Indices pare some early gains

Markets pared some initial gains in early noon session as traders awaited for the quarterly results of IT firm TCS and Infosys. Buying in FMCG, Utilities, Realty and Oil & Gas stocks helped markets to trade higher. Some optimism came as the Reserve Bank of India (RBI) in its latest report has stated that banks closed fiscal 2018-19 (FY19) with robust disbursals. The data showed that bank credit rose 13.24% to Rs 97.67 lakh crore for the fortnight to March 29, while deposits grew by 10.03% to Rs 125.72 lakh crore during the same period. Some comfort also came as Reserve Bank of India (RBI) in its latest data has stated that the outward foreign direct investment showed that Indian companies’ foreign investment grew 18 percent to $2.69 billion in March 2019 as compared to same month year ago. It indicated that the domestic companies made investment of $2.28 billion in their subsidiaries and wholly-owned units abroad during March 2018.

On the global front, Asian markets were trading mixed, as investor caution prevailed ahead of the release of first-quarter corporate earnings, although stronger US economic data helped offset some concerns about global growth. Back on home turf, Aviation Minister Suresh Prabhu has directed civil aviation secretary Pradeep Singh Kharola to review issues concerning Jet Airways, which has been operating with less than 10 planes. Cash-strapped Jet Airways had grounded its services to and from the East and Northeast regions. It also suspended its international operations for a day. Consequently, many passengers were left stranded at the airports.

The BSE Sensex is currently trading at 38631.51, up by 24.50 points or 0.06% after trading in a range of 38621.71 and 38721.01. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.05%, while Small cap index was up by 0.14%.

The top gaining sectoral indices on the BSE were FMCG up by 0.79%, Utilities up by 0.63%, Realty up by 0.57%, Oil & Gas up by 0.45%, Power up by 0.37%, while Telecom down by 0.82%, Capital Goods down by 0.55%, Metal down by 0.45%, Industrials down by 0.15% and Basic Materials was down by 0.14% were the top losing indices on BSE.

The top gainers on the Sensex were ITC up by 1.11%, Asian Paints up by 1.01%, Maruti Suzuki up by 0.66%, Hero MotoCorp up by 0.61% and Bajaj Auto was up by 0.57%. On the flip side, Bharti Airtel down by 1.67%, Tata Motors down by 1.01%, Tata Motors - DVR down by 0.96%, Larsen & Toubro down by 0.86% and SBI was down by 0.68% were the top losers.

Meanwhile, Global rating agency Moody’s Investors Service in its latest report has said that Reserve Bank of India’s (RBI) recent move to cut repo rate by 25 basis points (bps) to 6 percent is credit positive for residential mortgage-backed securities (RMBS) market as it will help offset rising funding cost for the lenders, preventing further increase in mortgage rates. It also said “funding costs for lenders have increased by 50 basis points over the past year, and as a result we view a cut in mortgage interest rates as unlikely.”

According to the report, mortgage interest rates will remain elevated through the rest of 2019, following significant increases over the past 12 months. It said “however, we do not expect the elevated interest rates to cause delinquencies in the mortgages backed RMBS as in most cases these higher interest rates have been passed on to borrowers in the form of extensions to loan terms, rather than higher monthly loan amounts.”

The rating agency further said that strong loan characteristics, low household debt and India’s high economic growth would support borrowers’ ability to repay mortgage loans. It also noted that the mortgages backed RMBS continues to have strong characteristics, including borrowers with good credit histories, low loan-to-value ratios and amortizing principal and interest loan terms. It added that these strong characteristics will support the performance of RMBS and keep delinquency rates stable at their current low levels over the next year.

The CNX Nifty is currently trading at 11602.80, up by 6.10 points or 0.05% after trading in a range of 11595.70 and 11627.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 2.61%, Adani Ports &Special up by 1.46%, Cipla up by 1.28%, ITC up by 1.11% and Asian Paints was up by 0.97%. On the flip side, Bharti Airtel down by 1.40%, Hindalco down by 1.23%, Indiabulls Housing down by 1.21%, Indian Oil Corporation down by 1.17% and Tata Motors was down by 1.08% were the top losers.

Asian markets were trading mixed; Hang Seng decreased 108.75 points or 0.36% to 29,730.70, Shanghai Composite declined 13.77 points or 0.43% to 3,176.19, Taiwan Weighted dropped 3.47 points or 0.03% to 10,805.30 and Straits Times was down by 8.35 points or 0.25% to 3,322.47.

On the flip side, Jakarta Composite soared 4.91 points or 0.08% to 6,415.08, KOSPI rose 5.37 points or 0.24% to 2,229.81 and Nikkei 225 was up by 151.66 points or 0.7% to 21,863.04.