Indian bourses continue to trade weak; Realty plunges

Indian equity markets continued to trade with a negative bias in the afternoon session on account of selling in frontline blue chip counters. Sentiments remained dampened with the report that asset quality pain for banks is expected to continue in fiscal year ended March 2018 due to restructuring by banks, weakness in some large corporate accounts and events like waiver of farm loans. It expects gross non-performing assets (GNPAs) of Indian banks to increase to 9.9% to 10.2% by March 2018 from 9.5% in March 2017 with fresh slippages of loans expected at 3% to 4% in the fiscal. Investors paid no heed towards Reserve Bank of India (RBI) Governor Urjit Patel's statement that the GST regime will expand the taxation base which in turn will lower the overall tax burden in the long-term. Meanwhile, rupee edged up 9 paise to 64.50 against the US dollar on fresh selling of the American currency by banks and exporters. In scrip specific development, Reliance Infrastructure was trading in green with its arm signing a Memorandum of Understanding (MoU) with Daher Aerospace, France for Aerospace and Advanced Technologies.

On the global front, Asian markets were trading mostly in green at this point of time even though oil halted its losing streak. Japanese manufacturing activity slowed in June as new orders grew at the slowest pace in seven months, a sign of a slight weakening in domestic demand. Back home, the BSE Sensex is currently trading at 31184.32, down by 106.42 points or 0.34% after trading in a range of 31128.36 and 31365.39. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.28%, while Small cap index was down by 1.69%.

The only gaining sectoral index on the BSE was IT up by 0.05%, while Realty down by 1.94%, Industrials down by 1.45%, PSU down by 1.37%, Basic Materials down by 1.26% and Auto down by 1.22% were the top losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.32%, Power Grid up by 1.12%, NTPC up by 0.44%, Sun Pharma up by 0.31% and Coal India up by 0.30%. On the flip side, SBI down by 1.83%, ONGC down by 1.78%, Tata Motors down by 1.67%, Tata Steel down by 1.60% and Adani Ports & SEZ down by 1.44% were the top losers.

Meanwhile, owing to restructuring by banks, weakness of some large corporate accounts along with the increasing demand for waiver of farm loans, credit rating agency, ICRA in its latest report has said that the current financial year 2017-18 (FY18) may continue to pose asset quality pain for the Indian banking sector. The rating agency further stated that the gross non-performing assets (GNPAs) of banks too are expected to reach Rs 8.8 - 9 lakh crore by the end of FY18 as against Rs 7.65 lakh crore as on March 31, 2017.

The rating agency said that the current financial year may continue to pose asset quality pain for banks, but it may also turn out to be a decisive year for resolution of the stressed assets on the back of the Reserve Bank’s ongoing resolution process. ICRA further added that the Reserve Bank’s move on insolvency proceedings against 12 large borrowers will break the status-quo and force the stakeholders to arrive at a resolution plan since the losses in case of liquidation of these entities can be higher for all the stakeholders.

Moreover, the rating agency expects a possibility of 10-20 bps decline in deposit and lending rates in upcoming quarters. It also said that with expectations of fresh slippages at 3-4% of advances for FY2018, credit provisions required on the earlier NPAs and relatively lower treasury gains, the possibility of another year of losses or low single digit return on equity for public sector banks (PSBs) is not ruled out.The CNX Nifty is currently trading at 9578.75, down by 51.25 points or 0.53% after trading in a range of 9565.30 and 9647.65. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.08%, Power Grid up by 0.91%, HCL Tech. up by 0.69%, Indusind Bank up by 0.56% and NTPC up by 0.47%. On the flip side, Indiabulls Housing down by 2.71%, Indian Oil Corp. down by 2.62%, GAIL India down by 2.43%, Bank of Baroda down by 2.06% and Tata Motors down by 1.97% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.26 points or 0.01% to 1,777.69, KOSPI Index surged 8.23 points or 0.35% to 2,378.60, Hang Seng added 11.85 points or 0.05% to 25,686.38 and Nikkei 225 was up by 22.16 points or 0.11% to 20,132.67.

On the flip side, Taiwan Weighted decreased 21.36 points or 0.21% to 10,377.70 and Shanghai Composite was down by 7.41 points or 0.24% to 3,140.05.

