Markets at day's low on incremental selling pressure

Continuing its negative momentum, the local equity markets were now trading at day’s low points in afternoon session, on the back of sustained selling activities by market-participants. Sentiment on the street further weakened with a private report that liberalising foreign borrowings for oil companies to raise to $10 billion will not have a material impact on arresting the slide of the rupee. Caution ahead of a likely hike in key lending rates by the Reserve Bank of India (RBI), along with a weak trend at other Asian markets, pulled the indices deep into the red. Adding the pessimism among investors, Union minister Nitin Gadkari said that the country is facing lot of economic crisis due to crude oil imports and need to reduce imports and increase exports. On the global front, Asian markets were trading in red, after benchmark U.S. Treasury yields surged to a seven-year high and strong economic data fanned concerns about inflation and the risk of faster-than-expected interest rate rises.

The BSE Sensex is currently trading at 34755.96, down by 413.20 points or 1.17% after trading in a range of 34732.78 and 35118.54. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.44%, while Small cap index was down by 1.08%.

The few gaining sectoral indices on the BSE were Consumer Durables up by 1.51%, IT up by 0.48% and TECK up by 0.38%, while Oil & Gas down by 11.19%, Energy down by 6.33%, PSU down by 5.68%, Metal down by 2.90% and Realty down by 2.24% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.24%, Infosys up by 1.10%, Power Grid up by 0.98%, Kotak Mahindra Bank up by 0.97% and TCS up by 0.54%. On the flip side, ONGC down by 14.76%, Reliance Industries down by 3.41%, Coal India down by 3.31%, Vedanta down by 3.27% and Mahindra & Mahindra down by 3.26% were the top losers.

Meanwhile, Credit ratings agency, Crisil Ratings in its latest report has said that public sector banks (PSBs) will narrow down their losses to Rs 500 billion in the financial year 2019 as compared to Rs 850 billion in the previous fiscal year, as the quantum of dud loans reduce. It pointed out that as a result of the high provisioning requirements, many state-run lenders' will continue to report losses for the third consecutive year, though the extent of this will be lesser at Rs 500 billion. 

According to the report, profits for the entire banking system are expected to start improving from the second half of this fiscal and turn positive for the whole fiscal, as most large private banks are expected to report profit. It indicated that at present, the gross non-performing asset (NPA) ratio of the PSBs is at 14.7 percent, compared with 4.7 percent for the private sector ones.

The ratings agency further said that the provisioning for bad assets is expected to stay elevated at Rs 2.8 trillion for the system, attributing it to ageing of already identified NPAs and also the money to be set aside for the second list of 26 assets to be resolved under the bankruptcy law. It added that the fresh slippages are reducing and it is troubles of the past which is leading to the elevated provisioning.

The CNX Nifty is currently trading at 10435.85, down by 163.40 points or 1.54% after trading in a range of 10433.95 and 10540.65. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Titan Co up by 4.20%, Indiabulls Housing Finance up by 3.03%, Indusind Bank up by 1.28%, Bharti Infratel up by 1.09% and Power Grid up by 1.03%. On the flip side, HPCL down by 23.16%, BPCL down by 18.69%, Indian Oil Corp. down by 14.97%, ONGC down by 13.81% and GAIL India down by 9.05% were the top losers.

Asian markets were trading in red; Nikkei 225 decreased 191.90 points or 0.81% to 23,783.72, Hang Seng was down by 35.91 points or 0.14% to 26,587.96, Taiwan Weighted fell 201.79 points or 1.92% to 10,517.12, Jakarta Composite dropped 19.92 points or 0.35% to 5,736.70, KOSPI decreased 6.97 points or 0.31% to 2,267.52 and Straits Times dipped 21.49 points or 0.67% to 3,210.10.