Sensex, Nifty give up early gains; manage to keep head above water

Paring most of their initial gains, Indian equity benchmarks came off day’s high where Nifty hit the psychological mark of 10,000 for the first time. Markets somehow managed to keep their head above water, as sentiments remained up-beat on report that the foreign direct investment (FDI) inflows into the country increased 23 per cent in the first two months of the current fiscal from a year ago. The cumulative foreign direct investment in April-May was $10.02 billion, or about Rs 64,524 crore, compared with $8.12 billion, or about Rs 52,289 crore, a year earlier. Meanwhile, Finance Minister Arun Jaitley has introduced a bill in the Lok Sabha to authorise the Reserve Bank of India (RBI) to direct banking companies.

On the global front, Asian markets were exhibiting mixed trend and some of the indices are marginally in red at this point of time. Though, some others are trading higher led by energy stocks as oil extended gains after Saudi Arabia promised deep cuts to crude exports next month to help ease a global glut. The US markets made a mixed closing in the last session.

Back home, telecom stocks were ringing loud on report that telecom operators could get some relief, as a draft recommendations of the government-appointed inter-ministerial group (IMG) were discussed at a recent meeting between the finance ministry and the department of telecommunications, wherein it was decided to provide some cash flow relief to the operators. The auto sector remained in focus, as the Deputy Chairman of Rajya Sabha PJ Kurien has called for an all-party meeting today to discuss the Motor Vehicle (Amendment) Bill. Meanwhile, Union Road Transport and Highways Minister Nitin Gadkari has said that driverless cars will not be allowed in India because they will lead to more unemployment.

The BSE Sensex is currently trading at 32260.49, up by 14.62 points or 0.05% after trading in a range of 32209.68 and 32374.30. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index gained 0.24%, while Small cap index was down by 0.03%.

The top gaining sectoral indices on the BSE were Telecom up by 1.53%, Utilities up by 0.46%, Metal up by 0.42%, Bankex up by 0.41% and Basic Materials up by 0.34%, while IT down by 0.40%, Industrials down by 0.29%, Capital Goods down by 0.21%, Energy down by 0.18% and Oil & Gas down by 0.16% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 1.09%, NTPC up by 0.94%, Bharti Airtel up by 0.77%, ICICI Bank up by 0.64% and Tata Steel up by 0.63%. On the flip side, Tata Motors down by 0.83%, Tata Motors - DVR down by 0.78%, ONGC down by 0.70%, Lupin down by 0.70% and Axis Bank down by 0.52% were the top losers.

Meanwhile, in order to resolve the problem of stressed assets, Finance Minister Arun Jaitley has introduced a bill in the Lok Sabha to authorise the Reserve Bank of India (RBI) to direct banking companies. The Banking Regulation (Amendment) Bill, 2017, seeks to amend the Banking Regulation Act, 1949 and replace the Banking Regulation (Amendment) Ordinance, 2017, which was promulgated in May 2017.

Jaitley said that stressed assets in the banking system have reached unacceptably high levels over Rs 8 lakh crore and hence, urgent measures are required for their speedy resolution. Therefore, it was considered necessary to make provisions in the Banking Regulation Act, 1949 for authorizing the RBI to issue directions to any banking company or banking companies to effectively use the provisions of the Insolvency and Bankruptcy Code, 2016 for timely resolution of stressed assets.

Under the ordinance, RBI has been given powers to initiate insolvency proceedings and right to issue directions for resolution, appoint or approve for appointment, authorities or committees, which would advise the banking companies to deal with the case of stressed assets. Moving on fast-track, the RBI had in June identified 12 large loan defaulters who account for 25% of the total bad loans in the banking sector. Besides, action under the Insolvency and Bankruptcy Code has already begun in certain cases, including Essar Steel, Bhushan Steel and Bhushan Power & Steel.

The CNX Nifty is currently trading at 9967.85, up by 1.45 points or 0.01% after trading in a range of 9954.70 and 10011.30. There were 20 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.68%, Indiabulls Housing up by 2.29%, Vedanta up by 1.59%, Hero MotoCorp up by 1.20% and Yes Bank up by 0.86%. On the flip side, Zee Entertainment down by 1.81%, HCL Tech down by 1.28%, Tech Mahindra down by 1.19%, Eicher Motors down by 1.09% and Tata Motors down by 0.86% were the top losers.

Asian markets were exhibiting mixed trend; Jakarta Composite decreased 18.74 points or 0.32% to 5,782.84, Shanghai Composite slipped 4.56 points or 0.14% to 3,246.04, KOSPI Index shed 4.13 points or 0.17% to 2,447.40 and Nikkei 225 was down by 2.85 points or 0.01% to 19,972.82.

On the flip side, FTSE Bursa Malaysia KLCI rose 0.2 points or 0.01% to 1,762.19, Hang Seng increased 2.93 points or 0.01% to 26,849.76 and Taiwan Weighted was up by 8.88 points or 0.08% to 10,470.16.