Indian bourses continue to show sluggish trend in afternoon deals

Indian equity benchmarks continued to show a sluggish trend in early afternoon session, with Senxex and Nifty trading below their psychological 32400 and 10050 levels, respectively. Traders were concerned with report showing that the services sector contracted in July and fell to its lowest level in nearly four years following implementation of the Goods and Services Tax (GST). Nikkei India Services Purchasing Managers' Index fell to 45.9 in July. Some concern also came with the Reserve Bank’s third bi-monthly monetary policy statement that farm loan waivers by state governments could result in possible fiscal slippages and undermine the quality of public spending. Strength in the rupee too was unable to support the markets. The rupee strengthened by 7 paise to 63.63 against the US dollar in early trade, buoyed by hopes of more capital inflows, coupled with more selling of the American currency by banks and exporters. In scrip specific development, Ratnamani Metals was trading in green after bagging new export order worth $29.00 million or Rs 184 crore for supply of Carbon Steel Coated Pipes.

On the global front, Asian markets were trading mostly in red, following the mixed cues overnight from Wall Street. Besides, investors remained cautious ahead of the Bank of England's interest rate decision due later in the day and Friday's all-important US jobs report. Back home, the BSE Sensex is currently trading at 32335.06, down by 141.68 points or 0.44% after trading in a range of 32282.46 and 32502.55. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.23%, while Small cap index was down by 0.27%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.25%, Energy up by 0.86%, Consumer Durables up by 0.64%, Healthcare up by 0.60% and Utilities up by 0.31%, while Metal down by 1.20%, Bankex down by 1.14%, Basic Materials down by 0.28%, Industrials down by 0.27% and IT down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were Lupin up by 1.47%, Hindustan Unilever up by 0.83%, TCS up by 0.76%, Reliance Industries up by 0.75% and Cipla up by 0.74%. On the flip side, Coal India down by 2.14%, Axis Bank down by 1.69%, SBI down by 1.51%, ICICI Bank down by 1.41% and HDFC down by 1.30% were the top losers.

Meanwhile, ahead of the implementation of the Basel III capital regulations in India from March 31, 2019, the Reserve Bank of India (RBI) has amended a slew of previous regulations on the same. This will help banks to shore up their capital buffers along with improve liquidity coverage ratios (LCR). Therefore, the new amendments widen the assets of banks such as the excess CRR; excess G-secs holdings in SLR, and also excess g-secs under marginal standing facility, which all would now be included in the stock of liquid assets without any limit as also without applying any haircut.

The central bank has stated that liquid stock will also include marketable securities issued/guaranteed by foreign sovereigns which have only zero percent risk weight under the Basel II standardized approach for credit risk; actively traded repo or cash markets operations with zero risks, reserves held with foreign central banks in excess of the reserve requirement.

The regulator further said that the RBI reserves would include banks’ overnight deposits and term deposits with the central bank which are explicitly and contractually repayable on notice from the depositing bank or that constitute a loan against which the bank can borrow on a term or on an overnight basis but automatically renewable basis. It also noted that other term deposits with the central bank are not eligible for this. However, it pointed out that if the term expires within 30 days, the term deposits could be considered as an inflow.

The CNX Nifty is currently trading at 10042.90, down by 38.60 points or 0.38% after trading in a range of 10023.15 and 10081.15. There were 24 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indian Oil Corp. up by 4.04%, Aurobindo Pharma up by 2.05%, Lupin up by 1.40%, Bharti Infratel up by 1.16% and ACC up by 1.12%. On the flip side, Hindalco down by 2.43%, Coal India down by 2.33%, Axis Bank down by 1.76%, Yes Bank down by 1.74% and ICICI Bank down by 1.52% were the top losers.

Asian markets were trading mostly in the red; Nikkei 225 slipped 50.78 points or 0.25% to 20,029.26, Taiwan Weighted dropped 49.39 points or 0.47% to 10,469.88, KOSPI Index was down by 40.78 points or 1.68% to 2,386.85, Hang Seng declined 40.08 points or 0.15% to 27,567.30, Jakarta Composite shed 21.82 points or 0.37% to 5,802.43 and Shanghai Composite dipped 9.84 points or 0.3% to 3,275.22.

On the flip side, FTSE Bursa Malaysia KLCI was up by 0.11 points or 0.01% to 1,770.72.