Key indices continue to trade with small losses

Key benchmark indices continued to trade with small losses in afternoon trade, tracking subdued trading in global markets after US-China trade war escalated. The trade remained in negative terrain with the Central Statistics Office (CSO) data showing that retail inflation inched up to a six-month high of 2.92% in April due to a spike in food prices, including vegetables, meat, fish and eggs. Inflation based on the Consumer Price Index (CPI) was at 2.86% in the previous month and 4.58% in April 2018. Some anxiety also came in with Moody's Investors Service stated that India’s rising oil consumption will support its investments in refining capacity additions and upstream production, but imports will keep growing amid stagnant production. However, losses were limited as traders found some support with data showing that wholesale price inflation (WPI) for the month of April eased to 3.07 percent compared to 3.18 percent in March led by fall in prices of manufacturing products.

On the global front, Asian markets were trading in red, after China upped the ante in its trade war with the US. Back home, the BSE Sensex is currently trading at 37028.63, down by 62.19 points or 0.17% after trading in a range of 36956.10 and 37146.58. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.06%, while Small cap index was down by 0.36%.

The top gaining sectoral indices on the BSE were Energy up by 0.69%, Healthcare up by 0.51%, Utilities up by 0.50%, Capital Goods up by 0.50% and Industrials was up by 0.37%, while IT down by 1.87%, TECK down by 1.67%, Consumer Discretionary Goods & Services down by 0.67%, Auto down by 0.64% and Realty was down by 0.27% were the top losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 3.69%, Vedanta up by 2.33%, ITC up by 1.54%, ICICI Bank up by 1.49% and Reliance Industries was up by 1.42%. On the flip side, TCS down by 2.16%, Infosys down by 2.01%, Bajaj Auto down by 1.98%, Bajaj Finance down by 1.84% and HCL Technologies was down by 1.66% were the top losers.

Meanwhile, India Ratings and Research (Ind-Ra) in its latest report stated that liquidity crisis faced by non-banking financial companies (NBFCs) along with poor sentiment in the property market has weakened the performance of the loans against property (LAP) segment in 2018-19. He also said that other segments, especially commercial vehicle loans which were not doing so good recently, are showing signs of improvement. 

According to the report, delinquency indices for the LAP transactions rated by the agency have been on the rise and the 90-day overdue loans increasing to 1.77 percent in January 2019 from 1.05 percent in the year-ago period. It also said that high delinquencies have been observed among high loan-to-value and high-yield buckets. In the case of commercial vehicle (CV) loans, it said its early delinquency index for rated CV loans dropped to 7.53 percent in January as compared to 8.19 percent in the year-ago period.

The rating agency has pointed out that the improvement in the performance of CV loans has mainly been on account of a moderate uptick in freight rates and changes in government norms such as revised axle load norms, which have led to adequate asset utilisation and, hence, regular cash flows for borrowers, thereby ensuring timely debt servicing. It observed that new vehicle loans have performed better than the used vehicle loans and added that the performance has improved across states. In the case of micro-finance, it said capital infusion, desire to diversify into newer geographies and significant improvement and updates in underwriting standards resulted in an improvement.

The CNX Nifty is currently trading at 11131.60, down by 16.60 points or 0.15% after trading in a range of 11108.30 and 11157.95. There were 20 stocks advancing against 29 stocks declining on the index.

The top gainers on Nifty were Sun Pharma up by 3.50%, Indiabulls Housing Finance up by 2.75%, Vedanta up by 2.46%, GAIL India up by 2.38% and Adani Ports &SEZ was up by 2.00%. On the flip side, Tech Mahindra down by 2.83%, TCS down by 2.04%, Bajaj Auto down by 1.98%, Infosys down by 1.85% and Tata Steel was down by 1.84% were the top losers.

All Asian markets were trading in red; Nikkei 225 slipped 156.68 points or 0.74% to 21,034.60, Taiwan Weighted dropped 35.13 points or 0.33% to 10,523.16, Jakarta Composite lost 73.50 points or 1.2% to 6,061.90, KOSPI fell 0.70 points or 0.03% to 2,078.31, Straits Times trembled 27.63 points or 0.85% to 3,206.65, Shanghai Composite declined 10.36 points or 0.36% to 2,893.35 and Hang Seng decreased 452.48 points or 1.58% to 28,097.76.