Indian bourses continue to trade in negative terrain

Indian bourses continued to trade in negative territory in afternoon session, following weak global cues amid persistent trade tensions. The sentiments remained pessimistic on report that the Securities and Exchange Board of India has issued a fresh show-cause notice to the National Stock Exchange and some of the key officials - including former CEOs Ravi Narain and Chitra Ramkrishna - on Wednesday, asking them to explain the allegations of preferential access to a few high-frequency traders and brokers to its trading platform. Besides, a deprecating rupee against the dollar also dampened the sentiment. However, losses were limited as traders found some support with Rajiv Kumar, Vice-Chairman, Niti Aayog stating that food and fuel are not contributing to the overall inflationary pressures in the economy. So this constant talk about inflationary pressures because of the MSP is quite misplaced. On the sectoral front, stocks related to healthcare sector were trading lower with rating agency Icra stating that regulatory overhang on the hospitals sector is likely to persist, with further pricing restriction expected on products and services in the future. Furthermore, shares of liquor makers such United Breweries and Pincon Spirit fell after Karnataka chief minister HD Kumaraswamy proposed four percent tax hike on liquor in today’s Budget speech.

On the global front, All the Asian markets were trading under pressure, as investors remained cautious ahead of a deadline when tariffs from the U.S. and China are due to be implemented. Back home, the BSE Sensex is currently trading at 35548.22, down by 97.18 points or 0.27% after trading in a range of 35522.88 and 35748.26. There were 13 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.44%, while Small cap index was down by 0.31%.

The few gaining sectoral indices on the BSE were FMCG up by 0.49%, Bankex up by 0.14% and Energy up by 0.10%, while Consumer Durables down by 2.55%, IT down by 2.16%, TECK down by 1.94%, Metal down by 1.77% and Realty down by 1.04% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.74%, ITC up by 1.29%, Mahindra & Mahindra up by 0.95%, Hero MotoCorp up by 0.81% and Maruti Suzuki up by 0.70%. On the flip side, Infosys down by 5.29%, Vedanta down by 2.74%, Tata Motors down by 2.68%, Tata Steel down by 2.41% and Tata Motors - DVR down by 2.09% were the top losers.

Meanwhile, credit ratings agency, Crisil Ratings in its latest report has said that banks’ unsecured loans clocked a compound annual growth rate (CAGR) of 27 percent, or nearly four times growth in bank credit between FY15 and FY18. It noted that growth in unsecured loans is largely due to surge in discretionary spending, increased availability of customer data, faster disbursements driven by technology, as well as lower interest rates in some segments.

The ratings agency further explained that unsecured loans are the loans where individual exposures are smaller and more distributed and given without any collaterals but banks get higher margins. It also said that typically personal loan, education loans and credit card spend falls under this category of loans. Besides, it highlighted that as of March 2018, outstanding unsecured loans stood at around Rs 5 trillion, accounting for 26 percent of retail lending, compared to 21 percent three years ago. It also stated that financiers are expected to focus more on this segment due to attractive yields.

According to the report, return on assets are 2.5-3 percent for personal and SME loans, and 3-4 percent for credit cards, compared to under 2 percent for home loans and new passenger vehicle loans. It pointed out that rising competition has led to lower rates in some segments such as personal loans. It also showed that in unsecured SME loans, rates have remained sticky, but average tenure and commissions paid to direct selling agents have increased.

The CNX Nifty is currently trading at 10744.60, down by 25.30 points or 0.23% after trading in a range of 10726.25 and 10786.05. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 2.82%, Ultratech Cement up by 2.30%, ITC up by 1.34%, Hero MotoCorp up by 1.13% and HPCL up by 1.13%. On the flip side, Infosys down by 5.27%, Titan Co down by 4.82%, Tata Motors down by 2.83%, Tata Steel down by 2.77% and Vedanta down by 2.70% were the top losers.

All the Asian markets were trading under pressure; Nikkei 225 decreased 170.05 points or 0.79% to 21,546.99, Hang Seng plunged 305.13 points or 1.09% to 27,936.54, KOSPI declined 7.91 points or 0.35% to 2,257.55, Shanghai Composite slipped 25.04 points or 0.92% to 2,734.09, Taiwan Weighted fell 110.06 points or 1.04% to 10,611.81, Straits Times lost 2.99 points or 0.09% to 3,241.90 and Jakarta Composite was down 29.12 points or 0.51% to 5,704.52 .