Local benchmarks continue sluggish trend

Indian equity benchmarks continued to show a sluggish trend in late morning session, with Sensex breaching 35,300 mark. Sentiments remained down-beat with a report stating that the total investments through participatory notes (P-notes) into Indian capital markets declined to a 9-year low of Rs 1 lakh crore in April amid stringent norms put in place by the Securities and Exchange Board of India to check the misuse of these instruments. The street continued to remain under pressure with a report stating that India’s trade deficit slightly widened to $13.72 billion in April from $13.25 billion a year ago. Traders overlooked a report which stated that the Union Cabinet has approved the National Policy on Biofuel, which is expected to not only reduce pollution but also help farmers in case of surplus production. The Biofuels policy allows doping of ethanol produced from damaged foodgrains, rotten potatoes, corn and sugar beet with petrol to cut oil imports by Rs 4,000 crore this year alone. Investors also failed to get any sense of relief from a report which stated that the government has approved a corpus of Rs 5,000 crore for the setting up of a dedicated micro irrigation fund (MIF) under the National Bank for Agriculture and Rural Development (Nabard). 

On the global front, Asian markets were trading mostly in red. Traders remained concerned with a private report which stated that Japan’s economy shrank for the first time in two years during the first quarter, contracting more than expected on a surprise fall in business spending and flat private consumption. Back home, in scrip specific development, Larsen & Toubro gained with construction arm bagging orders worth Rs 2,440 crore. Besides, Geojit Financial Services surged on reporting 26% rise in Q4 consolidated net profit at Rs 19.28 crore for the quarter ended March 31, 2018.

The BSE Sensex is currently trading at 35296.28, down by 91.60 points or 0.26% after trading in a range of 35253.75 and 35510.01. There were 13 stocks advancing against 17 stocks declining on the index, while 1 stock remained unchanged.

The broader indices were trading in green; the BSE Mid cap index gained 0.23%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.74%, Telecom up by 0.78%, Industrials up by 0.41%, Capital Goods up by 0.39% and Utilities was up by 0.20%, while Metal down by 1.20%, Energy down by 0.37%, Basic Materials down by 0.32%, Oil & Gas down by 0.24% and IT was down by 0.19% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 1.51%, Coal India up by 0.98%, Hindustan Unilever up by 0.93%, Tata Motors - DVR up by 0.71% and Sun Pharma was up by 0.67%. On the flip side, Tata Steel down by 2.58%, Dr Reddys Lab down by 1.48%, HDFC down by 1.23%, Infosys down by 0.83% and Indusind Bank was down by 0.76% were the top losers.

Meanwhile, the Union Cabinet, Chaired by Prime Minister Narendra Modi, has approved a new two-tier mechanism to strengthen commercial dispute resolution between Central Public Sector Enterprises (CPSEs) and also between CPSEs and other government departments, through an institutionalised framework. Once implemented, these entities will not have to approach court and the matter will be resolved within three months.

The new mechanism will replace the Permanent Machinery of Arbitration (PMA). It has a two-tier system, at the first level (tier), a committee comprising of secretaries of the relevant administrative and secretary department of legal affairs will look at the dispute. At the second level (tier), in case the dispute remains unresolved, it will be referred to the Cabinet Secretary, whose decision will be final and binding on all concerned.  For the prompt disposal of disputes, a time schedule of 3 months at the first level has been prescribed. The government has said that it would reduce the number of litigations regarding commercial disputes in Court of Law and also avoid wastage of public money.

Department of Public Enterprises (DPE) will issue guidelines immediately to all CPSEs through their administrative Ministries/Departments and State Governments/UTs for compliance. The new mechanism will promote equity through mutual/collective efforts to resolve commercial disputes thereby reducing the number of litigations regarding commercial disputes in Court of Law and also avoid wastage of public money.

The CNX Nifty is currently trading at 10716.15, down by 24.95 points or 0.23% after trading in a range of 10698.40 and 10777.25. There were 21 stocks advancing against 28 stocks declining on the index, while 1 stock remained unchanged.

The top gainers on Nifty were Bharti Infratel up by 1.87%, Titan Company up by 1.74%, Tata Motors up by 1.53%, Coal India up by 1.39% and GAIL India was up by 1.03%. On the flip side, Hindalco down by 3.13%, BPCL down by 2.54%, Tata Steel down by 2.45%, Cipla down by 1.73% and UPL was down by 1.52% were the top losers.

Asian markets were trading mostly in red, Taiwan Weighted slipped 63.76 points or 0.59% to 10,833.81, Hang Seng lost 31.69 points or 0.1% to 31,078.51, KOSPI Index dropped 9.62 points or 0.39% to 2,450.20 and Shanghai Composite was down by 9.05 points or 0.29% to 3,160.52. 

On the other side, FTSE Bursa Malaysia KLCI gained 4.91 points or 0.26% to 1,863.17, Jakarta Composite surged 42.98 points or 0.74% to 5,884.44 and Nikkei 225 was up by 163.41 points or 0.72% to 22,880.64.