Benchmarks continue to trade lower; Realty melt

Indian equity benchmarks continued their weak trend in afternoon session on account of across the board selling amid dollar outflows and a sluggish trend overseas. The mood on the street remained cautious ahead of two-day GST Council meet beginning in Srinagar, which will see participation from 29 states and union territories, along with Jaitley, and senior officials from the revenue department. In the meeting Finance Ministry Arun Jaitley is likely to finalise the rates that various goods and services will attract from July 1. Besides, depreciation in Indian rupee also weighed on the sentiment. Extending its losses for the third day in a row, the rupee depreciated by 19 paise to 64.34 against the US dollar as concern over US President Donald Trump spurred a selloff in emerging market currencies.  In scrip specific development, JSW Steel declined by 3 percent despite its March quarter consolidated net profit nearly tripling, fueled by highest ever steel sales and production levels.

On the global front, Asian markets were trading mostly in red, as worries about the stability of the Trump administration intensified and also raised questions about its ability to implement proposed tax reforms and regulation. Back home, the BSE Sensex is currently trading at 30557.03, down by 101.74 points or 0.33% after trading in a range of 30436.56 and 30567.82. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.08%, while Small cap index was down by 0.87%.

The two gaining sectoral indices on the BSE were IT up by 2.48% and TECK up by 1.77%, while Realty down by 1.82%, Capital Goods down by 1.48%, Basic Materials down by 1.39%, Metal down by 1.31% and Auto down by 1.27% were the losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.04%, Wipro up by 3.95%, Infosys up by 2.14%, Lupin up by 1.19% and Cipla up by 0.56%. On the flip side, Larsen & Toubro down by 1.74%, Axis Bank down by 1.55%, Dr. Reddys Lab down by 1.43%, Tata Motors down by 1.40% and Hero MotoCorp down by 1.37% were the top losers.

Meanwhile, Credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that corporate and small and medium enterprise (SME) loans aggregating to Rs 2.60 lakh crore, which is 3.2 percent of total bank credit, could potentially be recognized as stressed loans by FY19. It noted that Indian banks are sitting on unrecognized stressed loans worth of Rs 7.7 lakh crore. It pegs stressed corporate and SME debt at 22 percent of total bank credit and the recognised stressed corporate and SME loans in the system currently stands at around 12 percent of total bank credit.

The report highlighted that the impaired assets will peak at 12.5-13 percent by fiscal 2019. It also estimated that out of the total unrecognized stressed book that banks are sitting on, around 1.8% is to stressed public sector units, around 2% of it either enjoys some group support and could flow to joint lender forum or would be subject to asset sale, around 2.9% could be the addition to the restructured book from infrastructure projects and 3.2% is the potential slippage in next 12-18 months.

The credit rating agency further said that the sectors which have the highest unrecognised stressed exposure include infrastructure, power, telecom and real estate among a few other sectors. It also elaborated that while the iron and steel sector has seen lot of stress recognition in the asset quality review exercise conducted by the Reserve Bank in the last fiscal, provisioning continues to remain inadequate considering higher loss given default estimates. It added that some sectors including infrastructure, real estate among others have lower amount of stress recognised as in many cases they enjoy group support.

The CNX Nifty is currently trading at 9473.75, down by 52.00 points or 0.55% after trading in a range of 9445.25 and 9489.10. There were 10 stocks advancing against 41 stocks declining on the index.

The top gainers on Nifty were TCS up by 3.86%, Wipro up by 3.26%, Infosys up by 2.12%, HCL Tech. up by 1.61% and Bank of Baroda up by 1.33%. On the flip side, Hindalco down by 2.69%, Bharti Infratel down by 2.35%, Ultratech Cement down by 2.26%, Yes Bank down by 2.04% and Larsen & Toubro down by 1.76% were the top losers.

The Asian markets were trading mostly in red; Nikkei 225 decreased 261.02 points or 1.32% to 19,553.86, Hang Seng shed 109.27 points or 0.43% to 25,184.36, Taiwan Weighted was down by 44.22 points or 0.44% to 9,969.45, Shanghai Composite declined 18.82 points or 0.61% to 3,085.63, FTSE Bursa Malaysia KLCI dipped 9.12 points or 0.51% to 1,766.53 and KOSPI Index was down by 6.26 points or 0.27% to 2,286.82.

On the flip side, Jakarta Composite was up by 11.78 points or 0.21% to 5,627.27.