Markets trade tad lower in late morning deals

Indian equity markets were trading tad lower in late morning deals as a slide in high-weightage IT stocks offset optimism owing to improved sentiment from the increased probability of a rate pause from the U.S. Federal Reserve. Meanwhile, traders remained on sidelines ahead of macro-economic data -- industrial production and retail inflation -- to be release on June 12.  Investors were also awaiting key rate decisions from the European Central Bank and Bank of Japan next week. However, broader indices on the BSE were trading in green with gains of 0.25% each. Traders were getting some encouragement as Associated Chambers of Commerce and Industry of India (ASSOCHAM) stated that the Reserve Bank of India's decision to keep the benchmark interest rates unchanged is on the expected lines, and added that the focus of the monetary policy is clearly on further taming inflation for a stable growth

On the global front, Asian markets were trading mostly in green as investors digested China’s consumer price index, which saw a 0.2% rise in May. Back home, traders were seen pilling up position in Telecom, Capital Goods, Realty, Industrials and Healthcare, while selling was witnessed in TECK, IT, Metal, PSU and FMCG.  

The BSE Sensex is currently trading at 62827.17, down by 21.47 points or 0.03% after trading in a range of 62720.89 and 62992.16. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.25%, while Small cap index up by 0.25%.

The top gaining sectoral indices on the BSE were Telecom up by 0.79%, Capital Goods up by 0.66%, Realty up by 0.61%, Industrials up by 0.55% and Healthcare up by 0.33%, while TECK down by 0.63%, IT down by 0.53%, Metal down by 0.44%, PSU down by 0.37% and FMCG down by 0.35% were the losing indices on BSE.

The top gainers on the Sensex were Indusind Bank up by 2.36%, Axis Bank up by 1.59%, Ultratech Cement up by 1.14%, Larsen & Toubro up by 0.98% and Tata Motors up by 0.80%. On the flip side, Hindustan Unilever down by 1.45%, Tata Steel down by 1.44%, SBI down by 1.36%, Infosys down by 1.25% and Mahindra & Mahindra down by 0.91% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said the RBI has decided to widen the scope of the framework for resolution of stressed assets, under which all the regulated entities including cooperative lenders will now be able to execute ‘compromise settlements and technical write-offs’ to resolve non-performing assets (NPAs).

Das stated that till now, this avenue for dud asset resolutions was available only with scheduled commercial banks and select non-bank finance companies. He added that comprehensive guidelines on the same will be released soon. It can be noted that the cooperative lending sector frequently makes headlines for lack of governance practices and conflicts of interest. He also said that it is proposed to rationalise the extant prudential norms on restructuring of borrower accounts affected by natural calamities.

The Governor also acknowledged that a need has arisen to ease the implementation challenges faced by other UCB (urban cooperative banks) on the priority sector lending targets, and announced to extend the timelines for achieving the targets by two more years up to March 2026. He said lenders which have met the targets as on March 31, 2023 shall be suitably incentivized.

The CNX Nifty is currently trading at 18627.70, down by 6.85 points or 0.04% after trading in a range of 18600.00 and 18676.65. There were 25 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were Indusind Bank up by 2.32%, Axis Bank up by 1.60%, Grasim Industries up by 1.23%, Ultratech Cement up by 1.05% and Larsen & Toubro up by 0.87%. On the flip side, SBI down by 1.51%, Hindustan Unilever down by 1.44%, Tata Steel down by 1.44%, ONGC down by 1.35% and Infosys down by 1.31% were the top losers.

Asian markets were trading mostly in green; Taiwan Weighted added 154.7 points or 0.92% to 16,888.39, Hang Seng advanced 71.55 points or 0.37% to 19,370.73, Shanghai Composite strengthened 3.57 points or 0.11% to 3,217.16, KOSPI increased 30.9 points or 1.17% to 2,641.75 and Nikkei 225 surged 643.77 points or 1.99% to 32,285.04. However, Jakarta Composite plunged 0.41 points or 0.01% to 6,665.92 and Straits Times fell 5.45 points or 0.17% to 3,181.16.