Key benchmarks hover near day's low

Indian equity benchmarks extended their losses and were hovering near lowest points of the day in the afternoon session, on the back of consistent selling in PSU, Capital Goods, Industrials and banking sector stocks amid mixed global indicators. Sentiments remained down-beat with CRISIL enlightening 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. Traders also remained concerned ahead of June month F&O expiry on Thursday. Meanwhile, rupee strengthened by 7 paise to 64.45 against the dollar in early trade at the Interbank Foreign Exchange on increased selling of the US currency by exporters and banks. In scrip specific development, Cadila Healthcare was trading in green after receiving an approval to raise funds through various sources.

On the global front, Asian markets were trading mixed, as investors waited to see if Federal Reserve Chair Janet Yellen would stick to her positive economic outlook at an event later in the day. Back home, the BSE Sensex is currently trading at 30994.16, down by 144.05 points or 0.46% after trading in a range of 30988.95 and 31294.96. 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 0.90%, while Small cap index down by 1.12%.

The top gaining sectoral indices on the BSE were Telecom up by 1.20%, FMCG up by 0.36% and Consumer Durables up by 0.26%, while PSU down by 1.68%, Capital Goods down by 1.38%, Industrials down by 1.14%, Bankex down by 1.08% and Consumer Disc down by 0.99% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.71%, ITC up by 1.21%, Dr. Reddys Lab up by 0.56%, Tata Steel up by 0.51% and HDFC Bank up by 0.35%. On the flip side, Axis Bank down by 3.48%, SBI down by 2.84%, Tata Motors - DVR down by 2.03%, Tata Motors down by 1.84% and Infosys down by 1.76% were the top losers.

Meanwhile, citing need of higher capital requirement to handle Non-performing assets (NPAs), the Finance Ministry has asked the Reserve Bank of India (RBI) to extend deadline for implementing Basel III banking norms beyond March 2019. Besides, the ministry noted that an extension would help banks meet the capital needs and increase credit flow to productive sectors along with balance sheet clean-up.

The apex bank had already extended the timeline for full implementation of the Basel III capital regulations from March 2018 to March 2019 in 2014. It believes that there is a set framework and it should not be disturbed and any divergence from Basel III norms by the RBI can impact the perception on Indian banks and the central bank globally. Besides, the Union Budget has allocated Rs 10,000 crore towards recapitalisation of public sector banks in the current fiscal in line with the Indradhanush scheme.

Meanwhile, Basel III capital regulations have been implemented in a phased manner from April 01, 2013 in India and shall be fully implemented as on March 31, 2019. According to the norms, banks need to maintain a minimum common equity ratio of 8 per cent and total capital ratio of 11.5 per cent by March 2019. Moreover, most of the 21 state-owned banks are already above the average prescribed by RBI but there are 6 PSU banks which have been put under prompt corrective action (PCA) requiring course correction and higher capital to come out of poor financial health.

The CNX Nifty is currently trading at 9522.10, down by 52.85 points or 0.55% after trading in a range of 9516.05 and 9615.40. There were 15 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.68%, GAIL India up by 1.30%, ITC up by 1.27%, Tata Steel up by 0.84% and Dr. Reddys Lab up by 0.62%. On the flip side, BPCL down by 4.42%, Bank of Baroda down by 3.64%, Axis Bank down by 3.41%, Zee Entertainment down by 3.06% and Indiabulls Housing down by 3.05% were the top losers.

Asian markets were trading mixed; KOSPI Index increased 3.29 points or 0.14% to 2,391.95, Shanghai Composite rose 5.33 points or 0.17% to 3,190.77 and Nikkei 225 surged 71.74 points or 0.36% to 20,225.09. On the flip side, Hang Seng decreased 33.2 points or 0.13% to 25,838.69 and Taiwan Weighted was down by 1.9 points or 0.02% to 10,512.06.