Indian bourses continue to trade flat with negative bias

Indian bourses continued to trade flat with negative bias in the afternoon session, as investors adopted a cautious stance ahead of key domestic cues of retail inflation data and industrial production data due tomorrow. Some pessimism also came with Federation of Indian Export Organisations’ (FIEO) report that rising protectionism, fluctuation in commodity prices and inadequate availability of liquidity are the three major challenges, which exporters will face in the coming months. It also stated that the WTO has already cautioned that the global trade growth is expected to be lower in 2019 than it was last year. Caution was also seen among investors ahead of important March quarter earnings. However, traders took some support with IMF’s statement that some reforms in India have shown the benefits of digitalization which has also reduced the opportunities for discretion and fraud. On the sectoral front, select steel sector stocks were trading in green with the Indian Steel Association stating that steel demand in India is likely to grow by 7.1 percent in calendar year 2019 and by 7.2 percent in the next calendar year 2020 driven by sectors like construction, capital goods and railways. As for financial years 2019-20 and 2020-21, it forecasted steel demand to grow by 7.2 percent.

On the global front, Asian markets were trading mostly in red, as cautious European and U.S. central banks reinforced investors’ worries about the slowing global economy and trade protectionism. Back home, the BSE Sensex is currently trading at 38559.19, down by 26.16 points or 0.07% after trading in a range of 38513.88 and 38649.42. There were 16 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index rose 0.01%, while Small cap index was down by 0.01%.

The top gaining sectoral indices on the BSE were Telecom up by 0.94%, Oil & Gas up by 0.61%, Capital Goods up by 0.51%, Energy up by 0.43% and Auto was up by 0.38%, while Metal down by 0.99%, IT down by 0.75%, TECK down by 0.54%, Basic Materials down by 0.34% and Bankex was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.74%, Bajaj Auto up by 1.21%, Mahindra & Mahindra up by 1.10%, Hindustan Unilever up by 1.08% and Larsen & Toubro was up by 0.86%. On the flip side, Vedanta down by 3.72%, Infosys down by 1.35%, Axis Bank down by 1.06%, Sun Pharma down by 0.99% and HCL Technologies was down by 0.82% were the top losers.

Meanwhile, International Monetary Fund (IMF) has said that the level of non-performing loans (NPLs) in India remains high and there is need to boost level of the capitalization of some banks, mainly government-owned banks.

IMF has said that there were some steps that were taken by the authorities to boost capital buffers in banks and also to improve governance in state-owned banks that have had some positive impact. It stated that the institutional mechanisms for resolution and the recognition of NPLs are, of course, an extremely important part of the process of cleaning up the banking system of non-performing loans. It added that the authorities should continue working along these lines.

Meanwhile, non-performing assets (NPAs) or bad loans declined by more than Rs 31,000 crore to Rs 8,64,433 crore in the first nine months of 2018-19 as compared to Rs 8,95,601 crore at March-end 2018.

The CNX Nifty is currently trading at 11583.15, down by 1.15 points or 0.01% after trading in a range of 11566.10 and 11604.20. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.69%, BPCL up by 1.51%, Dr. Reddys Lab up by 1.16%, Indiabulls Housing Finance up by 1.11% and Cipla was up by 1.10%. On the flip side, Vedanta down by 3.93%, Adani Ports &SEZ down by 1.23%, Power Grid down by 1.16%, Infosys down by 1.14% and Sun Pharma was down by 1.04% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 223.54 points or 0.74% to 29,896.02, Taiwan Weighted dropped 59.37 points or 0.55% to 10,808.77, Jakarta Composite dropped 49.53 points or 0.76% to 6,428.80 and Shanghai Composite was down by 35.47 points or 1.09% to 3,206.46.

On the flip side, KOSPI rose 0.05 points or 0% to 2,224.44, Straits Times advanced 2.86 points or 0.09% to 3,330.51 and Nikkei 225 was up by 23.81 points or 0.11% to 21,711.38.