Local equities continue to trade with healthy gains

Local equity benchmarks continued to trade with healthy gains in the morning trades, with Sensex and Nifty gaining more than 200 and 50 points, respectively. Among heavy-weights Bajaj Finance, Hero MotoCorp and Yes Bank exhibited a smart performance. Traders were encouraged with a report that the ongoing trade war between the US and China will help India tap export opportunities in both the countries in areas such as garments, agriculture, automobile and machinery. Traders remained optimistic with a private report that bilateral India-Mexico trade crossing $ 10.15 billion in 2018, India-Mexico Business Chamber (IMBC) has been inaugurated with the basic objective to strengthen the growing India Mexico economic and commercial linkages. Investors took note of a report that Reserve Bank of India (RBI) made it mandatory for NBFCs with assets size of more than Rs 50 billion to appoint a chief risk officer (CRO) to ensure highest standards of risk management. The RBI said that the CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate professional qualification or experience in the area of risk management.

On the global front, Asian markets were trading mostly in red, as upbeat US economic news and solid company earnings offered only a fleeting respite from the interminable Sino-US trade dispute. Back home, a private report stated that rice export prices in top exporter India slid this week to their lowest in nearly seven months as demand continued to stagnate, while rates for Vietnamese rice dipped on expected increase in stockpiles after the summer harvest.

The BSE Sensex is currently trading at 37615.71, up by 222.23 points or 0.59% after trading in a range of 37415.36 and 37631.38. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.19%, while Small cap index was up by 0.29%.

The top gaining sectoral indices on the BSE were Auto up by 0.99%, FMCG up by 0.82%, Consumer Disc up by 0.82%, Consumer Durables up by 0.68% and Realty was up by 0.54%, while Healthcare down by 1.07%, Metal down by 0.79%, IT down by 0.47%, TECK down by 0.35% and Basic Materials was down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Finance up by 5.20%, Hero MotoCorp up by 2.92%, Yes Bank up by 2.54%, HDFC up by 1.93% and Mahindra & Mahindra was up by 1.58%. On the flip side, Sun Pharma down by 1.69%, Infosys down by 1.68%, Tata Motors - DVR down by 1.63%, Tata Motors down by 1.54% and Tata Steel was down by 1.20% were the top losers.

Meanwhile, with an aim to augment risk management practices in view of the increasing role of non-banking financial companies (NBFCs) in direct credit intermediation, the Reserve Bank of India (RBI) has asked NBFCs with asset size of over Rs 5,000 crore to appoint board-approved chief risk officer (CRO) with adequate professional qualification and a fixed tenure. According to RBI, the CRO shall be a senior official in the hierarchy of an NBFC and shall possess adequate professional qualification/ experience in the area of risk management.

It said the CRO shall be appointed for a fixed tenure with the approval of the board and added that the officer can be transferred/ removed from his post before completion of the tenure only with the approval of the board. In case the NBFC is listed, any change in incumbency of the CRO should also be reported to the stock exchanges. Further, the board should put in place policies to safeguard the independence of the CRO. In this regard, RBI said the CRO should have direct reporting lines to the MD and CEO/ Risk Management Committee (RMC) of the board.

Besides, the CRO shall not have any reporting relationship with the business verticals of the NBFC and shall not be given any business targets. Further, there shall not be any 'dual hatting' i.e. the CRO shall not be given any other responsibility. Also, all credit products (retail or wholesale) should be vetted by the CRO from the angle of inherent and control risks. The CRO's role in deciding credit proposals shall be limited to being an advisor.

The CNX Nifty is currently trading at 11307.75, up by 50.65 points or 0.45% after trading in a range of 11259.85 and 11319.00. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Bajaj Finance up by 5.27%, Zee Entertainment up by 2.70%, Hero MotoCorp up by 2.69%, Yes Bank up by 2.40% and Bajaj Finserv was up by 2.30%. On the flip side, Hindalco down by 3.03%, Sun Pharma down by 1.94%, Indian Oil Corporation down by 1.72%, Adani Ports down by 1.66% and BPCL was down by 1.60% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 231.67 points or 0.82% to 28,043.40, Taiwan Weighted dropped 56.76 points or 0.54% to 10,417.85, Shanghai Composite declined 43.23 points or 1.46% to 2,912.48, Jakarta Composite lost 24.13 points or 0.41% to 5,871.61, Straits Times trembled 23.75 points or 0.74% to 3,206.51 and KOSPI was down by 1.40 points or 0.07% to 2,066.29. On the other hand, Nikkei 225 was up by 223.39 points or 1.06% to 21,286.37.