Markets extend last session losses with a weak start

With a gap-down opening Indian equity benchmarks have extended their previous session losses and are now trading lower by over a quarter percent, which dragged both the Sensex and Nifty below their psychological 25,150 and 7,750 levels respectively. Meanwhile, the session was also proving weak for broader indices which are trading with loss in the range of 0.25-0.35%. Depreciation in Indian rupee against dollar weighed down the sentiments. The rupee weakened 22 paise to 66.63 against the US dollar in early trade on Wednesday, tracking weak cues from other Asian currency markets. Meanwhile, Foreign Institutional Investors turned net sellers in equities worth Rs 755 crore on Tuesday, as per provisional stock exchange data.  Further, selling in banking shares also kept pressurizing the markets after reporting higher bad loans in Q4. Besides, weakness in other Asian markets too dampened sentiments after two prominent members of the US Federal Reserve's Open Market Committee overnight said they intend to support an interest rate hike in June.

In the scrip specific development, BASF India surged 8 per cent on the BSE after the company reported a net profit at Rs 77 crore for the fourth quarter ended March 2016 (Q4), on back of strong operational performance and one-time gain due to profit on sale of its non-core assets.

On the global front, US markets ended lower on Tuesday after weak economic data in China and Europe reignited worries about global growth. Asian markets were trading in red as PBOC set the Yuan reference rate at 6.4943 on Wednesday compared with 6.4565 a day earlier, showing a currency devaluation of around 0.55% , the most in over eight months.

Back home, all the sectoral indices on the BSE were trading in red led by Metal, Auto, TECK, PSU and IT. The market breadth on BSE was negative in the ratio of 584: 905, while 77scrips remained unchanged.

The BSE Sensex is currently trading at 25108.49, down by 121.21 points or 0.48% after trading in a range of 25104.39 and 25210.87. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.35%, while Small cap index was down by 0.25%.

The top losing sectoral indices on the BSE were Metal down by 1.33%, Auto down by 0.99%, TECK down by 0.57%, PSU down by 0.50%, IT down by 0.45%, while there were no gainers.

The top gainers on the Sensex were HDFC up by 0.91%, NTPC up by 0.70%, HDFC Bank up by 0.54%, ITC up by 0.38% and Reliance Industries up by 0.35%. On the flip side, Adani Ports &Special down by 7.80%, Tata Motors down by 3.42%, ICICI Bank down by 2.24%, Dr. Reddys Lab down by 1.44% and Axis Bank down by 1.30% were the top losers.

Meanwhile, amid the talks of rise in nonperforming assets (NPA) of the public sector banks (PSBs), the government has informed that the number of 'wilful defaulters' who have not repaid their loans to PSBs despite having the ability to do so shot up by 38% to 7,686 at the end of December 2015, compared to 5,554 in December 2012. The amount involved in these cases too shot up by 2.4 times to Rs 66,190 crore, compared to around 27,750 crore earlier.

State Bank of India (SBI) retained the top slot among PSBs with exposure to wilful defaulters, as its exposure rose 60% to Rs 11,705 crore in the three years to December 2015. Other PSBs with high exposure to wilful defaulters includes Central Bank of India Rs 4,408 crore , UCO Bank Rs 4,251 crore and Oriental Bank of Commerce Rs 3,834 crore.  The government further said that, while the number of wilful defaulters increased to 7,686 by the end of 2015, suits was filed in 6,816 cases involving Rs 58,500 crore and FIRs in 1,669 cases involving Rs 18,212 crore. Also, action under the Sarfaesi Act was taken in 5,840 cases involving Rs 53,407 crore. Minister of state for finance Jayant Sinha replying to a query in parliament said there were 1,365 borrower accounts having outstanding of Rs 500 crore and more at the end of December 2015. He said government has taken specific measures to address issues in sectors such as infrastructure, steel and textiles, where instances of NPAs are high.

The issue of wilful defaulters came to fore after a surge in NPAs in October-December 2015 due to the recognition of certain stressed accounts by banks as per RBI norms. RBI rules require banks to declare a borrower 'wilful defaulter' if it has defaulted in repayment despite having the capacity to honour the obligation. Similarly, a defaulter who has diverted or siphoned off the funds, or has disposed off fixed assets or immovable property, can be given the tag.

The CNX Nifty is currently trading at 7717.90, down by 29.10 points or 0.38% after trading in a range of 7715.15 and 7738.00. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 1.12%, Aurobindo Pharma up by 1.01%, HDFC up by 0.87%, Tata Power up by 0.84% and ITC up by 0.65%. On the flip side, Adani Ports &Special down by 7.81%, Tata Motors down by 3.10%, Tata Motors - DVR down by 3.03%, Zee Entertainment down by 2.32% and Hindalco down by 2.06% were the top losers.

Asian markets were trading in red, Hang Seng decreased 215.31 points or 1.04% to 20,461.63, Taiwan Weighted decreased 91.92 points or 1.11% to 8,202.20, Jakarta Composite decreased 27.38 points or 0.57% to 4,784.88, KOSPI Index decreased 12.03 points or 0.61% to 1,974.38, Shanghai Composite decreased 6.45 points or 0.22% to 2,986.19 and FTSE Bursa Malaysia KLCI decreased 1.38 points or 0.08% to 1,650.06.The Japanese market is closed until Friday for the Golden Week holidays.