Sensex Edges Lower On Weak Global Cues, Nifty Hovers Around 9,500

The Sensex and Nifty edged lower in morning deals today, tracking selling pressure in banking and real estate shares amid weak global cues. Asian shares slumped after Wall Street was knocked hard in the wake of a delay to a US healthcare reform vote, while the euro rallied after European Central Bank President Mario Draghi hinted that the ECB could trim its stimulus this year. MSCI’s broadest index of Asia-Pacific shares outside Japan was down 0.2 percent in early trading, while Japan’s Nikkei share average also slipped 0.2 percent.

Back home, selling pressure was visible across the board with banking, FMCG, real estate, infrastructure and energy indices falling between 0.4 and 1.4 per cent each.

Sensex Edges Lower On Weak Global Cues, Nifty Hovers Around 9,500

From the Nifty basket of shares, 27 were trading lower while 24 were among the gainers. Asian Paints was the top Nifty loser, down 1.66 per cent at Rs. 1,115. ACC, Zee Entertainment, Ambuja Cements, ITC, State Bank of India, Bank of Baroda, Reliance Industries and Hindustan Unilever were also among the laggards. On the other hand, BPCL, GAIL India, Tech Mahindra, Vedanta, Maruti Suzuki and Coal India were among the gainers.

The broader markets were also facing the heat of selling pressure as the BSE mid-cap index fell 0.37 per cent and the small-cap index declined 0.52 per cent.

The overall market breadth was neutral as 609 shares were advancing while 766 were declining on the BSE.

As of 9:29 am, the Sensex was down 6 points at 30,952 and Nifty was at 9,509, down 3 points.

Sensex Trades On Lacklustre Note, PSU Banks Under Pressure For Third Day

Sensex and Nifty were trading on a lacklustre note as selling pressure in heavyweights such as Reliance Industries, Infosys, TCS and ITC weighed on the benchmark indices. Meanwhile, PSU banking shares extended their selloff to a third day. Weak global cues also added to the negative sentiment.

Asian shares slumped on Wednesday after Wall Street was knocked hard in the wake of a delay to a U.S. healthcare reform vote, while the euro rallied after European Central Bank President Mario Draghi hinted that the ECB could trim its stimulus this year.

Back home, PSU banking, FMCG and energy shares were witnessing selling pressure while some amount buying was seen in metal, auto and realty shares.

Sensex Trades On Lacklustre Note, PSU Banks Under Pressure For Third Day

From the Nifty basket of shares, 34 were trading higher while 17 were among the losers. Asian Paints was the top Nifty loser, down 2 per cent at Rs. 1,110. Reliance Industries, State Bank of India, ITC, HDFC, Wipro, Bharti Airtel, Infosys, Larsen & toubro and TCS were also aong the losers.

On the other hand, Tech Mahindra, UltraTech Cement, Tata Steel, Vedanta, Maruti Suzuki, ICICI Bank and Yes Bank were among the gainers.

The broader markets recovered from morning lows and the BSE mid-cap and small-cap indices were trading 0.4 and 0.3 per cent higher.

The overall market breadth was marginally positive as 1,230 shares were trading higher while 1,014 were trading lower on the BSE.

As of 11:45 am, the Sensex was down 24 points at 30,934 and Nifty was unchanged at 9,510.

Sensex makes a shaky start as oil heads down

The Sensex took off on a bumpy note – in step with Asia — by stumbling 63 points on Wednesday as oil prices took a big beating on concerns of oversupply.

A low-lying rupee against the dollar proved to be a drag.

The 30-share barometer hit 31,234.98, lower by 62.55 points, or 0.19 %. Sectoral indices such as metal, IT, technology, oil and gas, consumer durables, auto and banking traded in the red.

The gauge had lost 14.04 points in the previous session.

On similar lines, the NSE Nifty declined by 26 points, or 0.28 %, to 9,627.50.

The benchmark Brent hit a fresh seven-month low of USD 45.85 a barrel — a level not seen since November 18 last year.

