Local equities continue sluggish trend

Local equity benchmarks continued to show a sluggish trend in morning session, with Sensex and Nifty falling more than 190 and 50 points, respectively, despite positive global clues. Weakness was also visible in the broader markets with the S&P BSE Mid-cap and the S&P BSE Small-cap indices losing over one third of a percent each in trade. Traders remained concerned with a report that merchandise exports rose 3.7% to $26.36 billion in January despite a weak rupee, up from 0.3% in December but lower than 9.1% growth achieved so far this fiscal. At $41.09 billion, imports barely grew, despite a 38% jump in gold buys. Trade deficit worsened to $14.7 billion in January from $13.1 billion in December. Traders paid no heed towards a report that India can play a key role in Nepal’s bid to expand its international trade being a close neighbour of the landlocked Himalayan nation. India is already a major trading partner of Nepal with free movement of goods, services and labour. Besides, a report state that the government’s disinvestment proceeds have touched Rs 53,558 crore so far in the current fiscal, as against the full year budget target of Rs 80,000 crore.

On the global front, Asian markets were trading in green, as investors hoped for a resolution to the drawn-out Sino-US trade dispute after both sides offered optimism following the Beijing talks. Back home, a private report stated that India’s oil imports from Iran fell by 45% in January to 270,500 barrels per day oil (bpd), below the estimated 300,000 bpd for the month as some cargoes were delayed.

The BSE Sensex is currently trading at 35613.20, down by 195.75 points or 0.55% after trading in a range of 35569.53 and 35912.44. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.45%, while Small cap index was down by 0.37%.

The only gaining sectoral indices on the BSE were Realty up by 1.28% and Telecom was up by 0.70% while Consumer Durables down by 1.09%, IT down by 1.03%, Energy down by 0.94%, FMCG down by 0.86% and Auto was down by 0.79% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.93%, Tata Motors - DVR up by 1.01%, ONGC up by 1.00%, Tata Steel up by 0.92% and NTPC was up by 0.81%. On the flip side, Asian Paints down by 2.17%, HCL Tech down by 2.02%, TCS down by 1.71%, Hindustan Unilever down by 1.64% and Bajaj Finance was down by 1.64% were the top losers.

Meanwhile, the Federation of Indian Chambers of Commerce and the Indian Banks’ Association’s (FICCI-IBA Bankers') survey has said a majority of banks expect liquidity to remain tight in the last quarter of current financial year (Q4FY19), due to year end liquidity demands, tax outflows, higher fiscal deficit and run-up to elections, despite a slight improvement in the situation. The liquidity scenario remained in deficit in the third quarter of FY19. In order to maintain liquidity, it mentioned the banks agreed that the Reserve Bank of India (RBI) has taken adequate measures, by the way of open market operations (OMOs) and suggested that the central bank should continue OMO purchases for remaining period of the fiscal year.

Another key finding of the survey has been the changing trend in non-performing assets (NPAs), it said adding about 54% of reporting public sector banks have cited a reduction in the NPA levels. It added ‘while infrastructure continues to remain the key sector with high NPAs, with over 90% of respondents citing so’. The bankers were of the view that the recent recapitalisation plan of the government will further help in improving the balance sheets and then write-off some of their current bad loans.

Besides, it added that this is expected to improve financial health of PSBs, bring out some PSBs from the PCA (Prompt Corrective Action) framework and facilitate overall economic growth. It will help banks to extend fresh credit and thus support credit growth, especially for small and micro industries.

The CNX Nifty is currently trading at 10667.65, down by 56.75 points or 0.53% after trading in a range of 10653.40 and 10759.90. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 3.42%, Dr. Reddy’s Lab up by 2.13%, Tech Mahindra up by 1.08%, Vedanta up by 0.98% and ONGC was up by 0.93%. On the flip side, Asian Paints down by 2.07%, Bajaj Finserv down by 2.04%, HCL Tech down by 1.97%, Bajaj Auto down by 1.89% and HPCL was down by 1.78% were the top losers.

All Asian markets were trading in green, Hang Seng increased 418.13 points or 1.5% to 28,318.97, Jakarta Composite soared 76.95 points or 1.2% to 6,466.04, Nikkei 225 surged 379.56 points or 1.82% to 21,280.19, Taiwan Weighted strengthened 84.37 points or 0.84% to 10,149.15, Shanghai Composite gained 47.88 points or 1.78% to 2,730.27, Straits Times advanced 24.54 points or 0.76% to 3,264.28 and KOSPI was up by 9.43 points or 0.43% to 2,205.52.