Indian equity benchmarks continue to trade in red in noon session

Indian equity benchmarks continued to trade in red in the noon session as funds and retail investors indulged in booking profits at prevailing levels. Besides, a weakening trend on the other Asian markets following overnight losses on the US bourses also influenced the sentiment.  However, further losses remained restricted with 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. Meanwhile, banking stocks were seen carrying forward the positive sentiment arising out of the government’s decision to bring an ordinance to give greater powers to the Reserve Bank to tackle mounting bad loans.  President Pranab Mukherjee has also approved the ordinance to amend the Banking Regulation Act, 1949, paving the way for a new framework to deal with the problem of non-performing assets.

On the global front, Asian markets were trading mostly lower on Friday, as fresh fall in commodities raised concerns about the health of the global economy, though the euro bucked the broad weakness on receding concerns about France's presidential election. Traders are eyeing the release of the US Labor Department's closely-watched monthly jobs data later today for further cues. The energy stocks in the region were under pressure after the crude oil futures plummeted overnight on global glut concern. Further, Chinese stocks led regional losers, falling to a three-month low as concerns about tighter financial regulations weighed on banking shares. Meanwhile, Wall Street ended flat after Representatives narrowly approved a bill to repeal Obamacare, handing Republican President Donald Trump a victory that could prove short-lived as the healthcare legislation heads into a likely tough battle in the Senate.

Back home, stocks from Consumer Durables, Realty and PSU counters were supporting the markets, while those from Metal, Basic Materials and Telecom counters were adding to the underlying cautious undertone. In scrip specific development, Bank of Maharashtra declined after the bank reported a net loss of Rs 455.45 crore for the quarter ended March 31, 2017 as compared to a net loss of Rs 119.84 crore for the same quarter in the previous year. On the other hand, Praj Industries gained after the company commenced its first integrated 2nd generation technology (2G) smart bio-refinery to produce ethanol from agri-waste in Gujarat.

The market breadth remained pessimistic, as there were 904 shares on the gaining side against 1594 shares on the losing side, while 131 shares remained unchanged.

The BSE Sensex is currently trading at 29977.51, down by 148.70 points or 0.49% after trading in a range of 29957.17 and 30176.55. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.18%, while Small cap index was up by 0.04%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.91%, Realty up by 0.31%, PSU up by 0.26%, Bankex up by 0.24% and Consumer Disc up by 0.15%, while Metal down by 2.22%, Basic Materials down by 1.16%, Telecom down by 0.90%, Industrials down by 0.90% and Capital Goods down by 0.87% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 1.83%, SBI up by 1.47%, Coal India up by 0.80%, Adani Ports & SEZ up by 0.71% and Maruti Suzuki up by 0.48%. On the flip side, Tata Motors down by 2.91%, Tata Steel down by 1.95%, ONGC down by 1.93%, HDFC down by 1.30% and Larsen & Toubro down by 1.24% 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 9316.60, down by 43.30 points or 0.46% after trading in a range of 9313.10 and 9377.10. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 2.40%, Indiabulls Housing up by 1.78%, Asian Paints up by 1.61%, SBI up by 1.45% and HCL Tech up by 1.00%. On the flip side, Hindalco down by 3.92%, Tata Motors down by 2.93%, Tata Motors - DVR down by 2.23%, ONGC down by 2.04% and Tata Steel down by 1.82% were the top losers.

Most of the Asian markets were showing a negative trend, Hang Seng lost 1.18%, Taiwan Weighted decreased 0.68% and Shanghai Composite was down by 0.83%. On the other hand, FTSE Bursa Malaysia KLCI was up by 0.20% and Jakarta Composite increased by 0.23%.