Equity benchmarks continue negative trend

Mirroring weak global cues, Indian equity benchmarks continued to show a negative trend in morning session, as minutes of the Reserve Bank of India’s (RBI) monetary policy panel meeting indicated that they were likely to take a more hawkish stance in June. Meanwhile, RBI’s MPC members flagged several concerns, including an increase in minimum support prices for farmers and high and volatile crude oil prices. Investor’s sentiments remained downbeat with a private report stating that the import duties on solar panels has had a dampening effect on bidders for new projects. This marks a reversal of the trend witnessed in the second half of FY17 when solar tariffs fell 47% annually to Rs 2.97/unit. Traders failed to get any sense of relief from a report that the PE investments witnessed a robust 46% jump in deal values at $ 1.3 billion in March, taking the total tally for the Q1 of 2018 to $ 4 billion, up 76% over the same period a year ago.

On the Global front, all the Asian markets were trading in red after two days of broad gains, with a downbeat outlook from Taiwan Semiconductor prompting declines in technology names. Back on domestic turf, in scrip specific development, Shalby gained after Gujarat government empanels it under ‘Mukhyamanatri Amrutam Yojana’. Besides, Lasa Supergenerics gains on receiving ‘WHO-GMP Certificate’ for Mahad unit situated at Mahad issued by the office of The Commissioner, the Food and Drug Administration and Cyient gained on reporting 51% rise in Q4 consolidated net profit at Rs 118.40 crore for the quarter ended March 31, 2018 as compared to Rs 78.40 crore for the corresponding quarter in the FY17.

The BSE Sensex is currently trading at 34391.43, down by 35.86 points or 0.10% after trading in a range of 34336.06 and 34453.71. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined by 0.50%, while Small cap index was down by 0.06%.

The few gaining sectoral indices on the BSE were IT up by 3.68%, TECK up by 2.97%, Consumer Durables up by 0.19% and Telecom was up by 0.05%, while Metal down by 1.76%, Basic Materials down by 0.94%, Bankex down by 0.89%, Realty down by 0.75% and PSU was down by 0.66% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 4.94%, Infosys up by 3.73%, Wipro up by 2.16%, Tata Motors up by 1.94% and Tata Motors – DVR was up by 1.36%. On the flip side, Tata Steel down by 2.02%, Yes Bank down by 1.97%, SBI down by 1.66%, Bajaj Auto down by 1.63% and Asian Paints was down by 1.48% were the top losers.

Meanwhile, in a bid to support Micro- Small and Medium Enterprises (MSME) over the cash crunch issue, the Government of India (GoI) has approached the Reserve Bank of India (RBI) to ease norms for non-performing assets (NPAs) or bad loans in case of small and mid-sized businesses. The MSME ministry is looking for an extension of the NPA classification period from the current 90-day window to 180 days and RBI is making efforts to get it further extended.

Generally, an accounts turns NPA if it is not serviced for 90 days and in case of small businesses and SMEs, payments usually delayed. Once they miss the 90-day period and fall in the NPA category, their credit line is cut. In the absence of vibrant factoring or trade receivable market, small business and SME face the issue of timely credit availability.

As of now, banks are sitting on unrecognised stressed loans worth approximately Rs 7.7 lakh crore in corporate and SME sectors and expect around 35 per cent of them to slip into the NPA category in the next few months.

The CNX Nifty is currently trading at 10546.50, down by 18.80 points or 0.18% after trading in a range of 10539.40 and 10564.00. There were 14 stocks advancing against 36 stocks declining on the index.

The top gainers on Nifty were TCS up by 4.82%, Infosys up by 3.68%, Tech Mahindra up by 2.81%, HCL Tech. up by 2.80% and Tata Motors up by 2.14%. On the flip side, Hindalco down by 3.42%, Tata Steel down by 2.47%, Bajaj Finance down by 2.37%, Vedanta down by 2.18% and Yes Bank was down by 2.15% were the top losers.

All Asian Markets were trading in red, Taiwan Weighted slipped 186.1 points or 1.7% to 10,785.12, Hang Seng declined 128.9 points or 0.42% to 30,579.54, Shanghai Composite fell 37.37 points or 1.2% to 3,080.01, Jakarta Composite losses 34.15 points or 0.54% to 6,321.75, Nikkei 225 decreased 18.24 points or 0.08% to 22,172.94, KOSPI Index dropped 8.39 points or 0.34% to 2,477.71 and FTSE Bursa Malaysia KLCI was down by 5.89 points or 0.31% to 1,889.29.