan's consumer sentiment increased for the second straight month in July, though marginally. The survey data from the Cabinet Office showed that the seasonally adjusted consumer confidence index rose to a 3-month high of 36.7 in July from 36.4 in June. The latest survey was conducted on July 15 among 8,400 households. Back home, sugar industry stocks remained in focus as industry body ISMA said India's gross sugar production is estimated to decline 2 per cent to 33.3 mn tonnes in 2024-25 marketing year starting October. 

Finally, the BSE Sensex rose 285.94 points or 0.35% to 81,741.34, and the CNX Nifty was up by 93.85 points or 0.38% points to 24,951.15.

The BSE Sensex touched high and low of 81,828.04 and 81,434.32 respectively. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose by 0.86%, while Small cap index was down by 0.14%.

The top gaining sectoral indices on the BSE were Utilities up by 1.57%, Power up by 1.46%, Metal up by 1.12%, Healthcare up by 0.91% and Basic Materials up by 0.74%, while Realty down by 0.41%, Telecom down by 0.12% and Energy down by 0.01% were the few losing indices on BSE.

The top gainers on the Sensex were JSW Steel up by 3.64%, Asian Paints up by 2.59%, Maruti Suzuki up by 2.28%, NTPC up by 2.25% and Adani Ports & SEZ up by 1.56%. On the flip side, Tata Motors down by 0.51%, Reliance Industries down by 0.51%, Infosys down by 0.48%, Mahindra & Mahindra down by 0.36% and Bajaj Finance down by 0.31% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has issued a Master Direction on the treatment of wilful defaulters and large defaulters under which banks and NBFCs will have to examine the wilful default aspect in all non-performing asset accounts with outstanding amounts of Rs 25 lakh and above.

A lender will identify and classify a person as a wilful defaulter by following a specified procedure. The evidence of wilful default will be examined by an identification committee. Wilful defaulter means a borrower or a guarantor who has committed wilful default, and the outstanding amount is Rs 25 lakh and above.

It stated ‘The lender shall examine the ‘wilful default’ aspect in all NPA accounts with an outstanding amount of Rs 25 lakh and above…from time to time.’ If a wilful default is observed in the internal preliminary screening, the lenders will complete the process of classification/declaring the borrower as a wilful defaulter within six months of the account being classified as NPA.

Further, it said the lenders should formulate a non-discriminatory board-approved policy that clearly sets out the criteria based on which the photographs of persons classified and declared as wilful defaulters shall be published. It added ‘No additional credit facility shall be granted by any lender to a wilful defaulter or any entity with which a wilful defaulter is associated.’

The CNX Nifty traded in a range of 24,984.60 and 24,856.50. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were JSW Steel up by 2.90%, Asian Paints up by 2.64%, HDFC Life Insurance up by 2.62%, NTPC up by 2.22% and SBI Life Insurance up by 1.89%. On the flip side, Britannia down by 0.99%, Dr. Reddy's Lab down by 0.79%, Grasim Industries down by 0.51%, Reliance Industries down by 0.51% and Tata Consumer Products down by 0.50% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 110.22 points or 1.33% to 8,384.63, France’s CAC rose 97.36 points or 1.3% to 7,572.30 and Germany’s DAX gained 88.42 points or 0.48% to 18,499.60.

Asian markets settled mostly higher on Wednesday as investors looked ahead to US Federal Reserve meeting later in the day for further clarity regarding when the Fed will begin cutting interest rates. Japanese shares rallied and the yen turned volatile after the country's central bank hiked its key interest rate to 0.25% in a surprise move and announced plans to reduce its massive bond-buying program. Meanwhile, the Biden administration planned to exempt chip equipment makers from Japan, the Netherlands and South Korea from upcoming export restrictions. Chinese and Hong Kong shares rebounded as soft Chinese PMI fuelled bets on more stimulus measures.