Benchmarks continue weak trade in early noon session

Indian benchmarks were trading lower in early noon session tracking weakness in Asian peers amid pessimism about world economic growth. Profit booking in frontline blue chip stocks such as Vedanta, Mahindra & Mahindra, Tata Steel and Tata Motors pulled the markets lower. Metal, Auto and Basic Materials stocks were amongst the top losers on the BSE sectoral space. Some pessimism also spread amongst investors as the 12 large states grew faster than national GDP in FY18, the same has not translated into job creation, as Gross State Domestic Product (GSDP) expansion has come in from sectors which are less job-intensive. 11 states have recorded lower growth in employment-intensive sectors such as manufacturing, construction and trade, and hotels, transport and communication services, compared with the national rate. Besides, investors paid no heed to the report that the government may consider reducing customs duty on certain medical devices in the forthcoming budget with an aim to boosting domestic manufacturing of such goods. Meanwhile, investor appetite for risk declined as the International Monetary Fund (IMF) slashed its global economic growth forecast for 2019 for the second time in four months, raising fresh concerns. However, the IMF maintained upbeat outlook on India, which capped losses.

On the global front, Most of Asian markets were trading in red, after the International Monetary Fund cut its world economic growth forecasts for 2019 and 2020, citing weakness in Europe and some emerging markets. Back on street, broader indices were trading in red with the BSE Mid cap index lost 0.75%, while Small cap index was down by 0.65%. On scrip specific developments, Jet Airways edged up on reporting the Passenger Load Factor (PLF) of 87.0% during the month of December 2018. The company had reported the Passenger Load Factor of 82.1% during the month of November 2018. Besides, Zensar Technologies declined on reporting a fall of 12.87% in its net profit at Rs 33.37 crore for third quarter ended December 31, 2018 as compared to Rs 38.30 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 36378.03, down by 200.93 points or 0.55% after trading in a range of 36355.76 and 36650.47. There were 6 stocks advancing against 25 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.75%, while Small cap index was down by 0.65%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.84%, Healthcare up by 0.47%, Energy up by 0.33% and Realty was up by 0.11% , while Metal down by 2.51%, Auto down by 1.61%, Basic Materials down by 1.55%, Industrials down by 1.02%, Consumer Discretionary stocks was down by 0.89% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 4.63%, Kotak Mahindra Bank up by 2.18%, Bajaj Finance up by 0.87%, ONGC up by 0.31% and Reliance Industries was up by 0.28%. On the flip side, Vedanta down by 2.92%, Mahindra & Mahindra down by 2.85%, Tata Steel down by 2.84%, Tata Motors down by 2.32% and Hero MotoCorp was down by 1.59% were the top losers.

Meanwhile, in a bid to give a fillip to innovation and competition, the Reserve Bank of India (RBI) has proposed to relax norms for allowing new players in retail payment systems. It has been issuing guidelines for various payment systems and grants authorisation to non-banks for setting up and operating payment systems. Licensed banks also need to obtain specific permission from RBI for setting up and operating a payment system. It added that at the end of 2018, there are a total of 89 authorised non-bank Payment System Operators (PSOs) in the country.

In its policy paper on 'Authorisation of New Retail Payment Systems', the RBI proposes a multi-pronged policy action for a more appropriate level of retail payment systems and operators. With regard to entry point norms for entities, it pointed out that a judicious approach needs to be adopted with regard to networth criteria. Adding further, it said for all payment systems it would be desirable that they have physical presence in the country, impeccable track record and are likely to conform to the best overall standards, including those pertaining to customer service and efficiency.

The central bank also makes a case for alignment of regulatory framework to encourage enhanced participation of both bank and non-bank entities. Also, it is planning to encourage more players to participate in and promote pan-India payment platforms and would bring out a policy paper. It noted that with the maturing of the retail payments market, it is important that the concentration risk in retail payment systems is minimised from a financial stability perspective.

The CNX Nifty is currently trading at 10895.70, down by 66.15 points or 0.60% after trading in a range of 10888.75 and 10949.80. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 4.73%, Kotak Mahindra Bank up by 2.20%, GAIL India up by 2.01%, BPCL up by 1.42% and HPCL was up by 1.40%. On the flip side, JSW Steel down by 3.22%, Vedanta down by 3.00%, Tata Steel down by 2.94%, Mahindra & Mahindra down by 2.92% and Hindalco was down by 2.84% were the top losers.

Most of the Asian markets were trading in red, Hang Seng decreased 298.04 points or 1.10% to 26,898.50, Nikkei 225 slipped 135.40 points or 0.65% to 20,583.93, Shanghai Composite declined 29.98 points or 1.15% to 2,580.53, KOSPI fell 8.86 points or 0.42% to 2,115.75, Straits Times trembled 13.46 points or 0.42% to 3,207.10 and Jakarta Composite was down by 31.72 points or 0.49% to 6,419.11. On the other hand, Taiwan Weighted was up by 5.26 points or 0.05% to 9,894.66.