Post Session: Quick Review

Indian equity benchmarks ended higher for the third consecutive trading session on Tuesday, boosted by positive global cues and rupee’s gain against the US dollar. Markets started off with marginal gains, as traders took some support with report that SEBI proposed an informant mechanism to blow the whistle on insider trading cases, wherein genuine whistleblowers could get monetary reward of Rs 1 crore as well as amnesty from regulatory action. Buying further crept in with latest data from industry body the Association of Mutual Funds of India (Amfi) showing that average Assets Under Management (AUM) of mutual funds rose to Rs 25.43 trillion in May from Rs 25.27 trillion in the previous month on the back of increased inflows into equity-linked schemes.

Key indices extended their upside in late afternoon session, as sentiments on the street improved further with Crisil’s latest report which stated that the system-wide non-performing assets (NPAs) stock declined massively to 9.3 per cent in last fiscal year (FY19), after tripling to 11.5 per cent in the four fiscals till March 2018. The decline was much faster than the Reserve Bank of India's (RBI) estimate. Some optimism also came with the Micro, Small and Medium Enterprise (MSME) ministry’s additional secretary Ram Mohan Mishra’s statement that ministry is working on developing enterprise facilitation centres at block level across the country to make MSMEs more competitive and help them integrate with big enterprises. However, key indices gave up some of their gains in last leg of trade, as market-men got anxious with Arvind Subramanian, Narendra Modi government's former chief economic adviser stating that India's economic growth rate has been overestimated by around 2.5 percentage points between 2011-12 and 2016-17 due to a change in methodology for calculating GDP.

On the global front, Asian markets ended mostly higher on Tuesday, while European markets were trading in green, as investor jitters over trade eased after US President Donald Trump suspended plans to impose tariffs on Mexican imports and said he expects to meet with the Chinese leader. Back home, select auto stocks ended lower, with data released by the Society of Indian Automobile Manufacturers (SIAM) showing that domestic passenger vehicle sales declined 20.55 percent to 2,39,347 units in May from 3,01,238 units in May 2018.

The BSE Sensex ended at 39970.28, up by 185.76 points or 0.47% after trading in a range of 39760.02 and 40066.31. There were 24 stocks advancing against 7 stocks declining on the index. (Provisional)

The broader indices ended in green; the BSE Mid cap index rose 0.79%, while Small cap index was up by 0.28%. (Provisional)

The top gaining sectoral indices on the BSE were Metal up by 1.45%, PSU up by 0.97%, Bankex up by 0.94%, Oil & Gas up by 0.91% and Energy up by 0.81%, while Capital Goods down by 0.09% was the lone losing index on BSE. (Provisional)

The top gainers on the Sensex were Tata Motors - DVR up by 4.57%, Tata Motors up by 2.77%, Yes Bank up by 2.69%, Indusind Bank up by 2.46% and Vedanta up by 2.42%. (Provisional)

On the flip side, Sun Pharma down by 2.79%, Mahindra & Mahindra down by 1.26%, Coal India down by 0.56%, Larsen & Toubro down by 0.49% and Hindustan Unilever down by 0.30% were the top losers. (Provisional)

Meanwhile, Crisil in its latest report has stated that the system-wide non-performing assets (NPAs) stock declined massively to 9.3 per cent in last fiscal year (FY19), after tripling to 11.5 per cent in the four fiscals till March 2018. The decline was much faster than the Reserve Bank of India's (RBI) estimate. In its half-yearly financial stability report in December, the RBI had estimated that the gross non- performing assets ratio might improve to 10.3 per cent by March 2019 from 10.8 per cent in September 2018.

The report said in a sign of possible recovery from the impaired asset load, the gross NPA ratio of both public and private sector banks showed a half-yearly decline, for the first time since March 2015, the financial year prior to the launch of asset quality review by the RBI. Bad loan recognitions accelerated largely due to a nudge from the RBI, which wanted bank balance sheets to reflect a true picture of the stress.

The RBI's asset quality review led to a massive spike in NPAs, and was supported with the enactment of the bankruptcy law for resolving the cases. However, the progress on the bankruptcy cases has not been very fast as the legal provisions keep getting challenged frequently and the lack of precedents results in delays in arriving at resolutions due to legal tangles. This is part of the teething troubles which any legislations goes through.

The CNX Nifty is currently trading at 11965.35, up by 42.65 points or 0.36% after trading in a range of 11904.35 and 12000.35. There were 31 stocks advancing against 19 stocks declining on the index. (Provisional)

The top gainers on Nifty were Yes Bank up by 2.80%, JSW Steel up by 2.74%, Indusind Bank up by 2.67%, Tata Motors up by 2.65% and Zee Entertainment up by 2.61%. (Provisional)

On the flip side, Indiabulls Housing Finance down by 7.66%, Sun Pharma down by 2.71%, Mahindra & Mahindra down by 1.50%, BPCL down by 0.90% and Tech Mahindra down by 0.86% were the top losers. (Provisional)

European markets were trading in green; UK’s FTSE 100 increased 35.17 points or 0.48% to 7,410.71, France’s CAC increased 40.95 points or 0.76% to 5,423.45 and Germany’s DAX increased 157.19 points or 1.3% to 12,202.57.

Asian markets ended mostly higher on Tuesday as investor jitters over trade eased after US President Donald Trump suspended plans to impose tariffs on Mexican imports and said he expects to meet with the Chinese leader. Meanwhile, US President Donald Trump has threatening to slap huge new tariffs on China if his counterpart Xi Jinping doesn't attend the upcoming G20 meeting. Chinese stocks ended higher after Beijing said it would allow local governments to use proceeds from special bonds as capital for major projects including highways, gas and power supply and railways. Further, Japanese shares finished higher as the yen's retreat against the dollar helped lift exporters.