Benchmarks trade slightly in green in early deals

Indian equity benchmarks are trading slightly in green in early deals on Friday, as traders took some encouragement with Moody’s Investors Service retaining India’s growth forecast at 7.5 per cent for 2016 and revised upwards estimates for China to 6.6 per cent citing strong fiscal and monetary support. Some support also came with report that foreign portfolio investors (FPIs) bought shares worth a net Rs 162.17 crore yesterday, as per provisional data released by the stock exchanges.

On the global front, Asian markets paring most of their initial gains, trading mostly in red at this point of time as traders opted to book profits in risky assets at higher levels. Back home, Realty stocks remained on buyers’ radar, as a report on residential market has said that the affordable housing market doubled in new launches in the first half of 2016 as against the same time last year. Steel stocks too were trading jubilantly, as India has slapped anti-dumping duty on certain cold-rolled flat steel products from four nations including China and South Korea to guard domestic industry from cheap imports. 

The BSE Sensex is currently trading at 28144.17, up by 20.73 points or 0.07% after trading in a range of 28093.05 and 28212.30. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.45%, while Small cap index was up by 0.44%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.65%, Bankex up by 0.60%, Capital Goods up by 0.48%, Power up by 0.48% and PSU up by 0.43%, while Energy down by 0.29%, Telecom down by 0.28% and Oil & Gas down by 0.16% were the few losing indices on BSE.

The top gainers on the Sensex were SBI up by 3.12%, NTPC up by 1.50%, Cipla up by 1.15%, Asian Paints up by 0.96% and Infosys up by 0.60%. On the flip side, Coal India down by 1.14%, Power Grid down by 0.85%, HDFC down by 0.59%, TCS down by 0.58% and Hindustan Unilever down by 0.45% were the top losers.

Meanwhile, domestic rating agency, Care ratings in its latest report has said that the banking sector’s gross non-performing assets (NPA) almost doubled to 8.5% in first quarter of this fiscal as against 4.6% a year ago, driven by surging bad assets of state-run lenders. However, the rating agency did not quantify the bad loans in absolute terms.

The report stated that the spike was largely due to the doubling of NPAs at public sector banks to 10.4%   compared to 5.3% in June 2015. Private sector lenders witnessed their NPA ratio increasing to 3% from 2.1% a year ago. It further stated that the state-run banks have been under pressure to identify and provide for their NPAs, which could last for another one to two quarters. Report also added that the high NPAs and consequent provisioning is an ‘area of concern’ that will impact their profitability going forward.

Many state-run lenders reported net losses in the June quarter, with market leader State Bank of India (SBI) turning in a 32% drop in net income, while private sector banks' net collectively fell just 2.6%. Rating agency said that the government's plan to raise money by offloading stakes in banks, profit is an important issue. High NPAs and low profitability would not augur well if the government is working towards lowering its stake in these banks to 51%. However, it termed the recognition of NPAs as a positive step in the long term as higher provisioning makes the state-run lenders better prepared to face the market. 

The CNX Nifty is currently trading at 8678.40, up by 5.15 points or 0.06% after trading in a range of 8663.35 and 8696.60. There were 29 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were SBI up by 3.04%, Bank of Baroda up by 2.14%, Ambuja Cement up by 1.69%, Hindalco up by 1.46% and Asian Paints up by 1.32%. On the flip side, Coal India down by 1.19%, Power Grid down by 1.10%, Bharti Infratel down by 0.86%, TCS down by 0.74% and BPCL down by 0.64% were the top losers.

Asian markets were trading mostly in red; Hang Seng slipped 67.75 points or 0.29% to 22,955.41, Taiwan Weighted decreased 57.1 points or 0.63% to 9,065.40, Shanghai Composite shed 14.04 points or 0.45% to 3,090.07, Jakarta Composite dipped 8.75 points or 0.16% to 5,452.70, FTSE Bursa Malaysia KLCI fell 3.78 points or 0.22% to 1,691.09 and KOSPI Index was down by 2.13 points or 0.1% to 2,053.34. On the flip side, Nikkei 225 was up by 65.33 points or 0.4% to 16,551.34.