Benchmarks continue lackluster trade in afternoon deals

Indian equity benchmarks continued their lackluster trade marginally in red in afternoon session, on the back of selling activities by market-participants. Investors’ sentiments remain dented with the India Meteorological Department’s (IMD) statement that the arrival of the monsoon in the national capital is likely to be delayed by two-three days, though the city is expected to receive normal rainfall. It said normally, the monsoon reaches Delhi by June 29. Since there is a delay in its onset in the southern peninsula, the wind system is likely to take two-three days longer to reach northwest India. However, losses were limited as some optimism remained among the traders with Commerce and Industry Minister Piyush Goyal’s statement that the repo rate cut by the RBI will help boost India's economy by making loans affordable to MSMEs, exporters and home buyers. He also said that removal of charges on NEFT and RTGS transactions will bring great relief to the people and will help in promoting Digital India initiative. On the sectoral front, steel sector remained in focus with CARE Ratings’ report that India’s steel consumption is expected to grow by 5%-6% this year, on the back of government’s expenditure towards infrastructure and construction.

On the global front, Asian markets were trading in green, following positive developments overnight on U.S.-Mexico negotiations, while investors digested recent comments from major central bank chiefs. Back home, the BSE Sensex is currently trading at 39463.45, down by 66.27 points or 0.17% after trading in a range of 39279.47 and 39666.63. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.08%, while Small cap index was up by 0.02%.

The top gaining sectoral indices on the BSE were Telecom up by 0.93%, Consumer Durables up by 0.56%, PSU up by 0.26%, Bankex up by 0.19% and Basic Materials was up by 0.16%, while Energy down by 0.84%, Utilities down by 0.45%, Healthcare down by 0.44%, FMCG down by 0.29% and Auto was down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 1.41%, Bajaj Finance up by 0.93%, ICICI Bank up by 0.84%, Bharti Airtel up by 0.76% and Mahindra & Mahindra was up by 0.70%. On the flip side, Reliance Industries down by 1.37%, Yes Bank down by 1.12%, Coal India down by 1.10%, Sun Pharma down by 0.97% and Power Grid was down by 0.89% were the top losers.

Meanwhile, in order to improve transparency and safety of money markets, the Reserve Bank of India (RBI) will rationalize existing regulations covering different money market products. It has issued regulations over time covering different money market products - call money, repo, commercial paper, certificates of deposit and other debt instruments with original maturity of less than one year.

A well-functioning money market is a crucial link in the chain of monetary policy transmission, apart from being a basic necessity for pricing and liquidity in other financial markets. To create market infrastructure for fair pricing for foreign exchange users, it has also proposed to set up a foreign exchange trading platform for retail participants. The platform will be available to users for transactions from early August 2019. The trading platform has now been developed by the Clearing Corporation of India (CCIL) and is being tested by users.

The RBI further decided to set up an internal working group to review the current liquidity management framework and suggest measures to simplify it and clearly communicate the objectives, quantitative measures and tool kit of liquidity management by the RBI. The Group is expected to submit its report by July 2019.

The CNX Nifty is currently trading at 11835.20, down by 8.55 points or 0.07% after trading in a range of 11769.50 and 11887.35. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.67%, Vedanta up by 1.35%, BPCL up by 1.26%, Indiabulls Housing Finance up by 0.97% and ICICI Bank was up by 0.96%. On the flip side, Dr. Reddys Lab down by 2.59%, Cipla down by 1.75%, Reliance Industries down by 1.42%, Yes Bank down by 1.12% and Britannia Industries was down by 0.98% were the top losers.

Asian markets were trading in green, KOSPI rose 3.22 points or 0.16% to 2,072.33, Straits Times advanced 11.77 points or 0.37% to 3,157.95 and Nikkei 225 was up by 110.67 points or 0.53% to 20,884.71.