Indices trade flat with positive bias in early noon session

Indian equity indices continued to move in a very tight range, with Nifty and Sensex trading flat with a positive bias in the early noon session due to buying in blue chip stocks such as Hindustan Unilever, Yes Bank and ONGC. Traders were seen piling up positions in FMCG, Healthcare and Energy stocks. Meanwhile, India has further delayed the implementation of higher tariffs on some goods imported from the United States to November 2. However, gains were limited as some concerns came with report stating that foreign portfolio investors offloaded shares to the tune of Rs 106.54 crore on September 17 as per provisional data. Sentiments were still a little negative with International Monetary Fund (IMF) estimating the real effective depreciation of Indian rupees to be between 6-7% compared to December 2017.  Besides, broader indices were underperforming their larger peers.

On the global front, Asian markets were exhibiting mixed trend as investors generally shrugged off the latest round of U.S. tariffs on $200 billion of Chinese goods set to go into effect next week. Back home, in scrip specific developments, Yes Bank surged on raising funds worth Rs 3,042 crore on private placement basis.

The BSE Sensex is currently trading at 37603.29, up by 17.78 points or 0.05% after trading in a range of 37465.68 and 37745.44. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.18%, while Small cap index was down by 0.32%.

The top gaining sectoral indices on the BSE were FMCG up by 1.16%, Healthcare up by 0.66%, Energy up by 0.22%, Oil & Gas up by 0.20% and Consumer Durables was up by 0.12%, while Realty down by 1.27%, PSU down by 0.74%, Metal down by 0.72%, Bankex down by 0.66% and Basic Materials was down by 0.48% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 3.22%, Yes Bank up by 1.85%, ONGC up by 1.60%, Asian Paints up by 1.13% and Sun Pharma up by 1.06%. On the flip side, Tata Motors - DVR down by 1.84%, Vedanta down by 1.62%, Tata Motors down by 1.36%, SBI down by 1.16% and ICICI Bank down by 1.14% were the top losers.

Meanwhile, maintaining a stable outlook on private sector banks, credit rating agency, India Ratings and Research (Ind-Ra) in its latest report has said that banks' credit costs are likely to remain elevated at 2%-3% during FY19-FY20, on the back of ageing of non-performing assets (NPAs), accelerated provisioning and slippages especially from non-corporate accounts.

The rating agency also kept a stable outlook on two large public sector banks (PSBs) namely State Bank of India and Bank of Baroda and kept a negative outlook for the remaining PSBs. It further said that the prevailing stressed financial conditions could intensify credit tightening, on rising headwinds for credit availability & cost, which could impact Rs 3 trillion - Rs 4 trillion exposures. As per the agency, large non-banking financial companies and private banks may get an opportunity from this to expand their share with some of these accounts and risk in terms of liquidity, given the capital conservation by the PSBs, especially those under prompt corrective action.

According to the report, issuances of corporate bond rose to Rs 27.5 trillion in FY18, on benign interest rates and availability of supply from mutual funds. In a tightening interest rate scenario, the agency expects some of this growth to accrue towards the corporate bank loan segment (particularly highly rated corporates). Even in the corporate segment, Ind-Ra expects some shift in the loan book to well capitalised banks from weaker banks during FY19.

The CNX Nifty is currently trading at 11379.05, up by 1.30 points or 0.01% after trading in a range of 11335.65 and 11411.45. There were 21 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 3.21%, Yes Bank up by 2.02%, Dr. Reddys Lab up by 1.89%, ONGC up by 1.49% and Titan Co up by 1.18%. On the flip side, Hindalco down by 2.07%, Vedanta down by 1.43%, Tata Motors down by 1.36%, Ultratech Cement down by 1.30% and SBI down by 1.26% were the top losers.

Asian markets were trading mixed; Hang Seng increased 116.50 points or 0.43% to 27,049.35, KOSPI increased 6.03 points or 0.26% to 2,309.04, Shanghai Composite increased 28.36 points or 1.06% to 2,680.15 and Nikkei 225 increased 325.87 points or 1.39% to 23,420.54.

On the other hand, Taiwan Weighted decreased 68.40 points or 0.64% to 10,760.21, Straits Times decreased 12.67 points or 0.4% to 3,128.73 and Jakarta Composite decreased 28.93 points or 0.5% to 5,795.33.