Indian bourses continue to trade under pressure

Indian bourses continued their weak trade in early afternoon session, with all sectoral indices traded in red. The mood of the markets remained impacted by Ficci survey report stating that glitches in the GSTN portal, cumbersome procedures and documentation as well as the cost of compliance are major areas of concern that need to be addressed to make the Goods and Services Tax (GST) a success. Additional pressure also came with a joint study by the Confederation of Indian Industry (CII) and the Indian Banks’ Association (IBA) which has indicated that the India’s financial conditions index stood at 53.2 for Q4 (January-March) of 2017-18 as against 65.3 in the previous quarter, thereby registering a significant fall of 12.1 points. In scrip specific development, Jet Airways was trading in green after reporting the Passenger Load Factor (PLF) of 88.7% during the month of January 2018.

On the global front, Asian markets were trading in green, with investors buoyed by gains on Wall Street despite ongoing concern about volatility. Back home, the BSE Sensex is currently trading at 33821.06, down by 189.70 points or 0.56% after trading in a range of 33789.57 and 34122.96. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 1.03%, while Small cap index was down by 0.95%.

The top losing sectoral indices on the BSE were Metal down by 2.27%, PSU down by 1.81%, Capital Goods down by 1.53%, Basic Materials down by 1.23% and Industrials down by 1.11%, while there were no gaining sectoral indices on the BSE.

The top gainers on the Sensex were Coal India up by 0.87%, Infosys up by 0.67%, Wipro up by 0.45%, Kotak Mahindra Bank up by 0.36% and Reliance Industries up by 0.30%. On the flip side, Tata Steel down by 5.81%, SBI down by 3.86%, Larsen & Toubro down by 2.44%, Adani Ports & SEZ down by 2.08% and Indusind Bank down by 1.98% were the top losers.

Meanwhile, citing the fraudulent transactions of Rs 11,300 crore at Punjab National Bank (PNB) and the closure of Bank of Baroda’s South Africa branch, the Government of India’s Chief Economic Advisor (CEA) Arvind Subramanian has said that the private sector’s participation in public sector banking (PSBs) and better external regulations are key to reforming the industry.

Subramaniam said there were three reasons for greater privatisation. The first one is that public sector ownership serves as a handicap in bank recruitments, human resources procurement and governance, especially when they need more freedom to compete with private sector lenders. The second reason is that the decision making in Indian government is almost paralysed due to the four ‘C’s -- courts, CBI, CVC and CAG. The third argument is that the private sector has been a creator of wealth at least in the past three-and-a-half years.

Arvind Subramanian has proposed that the banking sector should follow five ‘R’s to straighten itself out: recognition, resolution, recapitalisation, reform and regulation, as the twin balance sheet problem was holding up bank’s growth in India. He added that recognition is identifying stressed assets to avoid NPA and secondly resolution means to pass the Bankruptcy code. Talking about recapitalization, he said there might be need for more resources, though the government has earmarked Rs 2.10 lakh crore.

The CNX Nifty is currently trading at 10388.10, down by 64.20 points or 0.61% after trading in a range of 10379.05 and 10489.35. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 0.81%, Coal India up by 0.79%, Ambuja Cement up by 0.64%, Infosys up by 0.50% and Kotak Mahindra Bank up by 0.50%. On the flip side, Tata Steel down by 6.04%, SBI down by 3.81%, Larsen & Toubro down by 2.51%, Tech Mahindra down by 2.50% and Adani Ports & SEZ down by 2.37% were the top losers.

Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 15.86 points or 0.86% to 1,854.14, KOSPI Index rose 20.99 points or 0.87% to 2,442.82, Jakarta Composite added 63.2 points or 0.96% to 6,654.79 and Nikkei 225 was up by 428.96 points or 1.97% to 22,149.21.

Stock markets in China, Hong Kong and Taiwan remained closed on account of National holiday.