Local equities continue lackluster trade

Mirroring weak global clues, local equity benchmarks continued their lackluster trade in morning session, with losses of over one third of a percent. Sensex slumped over 120 points and broader Nifty 50 trading below the psychological 10,750 mark. Investors took note of a report that signaling a temporary truce, the Reserve Bank and the government agreed to refer to an expert committee the contentious issue of appropriate size of reserves that the RBI must hold, while restructuring of stressed loans of small businesses would be considered by the central bank. The traders overlooked a report stating that Prime Minister Narendra Modi has set an ambitious deadline of December-end to implement as many business reforms as possible on the ground so that India could break into the top 50 of the World Bank Ease of Doing Business next year. Beside, a report stated that the commerce ministry will soon start consultations with its finance counterpart and other ministries to implement the suggestions made by a committee on revamping special economic zones (SEZs).

On the global front, Asian markets were trading in red, extending sharp overnight losses on Wall Street as technology firms bore the brunt of worries about slackening demand, while the dollar sagged after weak US data further sapped confidence in the currency. Back home, Sugar Industries stock were trading mixed, as Industry body ISMA stated that India's sugar production fell by 15 per cent to 1.16 million tonnes till November 15 of the current marketing year that started last month as many mills have not yet started crushing operation in this season.

The BSE Sensex is currently trading at 35653.41, down by 121.47 points or 0.34% after trading in a range of 35623.10 and 35731.67. There were 10 stocks advancing against 20 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.13%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.70%, Utilities up by 0.42%, FMCG up by 0.17%, Energy up by 0.14%, PSU up was by 0.08%, while Metal down by 1.36%, IT down by 0.97%, TECK down by 0.86%, Basic Materials down by 0.82% and Consumer Durables was down by 0.60% were the top losing indices on BSE.

The top gainers on the Sensex were Adani Ports up by 1.72%, IndusInd Bank up by 1.45%, Tata Motors up by 1.14%, Mahindra & Mahindra up by 0.60% and Asian Paints was up by 0.54%. On the flip side, Yes Bank down by 4.15%, Tata Steel down by 1.58%, Bharti Airtel down by 1.13%, TCS down by 1.08% and SBI was down by 1.02% were the top losers.

Meanwhile, the Reserve Bank of India's (RBI) Board meeting concluded on a cordial note. In the high profile meeting, which came amid the differences between the government and the RBI, the board agreed to ease liquidity for the financial sector and increase credit to small businesses. The RBI's board decided to set up an expert committee to examine the central bank's Economic Capital Framework (ECF). The membership and terms of reference of the ECF committee will be ‘jointly determined’ by the government and the RBI.

Further, it also decided that the central bank's Board for Financial Supervision (BFS) will examine the issues concerning the banks that are under the Prompt Corrective Action framework. The Board also advised RBI to consider scheme for restructuring of stressed assets of MSME with aggregate credit facilities of up to Rs 25 crore. There will be a board for Financial Supervision of RBI to examine framework for banks under Prompt Corrective Action (PCA). RBI board also decided to set up a high-powered committee to examine issues related to surplus capital of Rs 9.69 lakh crore with the central bank and advised it to consider a scheme for restructuring stressed assets in the MSME sector.

Besides, the Board, while deciding to retain the CRAR at 9%, agreed to extend the transition period for implementing the last tranche of 0.625% under the Capital Conservation Buffer (CCB), by one year, i.e., up to March 31, 2020. With regard to banks under PCA, it was decided that the matter will be examined by the Board for Financial Supervision (BFS) of RBI.

The Reserve Bank of India’s (RBI) Central Board met and discussed the Basel regulatory capital framework, a restructuring scheme for stressed MSMEs, bank health under PCA framework and the ECF of RBI.

The CNX Nifty is currently trading at 10718.45, down by 44.95 points or 0.42% after trading in a range of 10710.75 and 10740.85. There were 17 stocks advancing against 32 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were GAIL India up by 2.17%, HPCL up by 1.47%, IndusInd Bank up by 1.40%, Adani Ports up by 1.33% and Eicher Motors was up by 1.16%. On the flip side, Hindalco down by 4.16%, Yes Bank down by 3.91%, HCL Tech down by 3.20%, Tech Mahindra down by 3.00% and JSW Steel was down by 1.71% were the top losers.

Asian markets were trading in red; KOSPI slipped 23.27 points or 1.12% to 2,077.29, Straits Times fell 37.55 points or 1.24% to 3,027.52, Shanghai Composite dropped 44.14 points or 1.66% to 2,659.37, Hang Seng lost 504.47 points or 1.95% to 25,867.53, Nikkei 225 declined 263.19 points or 1.22% to 21,557.97 and Taiwan Weighted was down by 77.04 points or 0.79% to 9,751.65.