Benchmarks trade slightly in red

Indian equity benchmarks were trading slightly in red in morning session, as Asian peers continue to remain weak due to US-China trade tensions. Sentiments remained pessimistic with a report stating that foreign investors have pulled out over Rs 14,500 crore from the Indian capital markets this month so far, primarily due to global trade war and hawkish commentary by the US Federal Reserve. Investors were also on the back foot on a report that after a year into implementation, goods and services tax (GST) has not delivered on the promised formalisation of the economy as yet, while the glitches in the one-nation-one-tax regime has increased the demand for cash. The markets were reacting negatively on the Reserve Bank of India’s (RBI) data showing that that India’s foreign exchange reserves fell by $3.03 billion to $410.070 billion as on June 15. Foreign currency assets, which form a key component of reserves, fell by $3.05 billion from the previous week to $385.333 billion. Traders failed to get any sense of relief with a report that India and Cuba have agreed to enhance cooperation in biotechnology, renewable energy and traditional medicine to further cement the strong bilateral ties.

On the global front, Asian markets were trading in red, on escalating trade tensions between the United States and major economies while oil prices gave up some of their hefty gains made after major oil producers agreed to a modest increase in production. Back home, in scrip specific development, Lupin gained on planning to launch around 30 generic products in US market this year. Besides, Tech Mahindra advanced on getting nod to amalgamate Sofgen India with itself.

The BSE Sensex is currently trading at 35645.53, down by 44.07 points or 0.12% after trading in a range of 35607.35 and 35806.97. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.06%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were IT up by 1.03%, TECK up by 0.75%, Basic Materials up by 0.70%, Healthcare up by 0.67% and Metal was up by 0.40%, while Oil & Gas down by 1.12%, PSU down by 1.12%, Telecom down by 0.93%, Auto down by 0.81% and Power was down by 0.80% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 3.11%, Infosys up by 2.01%, Sun Pharma up by 1.43%, Indusind Bank up by 0.79% and HDFC Bank was up by 0.63%. On the flip side, Tata Motors - DVR down by 3.47%, Tata Motors down by 3.26%, NTPC down by 1.85%, ITC down by 1.72% and ICICI Bank was down by 1.71% were the top losers.

Meanwhile, having recognized the huge pile of NPAs hidden on bank books by ‘biting the bullet’, Interim finance minister Piyush Goyal has said that the banking system is now poised for a better future and support the credit needs of the economy. He also highlighted that the banking system is now strengthened to once again start becoming a powerful engine of growth, financing the infrastructure and other credit needs of the economy.

Goyal further said that there is a lot of enthusiasm among bankers to lend to particularly Micro Small and Medium Enterprises (MSMEs) and other small businesses. They are very keen to participate in the growing infrastructure story in the country.

Besides, the Minister underlined the Reserve Bank of India’s (RBI) asset quality review has led to the recognition of a huge pile of Non-Performing Assets (NPAs) hidden on bank books which is worth over 40% of the system-wide bad loans. This was followed by steps on resolution of stressed assets, including the passage of the Insolvency and Bankruptcy Code.  In recent times, concerns have been raised over the ability of the banking system, 70% of which is dominated by state-run lenders, to support the credit needs of the economy as provisions for the bad assets drain capital buffers, leaving little for lending.

The CNX Nifty is currently trading at 10812.70, down by 9.15 points or 0.08% after trading in a range of 10797.50 and 10831.05. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 3.48%, Ultratech Cement up by 2.27%, Bajaj Finance up by 2.22%, Infosys up by 1.90% and Bajaj Finserv was up by 1.59%. On the flip side, Tata Motors down by 3.04%, BPCL down by 2.81%, Indian Oil Corporation down by 2.03%, NTPC down by 2.00% and ITC was down by 1.85% were the top losers.

Asian markets were trading in red; Nikkei 225 declined 151.98 points or 0.68% to 22,364.85, Straits Times shed 14.04 points or 0.43% to 3,273.36, Hang Seng dropped 211.61 points or 0.73% to 29,127.09 Taiwan Weighted slipped by 82.19 points or 0.76% to 10,817.09, Jakarta Composite losses 7.28 points or 0.13% to 5,814.53, Shanghai Composite fell 1.66 points or 0.06% to 2,888.10 and KOSPI was down by 3.27 points or 0.14% to 2,353.95.