Key gauges trade flat with positive bias

Local equity benchmarks traded flat with positive bias, with Sensex and Nifty breaching over 37,600 and 11,350 mark respectively, as investors were waiting for the outcome of the Reserve Bank of India (RBI) MPC’s meeting outcome later in the day. The gainers among sectoral indices on the BSE were Oil & Gas, Healthcare and Telecom, while Auto, Power and Realty were on the losing side. Some comfort came with a report that government’s finances have shown improvement in the June quarter of 2018-19 with fiscal deficit working out to 68.7% of the Budget Estimate, mainly on account of higher revenue collection. Some encouragement also came with a report that growth of eight core sectors expanded to 7-month high of 6.7% in June due to better performance by cement, refinery and coal segments. The eight sectors, which also include fertilisers, steel, natural gas, electricity and crude oil, had expanded by 1% in June last year. However, gains remained capped with a report stating that the Indian economy is likely to have witnessed solid economic growth in the April-June quarter but leading indicators suggest a slowdown in the coming months and growth rates are likely to get constrained in the second half of this year.

On the global front, Asian markets were trading mostly in green, following gains on Wall Street, as a report of attempts to renew talks between the United States and China eased trade war fears, but investors will be keeping a close eye on data due today. Back home, in scrip specific development, Bajaj Auto surged on reporting 30% rise in July sales. Beside, Bharat Electronics gained on reporting 43% rise in Q1 net profit.

The BSE Sensex is currently trading at 37643.30, up by 36.72 points or 0.10% after trading in a range of 37597.24 and 37711.87. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.52%, while Small cap index was up by 0.50%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 1.51%, Energy up by 1.14%, Healthcare up by 0.96%, Telecom up by 0.91% and PSU was up by 0.83%, while Auto down by 0.44%, Realty down by 0.26%, Power down by 0.21% and Industrials was down by 0.07% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.49%, Bharti Airtel up by 1.46%, ONGC up by 1.30%, Sun Pharma up by 1.26% and Bajaj Auto was up by 1.21%. On the flip side, Tata Motors down by 2.25%, Tata Motors - DVR down by 2.18%, Maruti Suzuki down by 1.75%, Axis Bank down by 0.96% and Infosys was down by 0.69% were the top losers.

Meanwhile, the Minister of State for Finance Shiv Pratap Shukla has said that gross bad loans in Indian banks surged to more than Rs 9.61 lakh crore by the end of 2017-18, while loans to industries formed a major chunk of such non-performing assets. He added that after the asset quality review (AQR) directed by the Reserve Bank of India (RBI) to lenders in 2015, transparent recognition of stressed assets as non-performing assets (NPAs) began.

Shukla further said as a result of transparent recognition of stressed assets as NPAs, aggregate gross non-performing assets of scheduled commercial banks, as per Reserve Bank data for domestic operations, increased to Rs 9,61,962 crore as on March 31, 2018. Of this, Rs 85,344 crore worth of NPA pertained to agriculture and allied activities and Rs 7,03,969 crore pertained to industries. He added that in the course of last ten years, 2015-16 witnessed the highest increase in aggregate gross NPAs in the banking system.

The Minister also said that Rs 1,51,482 crore of loan amount has been written-off (including compromise) by the banks during 2017-18. He said ‘Banks write-off NPAs as part of their regular exercise to clean up their balance-sheet, tax benefit and capital optimisation. Borrowers of such written-off loans continue to be liable for repayment. Recovery of dues takes place on ongoing basis under legal mechanisms...Therefore, write-off does not benefit the borrower.’

Shukla said over the last three fiscal years to March 2018, gross domestic loans outstanding of banks for retail, agriculture and allied activities and micro and small enterprises showed significant growth. Separately, about 19 nationalised banks, he said that their gross NPAs increased by Rs 1,54,470 crore in 2017-18. Talking on loans disbursed under Pradhan Mantri Mudra Loan Scheme, he said over 13.30 crore loans were sanctioned to borrowers as on July 7, 2018 since inception of the scheme in April 2018.

The CNX Nifty is currently trading at 11376.50, up by 20.00 points or 0.18% after trading in a range of 11358.65 and 11390.55. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were HPCL up by 3.23%, Indian Oil Corporation up by 2.68%, BPCL up by 2.41%, Bajaj Finserv up by 2.23% and Bajaj Finance was up by 2.19%. On the flip side, Tata Motors down by 2.23%, Maruti Suzuki down by 2.15%, Eicher Motors down by 1.81%, Indiabulls Housing Finance down by 1.46% and Axis Bank was down by 1.16% were the top losers.

Asian market were trading mostly in green; KOSPI rose 9.25 points or 0.4% to 2,304.51, Taiwan Weighted strengthened 38.79 points or 0.35% to 11,096.30, Nikkei 225 gained 204.15 points or 0.9% to 22,757.87, Hang Seng advanced 10.08 points or 0.04% to 28,593.09, Straits Times surged 4.33 points or 0.13% to 3,324.18 and Jakarta Composite was up by 64.36 points or 1.07% to 6,000.80.

On the other hand; Shanghai Composite was down by 9.07 points or 0.32% to 2,867.33.