Bourses off day’s high; Nifty struggles to hold 9900 level

Indian equity benchmarks gave up some of their gains and were trading off days’ highs in late afternoon session amid weak opening of European markets.  Mixed trend seen in Asian markets following speeches from top central bankers at a central banking meeting in Jackson Hole on Friday, also trimmed some of gains. However, traders remained optimistic with Niti Aayog’s statement that India has good prospects of achieving over 8 percent growth within 2-3 years and the chances of massive cut in the poverty rate in the upcoming decade are excellent. Some support also came with industry body ASSOCHAM’s statement that biometric cards have facilitated disbursement of as much as Rs 83,184 crore to beneficiaries of Direct Benefit Transfer (DBT) schemes without the notorious leakages of the past.

On the global front, European markets were trading in red as investors geared up for the next round of Brexit talks in Europe and kept a close eye on the moves in oil. Asian markets were trading mixed. Back home, in scrip specific development, Rural Electrification Corporation (REC) gained after the company entered into Memorandum of Understanding (MoU) with Maharashtra State Power Generation Company (MAHAGENCO) for extending financial assistance to the tune of Rs 13,000 crore and for providing required services.

The BSE Sensex is currently trading at 31722.66, up by 126.60 points or 0.40% after trading in a range of 31701.67 and 31809.70. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.76%, while Small cap index was up by 0.93%.

The  top gaining sectoral indices on the BSE were IT up by 1.25%, Capital Goods up by 1.10%, TECK up by 1.09%, Consumer Durables up by 0.87% and Industrials up by 0.86%, while there were no losing sectoral indices on the BSE.

The top gainers on the Sensex were Infosys up by 3.43%, Hero MotoCorp up by 2.39%, NTPC up by 2.04%, Adani Ports & SEZ up by 1.92% and Sun Pharma Inds. up by 1.85%. On the flip side, Dr. Reddy’s Lab down by 1.92%, Tata Motors down by 1.15%, Power Grid Corpn. down by 1.00%, Tata Steel down by 0.85% and Tata Motors - DVR down by 0.84% were the top losers.

Meanwhile, commenting on the government’s decision to merge public sector banks (PSBs) through an Alternative Mechanism (AM), global credit rating agency, Moody's Investor Services in its latest report has said that this move is credit positive, as it would provide scale efficiency and improve the quality of corporate governance. However, the report also said that such mergers would not improve PSBs’ weak capitalisation.

The rating agency further said that the consolidation may provide potential to the state-owned banks to grow their deposits level, creating competitive advantage compared to the private banks. As the poor corporate governance has been structural credit weakness at PSBs and managing the country’s all 21 PSBs has proven to be unwieldy for the government. In view of this, it noted that the consolidation would also address key issues like long-term strategies and human resources on which the government has been unable to pay sufficient attention.

The Union Cabinet had recently given in-principle approval for Public Sector Banks to amalgamate through an Alternative Mechanism.  As per the government’s notification, the decision would facilitate consolidation among the Nationalised Banks to create strong and competitive banks.

The CNX Nifty is currently trading at 9899.90, up by 42.85 points or 0.43% after trading in a range of 9882.00 and 9925.75. There were 30 stocks advancing against 19 stocks declining on the index, 2 stocks remained unchanged.

The top gainers on Nifty were Infosys up by 3.49%, Indian Oil Corp. up by 2.76%, NTPC up by 2.16%, Hero MotoCorp up by 2.12% and ACC up by 2.10%. On the flip side, Dr. Reddy’s Lab down by 2.07%, Power Grid Corpn. down by 1.56%, Tata Motors down by 1.34%, Tata Motors - DVR down by 1.10% and Tata Steel down by 0.86% were the top losers.

Asian markets were trading mixed; Jakarta Composite decreased 21.93 points or 0.37% to 5,893.43, KOSPI Index decreased 8.21 points or 0.35% to 2,370.30, Nikkei 225 decreased 2.71 points or 0.01% to 19,449.90 and FTSE Bursa Malaysia KLCI decreased 1.56 points or 0.09% to 1,767.61. On the flip side, Taiwan Weighted increased 10.47 points or 0.1% to 10,525.98, Hang Seng increased 15.13 points or 0.05% to 27,863.29 and Shanghai Composite increased 31.13 points or 0.93% to 3,362.65.

All European markets were trading in red; Germany’s DAX decreased 57.37 points or 0.47% to 12,110.57, France’s CAC decreased 11.66 points or 0.23% to 5,092.67 and UK’s FTSE 100 decreased 5.6 points or 0.08% to 7,401.46.