Benchmarks continue to trade in negative zone

Indian bourses extended their losses and were trading with cut of around quarter a percent in early noon session as selling appeared in Metal, Telecom and Basic Materials stocks. Some cautiousness prevailed in the markets with a report that Governor Shaktikanta Das has called for more cooperation between the government and the Reserve Bank to help boost the sagging growth engine and to ensure systemic stability. A dip in consumption and private investment has exerted pressure on the fiscal math. However, losses remain restricted with Reserve Bank’s report that the non-performing assets has ‘turned around’ with a sharp fall in the system-wide NPAs to 9.3 percent in March 2019 from 11.2 percent a year ago. Meanwhile, Prime Minister Naredra Modi held a productive trilateral meeting with US President Donald Trump and Japanese premier Shinzo Abe, and extensively discussed issues of the Indo-Pacific region, connectivity and infrastructure development ahead of the formal opening of the G-20 Summit.

On the global front, Asian markets were trading red despite investors clung on to hopes that a highly anticipated meeting between U.S. President Donald Trump and Chinese President Xi Jinping this weekend could lead to an easing of trade tensions. Back on the street, in scrip specific development, shares of Cox and Kings edged lower as the company has defaulted on the payment of commercial papers (CP) due to cash flow mismatch and a situation exacerbated by rating downgrade. However, Power Grid advanced on planning to raise funds up to Rs 10,000 crore.

The BSE Sensex is currently trading at 39505.02, down by 81.39 points or 0.21% after trading in a range of 39464.23 and 39675.25. There were 12 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.15%, while Small cap index was down by 0.21%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.56%, Capital Goods up by 0.39%, Utilities up by 0.38%, PSU up by 0.27% and Power up by 0.26%, while Metal down by 1.26%, Telecom down by 1.02%, Basic Materials down by 0.84%, Bankex down by 0.57% and Energy was down by 0.34% were the losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.57%, Larsen & Toubro up by 0.75%, Sun Pharma up by 0.74%, HCL Technologies up by 0.52% and Infosys was up by 0.50%. On the flip side, Indusind Bank down by 1.95%, Yes Bank down by 1.42%, Tata Steel down by 1.42%, Vedanta down by 1.36% and ICICI Bank was down by 1.13% were the top losers.

Meanwhile, global rating agency Moody’s Investors Service in its latest report has stated that the planned spectrum auctions in India, which includes radiowaves for 5G technology, are likely to be held only in the second half of 2020 (H2 2020) or later, given the stressed balance sheets of telecom operators. It also said that regulators in countries like India, Indonesia, and Bangladesh are still initiating consultations with operators and are likely to schedule 5G spectrum auctions only in H2 2020 or later.

The report has stated that Indian government has identified the 5G spectrum in the 3.3-3.6 GHz bands.  However, it said that sale of spectrum in 2019 is unlikely, especially given the telcos' request to the government to restructure their existing spectrum debt in light of their stretched balance sheets. It noted that all telecom operators, barring Reliance Jio, have been under pressure due to huge debt and decline in margins. It pointed out that even though there are signs of market recovery this year, severe price competition in India and Indonesia is leading to an acceleration in capex plans for companies.

Although 5G spectrum allocation timelines are still being discussed in these countries, Moody’s expects all companies to participate in these spectrum auctions. It highlighted that most of the countries in Asia-Pacific region are offering spectrum at low prices to help companies leapfrog into 5G services, and to incentivise operators. It added that India seems to be an exception given spectrum pricing is still quite contentious.

The CNX Nifty is currently trading at 11812.45, down by 29.10 points or 0.25% after trading in a range of 11803.85 and 11871.70. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.52%, Dr. Reddys Lab up by 1.20%, GAIL India up by 0.99%, Larsen & Toubro up by 0.88% and BPCL was up by 0.68%. On the flip side, Bharti Infratel down by 2.57%, Indusind Bank down by 2.08%, UPL down by 1.96%, Zee Entertainment down by 1.66% and Tata Steel was down by 1.52% were the top losers.

All Asian markets were trading red; Shanghai Composite declined 26.77 points or 0.89% to 2,970.02, KOSPI fell 5.36 points or 0.25% to 2,128.96, Nikkei 225 slipped 113.12 points or 0.53% to 21,225.05, Straits Times trembled 0.79 points or 0.02% to 3,327.81, Taiwan Weighted dropped 40.79 points or 0.38% to 10,733.11, Hang Seng decreased 182.11 points or 0.64% to 28,439.31 and Jakarta Composite was down by 0.52 points or 0.01% to 6,352.19.