Benchmarks continue to trade in negative territory

Indian benchmarks continued to trade in negative territory in early noon session, with Sensex and Nifty plunging 0.26% and 0.24% respectively. Selling in frontline blue chip stocks such as Power Grid Corporation, Yes Bank, Infosys and HDFC weighed down sentiment. Besides, broader indices were also trading in red, dragging their larger peers lower during the trade.  However, losses remain capped as the RBI data on ‘Census on Foreign Liabilities and Assets of Indian Direct Investment Companies, 2017-18’ has showed that during the fiscal year 2017-18 (FY18), foreign direct investment (FDI) recorded a healthy jump of 18% to Rs 28.25 lakh crore. Meanwhile, with an aim to produce more scrap, Union Steel Minister Chaudhary Birender Singh has said the government is formulating a draft National Scrap Policy. At present, the nation’s requirement of scrap is round 8.3 million tonne (MT) and a big portion of the requirement is met via imports. The minister mentioned that a National Scrap Policy is being drafted which will be ready in a few months. This will make available nearly 7 MT scrap in the country. Steel produced out of scrap is of good quality and is environment friendly.

On the global front, Asian stocks were trading in red, as the charging of Chinese giant Huawei in the US cast a shadow over upcoming trade talks, while investors were also tracking a Wall Street sell-off fuelled by concerns corporate profits. Back on street, on scrip specific development, Shalby’s share fell despite reporting 22.88% rise in its net profit at Rs 12.89 crore for the quarter under review as compared to Rs 10.49 crore for the same quarter in the previous year.

The BSE Sensex is currently trading at 35564.53, down by 92.17 points or 0.26% after trading in a range of 35532.53 and 35718.90. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.05%, while Small cap index was down by 0.08%.

The top gaining sectoral indices on the BSE were Telecom up by 0.99%, Healthcare up by 0.71%, Basic Materials up by 0.36%, Metal up by 0.36% and Auto was up by 0.26%, while IT down by 0.78%, Consumer Durables down by 0.72%, Energy down by 0.72%, TECK down by 0.54%, Oil & Gas was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 1.51%, Maruti Suzuki up by 1.39%, Tata Motors - DVR up by 1.29%, Hero MotoCorp up by 1.06% and Tata Motors was up by 1.02%. On the flip side, Power Grid Corporation down by 1.46%, Yes Bank down by 1.44%, Infosys down by 1.35%, HDFC down by 1.13% and Reliance Industries was down by 1.03% were the top losers.

Meanwhile, Finance Minister Piyush Goyal has urged public sector banks (PSBs) to step up lending to micro, small and medium enterprises (MSMEs), agriculture and housing sectors and also assured these lenders of all kinds of support. He observed that the Insolvency and Bankruptcy Code (IBC) has helped the PSBs recover over Rs 1 lakh crore in the three quarters of 2018-19. He expressed confidence that it would make them more profitable in days to come.

Goyal in its meeting with the heads of PSU banks discussed internal mechanism to resolve cases under the RBI guidelines and within the framework set in the bankruptcy court and see how there can be a faster resolution so that business can turnaround and banks can turnaround. Assuring full support to PSBs, he said that bankers have also got confidence from the amendment in the Prevention of Corruption Act that bona fide actions are protected by the law. He further said that banks have had discussions on various matters with RBI Governor Shaktikanta Das. He noted that they have also discussed various ways in which the operations of the banks can become more efficient, customer friendly and profitable, besides ensuring that the stated goals of this government are directed towards reaching financial inclusion of every Indian anywhere in the country.

The minister further said “we would like them to look at ways to improve delivery of services to our farmers. We would like them to be more proactive in encouraging retail businesses. We are going to see a far more vibrant, a far more proactive and a far more profitable banking sector in the days to come.' He also said that the banks were advised to maintain the trend of improvement in performance, with a view to bringing them out of the Prompt Corrective Action (PCA) framework at the earliest. In this connection, he said the significant reduction in stressed assets and significant de-risking of their credit portfolios during the financial year 2019 were taken note of.

The CNX Nifty is currently trading at 10635.70, down by 25.85 points or 0.24% after trading in a range of 10616.85 and 10675.50. There were 28 stocks advancing against 22 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 3.20%, Bharti Infratel up by 2.23%, Dr. Reddys Lab up by 1.86%, JSW Steel up by 1.38% and Sun Pharma was up by 1.35%. On the flip side, Indiabulls Housing down by 5.60%, GAIL India down by 1.77%, Yes Bank down by 1.71%, Infosys down by 1.48% and Power Grid Corporation was down by 1.44% were the top losers.

All Asian markets were trading in red; Nikkei 225 slipped 8.31 points or 0.04% to 20,640.69, Jakarta Composite dropped 8.23 points or 0.13% to 6,450.48, Shanghai Composite declined 2.40 points or 0.09% to 2,594.58, Straits Times trembled 15.08 points or 0.47% to 3,184.42, KOSPI fell 1.42 points or 0.07% to 2,175.88, Hang Seng decreased 82.18 points or 0.30% to 27,494.78 and Taiwan Weighted was down by 96.94 points or 0.97% to 9,916.39.