Local equities trim losses in morning deals

Local equity benchmarks trimmed some of their losses in morning session, but continue to trade below the neutral lines. Energy, Metal and Healthcare counters witnessed notable losses, while IT and Realty sectors edged higher. Traders took some support with a report that India is expecting improvement in its ranking in the World Bank’s doing business report this year particularly in indicators such as paying taxes and trading across borders. Investors also took note of a report that senior officials of India and China will meet here May 09, 2019 to discuss trade-related issues, particularly matters concerning the agriculture sector. However, market continue to be in negative trajectory, as traders remain cautious with a report that the Reserve Bank warned of the rising risks to fiscal consolidation of the states as their finances are saddled with farm loan waivers, income support schemes and the Uday bonds for their power distribution companies. Some concerns also came with former finance minister P Chidambaram’s statement that the Modi government is misleading the people with hollow claims, even as economy is treading a weak path. Besides, a private report stated that the upcoming bi-monthly policy in June may see the last rate cut for 2019 by the Reserve Bank of India, even as surging inflation and fiscal deficit concern leaves reduced scope for more action going ahead.

On the global front; Asian markets are trading in red, as US-China trade tensions rose, with President Donald Trump saying China ‘broke the deal’ and China vowing to retaliate if the US raises tariffs. Back home, on the sectoral front, Aviation Industry stocks were trading mixed; on a report that the growth of India's domestic passenger market fell to 3.1% in March as compared to 8.3% in February as there was ‘reduction in flight operations of Jet Airways’ and ‘disruptions at Mumbai airport owing to construction’.

The BSE Sensex is currently trading at 37713.21, down by 75.92 points or 0.20% after trading in a range of 37564.87 and 37747.91. There were 14 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.14%, while Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were TECK up by 0.81%, IT up by 0.78%, Realty up by 0.31%, Consumer Durables up by 0.15% and Consumer Discretionary Goods & Services was up by 0.07%, while Energy down by 1.37%, Power down by 0.93%, Healthcare down by 0.65%, Utilities down by 0.61% and Metal was down by 0.55% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 2.89%, Bajaj Finance up by 1.86%, Hero MotoCorp up by 1.54%, Infosys up by 1.48% and TCS was up by 0.81%. On the flip side, Reliance Industries down by 2.00%, NTPC down by 1.91%, Tata Motors - DVR down by 1.46%, Tata Motors down by 1.24% and HCL Tech was down by 1.08% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that financial institutions are likely to realise more than Rs 80,000 crore in the current financial year (2019-20) from the resolution of stressed assets under the Insolvency and Bankruptcy Code (IBC), on the back of expected conclusion of the Corporate Insolvency Resolution Process (CIRP) of two large accounts - Essar Steel and Bhushan Steel and Power. It noted that this is 21% higher as compared to about Rs 66,000 crore realised in FY19. It added that both Essar Steel and Bhushan Steel and Power are part of the Reserve Bank of India's (RBI) list of the 12 largest defaulting companies announced in June 2017.

According to the report, successful completion of the CIRP for these two accounts would bring closure to eight companies from the RBI's list and could help strengthen the confidence in the IBC, despite the significant delays seen in the process with most of the CIRPs lasting more than 500 days. However, despite the hurdles being faced by the IBC, it expects the number of cases being admitted to the National Company Law Tribunal (NCLT) to continue to increase, especially from the operational creditors who are responsible for 50 percent of all cases admitted by the NCLT.

ICRA has highlighted that CIRP under the IBC has been hampered over the past two years by the over-burdened NCLT Benches, innumerable litigations, defiant promoters and failing sectors. It also said that even then, the process under the IBC has chugged on, albeit at a slower pace than envisioned. It stated that the NCLTs continue to remain heavily burdened as the number of cases being admitted continues to increase quarter-on-quarter with the highest quarterly admissions of 359 cases reported in Q4 FY19.

The CNX Nifty is currently trading at 11341.10, down by 18.35 points or 0.16% after trading in a range of 11290.90 and 11341.25. There were 21 stocks advancing against 28 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Zee Entertainment up by 5.94%, Yes Bank up by 2.77%, Hero MotoCorp up by 2.01%, Bajaj Finance up by 1.84% and Indiabulls Housing was up by 1.46%. On the flip side, Reliance Industries down by 2.01%, Bharti Infratel down by 1.80%, NTPC down by 1.72%, Hindalco down by 1.63% and Dr. Reddys Lab was down by 1.31% were the top losers.

All Asian markets are trading in red; Straits Times decreased 13.01 points or 0.40% to 3,270.83, Hang Seng declined 434.36 points or 1.50% to 28,568.84, Taiwan Weighted slipped 181.64 points or 1.66% to 10,742.07, Jakarta Composite fell 38.14 points or 0.61% to 6,232.06 and Shanghai Composite decreased 39.05 points or 1.35 % to 2,854.71, Nikkei 225 tumbled 171.23 points or 0.79% to 21,431.36 and KOSPI was down by 37.49 points or 1.73% to 2,130.52.