Benchmarks continue to trade lower in morning deals

Indian equity benchmarks continued to trade lower in morning deals, dragged down by Realty, TECK and IT counters and a weak trend in the US equities. Traders remained cautious as the India Meteorological Department (IMD) said that a slight delay is expected in the onset of the southwest monsoon over Kerala and it is likely to arrive by June 4. Traders overlooked UN report stating that India’s economy is expected to grow by 6.7 per cent in the calendar year 2024, supported by resilient domestic demand. It also said inflation in India is expected to decelerate to 5.5 per cent in 2023 as global commodity prices moderate and slower currency depreciation reduces imported inflation. Meanwhile, Indian Banks' Association (IBA) chief executive Sunil Mehta has said that banks have requested the Reserve Bank of India (RBI) for one more year's time to implement the system of Expected Credit Loss (ECL) for provisioning of loans. At present, banks set aside money after an asset turns bad, and once the new system is put in place, it is widely expected to have an one-time impact on banks' profits. 

On the global front, Asian markets are trading mostly in green despite the broadly negative cues from global markets overnight, with traders hopeful a deal is reached on the U.S. debt ceiling as US President Joe Biden meets with top congressional leaders.

The BSE Sensex is currently trading at 61735.76, down by 196.71 points or 0.32% after trading in a range of 61733.10 and 61979.94. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index fell 0.14%, while Small cap index was up by 0.19%.

The top gaining sectoral indices on the BSE were Industrials up by 0.29%, Auto up by 0.28%, PSU up by 0.16%, Healthcare up by 0.11% and Capital Goods up by 0.10%, while Realty down by 1.29%, TECK down by 0.88%, IT down by 0.87%, Power down by 0.50% and Utilities down by 0.49% were the top losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 1.24%, Ultratech Cement up by 0.56%, Nestle up by 0.41%, Mahindra & Mahindra up by 0.36% and Sun Pharma up by 0.24%. On the flip side, HCL Technologies down by 1.94%, Infosys down by 1.08%, Tech Mahindra down by 1.07%, Asian Paints down by 1.07% and Kotak Mahindra Bank down by 1.06% were the top losers.

Meanwhile, Indian Banks' Association (IBA) chief executive Sunil Mehta has said that banks have requested the Reserve Bank of India (RBI) for one more year's time to implement the system of Expected Credit Loss (ECL) for provisioning of loans. At present, banks set aside money after an asset turns bad, and once the new system is put in place, it is widely expected to have an one-time impact on banks' profits. 

Mehta stated that in the ‘worst case scenario’, the banking system is gearing up for the switch to the new system. He also said the banking sector is already geared up, few of the banks have already developed their systems (and) have got their data in place on which they can design their ECL-based risk models. He noted that the RBI has already come up with its proposed guidelines on the switch to ECL but a definite timeline is yet to be decided.

Meanwhile, IBA chief executive said that Russian investors have started investing in Indian government securities after getting a nod from the RBI for the same. He said the investment activity has come about because of the excess rupee liquidity which the Russians are saddled with due to the trade deficit with India, which is among the few countries buying oil from Russia.

The CNX Nifty is currently trading at 18235.25, down by 51.25 points or 0.28% after trading in a range of 18234.65 and 18309.00. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Hero MotoCorp up by 1.68%, Indusind Bank up by 1.25%, UPL up by 1.17%, BPCL up by 1.10% and Cipla up by 0.91%. On the flip side, HCL Technologies down by 1.92%, Kotak Mahindra Bank down by 1.23%, Infosys down by 1.12%, Tata Consumer Product down by 1.09% and Wipro down by 1.05% were the top losers.

Asian markets are trading mostly in green; KOSPI increased 15.63 points or 0.63% to 2,495.87, Jakarta Composite gained 0.58 points or 0.01% to 6,677.14, Nikkei 225 surged 259.86 points or 0.86% to 30,102.85 and Taiwan Weighted added 269.68 points or 1.69% to 15,943.58.

On the flip side, Hang Seng declined 110.38 points or 0.56% to 19,867.87, Shanghai Composite weakened 7.71 points or 0.23% to 3,283.28 and Straits Times fell 26.8 points or 0.84% to 3,187.24.