Markets continue to trade in red in early noon session

Indian equity benchmarks recovered from the day’s low but continued to trade in red in early noon session on account of selling by investors in the pharmaceutical shares amid negative cues from the Asian markets. Besides, markets participants remained cautious ahead of the March series futures and options contracts expiry due on Thursday. However, some support came with the Prime Minister Narendra Modi’s statement that the growth in the Indian economy was led by some of the reforms undertaken by his government since taking over in May 2014. He said India’s economic success is the result of prudence, sound policy and effective management. Further, some support also came in with Finance Minister Arun Jaitley’s statement that the Indian government has resolved various legacy issues with regard to taxation and is gradually working to bring down the corporate tax rates to the global level at 25% from 30% currently.

On the global front, Asian markets were trading mostly in red ahead of key U.S. data amid continued concern over whether the U.S. Federal Reserve might hike interest rates at its April meeting. Back home, in scrip specific development, Excel Industries has surged over 14% on the BSE after the company’s board approved buyback of equity shares of the company at a price not exceeding Rs 275 per share from the open market purchase.

The BSE Sensex is currently trading at 24943.07, down by 23.33 points or 0.09% after trading in a range of 24835.56 and 25053.73. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.28%, while Small cap index down by 0.47%.

The top gaining sectoral indices on the BSE were Metal up by 0.87%, Auto up by 0.79%, Bankex up by 0.67%, Realty up by 0.42% and Oil & Gas up by 0.26%, while Capital Goods down by 0.53% and TECK down by 0.04% were the losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.68%, Tata Steel up by 2.25%, Maruti Suzuki up by 1.84%, Axis Bank up by 1.18% and Reliance Industries up by 1.18%. On the flip side, Lupin down by 11.78%, Cipla down by 3.36%, Sun Pharma down by 3.09%, Dr. Reddys Lab down by 2.62% and GAIL India down by 2.00% were the top losers.

Meanwhile, amid rising concern over the default by large borrowers, Prime Minister Narendra Modi has said that the government along with Reserve Bank of India (RBI) is taking tough actions in order to recover loans from the corporate defaulters. He said that the only segment showing an increase in downgrades is highly leveraged large firms. Even Finance Minister Arun Jaitley in a stern warning to wilful defaulters has said that they should settle dues honourably with the banks or else be ready to face 'coercive action' by lenders and investigative agencies.

Gross Non Performing Assets (NPAs) of public sector banks (PSBs) has increased to Rs 3, 61,731 lakh crore in December from Rs 2, 67,065 lakh crore in March last year. There was an increase of Rs 94,666 crore over the nine months of the current fiscal.  The gross NPAs of PSBs increased from 5.43 per cent as on March last year to 7.30 per cent in December.

Modi further stated that there has been a smart pickup in credit growth after September as the credit off-take between February 2015 and February 2016 increased by 11.5 per cent. The overall fund flow to corporate sector through equity and borrowings of various kinds, domestic and foreign, has increased in first three quarters of 2015-16 by over 30 per cent.

The CNX Nifty is currently trading at 7612.10, down by 3.00 points or 0.04% after trading in a range of 7582.25 and 7645.80. There were 28 stocks advancing against 21 stocks declining on the index while 1 stock remained unchanged.

The top gainers on Nifty were Tata Motors up by 2.66%, Tata Steel up by 2.59%, Hindalco up by 2.46%, Maruti Suzuki up by 1.85% and BPCL up by 1.63%. On the flip side, Lupin down by 11.82%, Cipla down by 3.29%, Sun Pharma down by 2.90%, Dr. Reddys Lab down by 2.69% and GAIL India down by 2.24% were the top losers.

Asian markets were trading mostly in red; Jakarta Composite increased 3.31 points or 0.07% to 4,776.94, FTSE Bursa Malaysia KLCI increased 9.98 points or 0.59% to 1,712.39, KOSPI Index increased 12.37 points or 0.62% to 1,994.91, while Taiwan Weighted decreased 73.1 points or 0.84% to 8,617.35, Nikkei 225 decreased 54.62 points or 0.32% to 17,079.75, Shanghai Composite decreased 30.41 points or 1.03% to 2,927.41 and Hang Seng decreased 2.91 points or 0.01% to 20,342.70