Benchmarks continue weak trade in early noon session

Indian equity benchmarks continued their weak trade in early noon session on account of weak global cues and selling witnessed in frontline blue chip stocks such as Tata Steel, Hindustan Unilever and Asian Paints. Investors’ sentiment remained subdued with CRISIL’s report that for states, balancing the fiscal math while continuing to spend on infrastructure capital expenditure (capex) will be challenging. Further, investors opted to remain on sidelines ahead of GDP data to be announced later in the day. On the sectoral front, Metal was the top losing index on BSE down by nearly 1.08% followed by Auto and Energy stocks down by over 0.70% each.  On stock specific, Shares of Rajesh Exports shined on securing another order worth Rs 863 crore of designer range of gold jewellery from Germany. 

On the global front, Asian markets were trading in mostly in red on account of concerns over delay in formation of a potential phase one trade deal between United States and China. Back home, the NSE Nifty and BSE Sensex were trading down their psychological 12,100 and 40,800 levels respectively. The market breadth on BSE was negative, out of 2,262 stocks traded, 1,017 stocks advanced, while 1,094 stocks declined on the BSE. 

The BSE Sensex is currently trading at 40797.14, down by 333.03 points or 0.81% after trading in a range of 40780.61 and 41143.22. There were 8 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.23%, while Small cap index was up by 0.49%.

The top gaining sectoral indices on the BSE were Telecom up by 2.74%, Power up by 1.23% and Utilities was up by 1.11%, while Metal down by 1.08%, Auto down by 0.81%, Energy down by 0.74%, FMCG down by 0.73% and Bankex was down by 0.73% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.38%, Bharti Airtel up by 1.19%, Yes Bank up by 1.00%, Tata Motors up by 0.76% and Tech Mahindra was up by 0.14%. On the flip side, Tata Steel down by 1.99%, Hindustan Unilever down by 1.81%, Asian Paints down by 1.63%, SBI down by 1.42% and Bajaj Auto was down by 1.41% were the top losers.

Meanwhile, in order to help the Non-Banking Financial Companies (NBFCs) and the real estate sector, the government is considering more relief measures for both stressed sectors. In the previous few months, the government has announced few measures to ease liquidity and the credit crunch in the economy. The government is weighing the option of unburdening some of the major NBFCs of stress assets through a dedicated scheme. A stressed asset fund may be created to buy out the stressed financial assets.

Further, the Reserve Bank of India (RBI) is likely to consider proposals from finance ministry and Prime Minister's Office to let the banks take the decisions of not classifying them as default or special mention accounts (SMA) and go for one time recast of selective real estate companies' loans. RBI, if allows banks to one-time rollover realty loans recast for temporarily removing the NPA or even SMA accounts tag, it will be done on a case to case basis for projects which are at an advanced stage but stalled due to funding because of repayment woes, projects with positive cash flows. It is not for the entire industry, but to sound projects which banks will decide on commercial judgement after being empowered by the RBI.

This would call for recast of real estate developers loans. One time recast would mean a one time rollover for real estate developers for loan repayments which will not classify their loans as SMA or NPA. And this will help them approach funding agencies or market without having any doubt on their profiles. This is being actively pursued as the industry has suggested it for as an option for meeting liquidity gap.

The CNX Nifty is currently trading at 12061.50, down by 89.65 points or 0.74% after trading in a range of 12055.45 and 12147.40. There were 13 stocks advancing against 37 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 8.46%, Adani Ports &Special up by 1.93%, NTPC up by 1.43%, Bharti Airtel up by 1.18% and Zee Entertainment was up by 1.11%. On the flip side, Hindalco down by 2.79%, Dr. Reddys Lab down by 2.07%, Tata Steel down by 2.00%, Hindustan Unilever down by 1.87% and Asian Paints was down by 1.71% were the top losers.

Asian markets were trading mostly in red; Nikkei 225 slipped 80.23 points or 0.34% to 23,328.91, KOSPI fell 27.25 points or 1.29% to 2,091.35, Shanghai Composite declined 27.33 points or 0.95% to 2,862.36, Taiwan Weighted dropped 127.51 points or 1.1% to 11,489.57, Straits Times trembled 13.77 points or 0.43% to 3,186.84 and Hang Seng was down by 540.56 points or 2.01% to 26,353.17. On the flip side, Jakarta Composite was up by 42.84 points or 0.72% to 5,995.90.