Benchmarks trade lower in early deals on F&O expiry session

Indian equity benchmarks have made a cautious start and are trading slightly in the red as investors turn cautious ahead of the expiry of July series derivative contracts slated today. However, losses remained capped as some solace came with National Statistical Commission Chairman Pronob Sen’s statement that the country’s growth can be as high as 6.5 percent in the current fiscal. He has also said that government’s economic growth projection of 5.4 percent to 5.9 percent stated in the Economic Survey is very modest. Meanwhile, Global rating agency Fitch has retained ‘BBB-’ sovereign ratings of the country with a 'stable' outlook and said rating revision depends on the new government’s willingness to make difficult choices.

On the global front, the US markets giving up their early gains ended mixed in the last session, as traders digested upbeat GDP data as well as the Federal Reserve’s monetary policy announcement. US GDP increased by 4.0 percent in the second quarter following a revised 2.1 percent decrease in the first quarter. Asian markets were trading mostly in the red at this point of time as investors braced for Argentina to default on its debt for the second time in twelve years.

Back home, on the sectoral front, metal, capital goods and realty witnessed the maximum gains in trade, while software, technology and banking remained the top losers on the BSE sectoral space. The broader indices however were outperforming benchmarks, while the market breadth on the BSE was positive; there were 974 shares on the gaining side against 711 shares on the losing side while 61 shares remain unchanged.

The BSE Sensex opened at 26105.89; around 18 point higher compared to its previous closing of 26087.42, and has touched a high and a low of 26115.78 and 26034.55 respectively. The index is currently trading at 26068.82, down by 18.60 points or 0.07%. There were 12 stocks advancing against 18 declines on the index.

The overall market breadth has made a positive start with 55.78% stocks advancing against 40.72% declines. The broader indices were trading in the green; the BSE Mid cap index was up by 0.47%, while Small cap index was up by 0.48%. 

The top gaining sectoral indices on the BSE were Metal up by 1.20%, Capital Goods up by 0.66%, Realty up by 0.63%, Consumer Durables up by 0.30% and Oil and Gas up by 0.24%, while IT down by 0.59%, TECk down by 0.37%, Bankex down by 0.26%, FMCG down by 0.20% and Power down by 0.12%, were the major losers on the sectoral index.

The top gainers on the Sensex were Tata Steel up by 2.23%, SSLT up by 1.59%, Cipla up by 1.55%, Coal India up by 1.06% and Hindalco up by 0.99%. On the flip side, Wipro was down by 1.34%, Dr Reddys was down by 0.93%, Axis Bank was down by 0.82%, HDFC was down by 0.64% and M&M was down by 0.61% were the top losers on the Sensex.

Meanwhile, in a proposal that comes against the backdrop of spiraling bad loans in the banking system, RBI has suggested to watchdog Securities and Exchange Board of India (SEBI) to bar ‘wilful’ defaulters from raising funds through capital market. Further, to facilitate such restrictions on entities found to have ‘wilfully’ defaulted on bank loans, the Reserve Bank is exploring ways to share details of these defaulters with SEBI on a real time basis, against the  practice of reporting such entities on quarterly basis.

According to RBI, sharing details on real time basis could better equip SEBI and other agencies would ensure that wilful defaulters identified by banks do not have an opening to raise further funds from gullible investors through the securities market.

However, final decision on this matter, which first needs to be discussed by SEBI internally, is pending and would be finalized, taking into account the provisions in various sets of existing regulations and the views of all stakeholders.

Uptill now, banks have been advised to examine all cases of wilful defaults of Rs 1 crore and above for filing of suits as well as consider criminal action wherever instances of cheating/fraud by the defaulting borrowers have been detected, according to RBI. The gross NPAs or bad loans of the domestic banking system were at 4.4 per cent of gross advances.

The CNX Nifty opened at 7,784.65; about 7 point lower as compared to its previous closing of 7,791.40, and has touched a high and a low of 7,790.65 and 7,768.70 respectively. The index is currently trading at 7,776.60, down by 14.80 points or 0.19%. There were 17 stocks advancing against 33 declines on the index.

The top gainers of the Nifty were Tata Steel up by 2.04%, Cipla up by 1.55%, SSLT up by 1.47%, Jindal Steel up by 1.37% and Ambuja Cement up by 1.20%. On the flip side, HCL Tech down by 2.55%, Wipro down by 1.38%, Dr Reddy down by 1.10%, Asian Paints down by 1.02% and Axis Bank down by 0.87% were the major losers on the index.

Asian markets were trading mostly in the green; Hang Seng slipped by 30.93 points or 0.13% to 24,701.28, KOSPI Index dropped by 8.20 points or 0.39% to 2,074.41, Jakarta Composite declined 9.84 points or 0.19% to 5,088.80, Shanghai Composite dipped 0.13 points or 0.01% to 2,181.11, FTSE Bursa Malaysia KLCI tumbled by 3.48 points or 0.19% to 1,874.86 and Taiwan Weighted was down by 106.29 points or 1.13% to 9,340.73.

On the flip side, Nikkei 225 spurted by 30.80 points or 0.20% to 15,677.03 and Straits Times was up by 29.20 points or 0.87% to 3,382.85.