Benchmarks trade with caution in early deals

Indian equity benchmarks made a cautious start and are trading slightly in red terrain following weak global cues. Traders remained cautious with the central bank’s statement that the total external commercial borrowings (ECB) will now be rule-based and will be capped at 6.5% of the gross domestic product. The limit now works out to be about $160 billion for the current fiscal year, against the actual outstanding of $126.29 billion as on September 30. The central bank already has a rule-based exposure for foreign investors’ exposure in bonds. Foreigners are allowed to invest up to 6% of the outstanding debt. However, losses remain capped as traders took some solace with report that the Lok Sabha passed the Consumer Protection Bill, and the government introduced a Bill to amend the Companies Act to further improve the ease of doing business and ensure better compliance levels. The Consumer Protection Bill seeks to strengthen the rights of consumers and provide a mechanism for redressing complaints regarding defects in goods and deficiency in services.

On the global front, all the Asian markets are trading in red following the overnight market rout on Wall Street. The US Department of Justice also charged two Chinese nationals on Thursday for participating in a global hacking campaign. The US markets settled in red territory on Thursday as worries mounted about a possible government shutdown and the Federal Reserve’s latest guidance on interest rates.

Back home, banking sector stocks remained buzzing with the Reserve Bank of India’s (RBI) data showing that bank credit rose at a healthy 15.07% to Rs 92.03 trillion in the fortnight to December 7, while deposits grew 9.66% to Rs 118.84 trillion. In the previous fortnight ended November 23, credit has risen by 15.09% to Rs 91.32 trillion, while deposits surged 9.43% to Rs 118.13 trillion. In scrip specific developments, PVR gained on launching first multiplex in Greater Noida and Infibeam Avenues was up on receiving Tier III Design Certification from Uptime Institute.

The BSE Sensex is currently trading at 36424.17, down by 7.50 points or 0.02% after trading in a range of 36327.31 and 36483.49. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.18%, while Small cap index was up by 0.26%.

The top gaining sectoral indices on the BSE were Telecom up by 1.03%, Metal up by 0.95%, FMCG up by 0.44%, Healthcare up by 0.40% and Basic Materials was up by 0.39%, while IT down by 1.04%, TECK down by 0.78%, Oil & Gas down by 0.41%, Consumer Durables down by 0.34% and Energy was down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.23%, Mahindra & Mahindra up by 2.09%, Tata Motors up by 1.73%, Tata Motors - DVR up by 1.56% and Tata Steel up by 1.42%. On the flip side, Infosys down by 1.93%, TCS down by 1.17%, Maruti Suzuki down by 1.16%, Asian Paints down by 0.58% and Yes Bank down by 0.48% were the top losers.

Meanwhile, in order to ease cash crunch, Finance Minister Arun Jaitley has said that the government will infuse Rs 83,000 crore in public sector banks (PSBs) in the remaining three months of the fiscal taking the total recapitalization of banks to Rs 1.06 lakh crore for the current financial year ending on March 31, 2019.

Jaitley said the move will increase the lending capacity of PSBs and help some of them to come out of Reserve Bank of India (RBI’s) Prompt Corrective Action (PCA) framework which imposes restrictions on their lending and bars them from opening more branches. He further said recognition of non-performing assets in the PSBs is complete, and the downslide in bad loans has begun.

Besides, the government sought Parliament's approval for infusion of an additional Rs 41,000 crore in the PSBs through the second batch of Supplementary Demands for Grants. This would enhance the total recapitalisation in the current fiscal from Rs 65,000 crore to Rs 1.06 lakh crore.

The CNX Nifty is currently trading at 10942.70, down by 9.00 points or 0.08% after trading in a range of 10923.95 and 10963.65. There were 27 stocks advancing against 23 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 2.14%, Bharti Airtel up by 2.04%, Tata Motors up by 1.64%, Tata Steel up by 1.49% and Hindalco up by 1.38%. On the flip side, Indian Oil Corporation down by 4.63%, Infosys down by 1.86%, Maruti Suzuki down by 1.36%, TCS down by 1.06% and Titan Co down by 1.00% were the top losers.

All the Asian markets are trading in red; Nikkei 225 declined 275.75 points or 1.35% to 20,116.83, Straits Times slipped 7.96 points or 0.26% to 3,042.66, Hang Seng dipped 53.35 points or 0.21% to 25,570.18, Taiwan Weighted shed 26.17 points or 0.27% to 9,648.35, KOSPI decreased 3.53 points or 0.17% to 2,056.59, Jakarta Composite fell 22.74 points or 0.37% to 6,125.14 and Shanghai Composite was down by 25.49 points or 1.01% to 2,510.78.