Sensex, Nifty trade choppy

Indian equity benchmarks traded choppy in late afternoon session, amid weak cues from European markets. Traders were cautious with Minister of State for Agriculture Parshottam Rupala’s statement that Union Government, at present, is not considering any loan waiver Scheme for farmers, as such, waivers may impact the credit culture of a State by incentivising the defaulters, even if they are in a position to repay the loan, and thus, create/amplify the moral hazard by discouraging those borrowers who have been regular in repaying their loans. Heavy selling at Telecom, Power and Consumer Durables counters, were also hitting the market sentiments. 

However, key indices managed to keep their heads above neutral lines, aided by a private report stating that India will remain the fastest-growing major economy this year supported by increased government spending ahead of next year's general election, but rising oil prices pose the biggest downside risk. Adding some support, Prime Minister Narendra Modi said that India is emerging as a global manufacturing and start-up hub and many of the 'Made-in-India' products, including cars and smart phones, are exported to nations from whom the country used to import. On the sectoral front, banking stocks such as Andhra Bank and Allahabad Bank were trading lower, despite Moody's latest report that the government's plan to infuse Rs 11,336 crore in five state-owned banks, including scam-hit PNB, is credit positive and will help these lenders meet the regulatory requirement.

On the global front, European markets were trading mostly in red, as investors await the outcome of a key meeting between US President Donald Trump and European Commission President Jean-Claude Juncker for directional cues. On the economic front, German business sentiment weakened marginally in July. As per survey results from Ifo Institute, the business confidence index fell to 101.7 from 101.8 in June. The score was forecast to fall to 101.5. Asian markets were trading mixed, although encouraging earnings results from the US and hopes that China will boost fiscal support for its economy helped support underlying sentiment. Back home, in scrip specific development, Oriental Bank of Commerce fell on reporting net loss of Rs 393.21 crore in Q1 FY19.

The BSE Sensex is currently trading at 36855.88, up by 30.78 points or 0.08% after trading in a range of 36809.45 and 36947.18. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was down by 0.07%, while Small cap index was up by 0.17%.

The top gaining sectoral indices on the BSE were Metal up by 0.66%, Capital Goods up by 0.34%, Industrials up by 0.19%, Oil & Gas up by 0.14% and FMCG up by 0.13%, while Telecom down by 1.68%, Power down by 1.41%, Consumer Durables down by 1.23%, Utilities down by 1.17% and Realty down by 1.11% were the losing indices on BSE.

The top gainers on the Sensex were Adani Ports & SEZ up by 1.66%, ONGC up by 1.27%, Vedanta up by 1.27%, Tata Steel up by 1.22% and HDFC up by 1.08%. On the flip side, NTPC down by 4.29%, Bharti Airtel down by 2.36%, Axis Bank down by 2.04%, Tata Motors - DVR down by 1.50% and Power Grid Corporation down by 1.26% were the top losers.

Meanwhile, underlining negative impact of loan waivers, Minister of State for Agriculture Parshottam Rupala has said that the Union Government, at present, is not considering any loan waiver scheme for farmers.  He further noted that waivers may impact the credit culture of a state by incentivising the defaulters, even if they are in a position to repay the loan, and thus, discourage farmers from paying up their dues.

Besides, the Minister said that each waiver granted makes it even more difficult to reject any future similar demand and further listed the various states including Tamil Nadu, Maharashtra and Karnataka who have announced their own loan waiver schemes in the past. Parshottam Rupala also said that Puducherry announced the agriculture loan waiver covering loans of all agricultural and allied activities availed through the cooperative structure.

In a relief to the farmers, Tamil Nadu government waived off loans amounting to Rs 5,318 crore, while Maharashtra's debt waiver of Rs 30,500 crore benefitted 31 lakh farmers. Jammu & Kashmir waived was Rs 244 crore for 1.15 lakh farmers and Chhattisgarh government announced 25% of debt amounting to Rs 129.76 crore for 1,89,379 farmers.

The CNX Nifty is currently trading at 11137.00, up by 2.70 points or 0.02% after trading in a range of 11118.20 and 11157.15. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing Finance up by 4.29%, Bajaj Finserv up by 2.16%, Adani Ports & SEZ up by 1.63%, Tata Steel up by 1.35% and HDFC up by 1.28%. On the flip side, NTPC down by 4.41%, Ultratech Cement down by 2.99%, Lupin down by 2.56%, HCL Tech down by 2.53% and Bharti Airtel down by 2.19% were the top losers.

Asian markets were trading mixed; Hang Seng zoomed 258.33 points or 0.89% to 28,920.90, Jakarta Composite increased 3.48 points or 0.06% to 5,935.32, Nikkei 225 surged 103.77 points or 0.46% to 22,614.25 and Straits Times was up by 35.45 points or 1.07% to 3,328.10. on the flip side, Taiwan Weighted fell 29.60 points or 0.27% to 10,965.79, Shanghai Composite decreased 1.19 points or 0.04% to 2,904.37 and KOSPI was down by 7.17 points or 0.32% to 2,273.03.

European markets were trading mostly in red; UK’s FTSE 100 decreased 44.79 points or 0.58% to 7,664.26 and Germany’s DAX fell 29.31 points or 0.23% to 12,660.08. On the flip side, France’s CAC increased 14.03 points or 0.26% to 5,448.22.