Weak trade continues on Dalal Street in early noon session

Weak trade continued on Dalal Street in early noon session, despite some positive signals from other Asian markets. Sentiments remain dampened with report that the country's services sector activity growth eased in August as new business inflows rose at a slower pace; following which job creation and output expansion moderated. The IHS Markit India Services Business Activity Index declined from 53.8 in July to 52.4 in August, pointing to a slower rate of increase in output. Broader indices continued to bleed in afternoon deals. On the global front, Asian markets were trading mostly in green; as US manufacturing and wrangling in Britain over the country's departure from the European Union. Back home, on the sectoral front, realty stocks remained in focus on report that the central government may soon come out with a slew of measures to boost the real estate sector in the country. This would be a part of series of steps taken since August 23 to give a boost to the economy facing slowdown.

The BSE Sensex is currently trading at 36456.60, down by 106.31 points or 0.29% after trading in a range of 36,409.54 and 36,636.67. There were 11 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index declined 0.76%, while Small cap index was down by 0.34%.

The top gaining sectoral indices on the BSE were Telecom up by 1.08%, Bankex up by 0.18%, Capital Goods up by 0.09%, TECK up by 0.04% and IT was up by 0.01%, while Auto down by 1.93%, Consumer Durables down by 1.79%, Healthcare down by 1.40%, Consumer Discretionary Goods & Services down by 1.29% and Energy was down by 0.94% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 1.81%, SBI up by 1.21%, HDFC Bank up by 0.64%, ITC up by 0.52% and Larsen & Toubro up by 0.43%. On the flip side, Sun Pharma down by 5.95%, Tata Motors down by 4.93%, Tata Motors - DVR down by 4.30%, Maruti Suzuki down by 3.45% and Indusind Bank down by 2.44% were the top losers.

Meanwhile, a  joint study carried out by industry body Associated Chambers of Commerce and Industry of India (ASSOCHAM) and rating agency Crisil has stated that Indian banks' gross non-performing assets (NPAs) may come down slightly to Rs 9.1 lakh crore by the end of current fiscal (March 31, 2020) as against Rs 9.4 lakh crore as on March 31, 2019. It also said that there is a significant potential opportunity for stressed-assets investors, given around Rs 9.4 lakh crore NPAs in the banking system as on March 31, 2019. Of this, it said the corporate segment, which has seen active interest from most investors, is estimated to account for 70 percent.

According to the report, large stressed borrowers have debt aggregating to Rs 5.4 lakh crore, which is a huge playing field in itself for investors. Of the total, National Company Law Tribunal (NCLT) list-1 and list-2 comprised around Rs 2.1 lakh crore and existing stock of NPAs comprised another Rs 2 lakh crore. It also noted that power, infrastructure and steel sectors together constitute about half of Rs 4.1 lakh crore worth stressed assets. It added that power sector accounts for the largest proportion, and resolution in this sector has not been significant.

The ASSOCHAM- Crisil study further stated that the revised stressed asset framework may benefit stressed power sector assets that were operational and on the verge of being referred to insolvency proceedings under Insolvency and Bankruptcy Code (IBC) (estimated at Rs 1 lakh crore as on March 31, 2019). It also said Reserve Bank of India’s (RBI) resolution framework on recognizing bad loans and the IBC have paved the way for attracting investors into the stressed-assets space and helped speed up resolution, ironing out issues regarding legal aspects and resolution timelines will be critical to boost investor confidence.

The CNX Nifty is currently trading at 10757.85, down by 40.05 points or 0.37% after trading in a range of 10746.35 and 10823.55. There were 15 stocks advancing against 35 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.83%, SBI up by 1.17%, Dr. Reddys up by 1.14%, Wipro up by 0.61% and HDFC Bank up by 0.54%. On the flip side, Sun Pharma down by 6.18%, Tata Motors down by 4.79%, Maruti Suzuki down by 3.60%, Zee Entertainment down by 2.84% and Titan Company down by 2.77% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 gained 27.04 points or 0.13% to 20,652.20, Straits Times strengthened 18.59 points or 0.60% to 3,109.22. Hang Seng gained 336.11 points or 1.32% to 25,863.96, Taiwan Weighted increased by 105.14 points or 1.00% to 10,663.35, Kospi advanced 7.08 points or 0.36% to 1,972.77 and Shanghai Composite soared 7.74 points or 0.26% to 2,937.89. On the flip side, Jakarta Composite was down by 17.06 points or 0.27% to 6,244.53.