Benchmarks continue to trade in red in late morning session

Indian benchmark indices continued to trade in red in late morning session on absence of positive triggers which could take the markets higher and profit booking in frontline line blue-chip stocks. Besides, weak trend in Asian stocks coupled with gains in Oil prices also weighted down sentiments. Rise in crude oil prices will adversely impact India's fiscal deficit situation and will increase fuel price inflation, as India imports about 80% of its crude requirements. At present, Sensex and Nifty were trading below the crucial 26,900 and 8,250 levels respectively, with cut of over half a percent. However, the broader markets outperformed benchmark indices as investors turned their focus on fundamentally sound mid-cap and small-cap stocks. Investors got some comfort with Prime Minister Narendra Modi’s statement that his dream was to economically empower every Indian by 2022, the 75th anniversary of India's Independence Day.  Appreciation in the rupee against dollar too supported market sentiment. Indian rupee advanced by 6 paise to trade at a fresh four-week high of 66.59 against the US dollar today on sustained selling of the American currency by banks and exporters. Some support also came with the report that foreign portfolio investors (FPIs) bought shares worth a net Rs 529.16 crore on June 08, 2016.

On the global front, Asian stock markets were trading mostly lower, as a weaker dollar negatively impacted Japanese stocks and investors weigh risks amid the Federal Reserve's cautious stance about tightening rates. South Korean stocks declined after the Bank of Korea (BOK) surprised markets by cutting its policy rate by 25 basis points to a record-low of 1.25 percent. Further, Financial markets in Hong Kong and China are closed today for a public holiday. Meanwhile, US markets closed higher on Wednesday, with the Dow Jones Industrial Average rising for a third straight session to close above the psychologically important 18,000 for the first time in over a month, as oil rallied to an 11-month high.

Back home, stocks from IT, FMCG and Capital Goods counters were among the worst performers, while Oil & Gas, PSU and Metal counters battled out against all odds. In scrip specific development, shares of NTPC gained after the company signed an agreement with South Western Railway for doubling of the Hotgi-Kudgi section under the Customer Funding Concession scheme. On the other hand, shares of Lupin came under pressure after the report that the company is recalling over 54,000 vials of anti-bacterial injection, Ceftriaxone, due to violation of current manufacturing norms.

The market breadth on BSE was optimistic, out of 2127 stocks traded, 1084 stocks advanced, while 907 stocks declined on the BSE. 

The BSE Sensex is currently trading at 26852.36, down by 168.30 points or 0.62% after trading in a range of 26809.09 and 26994.91. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index up by 0.23%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.15%, PSU up by 0.99%, Metal up by 0.99%, Power up by 0.75% and Consumer Durables up by 0.45%, while IT down by 1.72%, TECK down by 1.38%, FMCG down by 0.83%, Capital Goods down by 0.35% and Auto down by 0.17% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.99%, Reliance Industries up by 1.71%, ONGC up by 1.44%, Tata Steel up by 0.73% and Axis Bank up by 0.71%. On the flip side, Infosys down by 3.37%, Dr. Reddys Lab down by 1.93%, Hindustan Unilever down by 1.80%, Hero MotoCorp down by 1.32% and ITC down by 1.25% were the top losers.

Meanwhile, with an aim to improve the ease of doing business and to facilitate investment leading to higher economic growth and development, a Parliamentary Committee has sought comments from the stakeholders by June 22 on a bill to amend the Recovery of Debt Laws and Miscellaneous Provisions (Amendment) Bill, 2016. The bill is currently being scrutinized by the 30-member Joint Parliamentary Committee headed by Rajya Sabha MP Bhupender Yadav.

Last month, the bill was introduced in Lok Sabha, seeks to amend four legislations -- Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (Sarfaesi) Act, 2002, the Recovery of Debts due to Banks and Financial Institutions Act, 1993, the Indian Stamp Act, 1899 and the Depositories Act, 1996.

Regarding Sarfaesi Act, 2002, amendments have been proposed to suit changing credit landscape which include specific timeline for taking possession of secured assets, debenture trustees as secured creditors as well as integration of 'registration systems under different laws relating to property rights with the Central Registry so as to create a central database of security interest on property rights.

Further, the bill seeks to amend the Indian Stamp Act, 1899, to exempt assignment of loans in favour of asset reconstruction companies from stamp duty and the Depositories Act, 1996 for facilitating transfer of shares held in pledge or on conversion of debt into shares in favour of banks and financial institutions.

Amid mounting concern over loan recovery in view of stressed assets to the tune of over Rs 8 lakh crore in the banking system, the government has come up with this legislation.  The legislation proposes to give RBI powers to regulate asset reconstruction companies, prioritise secured creditors in repayment of debts and provide stamp duty exemption on loans assigned by banks and financial institutions to asset reconstruction firms.

The CNX Nifty is currently trading at 8231.90, down by 41.15 points or 0.50% after trading in a range of 8215.95 and 8273.35. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were NTPC up by 1.92%, Reliance Industries up by 1.80%, Hindalco up by 1.51%, BPCL up by 1.48% and Zee Entertainment up by 1.48%. On the flip side, Infosys down by 3.40%, Dr. Reddys Lab down by 2.10%, Hindustan Unilever down by 1.88%, Aurobindo Pharma down by 1.44% and HDFC down by 1.36% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 was down by 1.15%, Jakarta Composite down by 0 0.27%, Shanghai Composite down by 0.3% and KOSPI Index down by 0.52%. On the flip side, FTSE Bursa Malaysia KLCI was up by 0.12%.