Jubilation continues on Dalal Street in afternoon deals

Gaining further strength, Indian equity benchmarks continued to trade jubilantly in afternoon deals, as buying momentum in the equities persisted despite a muted trend in global markets. The sentiments were on upbeat mood with a report that the Department for Promotion of Industry and Internal Trade (DPIIT) has proposed to formulate a national retail policy to support growth of domestic trade. A national retail policy will be formulated to support development of the sector that would benefit 65 million small traders. Some optimism also came in with report that the commerce and industry ministry is gearing up to boost exports through e-commerce at a time when the government is expected to reframe the proposed e-commerce policy, yet again. On the sectoral front, Airline stocks were trading in green despite the International Air Transport Association (IATA) in its passenger traffic data indicating that India’s domestic air traffic recorded negative growth rate for the first time in over five years during the month of April 2019, largely due to the demise of Jet Airways.

Asian markets were trading mostly in red, after another round of selling on Wall Street and investor worries about a trade war. Back home, the BSE Sensex is currently trading at 39808.32, up by 306.27 points or 0.78% after trading in a range of 39500.56 and 39809.30. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.30%, while Small cap index was up by 0.22%.

The top gaining sectoral indices on the BSE were Telecom up by 1.13%, Power up by 1.10%, IT up by 1.10%, TECK up by 1.07% and Utilities was up by 0.88%, while Auto down by 0.48%, Consumer Durables down by 0.22%, Consumer Discretionary down by 0.13%, Metal down by 0.12%, Realty was down by 0.03% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 3.10%, Yes Bank up by 2.54%, Bharti Airtel up by 2.02%, TCS up by 1.98% and HDFC was up by 1.14%. On the flip side, Mahindra & Mahindra down by 1.95%, Sun Pharma down by 1.34%, ONGC down by 1.14%, Tata Motors down by 0.65% and Power Grid was down by 0.63% were the top losers.

Meanwhile, Chief Economic Advisor (CEA) Krishnamurthy Subramanian has said that the issue of solvency is at the core of the problems afflicting the Non-Banking Finance Company (NBFC) lenders. He also said that NBFCs, which account for a fifth of the overall lending in the economy, have been facing headwinds since late August 2018. 

Subramanian has pointed out that the crux of the problem is the asset liability mismatch, where lending institutions borrowed short for creating long term assets. He also said that in recent months, many NBFCs have been forced to exit non-core businesses and sell down future receivables, taking securitisation volumes to an all-time high in fiscal year 2018-19. He noted that a slew of measures have been taken by the government and the Reserve Bank to address the troubles, which started after the crisis at infra lender IL&FS. He added that rising interest rates also accentuated the asset liability mismatch issue.

Talking about Prime Minister Narendra Modi-led government's new term, CEA said the focus should be on what he described as the '4 Ls' of Land, Labour, Lend and Law in order to take the economy to greater heights. For a market economy, he said the legal framework forms the bedrock for all the transactions and has to be made stronger.

The CNX Nifty is currently trading at 11942.65, up by 81.55 points or 0.69% after trading in a range of 11859.40 and 11944.85. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were NTPC up by 3.02%, Yes Bank up by 2.64%, TCS up by 1.94%, Bharti Airtel up by 1.92% and BPCL was up by 1.40%. On the flip side, Mahindra & Mahindra down by 1.79%, Zee Entertainment down by 1.76%, Sun Pharma down by 1.72%, Eicher Motors down by 1.49% and Cipla was down by 1.26% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 116.69 points or 0.43% to 27,119.02, Nikkei 225 slipped 60.84 points or 0.29% to 20,942.53, Straits Times trembled 27.15 points or 0.86% to 3,136.13 and Shanghai Composite was down by 7.97 points or 0.27% to 2,906.73.

On the flip side, KOSPI rose 15.48 points or 0.77% to 2,038.80 and Taiwan Weighted was up by 81.21 points or 0.79% to 10,382.99.