Benchmarks continue to trade in negative zone

Indian bourses extended their losses and were trading with cut of around half a percent in early noon session, as selling appeared in IT, TECK and Healthcare, with Sensex and Nifty tumbling by 176.61 and 59.85 points respectively. Traders remain worried with the Reserve Bank of India’s (RBI) statement that Over 6,800 cases of bank fraud involving an unprecedented Rs 71,500 crore have been reported in 2018-19. In the last 11 fiscal years, a total of 53,334 cases of fraud were reported by banks involving a massive amount of Rs 2.05 lakh crore. However, losses remain limited with a report that the government could infuse Rs 40,000 crore in public sector banks (PSBs) in the current fiscal year. The move will help state-run lenders improve their balance sheets and enable them to boost lending. The announcement is likely to be made when the budget is presented on July 5. Meanwhile, foreign institutional investors bought equity worth Rs 3,068.88 crore on June 3, while domestic institutional investors sold shares to the tune of Rs 462.69 crore.

On the global front, Asian markets were trading mostly in red following a volatile Wall Street session as weak economic indicators and an intensifying Sino-US trade war inflamed concerns about global growth. Back on street, in scrip specific development, shares of Larsen & Toubro edged up as the company is all set to sell up to 40.34 lakh equity shares representing 3.88% of the total paid up equity share capital of L&T Technology Services of face value of Rs 2 each on June 04, 2019 (for non-Retail Investors only) and on June 06, 2019 for Retail Investors and for Non-Retail Investors who choose to carry forward their un-allocated bids.

The BSE Sensex is currently trading at 40091.01, down by 176.61 points or 0.44% after trading in a range of 40086.47 and 40312.07. There were 10 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.13%, while Small cap index was up by 0.08%.

The top gaining sectoral indices on the BSE were Utilities up by 0.81%, Power up by 0.77%, Realty up by 0.61%, Capital Goods up by 0.46% and Consumer Durables was up by 0.20%, while IT down by 1.21%, TECK down by 1.16%, Healthcare down by 0.85%, Energy down by 0.58%, Oil & Gas was down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 2.10%, Yes Bank up by 1.67%, Power Grid up by 1.30%, ITC up by 0.92% and Larsen & Toubro was up by 0.72%. On the flip side, TCS down by 2.10%, Hero MotoCorp down by 2.09%, Asian Paints down by 2.04%, HCL Technologies down by 1.88% and Bajaj Auto was down by 1.32% were the top losers.

Meanwhile, global rating agency Moody’s Investors Service in its latest report has said that the increasing share of renewables in the total energy mix of the country may result in an increase in regulatory risk for coal-based projects over the longer term as pressure mounts to move to a lower carbon economy. It pointed out that the higher share of renewable energy in the total energy mix presents a key regulatory challenge in terms of integrating new renewable capacity, while protecting investments already made in coal-based capacity.

Moody’s said predictability of tariff regulations enhances the credit profile of regulated electric companies and added that the Central Electricity Regulatory Commission has been responsive to changes in power sector trends. It also stated that over the last 20 years, regulations for the Indian utilities sector have been progressive and supportive of the power companies, and factored in technological advancements. It added that the regulatory framework in India is more independent, transparent and established versus the framework in Asian peers such as China and Indonesia.

According to the report, regulations in India have also balanced the interests of all stakeholders. It mentioned that the Indian electricity regulations allow a fair return on investment for generation and transmission companies, while ensuring that any benefits from technology, operational efficiency and debt refinancing are shared between the utilities and their customers.

The CNX Nifty is currently trading at 12028.70, down by 59.85 points or 0.50% after trading in a range of 12024.75 and 12095.20. There were 14 stocks advancing against 35 stocks declining, while 1 stock remains unchanged on the index.

The top gainers on Nifty were NTPC up by 2.25%, Yes Bank up by 1.74%, Wipro up by 1.20%, Power Grid up by 0.91% and Eicher Motors was up by 0.77%. On the flip side, HCL Technologies down by 2.27%, Asian Paints down by 2.23%, TCS down by 2.18%, Hero MotoCorp down by 1.92% and Dr. Reddys Lab was down by 1.73% were the top losers.

Asian markets were trading mostly in red; Shanghai Composite declined 28.24 points or 0.98% to 2,861.84, Nikkei 225 slipped 26.27 points or 0.13% to 20,384.61, Hang Seng decreased 150.93 points or 0.56% to 26,742.93, Taiwan Weighted was down by 69.79 points or 0.66% to 10,430.28. On the other hand, KOSPI rose 0.33 points or 0.02% to 2,068.18 and Straits Times was up by 14.20 points or 0.45% to 3,137.66.