Barometer gauges maintain gains in early noon session

Stock markets were trading in fine fettle in the early noon session due to buying in Healthcare, Capital Goods and Bankex sectors. Besides, Bharti Airtel, ICICI Bank and Larsen & Toubro contributed the most to Sensex's gains, while Indiabulls Housing and Bajaj Finserv contributed the most to Nifty’s gains. Traders got support with a report that Finance Minister Nirmala Sitharaman called for a significant reduction in the central bank's policy rates and said the government did not intend to review the budget proposal for overseas sovereign borrowings. The minister also said the increase in surcharge on foreign portfolio investments (FPI) was not intended to hurt investors. Investors also took encouragement with State Bank of India Ecowrap report stated that India has benefited from the trade war by exporting more items to US and China. It said the country’s exports to China post the trade war, have grown much faster than that to the US. However, gains were capped amid continued selling by FPIs.

On the global front, Asian markets were trading mostly in green on account of the anticipations for solid decisions from the resumption of US-China trade negotiations which is ought to be held this week. Back home, on the sectoral front, garment stocks were trading lower despite Crisil’s latest report stating that the Indian readymade garment (RMG) makers may witness revenue growth of 10% in this calendar year (CY2019). The growth will be mainly driven by healthy domestic demand and 10% growth in exports.

The BSE Sensex is currently trading at 37755.17, up by 68.80 points or 0.18% after trading in a range of 37690.43 and 37950.21. 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 0.49%, while Small cap index was down by 0.70%.

The top gaining sectoral indices on the BSE were Healthcare up by 0.59%, Capital Goods up by 0.43%, Bankex up by 0.30%, IT up by 0.29% and TECK was up by 0.21%, while Metal down by 1.18%, Auto down by 1.07%, Basic Materials down by 0.75%, Consumer Discretionary down by 0.60% and Realty was down by 0.57% were the losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.66%, ICICI Bank up by 1.58%, Larsen & Toubro up by 1.13%, Sun Pharma up by 0.66% and HDFC Bank was up by 0.61%. On the flip side, Vedanta down by 2.60%, Hero MotoCorp down by 2.47%, Yes Bank down by 2.16%, Bajaj Auto down by 1.31% and Tata Steel was down by 1.21% were the top losers.

Meanwhile, expressing caution over Indian baking sector, international rating agency Moody’s Investors Service in its latest report has said that even as more and more crippled banks come out of the dud asset tunnel, the heightening growth slowdown and the lingering crisis at non-banking lenders pose fresh challenges to their asset quality. Moody’s said its 12-18 month outlook on the banking system in India (Baa2 stable) is stable.

On the economic growth, the report said it expects growth to be ‘weaker’ in the next 12-18 months, without quantifying its growth expectation. It said the economic slowdown comes at a time when banks are recovering from legacy non-performing loans, which at the system level had crossed 12% in recent past and is trending under 10% now. While banks’ operating environment will stay stable, the slowdown poses challenges to their asset quality. It said growth moderation can lead to the creation of a fresh bad loan mess in the retail, and small and medium enterprise segments.

The agency said there will be a slowdown in fresh bad loans generation in the non-financial sector due to the recovery of the corporate sector and also recoveries from legacy problem loans. It also said capital infusions by the government will help public sector banks maintain their capital ratios at current levels and added that some private sector banks are in the process of raising new capital from the markets, as their asset growth outstrips internal capital generation.

The CNX Nifty is currently trading at 11191.70, up by 2.50 points or 0.02% after trading in a range of 11190.40 and 11267.45. There were 17 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Indiabulls Housing up by 2.11%, Bharti Airtel up by 1.73%, ICICI Bank up by 1.47%, Larsen & Toubro up by 0.98% and Bajaj Finserv was up by 0.69%. On the flip side, Bharti Infratel down by 3.96%, Hero MotoCorp down by 3.19%, Vedanta down by 2.70%, Yes Bank down by 2.37% and Grasim Industries was down by 2.04% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 62.24 points or 0.22% to 28,168.65, Nikkei 225 surged 67.61 points or 0.31% to 21,684.41, Straits Times advanced 3.59 points or 0.11% to 3,349.98, Jakarta Composite soared 43.09 points or 0.68% to 6,342.13, KOSPI rose 10.87 points or 0.54% to 2,040.35 and Shanghai Composite was up by 14.26 points or 0.48% to 2,955.27. On the flip side, Taiwan Weighted was down by 48.54 points or 0.45% to 10,837.19.