 

Investors started cutting down their bets amid continued capital outflows by foreign funds and a weak trend in Asian markets.

Mood took a hit following a weak trend in other Asian markets, tracking hefty losses on Wall Street yesterday as oil prices tanked.

Laggards were ONGC, Lupin, PowerGrid, Cipla, Tata Motors and HDFC Ltd, falling by up to 1.48 %.

Globally, Hong Kong’s Hang Seng was down 0.48 % while Japan’s Nikkei shed 0.23 % in early trade.

The Shanghai Composite index, however, was up 0.14 % after US—based index compiler MSCI agreed to include mainland—listed shares in its benchmark of emerging markets.

Meanwhile, the US Dow Jones Industrial Average ended 0.29 % lower yesterday.

 

Resolution process to increase capital requirement for banks: S.S. Mundra

Banks may require more capital for higher provisioning requirements to resolve stressed assets. However, it is not prudent to expect the Centre to bear the entire burden of capital infusion, says S.S.Mundra, deputy governor, Reserve Bank of India in an interview. Edited excerpts:

With the RBI asking banks to refer 12 large defaulters to the National Company Law Tribunal (NCLT), can we expect that the recognition of stressed assets is complete for now?

Recognition also involves diagnosis. So, in any meaningful resolution, there has to be recognition. Recognition started right from the asset quality review in late 2015. Also, it is not that resolution has started just now. Several initiatives were taken which are the building blocks of recognition, right from setting up a data repository, introducing the JLF [joint lenders forum] mechanism then giving various options like S4A, SDR, 5/25 — these were the building blocks for resolution. Now, all these have culminated into an ordinance. And [the] good part is ordinance is timed with the IBC [Insolvency and Bankruptcy Code]. Two years back there were so many resolution tools but there was no bankruptcy law in the country. Now that we have a bankruptcy law, it is time we [can] take the resolution process to a logical conclusion.

Of the top 500 cases taken up by the RBI’s Internal Advisory Committee, there are 488 cases that banks need to resolve in 6 months. Banks have sought relaxation in debt recast norms. Will the RBI look into it?

There is a whole wish list from the banking system. If you look at the wish list, some of them may be categorised as seeking the relaxations while some of them can be seen as modifications. My broad sense is that since the structure has been in the making for sometime, the room for such relaxation which only means buying more time, I don’t think this is a feasible idea. Yes, there may be merit for some modifications which are more tuned with reality and ground situation. The regulation side of RBI is looking into those issues.

Do you think 6 months is a reasonable time to resolve 488 accounts?

When you look at 488 as one bunch, it looks big. But if you go down in the 500 list of NPAs, and when you reach the 500th NPA, ticket size would be ₹150 or ₹170 crore — something which is not too big, which may be handled even from a zonal or regional office of a bank. For 488, when distributed across a number of banks where the lead bank would be different, so each bank is required to deal with some cases, it will not be too large.

RBI has said the 12 accounts which are being referred to NCLT constitute 25% of the system’s gross NPA. What is the proportion of NPAs in the 500 accounts?

Though I have not calculated the figure, it would a substantial proportion.

By solving the 500 accounts, a substantial amount of system NPAs — which is about ₹7 lakh crore — will be resolved. It is clear that once these 500 cases are taken care of, it takes care of a large percentage of stressed assets. Whatever is remaining, it is normal in the system at any given point of time.

Do you think the government should increase capital allocation in public sector banks?

This resolution framework, whichever way you look at it, it will entail capital. Once you complete the process, there will be provisioning requirement which may not come out of the current profitability of banks. So [at the] end of the day, it will all entail capital requirement. But to expect that the government will only be the provider of this capital is not a right way to think.

At the same time, all this capital will come without government support is also not the right thing to assume.

The key point is all the available options will be required to be explored. You can get some capital from the government, you can raise some capital from the market, you try to get out of the non-core investment, you also try to dispose of some non-core assets, etc. It will be a combination and each bank will have to work out its own strategy.

