Indian equities continue to reel under pressure in noon session

Indian equity benchmarks continued to trade weak in noon session as investors maintained conservative approach and remained cautious ahead of Federal Reserve Chair Janet Yellen's speech later in the day for clues on the outlook for US monetary policy. Sentiments remained downbeat after CRISIL enlightened that the steps taken by Reserve Bank to resolve NPAs are likely to raise provisioning by a whopping 25% this year as lenders will take up to 60% hair cut while resolving these accounts. Investors also stayed cautious ahead of F&O expiry due this week and GST rollout lined up for June 30 midnight. Meanwhile, US President Donald Trump urged Indian Prime Minister Narendra Modi to do more to relax Indian trade barriers on Monday during talks in which both leaders took great pains to stress the importance of a strong US-Indian relationship. Trump was warm but made clear he sees a need for more balance in the US-India trade relationship in keeping with his campaign promise to expand American exports and create more jobs at home. Last year the US trade deficit with India neared $31 billion.

On the global front, Asian markets were trading mixed on Tuesday, as investors awaited an appearance by Federal Reserve Chair Janet Yellen for clues on the outlook for interest rates and the American economy.  Yellen is scheduled to take part in a discussion on global economic issues at London's Royal Academy and a number of other top Fed officials are also due to speak later in the global day. Further, Japan's Nikkei share average edged up to hover near two-year highs as a weaker yen helped exporters rise, while financial stocks rebounded from Monday's declines. 

Back home, stocks from Telecom, FMCG and Consumer Durables counters were supporting the markets’ uptrend, while those from PSU, Capital Goods and Oil & Gas counters were adding to the underlying cautious undertone. In scrip specific development, UV Boards surged after the company received its board's approval to raise funds up to Rs 300.00 crore by way of issue of equity shares under Preferential allotment / Rights issue for purchase/acquisition of a branded plywood business subject to the approval of shareholders. Furthermore, Natco Pharma gained after the company received final approval of Abbreviated New Drug Application (ANDA) from the US Food and Drug Administration (USFDA) for Azacitidine for Injection, 100mg per Vial, Single-Dose Vial, a generic version of Vidaza by Celgene Corporation.

The market breadth remained pessimistic, as there were 661 shares on the gaining side against 1625 shares on the losing side, while 115 shares remained unchanged.

The BSE Sensex is currently trading at 31031.43, down by 106.78 points or 0.34% after trading in a range of 31017.08 and 31294.96. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.99%, while Small cap index down by 1.07%.

The top gaining sectoral indices on the BSE were Telecom up by 0.78%, FMCG up by 0.41%, Consumer Durables up by 0.09% and Healthcare up by 0.03%, while PSU down by 1.79%, Capital Goods down by 1.16%, Oil & Gas down by 1.12%, Industrials down by 1.03% and Bankex down by 1.02% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.37%, Bharti Airtel up by 1.08%, TCS up by 0.78%, Dr. Reddys Lab up by 0.66% and Adani Ports & SEZ up by 0.63%. On the flip side, Axis Bank down by 2.63%, SBI down by 2.54%, Bajaj Auto down by 1.76%, Infosys down by 1.67% and ICICI Bank down by 1.63% were the top losers.

Meanwhile, pushing for the passage, the labour ministry will table the Factories (Amendment) Bill, 2016 and Code on Wages Bill in the forthcoming monsoon session of Parliament beginning next month. Apart from these two bills, the ministry is also working on Code on Industrial Relations but, it is under scrutiny of ministerial panel on labour issues headed by Finance minister Arun Jaitley.

The Wage Code Bill will enable the central government to fix universal minimum wage applicable on all establishments and workers across the country. The Code on Wages Bill has already been approved by the ministerial panel, and will soon be placed for the Union Cabinet nod. On the other hand, the Factories (Amendment) Bill, 2016 will increase the working overtime hours up to 100 per quarter and allow workers to work more and earn more. The Bill was passed by the Lok Sabha in monsoon session last year. Now, it will be pushed for the passage in Rajya Sabha next month.

The code will ensure universal minimum wage for all industries and workers. It will also cover those workers, who are getting monthly pay of higher than Rs 18,000. At present, laws on wages do not cover workers getting monthly wage of more than Rs 18,000. The Code on Wages Bill seeks to empower the Centre to set a minimum wage across sectors, and states will have to maintain that. However, states will be able to provide higher minimum wage in their jurisdiction than fixed by the central government.

The Factories (Amendment) Bill seeks to double the overtime working hours to 100 in a quarter for factory workers with an objective of boosting job creations in manufacturing sector and improve ease of doing business. The current norms allow overtime of 50 hours in a quarter, while the ILO provides for upper limit of 144 hours. The bill also empowers the central government, in addition to the states, to make exempting rules and orders in respect to total number of hours of work on overtime in a quarter, which would ensure uniformity, in its application by various state governments and Union Territories.

The CNX Nifty is currently trading at 9533.65, down by 41.30 points or 0.43% after trading in a range of 9519.45 and 9615.40. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were ITC up by 1.58%, Bharti Airtel up by 1.24%, GAIL India up by 0.92%, TCS up by 0.82% and Aurobindo Pharma up by 0.78%. On the flip side, BPCL down by 4.53%, Bank of Baroda down by 3.67%, Zee Entertainment Enterprises down by 3.20%, Indiabulls Housing Finance down by 3.18% and Axis Bank down by 2.70% were the top losers.

Asian markets were trading mixed; Hang Seng declined 0.09%, Taiwan Weighted decreased 0.02% and Shanghai Composite was down by 0.2%. On the flip side, KOSPI Index increased 0.17% and Nikkei 225 was up by 0.39%.