Benchmarks make soft start on Friday; Sensex breaches 30,000 mark

Indian equity benchmarks have made a soft start and are trading with a cut of around half a percent in early deals on Friday, with frontline gauges declining below their crucial 30,000 (Sensex) and 9,350 (Nifty) levels. Sentiments remained dampened, tailing weakness in other global markets, as concerns over Indian stocks' rich valuations have heightened. Traders shrugged off Confederation of Indian Industry (CII) President Shobana Kamineni’s statement that India can achieve a gross domestic product (GDP) growth of 10 percent by fiscal year 2019-20 on the back of tremendous opportunities available in the economy. She added that the drivers for this step up in growth would include the benefits from implementation of GST and greater participation of women in the labour force.

On the global front, Asian markets were exhibiting mixed trend, with the Chinese market sliding for the fourth consecutive day, approaching near a level that would wipe out all of this year’s gains. The US markets remained in consolidation mood and made another flat closing in the last session.

Back home, banking stocks remained buzzing after President Pranab Mukherjee signed a NPA ordinance last night. The Finance Minister will also hold a press conference to announce the new framework for NPAs later in the day. The gold and jewellery stocks remained on buyers’ radar on report from the World Gold Council, which has said that the uptake for gold in India for January-March this year was 124 tonnes, up 15% compared with the overall demand for the same period in 2016. The market breadth indicating the overall health of the market was weak, with 807 shares gaining and 1224 shares declining, while a total of 85 shares were unchanged.

The BSE Sensex is currently trading at 29977.95, down by 148.26 points or 0.49% after trading in a range of 29972.13 and 30176.55. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.23%, while Small cap index was down by 0.07%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 1.14%, Consumer Disc up by 0.17%, Bankex up by 0.05% and Energy up by 0.04%, while Metal down by 1.75%, Basic Materials down by 1.03%, FMCG down by 0.91%, Capital Goods down by 0.88% and Utilities was down by 0.74% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.65%, Coal India up by 1.21%, Adani Ports up by 1.06%, SBI up by 0.59% and Maruti Suzuki up by 0.30%. On the flip side, ONGC down by 1.93%, GAIL India down by 1.88%, Larsen & Toubro down by 1.32%, ITC down by 1.32% and Tata Motors down by 1.28% were the top losers.

Meanwhile, after the government approved an ordinance to amend the Banking Regulation Act to tackle the issue of non-performing assets (NPAs), which will allow the Reserve Bank of India (RBI) to take tough action against loan defaulters, Finance Secretary Ashok Lavasa has expressed hope that amendments to the Banking Regulation Act will help in faster resolution of bad loans, he said ‘It is not possible for me to put down a number on how non-performing assets or NPAs will go down but certainly we feel that these changes will make the system more effective in handling the bad loans’.

Lavasa further said that they will be able to reach resolution in many of the cases, on the back of professionalism that exists in the country's banking system and with the participation of the promoters themselves. He also said that the amendments would enable regulator Reserve Bank of India and lenders to take effective steps to deal with problem of NPAs and the government will share details after the ordinance is notified.

He added that one should not judge the capacity that is there in the market because people do have appetite for investment in the Indian market. He said that India is probably one of the best destinations for investment at this point of time. He also said that the NPA situating has not worsened in the recent past and there has been marked improvement in some of the infrastructure sectors like power and road.

The CNX Nifty is currently trading at 9319.65, down by 40.25 points or 0.43% after trading in a range of 9317.05 and 9377.10. There were 17 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 1.62%, Eicher Motors up by 1.27%, Indiabulls Housing up by 1.11%, Adani Ports up by 1.09% and Coal India up by 1.09%. On the flip side, Hindalco down by 4.13%, GAIL India down by 2.12%, ONGC down by 2.01%, Infosys down by 1.29% and Larsen & Toubro down by 1.27% were the top losers.

Asian markets were trading mixed; FTSE Bursa Malaysia KLCI rose 3.2 points or 0.18% to 1,761.87, Jakarta Composite increased 8.73 points or 0.15% to 5,678.17 and KOSPI Index was up by 21.57 points or 0.97% to 2,241.24.

On the flip side, Hang Seng declined 287.03 points or 1.16% to 24,396.85, Taiwan Weighted decreased 47.02 points or 0.47% to 9,920.62 and Shanghai Composite was down by 21.27 points or 0.68% to 3,106.10.