Local indices hold positive momentum

Local benchmarks holds positive momentum on the streets in morning deals, as frontline gauges continue to hold crucial 10,550 (Nifty) and 35,100 (Sensex) levels. Market participants remained optimistic with report that finance ministry will seek immediate solutions to the issues of micro, small and medium enterprises (MSME) credit and NBFC liquidity in the central bank’s board meeting on November 19. Traders took some solace from top banker Uday Kotak’s statement that the country has been under a lot of pressure due to higher-than-$60 a barrel oil price in last one year but the latest retreat is giving a lot of comfort to India. Traders also took some support with CBDT Chairman Sushil Chandra’s statement that direct tax collection has already crossed Rs 5 lakh crore and will exceed the budgeted target of Rs 11.5 crore set for the current fiscal.

On the global front, Asian markets were trading mixed, following overnight declines in US stock prices and Treasury yields, while oil prices resumed their drop and the pound struggled to hold its gains. Back home, Confederation of Indian Industry (CII) has called for a change in regulations to improve access to credit for MSME, are facing increased risk of financial stress due to a liquidity crunch in the market.

The BSE Sensex is currently trading at 35195.11, up by 53.12 points or 0.15% after trading in a range of 35118.42 and 35268.49. There were 17 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.04%, while Small cap index was down by 0.22%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.92%, Industrials up by 0.79%, Consumer Durables up by 0.76%, Power up by 0.49%, Auto up by 0.40%, while Oil & Gas down by 1.05%, Energy down by 0.57%, Basic Materials down by 0.52%, Telecom down by 0.41% and PSU was down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.57%, Tata Motors - DVR up by 2.32%, Adani Ports & SEZ up by 2.19%, Hero MotoCorp up by 1.81% and Axis Bank was up by 1.60%. On the flip side, Yes Bank down by 8.02%, Mahindra & Mahindra down by 1.36%, Sun Pharma down by 1.03%, ICICI Bank down by 0.87% and ONGC was down by 0.75% were the top losers.

Meanwhile, in order to improve access to credit for micro, small and medium enterprises (MSME), the Confederation of Indian Industry (CII) has suggested several short-term measures to the Reserve Bank of India (RBI). It highlighted that MSMEs at present have been facing issues arising out of delayed decisions from banks on granting access to credit, additional collateral requirements, demand for personal guarantees, additional charges and conditionalities on bank guarantees.

CII suggested a 'One, Turn Around Time (TAT)' for sanction and enhancement of limits for working capital or term loans be fixed at 15 days from the date of application and for disbursement, 15 days from the date of sanction. It recommended that Letters of Undertaking (LoUs) be permitted for Buyers' Credit for cases where the MSMEs are incurring capital expenditure. It further suggested that MSMEs having no defaults should progressively receive discounts on the normal margin requirements and commensurate with their lower risk profile, similar to no claim bonus discounts for insurance. Moreover, RBI may allow banks to sanction Buyers Credit facility to MSMEs, wherever import of raw materials is being done under Letter of Credit.

It also sought a cap of 133% on the value of collateral banks can demand relative to the loan value, and 15% on the margin money requirements on bank guarantees and loans. Besides, as per the RBI data, Gross bank credit to micro and small industries fell 1.4% in September from a year earlier.

The CNX Nifty is currently trading at 10584.10, up by 7.80 points or 0.07% after trading in a range of 10557.50 and 10607.90. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 2.66%, Hero MotoCorp up by 2.05%, Adani Ports & SEZ up by 1.93%, Bajaj Finserv up by 1.90% and Titan Company was up by 1.75%. On the flip side, Yes Bank down by 7.96%, Grasim Industries down by 6.99%, Indiabulls Housing Finance down by 3.08%, BPCL down by 1.88% and Ultratech Cement was down by 1.31% were the top losers.

Asian markets were trading mixed; Nikkei 225 declined 103.09 points or 0.47% to 21,743.39, KOSPI dropped 0.45 points or 0.02% to 2,067.60, Straits Times fell 0.44 points or 0.01% to 3,042.75 and Shanghai Composite was down by 4.37 points or 0.16% to 2,650.51.

On the other hand, Hang Seng gained 110.90 points or 0.43% to 25,765.33, Taiwan Weighted rose 8.74 points or 0.09% to 9,800.62 and Jakarta Composite was up by 48.48 points or 0.82% to 5,906.77.