Benchmarks continue to trade lower; IT melt

Indian equity benchmarks continued the weak trend in afternoon session, on account of sustained selling by funds and retail investors in the blue chip counters amid global volatility on uncertainty in the UK elections. Sentiments remained dampened with a survey by the Reserve Bank of India showing that the economy will gradually consolidate growth in the current fiscal. The survey enlightened that real gross domestic product (GDP) and real gross value added (GVA) are expected to grow by 7.4% and 7.2%, respectively, in 2017-18 and consolidate further by 40 basis points (bps) and 50 bps, respectively in the following year. According to the forecasters, retail inflation is expected to gradually rise to 5 per cent by the fourth quarter of 2017-18. Besides, the depreciating rupee against the US dollar also added to the dampened sentiment. In scrip specific development, Zee Media Corporation was trading in green after receiving an approval from National Company Law Tribunal (NCLT) for demerger of its print media business into Diligent Media Corp (DMCL).

On the global front, Asian markets were trading mostly in green, with investors largely shrugging off political uncertainty in the UK. Back home, the BSE Sensex is currently trading at 31152.37, down by 60.99 points or 0.20% after trading in a range of 31087.28 and 31200.59. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.02%, while Small cap index was up by 0.45%.

The top gaining sectoral indices on the BSE were Realty up by 1.12%, Auto up by 0.69%, Metal up by 0.64%, Consumer Disc up by 0.55% and Telecom up by 0.22%, while IT down by 0.99%, FMCG down by 0.89%, TECK down by 0.75%, Oil & Gas down by 0.34% and PSU down by 0.33% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.09%, Mahindra & Mahindra up by 1.00%, Reliance Industries up by 0.82%, Tata Motors up by 0.66% and Power Grid up by 0.48%. On the flip side, ITC down by 1.85%, Infosys down by 1.70%, GAIL India down by 1.60%, Wipro down by 1.59% and ONGC down by 1.17% were the top losers.

Meanwhile, stressing that non-performing assets (NPAs) of the banks are a complex issue, the industry body, the Associated Chambers of Commerce of India (ASSOCHAM) has urged the Government and Reserve Bank of India to take flexible and pragmatic approach to deal with them, pointing that NPAs of banking sector are among the biggest road blocks for the economic growth as evident from latest data of GDP..

The industry body noted that if large NPAs were resolved by the RBI in next couple of quarters, this would spur the credit off-take and suggested that the NPA norms on getting the account classified under non-performing asset category for core sectors should be extended from 90-days to 180-days, specially for infra, power, steel and telecom companies.

ASSOCHAM stated that the NPA resolution would lead to cleaning up of the bank balance sheets and revival of the banks’ health will help uptick in the private sector investment. The industry body further said that the terms of different schemes for resolution of the NPAs should be flexible and liberal enough to be accommodative, rather than being rigid.

The CNX Nifty is currently trading at 9629.90, down by 17.35 points or 0.18% after trading in a range of 9608.15 and 9644.10. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 1.98%, Maruti Suzuki up by 1.91%, Mahindra & Mahindra up by 1.02%, Bharti Infratel up by 0.92% and Indiabulls Housing up by 0.91%. On the flip side, Tech Mahindra down by 2.47%, ITC down by 1.83%, Infosys down by 1.72%, Wipro down by 1.68% and GAIL India down by 1.63% were the top losers.

Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 2.98 points or 0.17% to 1,788.55, Shanghai Composite rose 8.81 points or 0.28% to 3,159.14, KOSPI Index surged 18.12 points or 0.77% to 2,381.69 and Nikkei 225 was up by 104 points or 0.52% to 20,013.26.

On the flip side, Hang Seng decreased 126.03 points or 0.48% to 25,937.03, Taiwan Weighted was down by 26.13 points or 0.26% to 10,199.65 and Jakarta Composite declined 13.57 points or 0.24% to 5,689.35.