Indian equity markets continued to trade with negative bias in the afternoon session on account of selling in frontline blue chip counters. Sentiments remained dampened with the report that asset quality pain for banks is expected to continue in fiscal year ended March 2018 due to restructuring by banks, weakness in some large corporate accounts and events like waiver of farm loans. It expects gross non-performing assets (GNPAs) of Indian banks to increase to 9.9% to 10.2% by March 2018 from 9.5% in March 2017 with fresh slippages of loans expected at 3% to 4% in the fiscal. However, downside were capped as some support came with Reserve Bank of India (RBI) Governor Urjit Patel's statement that the GST regime will expand the taxation base which in turn will lower the overall tax burden in the long-term. Meanwhile, rupee edged up 9 paise to 64.50 against the US dollar on fresh selling of the American currency by banks and exporters. In scrip specific development, Reliance Infrastructure was trading in green with its arm signing a Memorandum of Understanding (MoU) with Daher Aerospace, France for Aerospace and Advanced Technologies.

On the global front, Asian markets were trading mostly in green at this point of time even though oil halted its losing streak. Japanese manufacturing activity slowed in June as new orders grew at the slowest pace in seven months, a sign of a slight weakening in domestic demand. Back home, the BSE Sensex is currently trading at 31184.32, down by 106.42 points or 0.34% after trading in a range of 31128.36 and 31365.39. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.28%, while Small cap index was down by 1.69%.

The only gaining sectoral index on the BSE was IT up by 0.05%, while Realty down by 1.94%, Industrials down by 1.45%, PSU down by 1.37%, Basic Materials down by 1.26% and Auto down by 1.22% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.32%, Power Grid up by 1.12%, NTPC up by 0.44%, Sun Pharma up by 0.31% and Coal India up by 0.30%. On the flip side, SBI down by 1.83%, ONGC down by 1.78%, Tata Motors down by 1.67%, Tata Steel down by 1.60% and Adani Ports &SEZ down by 1.44% were the top losers.

Meanwhile, owing to restructuring by banks, weakness of some large corporate accounts along with the increasing demand for waiver of farm loans, credit rating agency, ICRA in its latest report has said that the current financial year 2017-18 (FY18) may continue to pose asset quality pain for the Indian banking sector. The rating agency further stated that the gross non-performing assets (GNPAs) of banks too are expected to reach Rs 8.8 - 9 lakh crore by the end of FY18 as against Rs 7.65 lakh crore as on March 31, 2017.

The rating agency said that the current financial year may continue to pose asset quality pain for banks, but it may also turn out to be a decisive year for resolution of the stressed assets on the back of the Reserve Bank’s ongoing resolution process. ICRA further added that the Reserve Bank’s move on insolvency proceedings against 12 large borrowers will break the status-quo and force the stakeholders to arrive at a resolution plan since the losses in case of liquidation of these entities can be higher for all the stakeholders.

Moreover, the rating agency expects a possibility of 10-20 bps decline in deposit and lending rates in upcoming quarters. It also said that with expectations of fresh slippages at 3-4% of advances for FY2018, credit provisions required on the earlier NPAs and relatively lower treasury gains, the possibility of another year of losses or low single digit return on equity for public sector banks (PSBs) is not ruled out.The CNX Nifty is currently trading at 9578.75, down by 51.25 points or 0.53% after trading in a range of 9565.30 and 9647.65. There were 13 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Wipro up by 1.08%, Power Grid up by 0.91%, HCL Tech. up by 0.69%, Indusind Bank up by 0.56% and NTPC up by 0.47%. On the flip side, Indiabulls Housing down by 2.71%, Indian Oil Corp. down by 2.62%, GAIL India down by 2.43%, Bank of Baroda down by 2.06% and Tata Motors down by 1.97% were the top losers.

The Asian markets were trading mostly in green; FTSE Bursa Malaysia KLCI increased 0.26 points or 0.01% to 1,777.69, KOSPI Index surged 8.23 points or 0.35% to 2,378.60, Hang Seng added 11.85 points or 0.05% to 25,686.38 and Nikkei 225 was up by 22.16 points or 0.11% to 20,132.67.

On the flip side, Taiwan Weighted decreased 21.36 points or 0.21% to 10,377.70 and Shanghai Composite was down by 7.41 points or 0.24% to 3,140.05.