Local equities trim some initial gains

Local equity benchmarks trimmed some of their initial gains in morning session but managed to trade in green territory. Some cautions came with a report that inflation seems to have become a double-edged sword for policy makers with political opponents attacking the government over farmers getting hit due to low prices for agricultural produce, even as the rate of price rise in 2018 has mostly been contained within the targeted comfort zone. However, markets remained above neutral lines with taking support from the industry body CII’s report which stated that the country is expected to witness strong economic growth in 2019, after it has emerged as the fastest growing major world economy this year despite growing global vulnerabilities. Traders took note of Niti Aayog vice chairman Rajiv Kumar’s statement that Niti Aayog plans to focus in the New Year on steps required to push economic growth, promote e-mobility and ensure expeditious implementation of the Modi government’s reform measures. Besides, a private report also said that India has pipped its neighbour in 2018 for the first time in the last 20 years in terms of attracting foreign direct investment (FDI). With 253 inbound deals amounting to $39.515 billion, India’s annual FDI was higher than that of China’s so far this calendar year.

On the global front, Asian markets were trading in green as US futures were higher after President Donald Trump tweeted that he expected to reach a deal to help result trade friction with China after speaking with Chinese President Xi Jinping. Back home, on the sectoral front, Realty stock were trading higher, as a report stated that Institutional investments in real estate doubled to $20 billion during 2014-18 compared to the previous five years, driven by reforms like a law to regulate the sector and relaxation in FDI norms.

The BSE Sensex is currently trading at 36125.57, up by 48.85 points or 0.14% after trading in a range of 36110.55 and 36285.46. There were 26 stocks advancing against 5 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.60%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Metal up by 1.49%, Consumer Durables up by 0.93%, Basic Materials up by 0.89%, Auto up by 0.70% and Realty was up by 0.62%, while Energy down by 0.09%, Utilities down by 0.07% and Oil & Gas was down by 0.05% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 1.93%, Tata Motors up by 1.49%, Tata Motors - DVR up by 1.31%, Bajaj Auto up by 1.27% and Vedanta was up by 1.05%. On the flip side, Power Grid down by 0.73%, Kotak Mahindra Bank down by 0.59%, HDFC down by 0.55%, ONGC down by 0.33% and Reliance Industries was down by 0.19% were the top losers.

Meanwhile, Reserve Bank of India (RBI) in its latest report has showed that banks recovered Rs 404 billion worth of bad loans in last financial year (FY18) as against Rs 385 billion recovered in FY17. Banks recovered their bad loans for various channels include the Insolvency and Bankruptcy Code (IBC), the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interests (SARFAESI) Act, debt recovery tribunals (DRTs) and Lok Adalats.

Banks have seen a significant improvement in recovery of stressed assets. Recovery of stressed assets was helped by the IBC and amendments in the SARFAESI Act. Report further showed, in FY 18, while banks recovered Rs 49 billion of bad loans through the IBC, the amount recovered through SARFAESI was Rs 265 billion.

Besides, report highlighted apart from vigorous efforts by banks for speedier recovery, amending the SARFAESI Act to bring in a provision of three months' imprisonment in case the borrower does not provide asset details and for the lender to get possession of the mortgaged property within 30 days, may have contributed to better recovery.

The CNX Nifty is currently trading at 10885.00, up by 25.10 points or 0.23% after trading in a range of 10872.35 and 10923.55. There were 40 stocks advancing against 10 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 2.14%, JSW Steel up by 2.10%, Hindalco up by 1.70%, Tata Motors up by 1.55% and Bajaj Auto was up by 1.49%. On the flip side, Cipla down by 0.67%, HDFC down by 0.60%, ONGC down by 0.37%, Power Grid down by 0.36% and Kotak Mahindra Bank was down by 0.25% were the top losers.

Asian markets were trading in green; Hang Seng increased 341.50 points or 1.34% to 25,845.70 and Straits Times was up by 15.33 points or 0.5% to 3,068.76.