Indian bourses continue to trade in positive territory

Key benchmark indices continued to trade in positive territory in the afternoon session, led by gains in frontline blue chip stocks such as Mahindra & Mahindra, Lupin, Dr. Reddys Lab and Power Grid among others. Sentiments remained positive with report that Southwest monsoon arrived in Kerala on the expected date this year and is also advancing into some parts of the Northeast India. Some support also came with India’s former chief statistician Pronab Sen’s statement that the country’s GDP for 2016-17 will get 50 basis points (bps) push to 7.6 percent from the government’s estimate of 7.1 percent, due to the recent revision of the base year of the Wholesale Price Index (WPI) and the Index of Industrial Production (IIP). Besides, recovery in the rupee value also supported the sentiment. The rupee was trading strong at 64.52 on increased selling of the American currency by exporters. However, investors maintained cautious approach ahead of the fourth quarter gross domestic product (GDP) numbers, slated to be announced later today. In scrip specific development, Glenmark Pharmaceuticals was up by around 2 percent on receiving final approval for generic version of Strattera Capsules.

On the global front, Asian markets were trading mostly in red, as investors turned cautious amid political worries in Europe as well as weaker commodity markets. However, Chinese markets traded higher after data showing China’s factory activity grew at a steady clip this month, reassuring investors worried about a slowdown in the world’s second-biggest economy.

The BSE Sensex is currently trading at 31199.48, up by 40.08 points or 0.13% after trading in a range of 31107.48 and 31233.68. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.86%, while Small cap index was up by 1.01%.

The top gaining sectoral indices on the BSE were Utilities up by 1.05%, Auto up by 0.96%, Consumer Disc up by 0.92%, Healthcare up by 0.88% and Consumer Durables up by 0.86%, while Metal down by 0.84%, Telecom down by 0.54%, Energy down by 0.27%, TECK down by 0.09% and Bankex down by 0.08% were the losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 5.23%, Lupin up by 4.29%, Dr. Reddys Lab up by 2.21%, Power Grid up by 2.16% and GAIL India up by 1.54%. On the flip side, ONGC down by 0.90%, Reliance Industries down by 0.59%, Tata Steel down by 0.55%, Infosys down by 0.45% and HDFC down by 0.44% were the top losers.

Meanwhile, signaling that bad loans will continue to hurt Indian banks, credit rating agency, S&P Global ratings in its latest report has said that the credit profiles of banks are unlikely to improve over the next 12 months seeing that their total stressed assets are likely to increase to 15 percent of total loans by the end of March 2018. The agency further noted that the public sector banks will account for most of this weakness.

In its latest report titled 'No Quick Cure for India's Banking Blues', the rating agency has said that performance of public sector banks (PSUs) that it rated was dismal in the March quarter of the last fiscal, adding that year-over-year increase in non-performing loans (NPLs) led to higher provisions and lower profits. Besides, it said that the available pool of capital to absorb unexpected losses remained thin and loan growth was among the lowest in a decade.

S&P Ratings stated that PSU banks operate with a thin capital cushion and they will have to continue to rely on external capital infusion to meet the Basel III capital requirements, or sell off their non-core assets or investments. Besides, large haircuts on loans may require resolving stressed loans. The report further said that capital shortfall and asset quality problems could pave the way for consolidation among the government-owned banks and this consolidation needs to be accompanied by significant improvement in risk management practices, efficiency gains, capitalisation and improvement in overall governance.

The CNX Nifty is currently trading at 9630.25, up by 5.70 points or 0.06% after trading in a range of 9609.25 and 9638.70. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 5.35%, Lupin up by 4.34%, Ultratech Cement up by 3.89%, Indiabulls Housing up by 2.58% and Dr. Reddys Lab up by 2.16%. On the flip side, Bharti Infratel down by 2.73%, Vedanta down by 2.45%, Aurobindo Pharma down by 1.60%, Yes Bank down by 1.14% and Zee Entertainment down by 0.96% were the top losers.

The Asian markets were trading mostly in red; Taiwan Weighted decreased 61.23 points or 0.61% to 10,040.72, Nikkei 225 shed 27.28 points or 0.14% to 19,650.57, Hang Seng was down by 3.28 points or 0.01% to 25,698.35 and FTSE Bursa Malaysia KLCI declined 0.91 points or 0.05% to 1,764.43.

On the flip side, KOSPI Index increased 3.7 points or 0.16% to 2,347.38, Shanghai Composite added 5.7 points or 0.18% to 3,115.76 and Jakarta Composite rose 13.52 points or 0.24% to 5,706.91.