Markets trade flat in early deals after negative start

Indian equity benchmarks made slightly negative start on Thursday amid India-China border tensions and the weak global cues. Markets are trading flat in early deals. Most of the sector indices were trading in green, bucking the trend Bankex and Oil & Gas were in red territory. Traders were concerned with the spike in Covid-19 cases. India has added nearly 13,000 cases of coronavirus in 24 hours, taking its total to 367,264, while death toll stands at 12,262. However, downside remained capped with Federation of Indian Export Organisations (FIEO) President S K Saraf’s statement that the ongoing India-China border tensions may not have any immediate impact on the bilateral trade relations. Adding some optimism Prime Minister Narendra Modi told the Chief Ministers of 14 States and the Lieutenant-Governor of a Union Territory to think about Unlock 2, following the graded opening of economic activities under Unlock 1 since June 1.

On the global front, most of the Asian markets are in negative territory following the lackluster cues overnight from Wall Street and as the rising number of coronavirus cases in Beijing as well as several US states dampened hopes of a quick economic recovery.

Back home, on the sector front, telecom companies gained ahead of the next hearing on the AGR case which is scheduled for today while the market will be keenly watching the repayment timeline decision. In scrip specific developments, Pidilite Industries fell on reporting a 33.92% decline in its consolidated net profit to Rs 156.51 crore for the fourth quarter ended March 31, 2020 as compared to Rs 236.87 crore for the January-March period of 2018-19.

The BSE Sensex is currently trading at 33488.60, down by 19.32 points or 0.06% after trading in a range of 33371.52 and 33544.38. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.65%, while Small cap index was up by 0.99%.

The top gaining sectoral indices on the BSE were Power up by 0.86%, Realty up by 0.80%, Industrials up by 0.65%, Healthcare up by 0.43%, Basic Materials up by 0.40%, while Bankex down by 0.62% and Oil & Gas down by 0.16% were the only losing indices on BSE.

The top gainers on the Sensex were Infosys up by 1.01%, Tata Steel up by 0.79%, Power Grid up by 0.75%, Bajaj Finance up by 0.68% and ITC up by 0.63%. On the flip side, ONGC down by 2.20%, ICICI Bank down by 1.14%, NTPC down by 0.82%, HDFC Bank down by 0.60% and Kotak Mahindra Bank down by 0.60% were the top losers.

Meanwhile, rating agency Crisil in its latest report has stated that the liquidity cover for non-banking financial companies (NBFCs) has not been affected much in April and May, as they managed partial collections and on lack of fresh disbursements. However, the NBFC sector continues to find challenges in fundraising due to risk-averse sentiment from investors amid lockdown due to coronavirus pandemic.

The report further stated that despite cash outflow owing to debt repayments, a combination of partial collections, incremental funding, and negligible disbursements has supported the liquidity levels of NBFC. It noted that in its base-case scenario, where collections in the next few months will be similar to April May levels without any moratorium on liabilities, the proportion of NBFCs with liquidity cover of less than one time will be 8 percent during the three months through August.

According to the agency, in a stress case, where collections are nil and there is no moratorium on liabilities, the proportion of companies with low liquidity could go up to 25 per cent. It said in an alternative case, where NBFCs get benefit of moratorium on their bank loans but there being no collections, the proportion of NBFCs with low liquidity cover is likely to be reduced to 5 percent.

The CNX Nifty is currently trading at 9884.35, up by 3.20 points or 0.03% after trading in a range of 9845.05 and 9895.90. There were 28 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.58%, Bajaj Finserv up by 1.88%, UPL up by 1.66%, Vedanta up by 1.62% and Britannia Industries up by 1.45%. On the flip side, ONGC down by 2.20%, Adani Ports & SEZ down by 1.55%, ICICI Bank down by 1.04%, Kotak Mahindra Bank down by 0.79% and NTPC down by 0.71% were the top losers.

Asian markets are trading mostly in red; Nikkei 225 slipped 47.04 points or 0.21% to 22,408.72, Straits Times declined 3.36 points or 0.13% to 2,666.26, Hang Seng weakened 59.35 points or 0.24% to 24,422.06, Taiwan plunged fell 2.28 points or 0.02% to 11,532.31, KOSPI dropped 3.29 points or 0.15% to 2,137.76 and Jakarta Composite lost 4.90 points or 0.10% to 4,982.88, while Shanghai Composite was up by 1.01 points or 0.03% to 2,936.88.