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Indian equity benchmarks trimmed gains ahead of the closing bell but managed to settle at fresh closing peaks on Thursday, amid buying in Telecom, Metal and TECK stocks. Benchmark indices began trading session in the green but soon turned in red terrain, as traders got anxious with private report stated that Micro, Small and Medium Enterprises (MSMEs) in India have seen an average 11 per cent decline in business volume due to lockdowns in 2021, compared to 46 per cent during the 2020 nationwide lockdown. Some concern also came with report that India’s monetary policy makers are likely to leave interest rates untouched for a seventh straight meeting, as their focus remains more on fixing a fickle economy than on controlling stubborn price pressures. The Reserve Bank of India’s six-member Monetary Policy Committee is meeting amid weak indicators raising doubts about the economy’s ability to sustain a nascent recovery.

However, markets moved higher in afternoon trading, as industry chamber PHDCCI has called for a 3-tier GST rate structure, with the highest slab at 18 per cent, in order to help boost consumption and reduce evasion. Under the Goods and Services Tax (GST), a four-rate structure that exempts or imposes a low rate of tax 5 per cent on essential items and top rate of 28 per cent is levied. The other slabs of tax are 12 and 18 per cent. Besides, a 3 per cent rate is applied on gold, silver and processed diamonds. Traders also found some support as the Rajya Sabha passed the Limited Liability Partnership (Amendment) Bill, which seeks to encourage the start-up ecosystem and further boost ease of doing business, amid uproar by the opposition on Pegasus snooping row and other issues. Meanwhile, the Reserve Bank of India (RBI) gave banks time till October 31 to comply with its guidelines on current account and overdraft facilities, by which time banks must come to a resolution on the issue.

On the global front, Asian markets ended mostly lower on Thursday following the mixed cues overnight from Wall Street, on economic growth concerns, coronavirus woes and tumbling oil prices. There are renewed concerns about the pace of U.S. economic growth after payroll processor ADP said private sector employment increased less than expected in July. European markets were trading mostly in green as traders awaited a key monetary policy update from the Bank of England for direction. The central bank is not likely to make any policy changes but looks set to raise its inflation forecasts as surging prices worldwide pose a threat to economic recovery. Back home, on the sectoral front, stocks related to aviation sector were in focus, as Minister of State in the Ministry of Civil Aviation, Vijay Kumar Singh has said that Airports Authority of India (AAI) has taken up development programme to spend around Rs 25,000 crore in next 4-5 years for expansion and modification of existing terminals, new terminals, expansion or strengthening of existing runways, aprons, Airport Navigation Services (ANS), control towers, technical blocks, etc. to meet the expected growth in the aviation sector.

Finally, the BSE Sensex rose 123.07 points or 0.23% to 54,492.84, while the CNX Nifty was up by 35.80 points or 0.22% to 16,294.60.    

The BSE Sensex touched high and low of 54,717.24 and 54,230.89, respectively and there were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended mixed; the BSE Mid cap index rose 0.10%, while Small cap index was down by 0.43%.

The top gaining sectoral indices on the BSE were Telecom up by 3.39%, Metal up by 1.37%, TECK up by 0.93%, Energy up by 0.92% and IT up by 0.61%, while Realty down by 1.06%, PSU down by 0.99%, Bankex down by 0.52%, Consumer Disc down by 0.50% and Utilities down by 0.39% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 4.30%, ITC up by 3.14%, Tech Mahindra up by 2.55%, Tata Steel up by 2.15% and HCL Technologies up by 1.93%. On the flip side, SBI down by 3.33%, Indusind Bank down by 2.20%, Bajaj Finance down by 1.78%, ICICI Bank down by 1.77% and Bajaj Finserv down by 1.36% were the top losers.

Meanwhile, Rajya Sabha has passed the Deposit Insurance and Credit Guarantee Corporation (Amendment) Bill amid opposition uproar. The Bill proposes that even if a bank is temporarily unable to fulfil its obligations due to restrictions such as moratorium, depositors can access their deposits to the extent of the deposit insurance cover through interim payments by the Deposit Insurance and Credit Guarantee Corporation (DICGC). For this, the Bill seeks to insert a new Section in the DICGC Act, 1961.

The bill also seeks to amend Section 15 of the DICGC Act to enable the Corporation to increase the ceiling on the amount of premium, with the prior approval of the Reserve Bank of India (RBI). Besides, it will also provide that the DICGC may defer or vary the receipt of repayments due to it from the insured bank and to empower the Corporation to charge penal interest in case of delay in repayment by the banks to the Corporation.

Though the RBI and the central government keep monitoring the health of all banks, there have been numerous recent cases of banks, especially cooperative banks, being unable to fulfil their obligations towards depositors due to the imposition of moratorium by the RBI. Recently, the Union Cabinet had cleared amendments to the DICGC Act.

The CNX Nifty traded in a range of 16,349.45 and 16,210.30 and there were 26 stocks advancing against 24 stocks declining on the index.    

The top gainers on Nifty were Bharti Airtel up by 3.86%, Eicher Motors up by 3.45%, ITC up by 3.07%, Tech Mahindra up by 2.75% and Tata Steel up by 2.32%. On the flip side, SBI down by 3.28%, Indusind Bank down by 2.33%, ICICI Bank down by 1.84%, Bajaj Finance down by 1.75%  and Bajaj Finserv down by 1.30% were the top losers.     

European markets were trading mostly in green; France’s CAC increased 25.23 points or 0.37% to 6,771.46 and Germany’s DAX rose 6.42 points or 0.04% to 15,698.55, while UK’s FTSE 100 decreased 9.77 points or 0.14% to 7,114.09.

Asian markets ended mostly lower on Thursday. South Korean shares settled down, driven by concerns over surging Delta coronavirus variant cases and hawkish remarks from a senior US Federal Reserve official. Chinese shares declined as the country tightened overseas travel restrictions for its citizens as part of efforts to contain the fast-spreading of delta variant corona-virus, after reporting its highest number of infections in months, while fears of Beijing’s crackdown also weighed on market sentiment. However, Japanese shares ended higher, supported by better-than-expected earnings results from Nippon Yusen, Kikkoman Corp and Hitachi Zozen.

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