Bourses manage to hold heads above water

Indian equity benchmarks managed to hold their heads above water in late afternoon session, on the back of firm opening in European markets. Traders were positive with the Reserve Bank of India (RBI) Governor Shaktikanta Das’ statement that the revised guidelines to deal with stressed assets will sustain improvement in credit culture that have been ushered in by the efforts of the Government and the Reserve Bank so far and will go a long way in promoting a strong and resilient financial system in India. However, markets witnessed some choppiness, after Commerce and Industry Minister Piyush Goyal said that slowdown in global trade and investment is of serious concern as it adversely affects economic growth, development and job creation. He has called for de-escalating trade tensions and reviving confidence in the rules-based multilateral trading system.

On the global front, European markets were trading in green, even though the UK economy contracted for the second straight month in April on weak manufacturing. The data from the Office for National Statistics showed that gross domestic product fell 0.4 percent on a monthly basis after easing 0.1 percent in March. Asian markets were trading in green, after Chinese trade data topped forecasts, helping ease investor concerns surrounding slowing global growth. China's exports grew 1.1 percent last month after falling 2.7 percent in April. Imports, however, plummeted 8.5 percent after rising 4.0 percent in April given softening external conditions.

The BSE Sensex is currently trading at 39731.94, up by 116.04 points or 0.29% after trading in a range of 39619.97 and 39979.48. There were 17 stocks advancing against 13 stocks declining, while 1 stock remained unchanged on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.01%, while Small cap index was down by 0.52%.

The top gaining sectoral indices on the BSE were IT up by 1.64%, TECK up by 1.46%, FMCG up by 0.97%, Capital Goods up by 0.65% and Telecom up by 0.54%, while Oil & Gas down by 1.33%, PSU down by 0.83%, Energy down by 0.58%, Bankex down by 0.13% and Industrials down by 0.01% were the top losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.98%, TCS up by 1.94%, Power Grid up by 1.46%, ITC up by 1.23% and Larsen & Toubro up by 1.16%. On the flip side, Yes Bank down by 2.89%, Tata Motors down by 2.66%, Coal India down by 2.06%, Tata Motors - DVR down by 2.02% and ONGC down by 1.76% were the top losers.

Meanwhile, after release of prudential framework for resolution of stressed assets, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the revised guidelines to deal with stressed assets will sustain improvement in credit culture that have been ushered in by the efforts of the Government and the Reserve Bank so far and will go a long way in promoting a strong and resilient financial system in India.

Das said that the new guidelines provide a system of strong disincentives in the form of additional provisioning for the delay in initiation of resolution or insolvency proceedings. He also added that the new framework makes inter-creditor agreements mandatory and provides for a majority decision to prevail.

After the Supreme Court nullified the Reserve Bank's circular of February 12, 2018, for resolution of stressed assets, the central bank issued a revised 'Prudential Framework for Resolution of Stressed Assets' on Jun 07, 2019.

The CNX Nifty is currently trading at 11902.70, up by 32.05 points or 0.27% after trading in a range of 11871.75 and 11975.05. There were 31 stocks advancing against 18 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Britannia up by 2.95%, Tech Mahindra up by 2.08%, Bharti Infratel up by 1.91%, Infosys up by 1.88% and TCS up by 1.87%. On the flip side, BPCL down by 3.25%, Tata Motors down by 2.80%, Yes Bank down by 2.72%, Coal India down by 2.39% and Indian Oil Corporation down by 2.14% were the top losers.

All Asian markets were trading in green; Shanghai Composite gained 22.88 points or 0.81% to 2,850.68, Taiwan Weighted strengthened 157.27 points or 1.51% to 10,566.47, KOSPI rose 27.16 points or 1.31% to 2,099.49, Straits Times advanced 25.95 points or 0.82% to 3,192.24, Nikkei 225 surged 249.71 points or 1.2% to 21,134.42, Hang Seng increased 577.15 points or 2.14% to 27,542.43, Jakarta Composite was up by 94.81 points or 1.53% to 6,303.93.

European markets were trading in green; UK’s FTSE 100 gained 36.70 points or 0.50% to 7,368.64 and France’s CAC was up by 13.15 points or 0.25% to 5,377.20.