Benchmarks trade marginally higher in early deals

Indian equity benchmarks are trading with marginal gains in early deals amid positive global cues. Investors took encouragement with report that foreign institutional investors (FIIs) bought shares worth Rs 216 crore on a net basis in the cash market, while domestic institutional investors (DIIs) bought shares worth Rs 171 crore on June 10. Traders got 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. Some support also came 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.

Global cues too remained supportive with all the Asian counters are trading in green at this point of time Tuesday after the Trump administration shelved plans for tariffs against Mexico. The US markets ended in green on Monday, buoyed by relief over the White House’s decision to drop a threat to hit Mexico with tariffs on billions of dollars of goods.

Back home, insurance stocks remained in focus with a private report indicating that the insurance industry in India saw a growth spike after privatisation, but the penetration of products still remains low. In scrip specific developments, Wipro gained on rolling out TOPS CREW for global airlines and Infosys edged higher on opening experience design & innovation studio in London.

The BSE Sensex is currently trading at 39881.61, up by 97.09 points or 0.24% after trading in a range of 39760.02 and 39926.82. There were 22 stocks advancing against 9 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.13%, while Small cap index was down by 0.10%.

The top gaining sectoral indices on the BSE were Energy up by 0.64%, Consumer Durables up by 0.45%, IT up by 0.41%, Oil & Gas up by 0.40% and Auto was up by 0.40%, while Healthcare down by 0.50%, Utilities down by 0.37%, Realty down by 0.21% and Power was down by 0.13% were the few losing indices on BSE.

The top gainers on the Sensex were ONGC up by 2.43%, Tata Motors - DVR up by 1.85%, Indusind Bank up by 1.85%, Tata Motors up by 1.59% and HCL Tech. up by 1.57%. On the flip side, Sun Pharma down by 3.06%, NTPC down by 0.67%, Mahindra & Mahindra down by 0.63%, Bharti Airtel down by 0.41% and Kotak Mahindra Bank down by 0.37% were the top losers.

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 11945.15, up by 22.45 points or 0.19% after trading in a range of 11904.35 and 11959.95. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were ONGC up by 2.40%, Vedanta up by 1.88%, Indusind Bank up by 1.79%, Yes Bank up by 1.69% and HCL Tech up by 1.63%. On the flip side, Indiabulls Housing down by 4.41%, Sun Pharma down by 3.02%, GAIL India down by 1.29%, Dr. Reddys Lab down by 0.86% and NTPC down by 0.78% were the top losers.

All the Asian markets are trading in green; Nikkei 225 jumped 61.66 points or 0.29% to 21,196.08, Straits Times gained 15.17 points or 0.48% to 3,203.28, Hang Seng increased 210.41 points or 0.76% to 27,789.05, Taiwan Weighted added 40.82 points or 0.39% to 10,607.29, KOSPI advanced 6.76 points or 0.32% to 2,106.25, Shanghai Composite surged 53.31 points or 1.87% to 2,905.44 and Jakarta Composite was up by 2.62 points or 0.04% to 6,292.23.