Indian bourses continue to trade in negative terrain

Indian bourses continued to trade in negative territory in afternoon session, following weak global cues amid rising trade tensions between the US and China as talks between the two countries ended without any significant outcome. The sentiments remained pessimistic on a report that the government has imposed standard conditions for as many as 25 sectors like steel, coal and oil, seeking environment clearance (EC) for expansion of existing projects or new projects. Some concern also came in with private report stated that India’s rural wage growth has slumped from an average of 11% in the financial years 2013-15 to a mere 0.45% in the financial years 2016-18, due to the negative impact of demonetization. The rural wage growth slumped to decimal points from double-digit in last three years despite government support. However, losses were limited as traders found some support with report that India will explore opportunities to increase exports of petroleum products, cars and motorcycles, and mobile phones to Kenya during the joint trade committee meeting of the two countries. On the sectoral front, insurance sector remained in focus with International rating agency Moody’s Investors Service in its latest report stating that the launch of government’s flagship health insurance scheme, Ayushman Bharat, is credit positive for India’s insurers as it will help grow health premiums and provide insurers with cross-selling and servicing opportunities.

Asian markets were trading mostly in red, after US-China trade talks ended without progress and market focus shifted to a speech by the Federal Reserve chairman for fresh clues on the direction of US monetary policy. Back home, the BSE Sensex is currently trading at 38234.37, down by 102.39 points or 0.27% after trading in a range of 38228.02 and 38429.50. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.32%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Metal up by 0.35%, Basic Materials up by 0.27%, Power up by 0.24%, Oil & Gas up by 0.22% and Realty up by 0.11%, while Bankex down by 0.81%, FMCG down by 0.58%, Healthcare down by 0.49%, Consumer Durables down by 0.40% and Auto down by 0.24% were the top losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.50%, Power Grid up by 1.34%, Wipro up by 0.98%, Vedanta up by 0.91% and Coal India up by 0.69%. On the flip side, Yes Bank down by 2.64%, ICICI Bank down by 2.49%, Sun Pharma down by 2.49%, Hero MotoCorp down by 1.28% and Adani Ports &SEZ down by 1.25% were the top losers.

Meanwhile, Niti Aayog vice chairman Rajiv Kumar has said that India needs three-four large lenders to figure among top 200 global-sized banks. He also noted that India's banking sector is highly conservative. He made a strong case for giving banking sector more freedom to take risks and provide credit to industry especially the Micro, Small & Medium Enterprises (MSME) sector.

Kumar also pointed out that its risk appetite is minimal and its capacity of project assessment is not as much it should be, so it takes recourse to safe banking. Adding further, he said that the Reserve Bank of India (RBI) should refrain from over regulation and encourage banks to take risks and increase exposure to the MSME sector.

Niti Aayog vice chairman has stated that the central bank should take steps to enhance the lending capacity of the banks. He noted that India's credit-to-GDP ratio is very low compared to many countries. Observing that 86 percent of the loans are given to the big companies, he said there is an urgency to increase credit MSME sector, start up and entrepreneurs. 

The CNX Nifty is currently trading at 11558.00, down by 24.75 points or 0.21% after trading in a range of 11552.55 and 11604.60. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.27%, Bharti Infratel up by 1.67%, UPL up by 1.38%, Grasim Industries up by 1.31% and Power Grid up by 1.24%. On the flip side, Yes Bank down by 2.61%, ICICI Bank down by 2.45%, Sun Pharma down by 2.21%, Titan Co down by 1.91% and GAIL India down by 1.73% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 24.61 points or 0.76% to 3,225.28, Taiwan Weighted dipped 53.78 points or 0.5% to 10,809.35, Jakarta Composite shed 19.78 points or 0.33% to 5,963.21 and Hang Seng was down by 109.73 points or 0.4% to 27,680.73.

On the flip side, KOSPI increased 10.61 points or 0.46% to 2,293.21, Shanghai Composite rose 10.07 points or 0.37% to 2,734.69 and Nikkei 225 surged 190.95 points or 0.84% to 22,601.77.