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Indian equity benchmarks continued to trade in high spirit in noon session, on account of broad based buying in blue chip counters with both Sensex and Nifty were trading above 56700 and 16850 marks, respectively. All sectoral indices were trading firm and IT was the top gainer on BSE, up by 2.18% followed by TECK and Realty indices, trading up around 2% each. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices trading up by over 0.50% each. Sentiments were upbeat as Reserve Bank of India (RBI) report showed that digital payments across the country registered a growth of nearly 29 per cent in a year through March 2022. The RBI's digital payment index (RBI-DPI) stood at 349.3 in March 2022 against 270.59 in March 2021. Traders took note of Ministry of Commerce & Industry’s latest report showing that Singapore (27.01%) and USA (17.94%) have emerged as top 2 sourcing nations in FDI equity flows into India in FY2021-22 followed by Mauritius (15.98%), Netherland (7.86%) and Switzerland (7.31%). On the global front, Asian markets were trading mostly higher after the Federal Reserve increased up its campaign against surging inflation by raising its key interest rate three-quarters of a point.

The BSE Sensex is currently trading at 56725.64, up by 909.32 points or 1.63% after trading in a range of 56236.45 and 56733.44. There were 25 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.93%, while Small cap index was up by 0.79%.

The top gaining sectoral indices on the BSE were IT up by 2.18%, TECK up by 1.93%, Realty up by 1.91%, Metal up by 1.84% and Bankex was up by 1.47%, while there were no losing sectoral index.

The top gainers on the Sensex were Bajaj Finance up by 9.55%, Bajaj Finserv up by 9.05%, Tata Steel up by 4.70%, Nestle up by 3.16% and Indusind Bank was up by 3.10%. On the flip side, Dr. Reddy's Lab down by 1.25%, Sun Pharma down by 0.71%, Bharti Airtel down by 0.51%, Larsen & Toubro down by 0.12% and ITC was down by 0.03% were the top losers.

Meanwhile, Credit Rating Agency ICRA in its latest report has said that while banks have been more calibrated in hiking their card rates on deposits, the deposit rate hikes will be aggressive in the coming months as credit growth picks up further, leading to a decline in banking system liquidity.

According to the report, the reliance of banks on Certificates of deposit (CD) has been increasing in recent months to fund incremental credit demand with the CD outstanding volume rising 243% year-on-year (YoY) as of July 1, 2022, to Rs. 2.4 trillion. The rise in the yields on T-Bills and consequently on CDs has also widened the gap between the yield on a CD compared to the average card rates on bank deposits. It also said the spread on CD issuances by banks rose to 170 bps over their average 6-month deposit rates in July 2022 compared to the spread of just 30 bps in April 2022.

ICRA also expect a hike in the repo rate (and hence SDF rates) by 60 bps by the end of September 2022 to 5.5%, which would further push up the yield on various benchmark instruments like T-Bills and hence the bank CD rates, thereby widening the spreads even more vis-à-vis bank deposit rates. It said this will push banks to start chasing deposits aggressively, which will also lead to higher deposit rates in the next three quarters. 

The CNX Nifty is currently trading at 16892.15, up by 250.35 points or 1.50% after trading in a range of 16746.25 and 16896.50. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 9.56%, Bajaj Finserv up by 9.27%, Tata Steel up by 4.70%, Nestle up by 3.46% and Indusind Bank was up by 3.09%. On the flip side, Dr. Reddy's Lab down by 1.31%, Sun Pharma down by 0.56%, Cipla down by 0.54%, Bharti Airtel down by 0.44% and Coal India was down by 0.29% were the top losers.

Asian markets were trading mostly in green; Jakarta Composite soared 66.75 points or 0.97% to 6,964.97, Shanghai Composite gained 6.08 points or 0.19% to 3,281.84, Straits Times advanced 12.40 points or 0.39% to 3,217.54, KOSPI rose 22.52 points or 0.93% to 2,438.05 and Nikkei 225 was up by 99.73 points or 0.36% to 27,815.48.

On the other hand, Hang Seng decreased 99.83 points or 0.48% to 20,570.21 and Taiwan Weighted was down by 29.69 points or 0.2% to 14,891.90.

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