Benchmarks trade flat in noon deals on monsoon worries

Indian equity benchmarks, after a firm opening, have turned flat and are trading in a narrow range near neutral lines as investors opted to book profits at higher levels. Sentiments turned down-beat on monsoon worries. The southwest monsoon was 32 per cent below normal in the first 15 days of July, key month for sowing of kharif crops. Large tracts of central and southern India remained dry. This could have serious impact on the final output of pulses and oilseeds, unless there is a pick-up in the second half of this month. Selling in banking stocks after government decided to keep banks out of the composite foreign investment cap too dampened the sentiments.

On the global front, European markets have made mostly a positive opening with CAC and DAX, trading higher, while FTSE was trading marginally lower in early deals. Asian stocks were trading mostly in green at this point of time as China’s markets extended their recovery, while the dollar stretched gains versus the euro and yen as economic indicators reinforced expectations for a U.S. rate hike by the end of this year. Back home, on the sectoral front, consumer durables, power and technology witnessed the maximum gain in trade, while metal and banking remained the top losers on the BSE sectoral space. The broader indices were trading with traction, while the market breadth on the BSE was positive; there were 1,335 shares on the gaining side against 1,160 shares on the losing side while 121 shares remain unchanged.

The BSE Sensex is currently trading at 28456.46, up by 10.34 points or 0.04% after trading in a range of 28417.46 and 28576.32. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index up by 0.61%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.83%, Power up by 0.78%, TECK up by 0.77%, Capital Goods up by 0.76% and Healthcare up by 0.73%, while Metal down by 0.15% and Bankex down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.50%, BHEL up by 1.18%, Hindalco up by 1.12%, Sun Pharma up by 1.02% and Cipla up by 0.86%. On the flip side, HDFC down by 1.99%, Coal India down by 1.46%, Hindustan Unilever down by 0.93%, Tata Motors down by 0.58% and Wipro down by 0.57% were the top losers.

Meanwhile, following recommendation made by the Technical Committee on Facilities and Services to the Exporters, chaired by Shri G. Padmanabhan, the Reserve Bank India (RBI) has allowed banks to factor export receivables on a non-recourse basis, so as to enable exporters to improve their cash flow and meet their working capital requirements.

RBI in its notification has said that Authorised Dealer Category - I (AD Category- I) banks may take their own business decision to enter into export factoring arrangement on non-recourse basis. They should ensure that their client is not over financed. Accordingly, they may determine the working capital requirement of their clients taking into account the value of the invoices purchased for factoring. The invoices purchased should represent genuine trade invoices.

It further stated that in case the export financing has not been done by the Export Factor, it may pass on the net value to the financing bank/institution after realising the export proceeds. Additionally, AD bank, being the Export Factor, should have an arrangement with the Import Factor for credit evaluation and collection of payment

The banking regulator added that after factoring, the Export Factor may close the export bills and report the same in the Export Data Processing and Monitoring System (EDPMS) of the Reserve Bank of India. In case of single factor, not involving Import Factor overseas, the Export Factor may obtain credit evaluation details from the correspondent bank abroad.  KYC and due diligence on the exporter shall be ensured by the Export Factor.

The CNX Nifty is currently trading at 8609.85, up by 1.80 points or 0.02% after trading in a range of 8593.15 and 8642.95. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.18%, Vedanta up by 1.53%, Idea Cellular up by 1.37%, Ultratech Cement up by 1.31% and Hindalco up by 1.12%. On the flip side, Asian Paints down by 2.23%, HDFC down by 2.00%, Coal India down by 1.36%, Zee Entertainment down by 1.22% and Kotak Mahindra Bank down by 1.03% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted rose 3.77 points or 0.04% to 9,045.98, Nikkei 225 gained 50.8 points or 0.25% to 20,650.92, Shanghai Composite soared 138.39 points or 3.62% to 3,961.57 and Hang Seng was up by 326.61 points or 1.3% to 25,489.39.

On the flip side, KOSPI Index declined 11.1 points or 0.53% to 2,076.79.

European Markets were trading mostly in the green; Germany’s DAX gained 0.27% and France’s CAC was up by 0.22%, while UK’s FTSE was marginally down by 0.05%.