Markets turn flat after making weak opening

After making a weak opening, Indian equity markets have recouped the early losses and turned flat in early morning deals. Sentiment got some support with Niti Aayog vice-chairman Arvind Panagariya’s statement that the economy is expected to grow over 8 per cent this fiscal with the forecast of above-normal monsoon raising hopes of the agriculture sector's revival after two successive drought years. However, market participants remained wary ahead of the April F&O expiry due tomorrow and the US FOMC meet outcome due today. Further, weaker than expected result from Axis Bank too dampened sentiments. Besides, Rupee weakened by 6 paise to 66.58 against the dollar in early trade at the Interbank Foreign Exchange market largely on account of month-end demand for the US currency from importers that kept pressurizing sentiment.

In the scrip specific development, Bharti Infratel was trading higher by 3 per cent on the BSE after the company’s board approved buy back of equity shares worth Rs 2,000 crore and proposed a dividend of Rs 3 per equity share. However, NHPC dropped over 5% on the BSE after the government decided to divest 11.36% stake in the power producer company through an offer-for-sale issue on Wednesday.

On the global front, US markets ended mixed on Tuesday as traders seemed reluctant to make significant moves ahead of the Federal Reserve's monetary policy announcement on Wednesday. Asian markets were trading mixed as investors remained on sidelines ahead of the US FOMC meet outcome due today and the BOJ meet slated tomorrow.

Back home, all the sectoral indices on the BSE, barring Bankex and Power, were trading in green led by Consumer Durables, Auto, Realty and Metal. The market breadth on BSE was positive in the ratio of 972: 517 while 89 scrips remained unchanged.

The BSE Sensex is currently trading at 26025.41, up by 18.11 points or 0.07% after trading in a range of 25885.24 and 26025.41. There were 20 stocks advancing against 10 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.29%, while Small cap index gained 0.44%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.81%, Auto up by 0.56%, Realty up by 0.55%, Metal up by 0.52% and Oil & Gas up by 0.49%, while Bankex down by 0.29% and Power down by 0.20% were the losing indices on BSE.

The top gainers on the Sensex were ONGC up by 1.54%, Tata Motors up by 1.17%, Bharti Airtel up by 1.01%, Hero MotoCorp up by 0.99% and Bajaj Auto up by 0.93%. On the flip side, Axis Bank down by 1.94%, ICICI Bank down by 1.50%, SBI down by 1.10%, Lupin down by 0.87% and HDFC down by 0.80% were the top losers.

Meanwhile, a Supreme Court bench led by Chief Justice T S Thakur, hearing on a 2003 public interest litigation (PIL) petition filed by non-profit Centre for Public Interest Litigation related to loans advanced to a few companies by state-owned Housing and Urban Development Corp. Ltd turning bad, said the banking mechanism of granting and recovering big loans appeared flawed and told the Centre that an expert panel could be set up to suggest remedial measures. The Supreme Court had taken a suo motu cognizance of the report that Rs 1.14 lakh had been written-off by PSBs in last three years.

The court asked the government to “reform” the banking system to prevent huge write-offs of bad loans and also to ensure people are not allowed to run away after default in repaying the loans. The bench further said that we are not aware of the technical issues relating to dealing with defaulters. The government must consider doing something. The court asked the Centre, Reserve Bank of India (RBI) and the Indian Banks Association to reply.

Earlier, the bench headed by chief justice T.S. Thakur directed Reserve Bank of India to provide a list of companies that have defaulted on bank loans in excess of Rs 500 crore and expressed serious concern over rising bad loans. The RBI, on the direction of the court, had submitted a list of big defaulters, each of whom had failed to repay loans worth Rs 500 crore but had put in a caveat by saying disclosure of names may have an impact on the livelihood of scores of employees employed in such entities and could have an adverse impact on the country's economy. But if the court desires, we are not standing in the way of disclosure.

The bench said that something is not working in the system, leading to accumulation of such huge loan defaults. The Centre should not take these proceedings as adversarial. If you (the government) propose, we can set up a committee of financial experts to go into all areas of loan and recovery and the committee can suggest remedial measures.

The CNX Nifty is currently trading at 7967.85, up by 5.20 points or 0.07% after trading in a range of 7940.55 and 7974.75. There were 31 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.29%, Kotak Mahindra Bank up by 2.09%, ONGC up by 1.47%, Tata Motors up by 1.25% and Ambuja Cement up by 1.20%. On the flip side, Axis Bank down by 1.92%, ICICI Bank down by 1.54%, SBI down by 1.17%, Lupin down by 1.05% and Tata Power down by 0.83% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 decreased 100.27 points or 0.58% to 17,253.01, Hang Seng decreased 67.59 points or 0.32% to 21,339.68, Taiwan Weighted decreased 7.4 points or 0.09% to 8,574.17, FTSE Bursa Malaysia KLCI decreased 6.34 points or 0.37% to 1,686.16 and KOSPI Index decreased 4.39 points or 0.22% to 2,015.24.

On the flip side, Shanghai Composite increased 0.91 points or 0.03% to 2,965.61 and Jakarta Composite increased 7.18 points or 0.15% to 4,821.27.