Markets continue to reel in red; rate sensitives' drag

Indian markets continue to trade cautiously ahead of the crucial policy announcement from the Reserve Bank of India (RBI), although there is wide expectation of a repo rate cut which will herald lower borrowing costs. Finance Minister Arun Jaitley too has pitched for a rate cut and said that the government has stuck to fiscal deficit commitments and inflation has been under control. He said that 'I do hope that this movement will continue in order to make our economy more competitive with more competitive interest rates.' He argued that high interest rates can make the economy sluggish. Back on street, the weakness in the global markets was weighing down the sentiments, keeping the local bourses under check. Also, snapping the early gains and a six-day winning streak, the rupee has fallen against the US dollar, ahead of the bimonthly money policy review by the RBI, putting pressure on the markets. Most of the sectoral gauges too have lost their momentum and were trading in red along with the broader indices. On the contrary, there is some cheer in the PSU oil marketing companies after they hiked petrol price by 2.19 a litre and diesel by 98 paise per litre from Monday midnight. BPCL and IOC shares were trading 1.36 per cent and 1.32 per cent, while HPCL was up 1.88 per cent (at 10.51 am).

The BSE Sensex is currently trading at 25284.14, down by 115.51 points or 0.45% after trading in a range of 25233.05 and 25372.44. There were 6 stocks advancing against 23 stocks declining on the index, while one stock remained unchanged. (at 10.51 am).

The broader indices were trading in red; the BSE Mid cap index was down by 0.41%, while Small cap index was lower by 0.39%.

The lone gaining sectoral index on the BSE was Consumer Durables up by 0.27%, while, Realty down by 0.87%, Metal down by 0.74%, Bankex down by 0.69%, Power down by 0.57%, Capital Goods down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.15%, Hero MotoCorp up by 0.74%, Dr. Reddys Lab up by 0.46%, Lupin up by 0.43% and HDFC Bank up by 0.11%. On the flip side, Adani Ports &Special down by 2.87%, ICICI Bank down by 2.20%, Bharti Airtel down by 1.97%, Tata Motors down by 1.48% and GAIL India down by 1.34% were the top losers.

Meanwhile, concerned over rising cases of wilful default on loans, Finance Minister Arun Jaitley has said that the industry is fighting a battle of creditability and asked to adopt positive and ethical approach towards non-performing assets (NPAs) or bad debts.

FM added that 'When the cycle reverses, the NPAs can also be reversed but the approach of the leaders of the industry will certainly have to be always positive and ethical because it is that approach which is going to add to their credibility. He also said the government has been trying to address the problem of NPAs in sectors like steel, textile, highways and infrastructure, which are on account of economic slowdown.

There are about 7,686 wilful defaulters who owe Rs 66,190 crore to public sector banks. Of these, suits have been filed in 6,816 cases and FIR has been lodged for 1,669 cases. Banks have initiated action under the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest Act (Sarfaesi) Act in 584 such cases.

The gross Non Performing Assets (NPAs) of public sector banks (PSBs) increased to Rs 3,61,731 lakh crore or 7.30 per cent as on December 2015 from Rs 2,67,065 lakh crore or 5.43 per cent as on March 2015.

The CNX Nifty is currently trading at 7714.80, down by 44.00 points or 0.57% after trading in a range of 7705.80 and 7736.30. There were 11 stocks advancing against 40 stocks declining on the index.

The top gainers on Nifty were BPCL up by 1.44%, Hindustan Unilever up by 1.13%, Hero MotoCorp up by 0.63%, Power Grid Corpn. up by 0.58% and HCL Tech. up by 0.38%. On the flip side, Adani Ports & SEZ down by 3.01%, Tata Motors - DVR down by 2.52%, ICICI Bank down by 2.41%, Bharti Airtel down by 2.35% and Zee Entertainment down by 2.29% were the top losers.

The Asian markets were trading mo0stly in red, barring Jakarta Composite which was up by 26.43 points or 0.54% to 4,876.61 and Shanghai Composite which gained 33.55 points or 1.11% to 3,043.08.

On the other hand, Nikkei 225 slumped by 320.94 points or 1.99% to 15,802.33, Hang Seng plunged by 295.73 points or 1.44% to 20,203.19, Taiwan Weighted lost 87.28 points or 1% to 8,657.55, KOSPI Index was down by14.37 points or 0.73% to 1,964.60 and FTSE Bursa Malaysia KLCI declined by 4.7 points or 0.27% to 1,720.54.