Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in early afternoon session, as investors adopted a cautious approach in view of November derivatives expiry and release of September-quarter GDP data. The sentiments remained sluggish with the report that the government’s revenue collection under the Goods and Services Tax (GST) slipped to Rs 83,346 crore in the month of October, from more than Rs 92,000 crore in the previous month, primarily because taxes on most commodities have come down. Further, subdued trend in Asian markets and selling witnessed in Telecom, Energy and Consumer Durables, too weighed on the sentiments. However, losses remained capped with FICCI’s latest Survey that India's GDP growth rate is expected to rise to 6.2 percent in the second quarter of the current fiscal as the adverse impact of demonetisation and GST appears to be bottoming out. In scrip specific development, Tata Power was up by around a percent with its arm commissioning India's first rooftop solar carport.

On the global front, Asian markets were trading mostly in red, as Chinese stocks tumbled for a second day as Beijing continued crackdown on shadow banking and other risky forms of financing.  Back home, the BSE Sensex is currently trading at 33654.49, down by 69.95 points or 0.21% after trading in a range of 33639.32 and 33742.04. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.24%, while Small cap index was up by 0.47%.

The top gaining sectoral indices on the BSE were Basic Materials up by 0.47%, Metal up by 0.47%, Consumer Disc up by 0.31%, Auto up by 0.19% and Healthcare up by 0.12%, while Telecom down by 0.85%, Energy down by 0.71%, Consumer Durables down by 0.65%, PSU down by 0.61% and Oil & Gas down by 0.60% were the top losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 1.14%, HDFC up by 0.92%, Tata Steel up by 0.88%, Bajaj Auto up by 0.58% and Cipla up by 0.57%. On the flip side, Power Grid down by 1.45%, NTPC down by 1.45%, ONGC down by 1.34%, Reliance Industries down by 1.03% and ICICI Bank down by 1.03% were the top losers.

Meanwhile, credit ratings agency, ICRA in its latest report has said that the overall credit provisioning for banks is expected to surge to Rs 2.4-2.6 lakh crore in the financial year 2018 as compared to Rs 2 lakh crore in the previous year, mainly due to provisioning for Insolvency and Bankruptcy Code (IBC) accounts and ageing of Non-performing assets (NPAs). Besides, it pointed out that increase in provisioning would lead to higher losses for public sector banks (PSBs) during the year.

The rating agency indicated that during July-September quarter (Q2FY18), bank’s provisions jumped to Rs 64,500 crore, up by 40 percent on a sequential basis and 30 percent on a year-on-year basis. It also said that with the recent amendments in IBC, the likelihood of the higher losses and a further increase in credit provisions appears to be a possibility. It expects that the asset quality pain is likely to continue in the near-term with nearly Rs 1.7 lakh crore of standard restructured advances. It also expects that the gross non-performing assets (GNPA) of Rs 8.8-9 lakh crore or 10-10.2 percent to peak out by end of FY18 as against GNPAs of Rs 7.65 lakh crore or 9.5 percent as on March 31, 2017.

As per the report, PSBs are positioned weakly on their capital ratios with seven PSBs (out of 21) and 12 PSBs below the regulatory minimum capital level required for March 2017 and March 2018 respectively. It stated that with the challenges of meeting capital levels, the PSBs continue to refrain from growing advances, which is reflected in a year-on-year growth of less than 1 percent in advances of PSBs even as the private sector banks continue to achieve a higher year-on-year growth of 17.2 percent as on September 30, 2017. It also expects the scope of a further cut in deposit rates to be limited, even as the cost of deposits will continue to decline upon re-pricing of fixed deposits, which, coupled with competitive pressure, may drive a marginal cut in lending rates.

The CNX Nifty is currently trading at 10383.25, down by 16.30 points or 0.16% after trading in a range of 10372.25 and 10401.25. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 1.49%, Indusind Bank up by 1.44%, Indiabulls Housing Finance up by 1.34%, UPL up by 1.26% and Maruti Suzuki up by 1.19%. On the flip side, Bharti Infratel down by 1.69%, ONGC down by 1.63%, GAIL India down by 1.48%, Power Grid down by 1.48% and NTPC down by 1.40% were the top losers.

The Asian markets were trading mostly in red; Hang Seng decreased 189.24 points or 0.64% to 29,496.95, Jakarta Composite was down by 45.86 points or 0.76% to 6,018.73, Taiwan Weighted shed 43.86 points or 0.41% to 10,707.07, Nikkei 225 dipped 9.75 points or 0.04% to 22,486.24 and FTSE Bursa Malaysia KLCI fell 5.63 points or 0.33% to 1,714.23.

On the flip side, Shanghai Composite increased 1.77 points or 0.05% to 3,324.00 and KOSPI Index was up by 6.38 points or 0.25% to 2,514.19.