Sensex, Nifty off day’s high in early noon deals

Markets pared some initial gains but continued to trade in green in early noon session as investors were cheering NDA's early lead in counting of votes for Lok Sabha election 2019. Capital Goods was top gaining index on BSE, up by around 2.65% followed by PSU and Industrials indices both up by 2.00%. Apart from blue chips, broader indices too equally participated in the rally with both mid and small cap indices were trading up by around 0.72% and 0.59%. Sentiment got a boost as early trends pointed to a comprehensive victory of BJP-led NDA. The strength in the markets was also being supported with a report that finance ministry has begun the pre-Budget consultation exercise with industry bodies in the run-up to the full budget for the current financial year to be unveiled by the new government sometime in July.

On the global front, Asian markets were trading mostly in red, as the trade tensions between the United States and China firmly dominating headlines once again. Back on street, in scrip specific development, shares of Bharat Forge gained on entering into a share subscription agreement with Aeron Systems and its founders on May 21, 2019, agreeing to subscribe to 97,500 equity shares of Rs 10 each for a stake of 26%.

The BSE Sensex is currently trading at 39496.64, up by 386.43 points or 0.99% after trading in a range of 39464.69 and 40124.96. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.72%, while Small cap index was up by 0.59%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.65%, PSU up by 2.09%, Industrials up by 2.04%, Power up by 1.91% and Energy was up by 1.80%, while FMCG down by 0.43%, Metal down by 0.20% and Healthcare was down by 0.07% were the few losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 6.03%, Indusind Bank up by 5.35%, Larsen & Toubro up by 4.17%, SBI up by 3.71% and Kotak Mahindra Bank was up by 2.91%. On the flip side, ITC down by 1.79%, Vedanta down by 1.47%, Sun Pharma down by 0.46%, Tata Motors - DVR down by 0.41% and TCS was down by 0.38% were the top losers.

Meanwhile, Fitch Ratings in its latest report has stated that the debt crunch in Infrastructure Leasing and Financial Services (IL&FS) has adversely impacted growth of the Non-banking financial company (NBFC) sector in India and might lead to its consolidation. The report comes in the wake of the Reserve Bank of India's (RBI) decision to create a ‘specialised supervisory and regulatory cadre’ to strengthen supervision over commercial banks, urban cooperative banks and NBFCs.

According to the report, NBFCs are commonly referred to as the shadow banking sector. It noted that the Indian shadow banking industry's rapid growth and dependence on short-term funding sources 'bubbled over' in 2018, most evident by the default of IL&FS in September last year. It also stated that default by IL&FS translated into higher borrowing costs and reduced market access for other non-bank financial institutions, leading to domestic regulators to re-examine liquidity norms for the sector and prod banks to increase their lending to, and asset purchases from, such entities. It believes these dynamics will weigh on growth prospects for the sector and likely lead to industry consolidation.

It also said that the debt-ridden IL&FS Group is sitting on a debt of about Rs 94,000 crore. The management of the company's board has been taken over a government-appointed directors. It added that several group companies have defaulted on the payment of interest payment on loans.

The CNX Nifty is currently trading at 11882.00, up by 144.10 points or 1.23% after trading in a range of 11836.90 and 12041.15. There were 37 stocks advancing against 13 stocks declining on the index.

The top gainers on Nifty were Adani Ports &Special up by 7.14%, Yes Bank up by 5.49%, Indusind Bank up by 5.05%, BPCL up by 5.00% and Zee Entertainment was up by 4.79%. On the flip side, ITC down by 1.92%, Vedanta down by 1.23%, Hindalco down by 1.21%, Sun Pharma down by 0.47% and Dr. Reddys Lab was down by 0.45% were the top losers.

Asian markets were trading mostly in red; Taiwan Weighted dropped 148.85 points or 1.42% to 10,308.37, Shanghai Composite declined 25.75 points or 0.89% to 2,865.95, Nikkei 225 slipped 162.27 points or 0.76% to 21,121.10, KOSPI fell 3.85 points or 0.19% to 2,061.01, Straits Times trembled 20.54 points or 0.65% to 3,162.60and Hang Seng was down by 418.94 points or 1.51% to 27,287.00. On the flip side, Jakarta Composite was up by 89.94 points or 1.51% to 6,029.58.