Key gauges extend gains in noon deals

Indian equity benchmarks extended gains in noon deals with frontline gauges inching toward their crucial 39,800 (Sensex) and 11,950 (Nifty) levels ahead of Q4 GDP data, scheduled to be announced later in the week. Buying in capital goods and power segment helped in up-move of the markets, while there were selling in telecom and healthcare segment. Sentiments remained upbeat amid unabated foreign fund inflow and higher Asian markets. Traders remained bullish since morning with RBI’s statement that it will inject Rs 15,000 crore into the financial system in the month of June 2019. It will infuse liquidity through purchase of government bonds via the auction route. The government securities (G-secs) will be bought under Open Market Operations (OMO). In scrip specific developments, Manpasand Beverages shares locked in lower circuit on the BSE, with huge sell orders on the counter, after the company’s top management was arrested in a Rs 40 crore Goods and Services Tax (GST) fraud case and Shares of Page Industries hit a 52-week low on the BSE after the company delivered its worst-ever quarterly performance. While the revenue grew flat, earnings declined mainly due to weak demand, high base and intensifying competition in the March quarter (Q4FY19) earnings.

The BSE Sensex is currently trading at 39746.75, up by 312.03 points or 0.79% after trading in a range of 39353.16 and 39752.13. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.98%, while Small cap index was up by 1.63%.

The top gaining sectoral indices on the BSE were Capital Goods up by 2.77%, Power up by 2.41%, Basic Materials up by 2.40%, Industrials up by 2.20% and Realty was up by 2.11%, while Telecom down by 0.45%, Healthcare down by 0.05% and Energy was down by 0.05% were the few losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 4.94%, Yes Bank up by 3.64%, NTPC up by 3.17%, Larsen & Toubro up by 2.92% and HDFC was up by 2.19%. On the flip side, Indusind Bank down by 1.45%, Bharti Airtel down by 1.37%, Asian Paints down by 1.12%, Bajaj Auto down by 0.98% and Reliance Industries was down by 0.53% were the top losers.

Meanwhile, in order to help ailing Non-Banking Financial Companies (NBFCs) deal with liquidity crisis, the Reserve Bank of India has proposed a set of guidelines for large NBFCs. The proposed norms are for helping NBFCs deal with severe liquidity problems and prevent re-occurrence of IL&FS type of debt crisis. According to proposal, a Liquidity Coverage Ratio (LCR) regime would be introduced in all deposit taking NBFCs and non-deposit taking shadow banks with an asset size of Rs 5,000 crore and above in a phased manner. The RBI has released a draft circular on the 'Liquidity Risk Management Framework for NBFCs and Core Investment Companies (CICs).

With a view to ensuring a smooth transition to the LCR regime, the proposal is to implement it in a calibrated manner through a glide path over a period of four years commencing April 2020 and up to April 2024. The draft said the LCR requirement would be binding on NBFCs from April 01, 2020, with the minimum LCR to be 60 per cent, progressively increasing in equal steps till it reaches the required level of 100 per cent, by April 1, 2024.

The draft said An NBFC shall maintain an adequate level of unencumbered HQLA (High Quality Liquid Assets) that can be converted into cash to meet its liquidity needs for a 30 calendar-day time horizon under a significantly severe liquidity stress scenario. HQLA means liquid assets that can be readily sold or immediately converted into cash at little or no loss of value or used as collateral to obtain funds in a range of stress scenarios.

The RBI further proposed that Asset-Liability Management Committee (ALCO) consisting of the NBFC's top management should be responsible for ensuring adherence to the risk tolerance/limits set by the Board as well as implementing the liquidity risk management strategy of the NBFC. The draft guidelines also cover application of generic asset liability management (ALM) principles, granular maturity buckets in the liquidity statements and tolerance limits, liquidity risk monitoring tool and adoption of the 'stock' approach to liquidity.

The CNX Nifty is currently trading at 11947.20, up by 103.10 points or 0.87% after trading in a range of 11812.40 and 11947.70. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were Tata Steel up by 5.19%, Grasim Industries up by 4.48%, Yes Bank up by 3.86%, Larsen & Toubro up by 3.07% and NTPC was up by 3.02%. On the flip side, Zee Entertainment down by 1.88%, Bharti Airtel down by 1.34%, Indusind Bank down by 1.26%, Asian Paints down by 1.05% and Bajaj Auto was down by 0.97% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted strengthened 5.85 points or 0.06% to 10,334.13, Shanghai Composite gained 38.62 points or 1.35% to 2,891.61, Jakarta Composite soared 52.67 points or 0.87% to 6,110.02 and Nikkei 225 was up by 65.36 points or 0.31% to 21,182.58.
 
On the flip side, Hang Seng decreased 43.24 points or 0.16% to 27,310.69, KOSPI fell 1.10 points or 0.05% to 2,044.21 and Straits Times was down by 4.63 points or 0.15% to 3,165.26.