Benchmarks continue lackadaisical trade

Indian equity benchmarks continued to trade flat in morning session, as investor sentiment remains weak across Asia due to trade conflict between the US and China. Traders remained concerned over the Reserve Bank of India (RBI) calling for greater vigilance on the domestic macro-economic front saying conditions, which pushed Gross Domestic Product (GDP) growth to 7.7% in March 2018 quarter, are changing and warned that bad loan situation might worsen. Sentiments also remained down-beat on a report which highlighted that government debt rose 1.7% to over Rs 76.94 lakh crore in the January-March period of 2017-18 fiscal over the previous quarter. The debt was Rs 75.66 lakh crore as of December 2017. However, investors shrugged off a report that Commerce and Industry Minister Suresh Prabhu has sought investments from Australian superannuation or pension funds in sectors including industrial corridors, ports, smart cities, airports and railway projects. Traders failed to draw any sense of relief from a report highlighted that amidst trade and tariff tension between India and the US, but the fundamentals of the relationship are very strong and the sentiment about India among American companies are positive as it provides a huge market.

On the global front, Asian markets were trading mostly in red as jitters over trade conflicts between the world’s major economies lingered. The prices of oil extended gains as the US pushed other countries to but oil imports from Iran. Back home, on the sectoral front, banking stock were trading in red, as a report from Reserve Bank of India stated that the gross non-performing assets (GNPAs), or bad loans, ratio in the Indian banking system is likely to rise from 11.6% in March 2018 to 12.2% by the end of March next year.

The BSE Sensex is currently trading at 35528.30, up by 38.26 points or 0.11% after trading in a range of 35477.32 and 35618.85. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.58%, while Small cap index was down by 0.59%.

The few gaining sectoral indices on the BSE were IT up by 1.02%, TECK up by 0.84% and FMCG was up by 0.35%, while Oil & Gas down by 2.35%, PSU down by 1.94%, Utilities down by 1.56%, Power down by 1.25% and Capital Goods was down by 0.86% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.92%, TCS up by 1.24%, Infosys up by 0.83%, HDFC Bank up by 0.81% and HDFC was up by 0.80%. On the flip side, ICICI Bank down by 1.46%, ONGC down by 1.46%, NTPC down by 1.45%, SBI down by 1.38% and Axis Bank was down by 1.18% were the top losers.

Meanwhile, the Ministry of Finance in its Quarterly Report on Debt Management has said that the government debt increased 1.7% to over Rs 76.94 lakh crore in the last quarter of financial year 2017-18 over the previous quarter. The debt was Rs 75.66 lakh crore as of December 2017. At this level, the ratio of outstanding liabilities of the central government to GDP worked-out to be 45.9% at end-March 2018.

The report further said that public debt accounted for 88.7% of the total outstanding liabilities at end-March 2018, while the share of ‘Public Account’ liabilities was 11.3%. About 26.2% of outstanding stock of G-Secs has a residual maturity of up to 5 years at the end of March 2018. This implies that over the next five years, around 5.2% of outstanding stock, on an average, needs to be repaid every year. Thus, the roll-over risk in the Debt Portfolio continues to be low.

The report also highlighted that during the fourth quarter of FY18, the central government issued dated securities worth Rs 67,000 crore as against issuance of dated securities of Rs 1,64,000 crore in the third quarter of FY 18 thus leading to cumulative issuances of Rs 5,88,000 crore. Moreover, it noted that in line with the Cash Management guidelines, the central government continued to time its expenditure as per pattern of receipts during the Quarter.

The CNX Nifty is currently trading at 10752.95, down by 16.20 points or 0.15% after trading in a range of 10752.35 and 10785.50. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 2.52%, Hindustan Unilever up by 1.99%, Bharti Infratel up by 1.96%, HCL Tech up by 1.19% and TCS was up by 1.18%. On the flip side, BPCL down by 5.23%, HPCL down by 5.07%, Indian Oil Corporation down by 4.95%, GAIL India down by 3.23% and ONGC was down by 1.96% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 declined 57.91 points or 0.26% to 22,284.09, Hang Seng dropped 215.29 points or 0.75% to 28,666.11, Taiwan Weighted slipped 15.69 points or 0.15% to 10,726.48, and Shanghai Composite was down by 28.82 points or 1.02% to 2,815.69.

On the flip side, Straits Times gained 3.04 points or 0.09% to 3,283.91, KOSPI increased 1.61 points or 0.07% to 2,352.53 and Jakarta Composite was up by 28.77 points or 0.49% to 5,854.42.