As on September 30, 2016, the gross NPA ratio of the system was 9.1% while the stressed asset ratio was 12.3%. What is the position as at March end?

If you look at March 31, the gross NPAs of the system was 9.51% or so, while for public sector banks it is 12.3%. Stressed asset for banking system will be 12% and for the public sector it will be 15% plus.

So, the March numbers have not gone up significantly as compared to the September numbers…

Yes, while there has been addition to NPA, but the pace of NPA growth has slowed down. So incremental NPA addition has come down in the last quarter as compared to the previous few quarters.

When do you see credit growth to come back?

Loan growth is larger issue. Saying that stressed asset is the only factor for slow credit growth is a simplistic assumption. Incremental lending will come from economic growth, it will come from fresh capacity creation, as we still have unutilized capacity. Once the demand picks up, first thing that will happen is the utilization of that capacity. That will entail credit demand. But that credit demand will be more in the nature of working capital. Resolution of NPA, growth picking up, investors confidence, all these are ingredients for credit growth.

Also, one important point is, if you see last few years, the incremental capacity creation was by a handful of groups. And majority of them are facing the asset quality issue. I don’t think they will be in a position any time soon to think about fresh investments. So new players have to come in.

Were there any deposit or lending restrictions of the five banks on which PCA have been imposed recently?

There is no blanket restriction either on lending or deposits. For example, what we suggest is that you need not offer very high rate for bulk deposits which will not be meaningful from the point of view of profitability. But those are broad guidelines and there is no blanket restrictions.

There are three banks which were under PCA for over 2 years now. However, the performance of these banks have not improved. What is the road map for these banks?

If you look at it closely, it is a mixed bag. One important thing which happened is that after putting them under PCA, the rate at which the deterioration was setting in is certainly checked. While there is no great sudden improvement, which is unrealistic to expect also, but the pace of deterioration has been arrested. Yes, there are certain parameters which needs improvement like GNPA which has accelerated. But they are not outlier in that. Their GNPA has deteriorated in the same fashion as was the world at large. But if you look at other parameters, like some of them have come to profit from loss, they have come to the positive RoA territory, some of them were able to improve their operating profit etc. It is always going to be a long haul.

RBI had asked some banks to increase provisioning in Q4. What was the reason?

When AQR happened, that clearly identified some accounts. Some accounts were given time till March 2017 to take care. In that process, if there are accounts which are still left which should have been provided for, those are kind of things which come out of the supervisory process. Banks should get a right message and streamline their processes to ensure that there is no need for such occurrence in future.

 

 

SEBI eases norms to buy stressed assets

Acquirers to be exempt from making open offers

As part of the larger attempts of the government to resolve the massive bad debt issue, the Securities and Exchange Board of India (SEBI) on Wednesday relaxed norms for investors acquiring assets in companies with stressed assets and facing bankruptcy proceedings.

The board of the capital markets regulator has decided to exempt the acquirers from making open offers after buying stakes from lenders while including checks such as a three-year lock-in for new investors and mandating that such relaxation would have to be approved by a special resolution.

This would come as a big relief to both lenders and acquirers concerned about a possible open offer since sizeable stakes could change hands.

“It has been represented to SEBI that where the lenders have acquired and propose to divest the same to a new investor, they are facing difficulties as the new investor would need to make a mandatory open offer which would reduce the funds available for investment in the company,” said a statement by the SEBI.

The regulator has decided to provide a similar exemption for acquisitions post the resolution plans approved by National Company Law Tribunal (NCLT) under the Insolvency and Bankruptcy Code 2016.

Stringent PN norms

SEBI has decided to levy a ‘Regulatory Fee’ of $1,000 on each subscriber of offshore derivative instrument (ODI), which will have to be collected by the registered foreign portfolio investor (FPI) that issues the ODIs.

The regulator had recently floated a consultation paper to further tighten the norms for issuance of ODIs. It has also decided to “prohibit ODIs from being issued against derivatives except on those that are used for hedging purposes.”

