Sluggish trend continues on street

Indian equity benchmarks continued to show a sluggish trend in afternoon session, with Sensex and Nifty trading below their psychological levels of 48,700 and 14,350, respectively. The sentiments were under pressure with former chief economic adviser Arvind Virmani statement that the Indian economy is likely to contract in the range of 5-7.5 per cent this fiscal (FY21) but will see a growth of 9 to 11 per cent in FY 2021-22. Further, Virmani said in the upcoming Budget, the government should come up with policies to accelerate India's economic growth. Meanwhile, finance ministry is looking at other avenues for affordable capital infusion, including setting up of a Bank Investment Company (BIC), as the RBI has raised concern over the issuance of zero coupon bonds for recapitalisation of public sector banks (PSBs).

On the global front, Asian markets were trading mixed despite data confirmed China's economy had bounced back last quarter as factory output jumped, helping partially offset recent disappointing news on U.S. consumer spending. Back on street, foreign portfolio investors (FPI) put in Rs 14,866 crore in Indian markets in the first half of January with participants expecting strong third-quarter results by companies.

The BSE Sensex is currently trading at 48648.84, down by 385.83 points or 0.79% after trading in a range of 48525.55 and 49122.23. There were 6 stocks advancing against 24 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 1.90%, while Small cap index was down by 1.78%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 0.48%, Energy up by 0.18%, and FMCG was up by 0.11%, while Metal down by 3.33%, Realty down by 2.82%, PSU down by 2.21%, Basic Materials down by 2.17% and Power was down by 2.01% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.20%, HDFC Bank up by 1.19%, Nestle up by 0.99%, ITC up by 0.69% and Titan Company was up by 0.61%. On the flip side, ONGC down by 4.00%, Indusind Bank down by 3.61%, Bajaj Finance down by 3.28%, Bajaj Finserv down by 3.03% and Sun Pharma was down by 2.76% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest report has showed that bank credit grew 3.2 per cent to Rs 107.05 lakh crore in the first nine months (April-December) of the current financial year (FY21), against a growth of 2.7 per cent registered in the corresponding period of 2019-20. In the fortnight ended March 27, 2020, bank advances stood at Rs 103.72 lakh crore.

As per the data, bank deposits rose 8.5 per cent to Rs 147.27 lakh crore in the April-December 2020 period as against an increase of 5.1 per cent a year ago. The sharp accretion in deposits during the year was due to the safe haven appeal of banks. In the fortnight ended January 1, 2021, the year-on-year growth in bank credit was 6.7 per cent and 11.5 per cent in deposits.

The bank credit growth in the fortnight ended January 1, 2021, increased compared to last fortnight (December 18, 2020) which can be ascribed to an increase in retail loans. However, the credit growth remained marginally lower compared with the year-ago period (7.5 per cent as of January 3, 2020) reflecting subdued demand and risk aversion in the banking system.

The CNX Nifty is currently trading at 14307.65, down by 126.05 points or 0.87% after trading in a range of 14263.60 and 14459.15. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were UPL up by 4.09%, Reliance Industries up by 1.37%, Nestle up by 1.28%, Britannia Industries up by 1.25% and HDFC Bank was up by 1.09%. On the flip side, Tata Motors down by 4.96%, Tata Steel down by 4.05%, ONGC down by 3.99%, Hindalco down by 3.85% and Indusind Bank was down by 3.55% were the top losers.

Asian markets were mixed; Nikkei 225 slipped 276.97 points or 0.97% to 28,242.21, KOSPI fell 71.97 points or 2.33% to 3,013.93, Taiwan Weighted dropped 4.39 points or 0.03% to 15,612.00 and Straits Times was down by 22.51 points or 0.75% to 2,982.36.

On the other hand; Jakarta Composite soared 29.86 points or 0.47% to 6,403.27, Hang Seng increased 213.54 points or 0.75% to 28,787.40 and Shanghai Composite was up by 30.54 points or 0.86% to 3,596.92.

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