Barometer gauges maintain gains in morning deals

Local equity benchmarks continued their trade in green in morning session on the back of buying in Bankex, Telecom and FMCG sectors. Buying in frontline stocks such as Yes Bank, HDFC Bank and Kotak Mahindra Bank were aiding sentiment, while selling in Mahindra & Mahindra, Sun Pharma and Tata Motors - DVR kept the gains in check. Sentiments got a boost with NITI Aayog vice chairman Rajiv Kumar’s statement that the government expects economy to grow by 6.5% in the current fiscal and that all efforts were focused on bringing India to a higher growth trajectory. Some comfort also came in with India Inc statement that the reduction in key lending rate by 25 basis points by the Reserve Bank of India (RBI) is likely to revive investment and encourage consumption, thereby kick-starting the sluggish economy.

On the global front, Asian markets were trading mostly in green as US unemployment rate dropped to the lowest in almost 50 years, easing concerns of a slowdown in the world's largest economy. Back on street, in scrip specific developments, shares of Zee Entertainment Enterprise slipped after the company announced that its promoter Essel Media Ventures have pledged 10.71 per cent equity with VTB capital. Besides, Godrej Consumer Products gained on recording volume growth in Q2FY20.

The BSE Sensex is currently trading at 37834.15, up by 160.84 points or 0.43% after trading in a range of 37534.54 and 37919.47. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.31%, while Small cap index was down by 0.13%.

The top gaining sectoral indices on the BSE were Bankex up by 1.11%, Telecom up by 0.72%, FMCG up by 0.48% and Consumer Durables was up by 0.37%, while Oil & Gas down by 1.10%, Healthcare down by 1.08%, PSU down by 0.98%, Auto down by 0.76% and Industrials was down by 0.67% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 3.80%, HDFC Bank up by 2.14%, Kotak Mahindra Bank up by 1.48%, ICICI Bank up by 1.26% and Bajaj Finance was up by 0.84%. On the flip side, Mahindra & Mahindra down by 1.76%, Sun Pharma down by 1.48%, Tata Motors - DVR down by 1.40%, Indusind Bank down by 1.40% and ONGC was down by 1.39% were the top losers.

Meanwhile, with an aim to improve credit availability in rural and semi-urban areas, the Reserve Bank of India (RBI) has raised the lending cap for microfinance institutions to Rs 1.25 lakh, against the earlier limit of Rs 1 lakh. The RBI has also been decided to increase the household income limit for borrowers of non-banking financial companies-micro finance institutions (NBFC-MFIs) from the current level of Rs 1 lakh for rural areas and Rs 1.60 lakh for urban/semi urban areas to Rs 1.25 lakh and Rs 2 lakh, respectively.

The RBI in its Statement on Developmental and Regulatory Policies said ‘taking into consideration the important role played by MFIs in delivering credit to those in the bottom of the economic pyramid and to enable them play their assigned role in a growing economy, it is proposed to revise these criteria.’ It added detailed guidelines would be issued soon. The income and loan limits to classify an exposure as an eligible asset were last revised in 2015.

Following the micro finance crisis in Andhra Pradesh in 2010, a sub-committee of the Central Board of the Reserve Bank, chaired by YH Malegam, was set up to study the issues in the sector. Based on the recommendations of the committee, it was decided to create a separate category of NBFC - non-banking financial company-microfinance institution (NBFC-MFI) - and a detailed regulatory framework for NBFC-MFIs was put in place in December 2011.

It further said that the RBI has been taking steps for popularising cross-border transactions in Indian rupee, especially in respect of external commercial borrowing (ECB), trade credit and exports and imports, thereby reducing the exchange risk for persons residing in India. Continuing these efforts, RBI said that it has been decided, in consultation with the government of India, to enhance the scope of non-interest bearing special non-resident rupee (SNRR) account by permitting persons residing outside India to open such accounts to facilitate rupee denominated ECB, trade credit and trade invoicing.

The CNX Nifty is currently trading at 11206.15, up by 31.40 points or 0.28% after trading in a range of 11117.85 and 11233.85. There were 21 stocks advancing against 28 stocks declining, while 1 stock remain unchanged on the index.

The top gainers on Nifty were Yes Bank up by 4.03%, Britannia Industries up by 3.79%, HDFC Bank up by 2.11%, Kotak Mahindra Bank up by 1.46% and ICICI Bank was up by 1.22%. On the flip side, Zee Entertainment down by 5.68%, BPCL down by 3.78%, Ultratech Cement down by 2.25%, Mahindra & Mahindra down by 1.99% and Grasim Industries was down by 1.97% were the top losers.

Asian markets were trading mostly in green; KOSPI rose 2.74 points or 0.14% to 2,023.43, Taiwan Weighted strengthened 38.89 points or 0.36% to 10,933.37, Straits Times was up by 20.30 points or 0.66% to 3,098.66. On the other hand, Nikkei 225 slipped 42.39 points or 0.2% to 21,367.81 and Jakarta Composite was down by 30.24 points or 0.5% to 6,031.01.