Local equities gain some more traction

Frontline equity indices added some more points and were trading higher with gains of over quarter a percent in late morning trade. Banking, FMCG and Basic Materials have elevated with gains on their respective front line stocks.  Sentiments turned largely positive after IT Minister Ravi Shankar Prasad exhorted Common Services Centres - the government’s rural outreach programme for delivery of digital services - to aim for transaction business worth Rs 3 lakh crore in the next five years. Sentiments were buoyed on commerce and industry minister Piyush Goyal’s statement that India’s foreign direct investment (FDI) norms in the multi-brand retail sector are a very well thought out policy which is unlikely to change any time soon. Traders took note of a private report that even as the trade deficit narrowed in the last month, the economy needs to be watchful going ahead. Currency movement, crude prices and trade wars are few of the factors that may impact India’s trade deficit in the coming months.  Market participants shrugged off Finance Ministry’s statement that tax officials detected Rs 37,946 crore worth of tax fraud in 2018-19 and Rs 6,520 crore in the April-June period of the current financial year after the GST implementation.

On the global front, Asian markets were trading in red; as fresh trade worries and uncertainty about the Federal Reserve's plans for cutting interest rates weighed trader’s sentiments. Back home, Chief Economic Advisor K V Subramanian stated that there is a need to tap foreign capital to accelerate growth from the current level of 7 per cent to 8 per cent. He added achieving $5-trillion economy by 2024-25 is possible although the goal is slightly stretched.

The BSE Sensex is currently trading at 39258.74, up by 127.70 points or 0.33% after trading in a range of 39081.14 and 39273.54. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.27%, while Small cap index was up by 0.31%.

The top gaining sectoral indices on the BSE were BANKEX up by 0.66%, Basic Materials up by 0.64%, FMCG up by 0.42%, Telecom up by 0.41% and TECK was up by 0.26%, while Utilities down by 0.32%, Oil & Gas down by 0.28%, Power down by 0.17%, Energy down by 0.15% and Consumer Durables was down by 0.11% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 2.10%, HCL Tech up by 1.83%, Tech Mahindra up by 1.58%, SBI up by 1.19% and Vedanta was up by 0.93%. On the flip side, ONGC down by 0.89%, Tata Motors down by 0.77%, Tata Motors - DVR down by 0.74%, Power Grid down by 0.74% and NTPC was down by 0.57% were the top losers.

Meanwhile, Finance Minister Nirmala Sitharaman has said that total non-performing assets (NPAs) of scheduled commercial banks (SCBs), after reaching a peak of Rs 10.36 lakh crore as on March 31, 2018, dropped by Rs 1.02 lakh crore to Rs 9.34 lakh crore in the fiscal ended March 2019 (FY19) as a result of steps taken by the government. She noted that the government has implemented a comprehensive 4R’s strategy, consisting of recognition of NPAs transparently, resolution and recovery of value from stressed assets, recapitalising of public sector banks (PSBs), and reforms in PSBs and the wider financial ecosystem for a responsible and clean system.

The minister also said that among others, change in credit culture with the Insolvency and Bankruptcy Code (IBC) fundamentally changing the creditor-borrower relationship, taking away control of defaulting companies, debarring wilful defaulters from taking part in resolution process as well as raising funds from markets are the steps that have been employed.

Sitharaman further highlighted that comprehensive measures have been taken to prevent frauds including directions to banks to examine all NPA accounts above Rs 50 crore from the angle of possible fraud, initiation of criminal proceedings, enactment of Fugitive Economic Offenders Act 2018, creation of Central Fraud Registry, empowering heads of Public Sector Banks to request for issue of Look Out Circular. She also stated that other steps under the banking reform process such as a board-approved loan policies in public sector banks, use of third party data sources for comprehensive due diligence across data sources have been put in place to check frauds.

The CNX Nifty is currently trading at 11694.20, up by 31.60 points or 0.27% after trading in a range of 11651.15 and 11703.80. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were UPL up by 2.53%, Kotak Mahindra Bank up by 2.13%, Zee Entertainment up by 2.01%, HCL Tech up by 1.90% and Tech Mahindra was up by 1.47%. On the flip side, GAIL India down by 1.12%, Tata Motors down by 1.00%, Coal India down by 0.99%, ONGC down by 0.82% and Maruti Suzuki was down by 0.73% were the top losers.

All Asian markets were trading in red; Hang Seng decreased 99.39 points or 0.35% to 28,520.23, Taiwan Weighted dropped 78.93 points or 0.73% to 10,807.12, Nikkei 225 slipped 66.54 points or 0.31% to 21,468.71, KOSPI fell 21.92 points or 1.05% to 2,069.95, Jakarta Composite lost 19.68 points or 0.31% to 6,382.20, Straits Times trembled 4.68 points or 0.14% to 3,355.35 and Shanghai Composite was down by 1.58 points or 0.05% to 2,936.04.