Markets gain traction; Banking stocks lead rally

Indian equity indices gained traction in late afternoon session to trade near their day’s high points, despite weak cues from European markets.  Banking stocks were leading the gaining rally on BSE. Sentiments on the street were positive with IBBI Chairperson M S Sahoo’s statement that resolution plans under IBC have yielded 200 per cent of liquidation value for creditors in addition to rescuing viable firms. He also noted that this is significantly better as compared to the previous regime which yielded a recovery of 25 per cent for creditors through a process which took about five years and entailed a cost of 9 per cent. However, the broader markets failed to recover the losses in late noon deals.

On the sectoral front, stocks related to the oil industry were trading higher, even though Fitch Ratings said that financial profiles of state-owned oil marketing companies may be at risk in the near to medium term due to pressure from the government to increase shareholder returns.

On the global front, European markets were trading in red, as Austria's production growth slowed in February. The data from Statistics Austria showed that the production index that combines both industry and construction climbed 5.9 percent year-on-year in February, after a 6.7 percent increase in January. Asian markets were also trading in red, as investors awaited the next batch of earnings as well as a preliminary reading on US GDP later in the day for directional cues. The pace of US growth is expected to slow to 2.1 percent in the first quarter from 2.2 percent in the fourth quarter.

The BSE Sensex is currently trading at 39056.71, up by 325.85 points or 0.84% after trading in a range of 38765.33 and 39073.63. There were 20 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.36%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Bankex up by 1.62%, Metal up by 1.44%, IT up by 1.22%, TECK up by 1.05% and Oil & Gas up by 1.05%, while Auto down by 1.06%, Consumer Disc down by 0.71%, Consumer Durables down by 0.68%, Industrials down by 0.41% and Telecom down by 0.13% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 5.49%, Axis Bank up by 2.83%, ICICI Bank up by 2.76%, TCS up by 2.07% and SBI up by 1.99%. On the flip side, Tata Motors - DVR down by 2.56%, Tata Motors down by 2.12%, Maruti Suzuki down by 1.45%, Mahindra & Mahindra down by 1.26% and Vedanta down by 1.05% were the top losers.

Meanwhile, expressing worries, credit rating agency, Fitch Ratings in its latest report has said that financial profiles of state-owned oil marketing companies (OMCs) may be at risk in near to medium term, on the back of government’s pressure to increase shareholder returns.

The rating agency underlined the details of dividends declared by oil marketing companies, noting that Bharat Petroleum Corporation (BPCL) and Oil India (OIL) declared high interim dividends of 67.5 per cent to 110 per cent of the face value of their shares, and undertook share buybacks in the financial year ended March 31, 2019.

Further, Fitch does not foresee any significant impact on OMCs' financial profiles on account of fuel price controls. It expects the OMCs to make up the losses in the subsequent period during the year in such an event. The rating agency believes OMCs will continue to revise prices daily to reflect the market prices over the medium term.

The CNX Nifty is currently trading at 11744.35, up by 102.55 points or 0.88% after trading in a range of 11661.75 and 11747.25. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 5.61%, BPCL up by 3.11%, GAIL India up by 2.99%, Axis Bank up by 2.82% and ICICI Bank up by 2.77%. On the flip side, Tata Motors down by 2.16%, Grasim Industries down by 1.59%, Maruti Suzuki down by 1.45%, Mahindra & Mahindra down by 1.37% and Dr. Reddy’s Lab down by 1.12% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted fell 87.39 points or 0.79% to 10,952.47, Nikkei 225 slipped 48.85 points or 0.22% to 22,258.73, Shanghai Composite declined 21.74 points or 0.7% to 3,102.09, KOSPI fell 11.19 points or 0.51% to 2,179.31. On the flip side, Straits Times gained 3.88 points or 0.12% to 3,354.16, Jakarta Composite soared 2.90 points or 0.05% to 6,375.69 and Hang Seng was up by 11.70 points or 0.04% to 29,561.50.

All European markets were trading in red; UK’s FTSE 100 slipped 26.98 points or 0.36% to 7,407.15, France’s CAC lost 4.73 points or 0.09% to 5,552.94 and Germany’s DAX was down by 13.83 points or 0.11% to 12,268.77.