Domestic bourses continue trade in red terrain in early noon session

Mirroring their Asian peers, domestic bourses were trading in negative terrain in early noon session. Sentiments remained down-beat after Union Minister Dharmendra Pradhan’s statement that with petrol and diesel kept out of the purview of GST, the state owned oil industry is losing Rs 200 billion annually in terms of input credit. Some concerns also came in with report showing that foreign portfolio investors have sold shares worth Rs 525.40 crore on June 7. Meanwhile, surging crude oil prices also influenced the trading sentiments. Further, heavy selling in utilities, power, metal, and banking stocks amid sustained capital outflows by foreign funds, dragged the markets lower. However, pharmaceutical sector stocks were surging which helped the markets to limit the losses. Sun Pharma edged higher by over 5 percent, while Dr. Reddys, Lupin and Cipla are the other top gainers on Nifty. Along with pharmaceutical sector, IT sector was also gaining as a weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion’s share of revenue from exports.

On the global front, all the Asian stocks were trading in red as risk appetite soured on bets that Europe's massive monetary stimulus was nearing an end, compounded by uncertainty over trade relations ahead of a key meeting of global leaders. Back home, in scrip specific development, Aurobindo Pharma soars on receiving USFDA’s nod for Omeprazole DR Tablets OTC and TCS gained on launching ‘TCS Digital Reimagination Framework’ on Microsoft Azure. On the sectoral front, defence stocks remained in limelight as the defence ministry approved military purchases worth over Rs 5,500 crore, including 12 high power radars for the Indian Air Force.

The BSE Sensex is currently trading at 35376.33, down by 86.75 points or 0.24% after trading in a range of 35309.12 and 35415.19. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained by 0.35%, while Small cap index was up by 0.35%.

The top gaining sectoral indices on the BSE were Healthcare up by 2.46%, Telecom up by 0.86%, TECK up by 0.65%, IT up by 0.63% and Consumer Durables up by 0.29%, while Utilities down by 0.71%, Power down by 0.70%, Metal down by 0.57%, Capital Goods down by 0.51% and Bankex down by 0.47% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 5.06%, Dr. Reddys Lab up by 3.03%, Tata Motors up by 2.65%, Tata Motors - DVR up by 2.50% and ONGC up by 0.90%. On the flip side, Power Grid Corporation down by 2.54%, Mahindra & Mahindra down by 1.39%, Larsen & Toubro down by 1.33%, HDFC down by 1.13% and HDFC Bank down by 0.99% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said that the interest subsidy scheme (ISS) for farmers will be implemented through the direct benefit transfer (DBT) mode from the financial year 2019. Under the scheme, farmers can avail of short-term crop loans of up to Rs 3 lakh at subsidised interest rate of 7 percent that could go down to 4 percent on prompt repayment. The government has earmarked a sum of Rs 15,000 crore for this purpose.

Central bank has said that as advised by government, from 2018-19 the ISS is being put on DBT mode on ‘In kind/services’ basis and not on ‘In cash’ basis and all loans processed in 2018-19 are required to be brought on ISS portal/DBT platform, once it is launched. In a notification, it said that the ISS 2018-19 will be required to be settled as applicable in Plan Scheme - Scheduled Caste (SC), Scheduled Tribe (ST) and North East Region (NER), among others. The notification also asked the banks to capture category-wise data (General, SC, ST, etc) of beneficiaries for reporting of the same on ISS portal ‘individual farmer wise’ to settle the claims arising from 2018-19 onwards.

RBI said that till the DBT portal becomes functional, banks are requested to submit their claims, category-wise and further stated that it is working on the detailed modalities regarding categorisation of loans. It stated that till the modalities are finalised, banks may obtain the category-wise data on self-declaration basis and there should however be no cap on the loans given under each category. Under the ISS, interest subvention is provided to NABARD, regional rural banks, cooperative banks, public sector banks as well as private banks for providing short term credit to farmers at subsidised rate of interest.

The CNX Nifty is currently trading at 10737.25, down by 31.10 points or 0.29% after trading in a range of 10717.70 and 10750.45. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Sun Pharma by 5.41%, Dr. Reddys Lab up by 3.16%, Lupin up by 2.81%, Tata Motors up by 2.78% and Cipla up by 2.15%. On the flip side, Power Grid Corporation down by 2.66%, BPCL down by 2.22%, HPCL down by 1.92%, Hindalco down by 1.85% and Grasim Industries down by 1.71% were the top losers.

All the Asian markets were trading in red; Hang Seng plunged 508.05 points or 1.61% to 31,004.58, Nikkei 225 declined 128.76 points or 0.56% to 22,694.50, Taiwan Weighted decreased 95.33 points or 0.85% to 11,156.42, Shanghai Composite slipped 51.57 points or 1.66% to 3,057.93, Jakarta Composite fell 51.07 points or 0.84% to 6,055.63, KOSPI Index lost 18.13 points or 0.73% to 2,452.45 and FTSE Bursa Malaysia KLCI was down 10.37 points or 0.58% to 1,775.44.