State Bank of India chief Arundhati Bhattacharya said the cut in lending rates can only happen when credit picks up. “What the banks are waiting for is a little bit more of a sign of a credit pick-up. Whatever we say, when we cut the lending rates our income comes down and we need some other ways of making up that income to keep paying interest on deposits. That can always happen if the credit growth is quite robust and volume picks up. But when the volumes are very thin and if you are not seeing that kind of a clear pipeline, then it is very difficult to cut lending rates. So, I think most of us are waiting to see a little bit more of a pick-up in credit,” Bhattacharya said on the sidelines of the bank launching the country’s first economic indicator, SBI Composite Index today.

The credit growth is slowly inching up and is definitely better than the growth up to September, she said. “Retail growth is alright. On the corporate side also we are seeing a little bit growth now, though new projects are still a challenge,” she added.

The sharemarket has opened in red amid global turmoil. The Sensex is down 25.40 points at 27771.61 and the Nifty is down 22.65 points at 8318.05. About 284 shares have advanced, 267 shares declined, and 31 shares are unchanged. Bharti is up 2 percent while Dr Reddy’s Labs, Wipro, Hero and ITC are top gainers in the Sensex. Among the losers are Tata Motors, SBI, Sesa Sterlite, GAIL and BHEL. The Indian rupee opened with marginal loss of 8 paise at 61.96 per dollar versus previous day’s closing value of 61.88 a dollar.

The dollar nursed hefty losses following a brutal shakeout of bullish positions. Spooking markets, political uncertainty in Greece appeared to have reignited worries about Europe, prompting a flight to safety into US treasuries. That drove yields lower, which in turn knocked the dollar index off a near six-year perch. NS Venkatesh of IDBI Bank expects the rupee to take the cues from the equity markets and also the external developments on dollar vis-a-vis other currencies. “The rupee is expected to trade within a narrow range of 61.70-61.95/dollar,” he says. Among global markets, US stocks ended mixed, with the Nasdaq composite rallying after stiff losses. In Europe, shares were hard hit, closing sharply lower as a slide in Chinese and Greek equities weighed on investor sentiment.

Coustery : http://www.moneycontrol.com/news/local-markets/sensex-niftyred-bharti2-tata-motors-falls-2_1249051.html