Indian equity markets trade slightly in red

Indian equity benchmarks were trading slightly in red in morning session, following weak global cues amid continued uncertainty over oil prices ahead of the OPEC meet. Sentiments remained pessimistic on union minister Suresh Prabhu’s statement that India was seeing real challenge at World Trade Organsation and in the global trading system itself. He stated that because, first time, countries are putting roadblocks and it is going to be real, real issue. Investors failed to get any sense of relief from a private report stating that India fared well on its early warning indicators (EWI) index showing no signs of domestic or financial risks during the last three years. On the other hand, economies of China, Hong Kong, Japan, Canada and Australia threw up several warning signals between 2015 and 2017. The traders overlooked a report stating that exports from special economic zones (SEZs) grew by 38% in May to Rs 29,236 crore. The major sectors contributing to the growth include biotech, chemicals, pharmaceuticals, computers, electronics, non-conventional energy, plastic, rubber, trading and services.

On the Global front, Asian markets are trading mostly in red, on signs of worsening US-China trade tensions. The investors are closely watching the outcome of a two-day OPEC meeting in Vienna on whether the oil cartel agrees to increase crude output. Back home, on the sectoral front, banking stock were in red, despite a report that bad loans worth Rs 15,000 crore will be wiped off the banking system with their reversal into standard accounts in the June quarter following new norms for differential treatment of defaults by small and mid-sized businesses. In the scrip specific development, JSW Steel gained on proposinginvestment of up to $500 million. Besides, Poly Medicure advanced with arm entering into Share Purchase Agreement with Plan 1 Health S.R.L.

The BSE Sensex is currently trading at 35380.60, down by 51.79 points or 0.15% after trading in a range of 35344.49 and 35444.18. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.37%, while Small cap index was down by 0.44%.

The top gaining sectoral indices on the BSE were Telecom up by 0.44%, TECK up by 0.21%, FMCG up by 0.18%, IT up by 0.14%, Capital Goods was up by 0.12%, while Energy down by 1.14%, Realty down by 0.73%, Basic Materials down by 0.70%, Consumer Durables down by 0.45% and Metal was down by 0.45% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 1.77%, ITC up by 0.90%, Larsen & Toubro up by 0.60%, Sun Pharma up by 0.48% and Infosys was up by 0.45%. On the flip side, Reliance Industries down by 1.75%, Wipro down by 1.33%, Indusind Bank down by 0.97%, Coal India down by 0.95% and Bajaj Auto was down by 0.87% were the top losers.

Meanwhile, following new norms for differential treatment of defaults by Micro, Small and Medium Enterprises (MSME), Financial Services Secretary Rajiv Kumar has said that bad loans worth Rs 15,000 crore will be wiped off the banking system with their reversal into standard accounts in the Q1 of current financial year (FY19). He underlined that 180 day NPA norm for MSMEs will help reverse Rs 15,000 crore in the banking system as they have become standard asset. This will help banks to make positive entry to the tune of Rs 2,200 crore making balance sheet of public sector banks (PSBs) healthier in the first quarter of FY19. It will assist growth in the MSME sector which is witnessing credit growth of over 20% in the last 5 quarters.

Kumar further said that MUDRA and initiatives in MSME space leads to rise in the new credit borrowers, giving wings to entrepreneurial ambitions. At the same time, banks will have additional funds to focus on MSME growth, which is engine of the economy.

According to the Reserve Bank of India’s NPA classification norms, banks have to make provision of 15% against the defaulting account of MSME. Providing relief to MSMEs, RBI earlier this month had eased NPA classification norms for such units facing input credit linkages and associated issues under the Goods and Services Tax. Following this, the 90-day period for classifying debt into bad loans was converted into 180-day for all MSME dues between September 1, 2017 and December 31, 2018 if the account was standard as on August 31, 2017.

The new dispensation covers both registered as well as unregistered MSMEs. However, with regard to GST registered MSMEs, 180-day NPA norms will be brought back to 90 days only in a phased manner, starting January 1, 2019. For non-GST registered MSMEs, NPA norms would revert to 90 days from January 1, itself.

The CNX Nifty is currently trading at 10724.15, down by 16.95 points or 0.16% after trading in a range of 10710.45 and 10745.30. There were 18 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 1.86%, Bharti Infratel up by 1.56%, Indiabulls Housing up by 1.05%, BPCL up by 0.90% and ITC was up by 0.82%. On the flip side, Grasim Industries down by 1.67%, Reliance Industries down by 1.67%, Indusind Bank down by 1.34%, Ultratech Cement down by 1.25% and UPL was down by 1.22% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 208.15 points or 0.93% to 22,484.89, Straits Times shed 14.75 points or 0.45% to 3,285.25, Hang Seng dropped 45.41points or 0.16% to 29,250.64, Taiwan Weighted fell 47.41 points or 0.44% to 10,893.66 and Jakarta Composite was down by 25.95 points or 0.45% to 5,796.38.

On the flip side, KOSPI gained 5.59 points or 0.24% to 2,343.42 and Shanghai Composite was up by 10.16 points or 0.35% to 2,885.97.