Domestic equity indices extend gains

Indian equity benchmarks extended their gains in morning session, with Sensex and Nifty gaining around 130 and 50 points, respectively, ahead of the Reserve Bank of India’s monetary policy decision announcement due later today. Traders remained optimistic on a private report stating that the government has effected a major overhaul of its credit guarantee scheme to make adequate loans available to micro and small enterprises easily by more than tripling its corpus to Rs 8,000 crore and allowing non-banking financial companies (NBFCs), along with banks, to avail of official guarantees to extend credit to such units. Market-men also took some support from a report stating that riding high on the success of UPI-based payments system, the digital payments in India has tripled to 7% of GDP from 2.5% three years ago. The whole thrust of the government, banks, regulator on banks is actually paying off. Everything is growing, whether is debit card transactions or credit card transactions. Traders also took note of a report that with an aim to promote use of solar power among farmers, the government is all set to launch Rs 1.4 crore KUSUM scheme next month.

On the global front, Asian market were trading mostly in green, following gains on Wall Street, while concerns about Italy's debt prompted investors to move into lower-risk government debt elsewhere, pushing US Treasury yields down from recent highs. Back home, in scrip specific development, CG Power was trading in green on bagging order worth Rs 319 crore from Indian Railways.

The BSE Sensex is currently trading at 35040.00, up by 136.79 points or 0.39% after trading in a range of 34896.37 and 35079.37. There were 27 stocks advancing against 4 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.66%, while Small cap index was up by 0.94%.

The top gaining sectoral indices on the BSE were Telecom up by 1.64%, Realty up by 1.34%, Power up by 1.22%, Capital Goods up by 1.09% and Consumer Durables was up by 1.04%, while there were no losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 2.60%, Bharti Airtel up by 2.39%, Sun Pharma up by 1.94%, Wipro up by 1.86% and Tata Motors - DVR was up by 1.69%. On the flip side, Asian Paints down by 1.53%, HDFC Bank down by 0.32%, Indusind Bank down by 0.21% and HDFC was down by 0.07% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that gross non-performing assets (GNPAs) in the banking system is expected to touch 11.5 per cent in current financial year as compared to 11.2 per cent in FY18, as Rs 5 lakh crore of bank loans have deteriorated into NPAs. However, it is expecting that after current financial year GNPAs will start reducing. Besides, GNPAs has increased to around Rs 10.3 lakh crore or 11.2 per cent of advances in the FY18 as compared to Rs 8 lakh crore, or 9.5 per cent of advances in FY 2017.

The ratings agency further said that the banking system reported a net loss of Rs 40,000 crore in the last financial year on account of the sharp rise in NPAs and the resulting increase in provisioning costs. It added that as much as Rs 5 lakh crore of bank loans slipped into the NPAs category, taking the total slippages in the past three fiscals to Rs 13.6 lakh crore in the last fanatical year. About a fifth of the slippages in FY18 were due to withdrawal of various structuring schemes by the Reserve Bank in February, after the Insolvency and Bankruptcy Code (IBC) process came into force.

However, Crisil highlighted that the tide is slowly turning and it expects moderation in slippages, better recoveries from NPAs and improved provision coverage to bode well for banks. Moreover, it added that the banking systems provisioning cover (excluding write-offs) for NPAs increased to 50 per cent as on March 31, 2018, compared to about 45 per cent a year ago.  This is expected to improve further in this fiscal.

The CNX Nifty is currently trading at 10641.45, up by 48.30 points or 0.46% after trading in a range of 10587.50 and 10647.10. There were 38 stocks advancing against 12 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.80%, Bajaj Auto up by 2.47%, HCL Tech up by 2.46%, Indiabulls Housing Finance up by 2.27% and Bajaj Finance was up by 2.20%. On the flip side, Tech Mahindra down by 1.68%, Asian Paints down by 1.30%, HPCL down by 1.19%, IOC down by 0.57% and HDFC Bank was down by 0.40% were the top losers.

Asian market were trading mostly in green, FTSE Bursa Malaysia KLCI gained 5.74 points or 0.33% to 1,760.88, Nikkei 225 advanced 88.83 points or 0.39% to 22,628.37, Taiwan Weighted rose 88.95 points or 0.8% to 11,189.06 and Hang Seng was up by 141.01 points or 0.45% to 31,234.46.

On the other side, Jakarta Composite slipped 4.63 points or 0.08% to 6,084.16 and Shanghai Composite down by 4.59 points or 0.15% to 3,109.61.