Benchmarks despite some recovery attempts continue to trade in red

Markets despite making some recovery were continuing in red in the noon trade, while the global cues remained pessimistic after US missile strike against Syria fuelled geopolitical concern, dampening risk appetite, there were no supporting cues from the home turf too. Decline in heavyweights like Reliance Industries, SunPharama, Coal India etc. were contributing to the negative milieu. RBI’s monetary policy stance which has now turned to liquidity control, too was making the mood cautious, while the repo rate was kept unchanged by the MPC, the reverse repo rate was increased to 6 percent. The apex bank cautioned about expected rise in inflation, though it also said that accelerated pace of remonetisation will spur consumer spending over the next several quarters pushing growth. On the sectoral front healthcare, IT and consumer durables, were trading in the negative territory, while telecom and capital goods were supporting the markets from slipping further.

In non sectoral gauges, the oil marketing companies were in jubilant mood on report that state-run oil marketing companies, which control over 90 per cent of the retail fuel market in the country, are mulling a plan that would allow daily changes in the price of petrol and diesel. BPCL was up by 2.5%, HPCL was up by 2% and Indian Oil was up over 3%.

The BSE Sensex is currently trading at 29858.95, down by 68.39 points or 0.23% after trading in a range of 29763.02 and 29883.98. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were outperforming the benchmarks and were trading in green; the BSE Mid cap index was up by 0.36%, while Small cap index added 0.41%.

The top gaining sectoral indices on the BSE were Telecom up by 1.35%, Capital Goods up by 1.03%, Industrials up by 0.63%, Oil & Gas up by 0.62%, PSU up by 0.44%, while Healthcare down by 0.68%, IT down by 0.47%, TECK down by 0.26%, Consumer Durables down by 0.26%, Bankex down by 0.24% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.77%, Larsen & Toubro up by 1.70%, Bajaj Auto up by 1.29%, Hero MotoCorp up by 0.66% and GAIL India up by 0.56%. On the flip side, Sun Pharma Inds. down by 2.26%, Lupin down by 1.46%, Infosys down by 1.35%, Dr. Reddys Lab down by 1.34% and Coal India down by 1.29% were the top losers.

Meanwhile, in order to tackle the bad loan menace, the Reserve Bank of India (RBI) has assured more new measures and said that even though there have been a few positives on the bad loans front the current level of dud loan resolution is untenable as there has been deterioration in non-performing assets (NPAs) situation. The RBI also said that a revised prompt corrective action framework will be introduced for banks in mid-April.

The central bank has introduced a slew of instruments to tackle the NPAs issue, which has crossed 9.5 percent of the system or Rs 14 trillion as of December 2016, including strategic debt restructuring, 5/25 restructuring, joint lenders’ forum, prompt corrective action (PCA) which will be out by end April. It has increased minimum capital requirement for asset reconstruction companies to Rs 100 crore from Rs 2 crore and announced that it will be tweaking the capital requirements for partial credit enhancement framework. It has also decided not to activate the counter cyclical capital buffer at this point of time.

The RBI’s deputy governor SS Mundra, who heads the banking department, has said that they are yet to get the final result of Q4 which has just ended, but based on the figures that were available for the December quarter, the various indicators of the stressed assets have further deteriorated during this period. He also said the positives achieved by the banks include a slowdown in the accretion of fresh NPAs and stable provision coverage ratios. He added that as resolution of the stress comes into the foreground there is a need to understand that there cannot be a ‘one size fits all’ approach and advocated adoption of various tools.

The CNX Nifty is currently trading at 9238.35, down by 23.60 points or 0.25% after trading in a range of 9212.60 and 9249.20. There were 23 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corp. up by 2.76%, BPCL up by 2.29%, Bharti Airtel up by 1.65%, Larsen & Toubro up by 1.64% and Bharti Infratel up by 1.43%. On the flip side, Sun Pharma Inds. down by 2.32%, Bank Of Baroda down by 1.66%, Dr. Reddys Lab down by 1.62%, Kotak Mahindra Bank down by 1.61% and Indiabulls Housing down by 1.55% were the top losers.

Most of Asian markets were trading in red, Hang Seng declined by 137.25 points or 0.57% to 24,136.47, Jakarta Composite was lower by 34.94 points or 0.62% to 5,645.30, Taiwan Weighted lost 24.43 points or 0.25% to 9,873.37, FTSE Bursa Malaysia KLCI was lower by 1.61 points or 0.09% to 1,737.95 and KOSPI Index decreased marginally by1.02 points or 0.05% to 2,151.73.

On the other hand, Shanghai Composite was tad higher by 5.33 points or 0.16% to 3,286.33
Nikkei 225 increased by 67.57 points or 0.36% to 18,664.63.