Weak trade continues on Dalal Street

Indian equity benchmarks continued their weak trade in afternoon deals, weighed by Healthcare and Realty stocks. The mood on the street remained cautious with International Monetary Fund warning governments to gear up for a possible economic storm as growth undershoots expectations. It said the bottom-line they see an economy that is growing more slowly than they had anticipated. Some cautiousness also crept in with Economic Affairs Secretary Subhash Chandra Garg’s statement that the country actually faces shortage of capital more than the scarcity of jobs. Trades failed to get any respite with the Minister of State for Finance Shiv Pratap Shukla’s statement that bad loans of public sector banks (PSBs) fell by Rs 31,168 crore to Rs 8,64,433 crore in the first nine months of the current fiscal as against Rs 8,95,601 crore  to end of March 2018. Meanwhile, Prime Minister Narendra Modi exuded confidence on Monday that India would continue to be the fastest-growing large economy, and could be the second-largest economy in the world by 2030.

On the global front, Asian markets were trading mostly in green as traders watched for developments on a fresh round of trade talks between American and Chinese officials in Beijing this week. Back home, the BSE Sensex is currently trading at 36434.11, down by 112.37 points or 0.31% after trading in a range of 36309.28 and 36588.41. There were 9 stocks advancing against 22 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 1.13%, while Small cap index was down by 1.29%.

The only gaining sectoral indices on the BSE were IT up by 0.69% and TECK up by 0.65%, while Healthcare down by 2.02%, Utilities down by 1.42%, Realty down by 1.16%, Oil & Gas down by 1.14% and Power down by 1.14% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 1.28%, TCS up by 1.18%, Tata Steel up by 1.05%, Infosys up by 1.03% and HDFC Bank up by 0.38%. On the flip side, Mahindra & Mahindra down by 3.48%, ONGC down by 2.68%, Bajaj Finance down by 2.15%, Tata Motors - DVR down by 2.03% and Sun Pharma down by 1.83% were the top losers.

Meanwhile, Department of Financial Services (DFS) secretary Rajiv Kumar has said that the Reserve Bank of India’s (RBI) restructuring package for micro, small and medium enterprises (MSMEs) announced last month will help recast Rs 1 lakh crore of loans for 700,000 eligible MSMEs. The estimate from Rajiv Kumar is much higher than domestic rating agency Icra's assessment of Rs 10,000 crore. It comes even as some banks have seen a reluctance among the target MSMEs to take advantage of the scheme.

Kumar said that 700,000 MSME units need restructuring. He also said that they all can be restructured till March 2020 without downgrading the asset. According to him, the scheme will help free up additional resources which will fuel demand and create further opportunities in the industry.

With an aim to provide support to the MSME sector, the 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.

The CNX Nifty is currently trading at 10896.65, down by 46.95 points or 0.43% after trading in a range of 10857.10 and 10930.90. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Cipla up by 1.40%, Tata Steel up by 1.39%, Indian Oil Corp. up by 1.31%, TCS up by 1.27% and Kotak Mahindra Bank up by 1.05%. On the flip side, Dr. Reddys Lab down by 6.25%, Indiabulls Housing Finance down by 3.64%, Mahindra & Mahindra down by 3.40%, ONGC down by 3.30% and Hindalco down by 2.77% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 159.35 points or 0.57% to 28,105.67, KOSPI rose 3.68 points or 0.17% to 2,180.73, Taiwan Weighted strengthened 71.99 points or 0.72% to 10,004.25 and Shanghai Composite gained 34.95 points or 1.33% to 2,653.18.

On the flip side, Straits Times trembled 7.33 points or 0.23% to 3,194.71 and Jakarta Composite dropped 3.26 points or 0.05% to 6,518.40.