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Benchmark indices continue lackluster trade
Aug-18-2022

Indian bourses continue to trade in red terrain in noon deals with Sensex and Nifty trading down by 261 and 74 points respectively. Traders were worried as aggressive rate hikes by the Fed and central banks in Europe and Asia to control inflation that is running at multi decade highs might disrupt global economic growth. Federal Reserve's July meeting pointed to US interest rates staying higher for longer to bring down inflation back to its 2% target. Sentiments were also impacted 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. Further, depreciating rupee too added pressure on the markets. The partially convertible currency is currently trading at 79.68, weaker by 23 paise from its previous close of 79.45 on Wednesday due to appreciation of the US currency overseas. On the global front, Asian markets were trading mostly lower.

The BSE Sensex is currently trading at 59999.13, down by 261.00 points or 0.43% after trading in a range of 59946.44 and 60287.13. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.13%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were Realty up by 0.87%, Telecom up by 0.49%, FMCG up by 0.38%, Capital Goods up by 0.19% and Utilities was up by 0.17%, while Oil & Gas down by 1.09%, IT down by 0.97%, Energy down by 0.94%, Healthcare down by 0.92% and TECK was down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.66%, Kotak Mahindra Bank up by 1.65%, Ultratech Cement up by 0.64%, Larsen & Toubro up by 0.30% and ITC was up by 0.29%. On the flip side, Dr. Reddy's Lab down by 3.04%, Wipro down by 1.76%, Sun Pharma down by 1.68%, Infosys down by 1.54% and Mahindra & Mahindra was down by 1.23% were the top losers.

Meanwhile, in order to ensure low-cost credit flow to hospitality and related segments hit hard by the COVID-19 pandemic, the Union Cabinet has approved the enhancement in the limit of the Emergency Credit Line Guarantee Scheme (ECLGS) by Rs 50,000 crore from Rs 4.5 lakh crore to Rs 5 lakh crore, with the additional amount being earmarked exclusively for enterprises in hospitality and related sectors.

The increase has been done on account of the severe disruptions suffered by hospitality and related enterprises due to the pandemic. The enhancement is expected to provide much needed relief to enterprises in these sectors by incentivizing lending institutions to provide additional credit of up to Rs 50,000 crore at low cost. The ECLGS was announced in May 2020 in wake of the outbreak of COVID-19 to help various sectors, especially in the MSME segment, to get credit at a concessional rate of 7 per cent. Loans of about Rs 3.67 lakh crore have been sanctioned under ECLGS till August 5, 2022.

In Union Budget 2022-23, Finance Minister Nirmala Sitharaman had announced extending the validity of ECLGS till March 2023 and an increase in the limit of guaranteed cover by Rs 50,000 crore. The additional amount of Rs 50,000 crore would be made applicable to enterprises in hospitality and related sectors till the validity of the scheme (March 31, 2023).

The CNX Nifty is currently trading at 17870.05, down by 74.20 points or 0.41% after trading in a range of 17852.05 and 17954.65. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Tata Consumer Products up by 2.19%, Kotak Mahindra Bank up by 1.89%, Bharti Airtel up by 1.57%, SBI Life Insurance up by 1.46% and Ultratech Cement was up by 0.66%. On the flip side, ONGC down by 3.04%, Dr. Reddy's Lab down by 2.91%, BPCL down by 2.11%, UPL down by 1.88% and Wipro was down by 1.74% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 173.31 points or 0.87% to 19,749.14, Shanghai Composite declined 17.49 points or 0.53% to 3,275.04, Nikkei 225 slipped 280.63 points or 0.96% to 28,942.14, Taiwan Weighted dropped 68.69 points or 0.44% to 15,396.76 and KOSPI was down by 1.10 points or 0.04% to 2,515.37.

On the other side, Jakarta Composite soared 6.63 points or 0.09% to 7,140.08 and Straits Times was up by 15.08 points or 0.46% to 3,277.84.
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