Markets trade flat; Capital Goods, Utilities major losers

Indian equity benchmarks traded flat in afternoon session, as investors remained wary ahead of the Q3 corporate earning session starting this week and outcome of the ongoing US-China trade talks. The sentiments remained lackluster with Crisil’s report that India Inc is set to report a decline in both revenue as well as profit growth numbers in the December quarter. It said revenue growth will dip by up to 5 percentage points on average to 12-13%. Some pessimism also came with a report that the growth in direct tax collection in the first nine months of the year was marginally lower than the rate of 14.4% required to meet the budget estimate of Rs 11.5 lakh crore for direct taxes in FY19. The net (post-refunds) direct tax collection for April-December period this fiscal was Rs 7.43 lakh crore, up 13.6% from the year-ago period. A deprecating rupee against the dollar also dampened the sentiment. However, traders took some support with the central statistics office’s (CSO) latest data showing that Indian economy is expected to grow at 7.2% in 2018-19, a tad higher from 6.7% in the previous fiscal, mainly due to improvement in the performance of agriculture and manufacturing sectors.

Back home, the BSE Sensex is currently trading at 35865.63, up by 15.47 points or 0.04% after trading in a range of 35753.95 and 35968.08. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.20%, while Small cap index was up by 0.03%.

The top gaining sectoral indices on the BSE were Telecom up by 0.89%, Healthcare up by 0.84%, Bankex up by 0.35%, Auto up by 0.34% and Realty up by 0.25%, while Capital Goods down by 0.61%, Utilities down by 0.44%, Power down by 0.44%, Oil & Gas down by 0.35% and Industrials down by 0.28% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.85%, Tata Motors up by 2.08%, ICICI Bank up by 2.05%, Yes Bank up by 1.50% and Tata Motors - DVR up by 1.33%. On the flip side, Kotak Mahindra Bank down by 1.19%, Power Grid down by 1.18%, Hindustan Unilever down by 0.98%, Mahindra & Mahindra down by 0.63% and HDFC Bank down by 0.61% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that necessary steps will be taken by the central bank if there is a liquidity shortage in the economy. Though, he assured that liquidity needs have been met at the moment. Pointing out that liquidity in the system is regularly monitored, he said the RBI will take steps whenever there is any deficit. He also said “at the same time, I must also add the RBI would not like a situation where liquidity becomes a kind of loose money. Any infusion of liquidity will have to be carefully considered and has to be need-based. Therefore, caution and care have to be exercised by the RBI so that excess liquidity, ... sometimes have adverse consequences, that is not created.”

Das also said that he will meet representatives of non-banking finance companies to understand the liquidity crunch the sector is facing. He informed that based on several inputs from various stakeholders, the RBI recently announced additional Open Market Operation (OMO) of Rs 60,000 crore spread over December and January. He believed that the liquidity requirements of the economy and financial institutions to a great extent are met.

The RBI governor met representatives of the MSME sector to interact and to get their views about the current state of functioning of the MSME and the implementation of the restructuring scheme which the RBI has announced earlier. Last week, the RBI allowed lenders to recast loans of stressed MSME, provided the total fund and non-fund based exposure to such a borrower does not exceed Rs 25 crore. Such a debt restructuring would not lead to a downgrade in asset classification.

The CNX Nifty is currently trading at 10765.05, down by 6.75 points or 0.06% after trading in a range of 10733.25 and 10798.85. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Eicher Motors up by 3.33%, Sun Pharma up by 2.74%, Tata Motors up by 1.91%, ICICI Bank up by 1.90% and Indiabulls Housing Finance up by 1.46%. On the flip side, UPL down by 1.66%, Adani Ports &SEZ down by 1.28%, Kotak Mahindra Bank down by 1.17%, Zee Entertainment down by 1.09% and Hindustan Unilever down by 1.06% were the top losers.

Asian market were trading mixed, KOSPI fell 11.83 points or 0.58% to 2,025.27, Jakarta Composite dropped 13.21 points or 0.21% to 6,274.01, Taiwan Weighted dropped 26.70 points or 0.28% to 9,563.60 and Shanghai Composite declined 6.62 points or 0.26% to 2,526.47. On the flip side, Nikkei 225 surged 165.07 points or 0.82% to 20,204.04, Hang Seng increased 61.44 points or 0.24% to 25,897.14 and Straits Times advanced 13.45 points or 0.43% to 3,116.25.