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Indian equity benchmarks ended on a flat note for second straight session on Thursday. After making cautious start, markets gained momentum as traders took some support with finance minister Nirmala Sitharaman’s statement that State-run banks will undertake a nation-wide loan outreach programme around October, as the government seeks to stir economic growth through sustained credit push, especially to Covid-hit small and medium businesses, retail and farm sectors, amid fears that bankers have turned risk-averse. Domestic sentiments were positive with Union Heavy Industries Minister Mahendra Nath Pandey’s statement that the government is working on establishing charging infrastructure across the country in order to promote faster adoption of electric vehicles (EVs) in the country.  Some optimism also came with Union minister Nitin Gadkari’s statement that the government looks to increase the contribution of the automobile sector to India's GDP to 12 per cent from the present 7.1 per cent and grow employment generation to 50 million from the current 37 million.

The breadth of the market remained positive in late morning session with private report stating that the Indian economic growth likely to touch record high in the quarter through June, reflecting a very weak base last year and a rebound in consumer spending. The rebound came despite the drag from the deadly second wave of the coronavirus, which forced states across India to reimpose localised lockdowns and stop mobility completely from late April to early June. However, markets erased initial gains and turned volatile in second half of the session, as traders turned cautious with rating agency Moodys stating that India's second Coronavirus (Covid-19) wave is increasing asset risks for banks in retail and the SME loan segment. However, factors like tight credit underwriting, strong loss provisions will help banks withstand pressures and prevent a sharp rise in bad loans. 

On the global front, Asian markets ended mixed note on Thursday as traders remain spooked amid the continuing spread of the delta variant of the coronavirus in the region and in several countries as well as the strong resurgence of infection rates in the U.S. European markets were trading lower, as a survey showed that the outlook amongst consumers in Germany is deteriorating heading into September. Gfk forward looking consumer confidence index dropped from -0.4 to -1.2, marking the worst reading in three months as accelerating inflation and rising COVID-19 cases made consumers more hesitant to buy.

Back home, on the sectoral front, sugar industry stocks were in focus as the Centre hiked the minimum price that mills have to pay to sugarcane growers, also known as the Fair and Remunerative Price (FRP), by Rs 5 per quintal to Rs 290 a quintal for 2021-22 (October-September) sugar season while ruling out any immediate commensurate increase in the sale price of sugar. There was some reaction in Insurance industry stocks’ with a private report that the government is mulling allowing foreign direct investment (FDI) in the country's largest insurer LIC, a move which would help overseas investors take part in the company's proposed mega IPO.

Finally, the BSE Sensex rose 4.89 points or 0.01% to 55,949.10, while the CNX Nifty was up by 2.25 points or 0.01% to 16,636.90.  

The BSE Sensex touched high and low of 56,112.39 and 55,854.07, respectively and there were 14 stocks advancing against 16 stocks declining on the index.   

 The broader indices ended in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.31%.

The gaining sectoral indices on the BSE were Energy up by 1.14%, Power up by 0.91%, Oil & Gas up by 0.72%, Capital Goods up by 0.69% and FMCG up by 0.57%, while Telecom down by 3.45%, Metal down by 1.36%, Basic Materials down by 0.80%, PSU down by 0.80% and TECK down by 0.59% were the top losing indices on BSE.

The top gainers on the Sensex were Reliance Industries up by 1.29%, Mahindra & Mahindra up by 1.18%, HCL Technologies up by 1.13%, ICICI Bank up by 1.09% and Axis Bank up by 0.98%. On the flip side, Bharti Airtel down by 4.18%, Maruti Suzuki down by 1.59%, Power Grid Corporation down by 1.34%, SBI down by 1.30% and Tata Steel down by 1.14% were the top losers.

Meanwhile, Union Finance Minister Nirmala Sitharaman has requested banks to work with all State governments to push the 'one district, one product' agenda, while advising public-sector banks (PSB) to adopt a nationwide credit outreach programme this year.

Sitharaman said banks have also been requested to have interaction with export promotion agencies, chambers of commerce and industry to understand and address the requirement of exporters on a timely manner. She said between public-sector banks (PSBs), there should be some kind of a simple approach so that exporters are not made to run between one bank to another scouting for a better offer.

Banks should go about to exhibit loan offerings in every district of the country in a bid to enhance the credit demand.A similar outreach programme was undertaken by the PSBs in which some private-sector banks also participated to boost credit offtake in the face of an economic slowdown. She said ‘With changed times, now industries have option of raising funds even from outside the banking sector. Banks themselves are raising funds through various avenues. These new aspects need to be studied to target credit where it is needed.

The CNX Nifty traded in a range of 16,683.70 and 16,603.40 and there were 22 stocks advancing against 28 stocks declining on the index.     

The top gainers on Nifty were Britannia Industries up by 2.67%, Tata Consumer Product up by 2.21%, BPCL up by 1.77%, HDFC Life Insurance up by 1.73% and Reliance Industries up by 1.33%. On the flip side, Bharti Airtel down by 4.42%, JSW Steel down by 1.77%, Maruti Suzuki down by 1.51%, SBI down by 1.42% and Hindalco down by 1.42% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 31.71 points or 0.44% to 7,118.41, France’s CAC decreased 29.98 points or 0.45% to 6,646.50 and Germany’s DAX decreased 105.44 points or 0.66% to 15,755.22.

Asian markets ended mixed note on Thursday ahead of US Federal Reserve chairman Jerome Powell’s speech at Fed's annual symposium at Jackson Hole for clues on the timing of a tapering of monetary stimulus. Seoul stocks declined as the country’s central bank Bank of Korea delivered its first pandemic-era rate hike to control inflation and household debt. Further, Japanese shares ended down following concerns of slowing economic growth in line with spread of highly contagious Delta coronavirus variant, while foreign investors sold Japanese shares worth a net 707.3 billion yen ($6.43 billion), the biggest since the week to May 14. However, some losses were capped by continued optimism about growth in the world’s largest economy after Dr. Anthony Fauci, top US infectious disease expert, said Covid-19 could be under control by early next year.

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