Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in afternoon session, backed by weak Asian peers, amid highly anticipated G20 Summit in Japan. Cautiousness remained in markets with a report that India’s monsoon rains were below average for the fourth straight week, with rainfall scanty over central and western parts of the country in the week ended on June 26, raising concerns about major crop production and the impact on the nation's economy. Traders took a note of Industry body Ficci urged the Finance Ministry to have a re-look at its Goods and Service Tax collection regime for Consulting and service-providing sector. It also urged to put the onus of depositing of Goods and service tax on the Client (Service Receiver) including both the government and Private sector. On the sectoral front, telecom sector was in focus with report that Communications minister Ravi Shankar Prasad has pitched for a series of relief measures, including lower licence fee, in the budget for the beleaguered telecom sector. 

On the global front, Asian markets were trading red, as investors watched for developments from the G-20 summit in Osaka, Japan, where U.S. President Donald Trump and Chinese President Xi Jinping are expected to meet amid the ongoing trade standoff. Back home, the BSE Sensex is currently trading at 39496.14, down by 90.27 points or 0.23% after trading in a range of 39444.82 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 fell 0.11%, while Small cap index was down by 0.12%.

The top gaining sectoral indices on the BSE were Capital Goods up by 0.47%, Healthcare up by 0.43%, PSU up by 0.27%, Industrials up by 0.23% and Utilities was up by 0.14%, while Telecom down by 1.18%, Metal down by 1.11%, Basic Materials down by 0.66%, Bankex down by 0.47% and Energy was down by 0.46% were the top losing indices on BSE.

The top gainers on the Sensex were Tech Mahindra up by 1.50%, Larsen & Toubro up by 1.04%, HCL Technologies up by 0.85%, Maruti Suzuki up by 0.61% and Bajaj Finance was up by 0.59%. On the flip side, Indusind Bank down by 1.71%, Yes Bank down by 1.69%, Vedanta down by 1.33%, Tata Steel down by 1.27% and ONGC was down by 0.94% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) Governor Shaktikanta Das has said that the government and the central bank must work more closely to help boost the sagging growth engine and to ensure systemic stability. He noted that a dip in consumption and private investment has exerted pressure on the fiscal math. He added that concerted efforts are required to recover private investment and the government needs to continue with economic reforms.

On the optimistic side, Das said the lower inflation and the moderate outlook on the same can help lessen the constraints to the fiscal numbers. He also said that overall, the situation warrants greater cooperation internationally as well as monetary and fiscal coordination domestically to ensure systemic stability. He noted that companies in the crisis-hit non-banking finance companies need to develop on ‘prudent lines’ and focus on asset liability management. He added that the shadow banks also need to focus on their strengths, by harnessing their expertise that has helped them grow.

RBI Governor further said that the central bank is reinforcing the regulatory and supervisory framework to help them better adapt to the evolving scenario. He also said that there has been an improvement in the performance of the state-run lenders due to recapitalization with both provision coverage ratios and capital buffers showing an uptick. However, he underlined the need for PSBs to be ‘specially focusing’ on governance reforms and strengthening their balance sheets.

The CNX Nifty is currently trading at 11814.10, down by 27.45 points or 0.23% after trading in a range of 11798.40 and 11871.70. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Tech Mahindra up by 1.48%, Larsen & Toubro up by 1.03%, GAIL India up by 0.99%, HCL Technologies up by 0.93% and Dr. Reddys Lab was up by 0.91%. On the flip side, Bharti Infratel down by 2.69%, UPL down by 1.90%, Yes Bank down by 1.69%, Indusind Bank down by 1.58% and Coal India was down by 1.54% were the top losers.

All Asian markets were trading red; Shanghai Composite declined 20.10 points or 0.67% to 2,976.69, KOSPI fell 3.70 points or 0.17% to 2,130.62, Nikkei 225 slipped 62.25 points or 0.29% to 21,275.92, Straits Times trembled 1.75 points or 0.05% to 3,326.85, Taiwan Weighted dropped 43.07 points or 0.4% to 10,730.83, Hang Seng decreased 144.52 points or 0.5% to 28,476.90 and Jakarta Composite was down by 0.52 points or 0.01% to 6,352.19.