Local equities trim losses in morning session

Local equity benchmarks trimmed some of their losses in morning session, but continue to trade below the neutral lines. Traders were taking support with a report that India remained ahead of China to retain the tag world’s fastest growing large economy withstanding several ups and downs, spike in oil prices and global trade war like situation during 2018. In the first quarter of 2018-19 ending June 30, it grew at an impressive 8.2 per cent, after 7.7 per cent in the first three months of the year. Investors took note of a report that the Reserve Bank of India (RBI) offered a New Year gift to micro, small and medium enterprises (MSMEs) by allowing a one-time restructuring of existing loans that are in default but ‘standard’ as on January 1. The facility could provide a timely support to scores of MSMEs hit by the double whammy of note ban and GST. However, some negativity still remained on the streets with a report that the goods and services tax (GST) revenue for November (collected in December) dropped to Rs 94,726 crore from Rs 97,637 crore in the previous month, belying expectations that the mop-up might have entered a phase of sustained upswing.

On the global front, Asian markets were trading in red, on the first trading day of 2019, following a turbulent 2018 that saw most major global stock exchanges end the year with significant losses. Back home, Aviation industries stocks were trading mostly in red, despite a report stated that Jet fuel price was cut by a record 14.7 per cent on the back of decline in international rates, making it cheaper than both petrol and diesel. The price of Aviation Turbine Fuel (ATF) -- used to power airplanes -- was slashed by Rs 9,990 per kilolitre, or 14.7 per cent, to Rs 58,060.97 per kiloliter.

The BSE Sensex is currently trading at 36187.38, down by 67.19 points or 0.19% after trading in a range of 36035.78 and 36236.70. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.03%, while Small cap index was up by 0.13%.

The top gaining sectoral indices on the BSE were IT up by 0.97%, TECK up by 0.78%, Realty up by 0.46%, FMCG up by 0.12% and Consumer Durables was up by 0.10%, while Metal down by 1.87%, Auto down by 1.24%, Oil & Gas down by 0.81%, Basic Materials down by 0.72%, Utilities was down by 0.58% were the top losing indices on BSE.

The top gainers on the Sensex were TCS up by 1.28%, Infosys up by 1.24%, Yes Bank up by 1.19%, ICICI Bank up by 0.47% and SBI was up by 0.40%. On the flip side, Mahindra & Mahindra down by 3.03%, Vedanta down by 2.67%, Tata Steel down by 2.46%, Tata Motors down by 1.58% and Tata Motors - DVR was down by 1.45% were the top losers.

Meanwhile, with an aim to provide support to the Micro, Small and Medium Enterprises (MSME) sector, the Reserve Bank of India (RBI) has allowed a one-time restructuring of existing debt up to Rs 25 crore for the companies which have defaulted on payment but the loans given to them have continued to be classified as standard assets. Accordingly, the decision of RBI will help the MSMEs which are facing cash crunch in the wake of demonetisation and GST implementation.

RBI stated that to facilitate a meaningful restructuring of MSME accounts that have become stressed, it has decided to permit a one-time restructuring of existing loans to MSMEs that are in default but 'standard' as on January 01, 2019, without an asset classification downgrade. To be eligible for the scheme, the aggregate exposure, including non-fund based facilities of banks and NBFCs, to a borrower should not exceed Rs 25 crore as on January 01, 2019, and the restructuring has to be implemented by March 31, 2020.

Earlier, the RBI’s board in its crucial meeting held on November 19, 2018 had advised the central bank examine a scheme for restructuring of stressed standard assets of MSME borrowers with aggregate credit facilities of up to Rs 25 crore, subject to such conditions as are necessary for ensuring financial stability.

The CNX Nifty is currently trading at 10872.15, down by 37.95 points or 0.35% after trading in a range of 10839.30 and 10895.35. There were 15 stocks advancing against 34 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were TCS up by 1.25%, Yes Bank up by 1.03%, Bharti Infratel up by 0.93%, Infosys up by 0.81% and Wipro was up by 0.72%. On the flip side, Eicher Motors down by 5.80%, Mahindra & Mahindra down by 3.14%, JSW Steel down by 3.04%, Vedanta down by 2.75% and Hindalco was down by 2.58% were the top losers.

Asian markets were trading in red; Hang Seng decreased 603.25 points or 2.33% to 25,242.45, KOSPI fell 31.70 points or 1.55% to 2,009.34, Taiwan Weighted dropped 163.15 points or 1.68% to 9,564.26, Jakarta Composite dropped 16.47 points or 0.27% to 6,178.03, Straits Times trembled 31.48 points or 1.03% to 3,037.28 and Shanghai Composite was down by 25.09 points or 1.01% to 2,468.81.