Markets continue to trade in green in afternoon session

Indian bourses continue to trade in green in afternoon session supported by fresh buying in oil & gas, FMCG and metal counters amid weak Asian cues. Though, the major indices were following a tight range, selling witnessed in realty, IT and Teck stocks kept the markets’ upside potential in check. However, most of the sectoral indices on BSE were trading in green. Sentiment got some support on report that foreign institutional investors (FIIs) have tightened their grip on the Indian equity market. Average FII stake in 489 companies from the BSE-500 index shot up by 30 basis points  to 19.9% in the quarter ended March 2014 from 19.6% as at end of December 2013 quarter. Oil and gas was the top gainer index on BSE up by over 1.96% followed by FMCG and metal indices both up by over 0.30%. 

V-Guard Industries has surged around 8% to Rs 530 after reporting a 129% year-on-year growth in net profit for Q4FY14 at Rs 20.48 crore due to higher sales and lower ad spends. Century Textiles and Industries has rallied 11% to its 52-week high at Rs 394, ahead of board meeting today to consider fund raising proposals and audited accounts for the year ended March 31, 2014. On the other hand, Financial Technologies India Ltd (FTIL), extending its 9.3% fall in past two trading sessions, has dipped nearly 4% to around Rs 288, after the company said it has decided to postpone its decision for divesting 24% stake in the Multi Commodity Exchange (MCX) to May 10 as bidders did not submit binding bids.

On global front, Asian equity indices were trading in red with Shanghai Composite down by 0.39% and Hang Seng down by 1.46% after HSBC manufacturing PMI of China manufacturing dropped to 48.1 from a preliminary reading of 48.3. Back home, the NSE Nifty and BSE Sensex were trading below their psychological 6,750 and 22,500 levels respectively. The market breadth on BSE was positive, out of 2,285 stocks traded, 1,091 stocks advanced, while 1,063 stocks declined on the BSE.

The BSE Sensex is currently trading at 22,465.12 up by 61.23 points or 0.27% after trading in a range of 22,545.18 and 22,354.45. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.15%, while Small cap index was down by 0.03%.

The gaining sectoral indices on the BSE were Oil and Gas up by 1.96%, FMCG up by 0.55%, Metal up by 0.30%, Capital Goods up by 0.22% and Bankex up by 0.17%. While, Realty down by 1.02%, Teck down by 0.56%, Power down by 0.43%, IT down by 0.40% and Consumer Durables down by 0.29% were the losing indices on BSE.   

The top gainers on the Sensex were ONGC up by 2.89%, RIL up by 2.07%, Hindalco Inds up by 1.21%, Axis Bank up by 1.12% and ITC up by 1.10%. On the flip side, Bharti Airtel down by 1.49%, HDFC down by 1.17%, Infosys down by 1.11%, Tata Motors down by 0.89% and Hindustan Unilever down by 0.84%.

Meanwhile, the Confederation of Indian Industry (CII) has suggested 5-point action plan to deal with the issue of rising non-performing assets (NPAs) of Indian banks. The CII’s report, recently submitted to Finance Ministry and the Reserve Bank recommended 5 steps, such as setting up a National Asset Management Company, revamping the corporate debt restructuring (CDR) mechanism, creating a special resolution mechanism for the infrastructure sector, liberalising norms to raise capitalisation of asset reconstruction companies and improving the effectiveness of the insolvency regime.

Expressing concerns over the deteriorating asset quality of banks, the industry body highlighted that stressed loans in India such as bad and restructured loans crossed 10 percent of all loans in mid 2013-14 and expected to increase 15 percent by the end of 2014-15. Prevailing economic slowdown accompanied with high interest rates in order to tame the inflation has led to a sharp deterioration in asset quality for the banking sector. Owing to their impaired portfolios, the banks are now cautious to extend credit which is impacting the growth in the corporate sector. The CII also recommended measures to reduce the recovery time in Debt Recovery Tribunal (DRT) so that delays could be minimized and remedial measures can be taken.

The Industry chamber added that effective implementation of these measures would release significant stress from the Indian banking system and would yield positive result in making the domestic banking sector more robust.

Indian banking industry is the most dominant segment of the country’s financial sector and plays an important role in the economic development of the country. Banks help to boost economic growth by allocating savings to investments that have potential to yield higher returns.

The CNX Nifty is currently trading at 6,705.35 up by 10.55 points or 0.16% after trading in a range of 6,732.05 and 6,680.45. There were only 23 stocks advancing against 27 declining on the index.

The top gainers of the Nifty were ONGC up by 2.63%, Reliance up by 2.12%, BPCL up by 2.04%, Jindal Steel up by 1.92% and Hindalco up by 1.56%. On the flip side, Bharti Airtel down by 1.52%, NMDC down by 1.51%, HCL Tech down by 1.39%, HDFC down by 1.39% and ACC down by 1.30% were the major losers on the index.

Asian equity indices were trading in red; Shanghai Composite down by 0.39% to 2,018.42,   Hang Seng down by 1.46% to 21,936.39 and Straits Times was down by 0.15% to 3,247.64. While,  Jakarta Composite up by 0.01% to 4,839.65 and Taiwan Weighted up by 0.04% to 8,870.43.