Benchmarks continue lackluster trade in afternoon session

Indian equity benchmarks continued their lackluster trade and are trading slightly in red in afternoon session, on selling in Metal, Oil & Gas, Power and IT sectors amid the ongoing Union Budget being presented by FM Nirmala Sitharaman. Sentiments remained down-beat as the US dragged India to the WTO by filing a complaint against New Delhi's move to increase customs duties on 28 American goods, alleging the decision is inconsistent with the global trade norms. However, losses remained capped as some support came with Finance minister Nirmala Sitharaman increasing the disinvestment target to Rs 1,05,000 crore for the financial year 2019-20, up 16 percent year-on-year from last year’s revised collections. Traders also took a note of Finance Minister Nirmala Sitharaman’s statement that India needs to make structural reforms to achieve $5 trillion economy in the next few years. She said the Indian economy, which stood at $1.85 trillion five years back, has reached $2.7 trillion now, and is within capacity to reach $5 trillion in the next few years. On the sectoral front, Retail stocks edged lower after Finance Minister has proposed local sourcing norms to be eased for single-brand retail FDI. However, Stocks related to Housing finance edged higher after Finance Minister has proposed setting up 1.95 crore houses under Pradhan Mantari Awas Yojna (PMAY).

On the global front, Asian markets were trading mixed, as investors steeled themselves for the release of a crucial US jobs report that could have a major bearing on the size of an expected Federal Reserve interest rate cut. Back home, the BSE Sensex is currently trading at 39831.35, down by 76.71 points or 0.19% after trading in a range of 39719.85 and 40032.41. 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 0.26%, while Small cap index was down by 0.35%.

The top gaining sectoral indices on the BSE were Telecom up by 0.54%, Bankex up by 0.25%, FMCG up by 0.09% and Consumer Durables was up by 0.08%, while Metal down by 1.44%, Oil & Gas down by 1.40%, Power down by 1.35%, IT down by 1.15% and TECK was down by 0.97% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.15%, Kotak Mahindra Bank up by 1.12%, Hindustan Unilever up by 0.88%, Asian Paints up by 0.67% and Larsen & Toubro was up by 0.56%. On the flip side, Yes Bank down by 4.57%, ONGC down by 3.11%, TCS down by 2.70%, Vedanta down by 2.34% and NTPC was down by 2.16% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that the performance of banking sector has improved as non-performing asset (NPA) ratios declined in the financial year 2018-19 (FY19) and credit growth accelerated. However, she noted that financial flows to the economy remained constrained because of decline in the amount of equity finance raised from capital markets and stress in the non-banking financial companies (NBFC) sector.

Sitharaman has pointed out that the monetary policy saw a U-turn over the last year. She also noted that the benchmark policy rate was first hiked by 50 basis points (bps) and later reduced by 75 bps due to weaker than anticipated inflation, growth slowdown and softer international monetary conditions. She noted that the eco-system for insolvency and bankruptcy is getting systematically built out. She added that it has already led to recovery and resolution of a significant amount of distressed assets as well as palpably improved business culture. However, she indicated that liquidity conditions have remained systematically tight since September 2018.

Talking on the performance of public sector banks (PSBs), the Minister said that the sector witnessed improvement during 2018-19 and the gross NPA ratio decreased from 11.5 percent to 10.1 percent between March 2018 and December 2018.

The CNX Nifty is currently trading at 11927.00, down by 19.75 points or 0.17% after trading in a range of 11880.85 and 11981.75. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 1.70%, Bharti Infratel up by 1.46%, Indiabulls Housing Finance up by 1.31%, Kotak Mahindra Bank up by 1.24% and Hindustan Unilever was up by 0.80%. On the flip side, Yes Bank down by 4.52%, ONGC down by 3.05%, Wipro down by 2.41%, TCS down by 2.38% and Vedanta was down by 2.28% were the top losers.

Asian markets were trading mixed; Nikkei 225 surged 43.93 points or 0.2% to 21,746.38, Taiwan Weighted strengthened 9.83 points or 0.09% to 10,785.73, Shanghai Composite gained 7.79 points or 0.26% to 3,013.04 and KOSPI was up by 1.86 points or 0.09% to 2,110.59.

On the flip side, Straits Times trembled 8.99 points or 0.27% to 3,363.26, Jakarta Composite lost 11.02 points or 0.17% to 6,364.95 and Hang Seng was down by 13.76 points or 0.05% to 28,782.01.