SEBI Chairman Ajay Tyagi, however, clarified that the regulator did not intend to ban PNs, but would want the instrument to be used only to “test the waters” and long-term investors should prefer the FPI route.

Meanwhile, the regulator would soon float a consultation paper on easing investment norms for FPIs by expanding the list of eligible jurisdictions for grant of FPI registration and simplification of broad-based requirements and ‘fit and proper’ criteria.

Forensic audit

The regulator is in the process of appointing a forensic auditor to look into the co-location matter of the National Stock Exchange (NSE), wherein it is alleged that certain brokers got preferential access to the exchange systems for trade execution.

The regulator is examining whether there was any connivance between NSE staffers and brokers. Interestingly, the regulatory move comes after NSE conducted its own forensic audit by Deloitte.

“Deloitte did not go in depth on the connivance issue. We are examining if unfair gains were made by brokers. It needs to be done comprehensively. We are personally engaging a forensic auditor and are in the process of appointing (the auditor),” said Mr. Tyagi.

Equity derivatives

The regulator will also float a consultation paper on the equity derivatives segment to get market feedback on product suitability and the kind of investors participating in the derivatives space.

Incidentally, the cash to derivatives ratio in the Indian market is among the highest globally and the regulator in the past had expressed its concerns especially with retail investors getting into the segment.

“It is a subject worth debating. Retail investors are not completely aware of the risks,” said Mr. Tyagi, who was appointed the SEBI Chairman in March 2017.

 

Sensex takes to caution, slips 68 points

Market struggled to capitalise on a higher opening on Friday as the Sensex dropped 68 points, with participants keen to scoop up profit amid mixed Asian leads.

Investors are trying to figure out how the Goods and Services Tax (GST) will pan out from July 1, its launch date.

Barring IT and technology that saw buying, selling picked up at other counters such as realty, auto, metal and oil and gas.

The Sensex opened higher, but traded at 31,222.33 at 1123 hours, down 68.41 points, or 0.22 per cent.

The NSE 50—share Nifty slumped 35.75 points, or 0.37 per cent, to 9,594.25 at 1123 hours.

 

Major losers were SBI 1.65 per cent, Tata Steel 1.63 per cent, Tata Motors 1.57 per cent and Adani Ports 1.34 per cent.

Asian markets were mixed, but remained on track for a weekly gain while crude oil prices started pulling away from this week’s 10—month lows.

The US stocks closed mostly lower yesterday as weak financials and consumer staple shares eclipsed a rally in healthcare and biotechnology sectors.

Meanwhile, foreign funds bought shares net Rs 192.68 crore yesterday, as per provisional figures.

 

Sensex Surges Over 200 Points To Record High, Nifty Near 9,700; Infosys Leads Gains

Indian shares extended gains in noon trade with the BSE Sensex rising nearly 240 point to a fresh all-time high of 31,522 and Nifty gaining nearly 60 points to 9,698. Gains in the market were led by banking and financial services and IT shares. Nifty Bank, NSE’s sub-index for banking shares nearly 0.8 per cent to a record high of 23,897.85 led by gains in Yes Bank, Axis Bank, HDFC Bank, PNB and SBI. Nifty IT, the IT sub-index of NSE rose as much as 0.82 per cent.
Sensex crossed the 31,500 mark for the first time on Thrusday (June 22).
Infosys was the top gainer in Nifty, up 2.5 per cent, followed by Yes Bank, Aurobindo Pharma, Sun Pharma and HDFC, which rose between 1.5-2.1 per cent.

As of 11:35 am, Sensex was up 233.54 points or 0.74 per cent at 31,517.18 and the NSE benchmark Nifty traded 61.70 points higher at 9,695.30.

 

GTPL Hathway IPO Subscribed 27% On Day 1

New Delhi: The initial public offering of GTPL Hathway, which offers cable TV and broadband services, was subscribed 27 per cent on the first day of bidding on Wednesday.

The IPO received bids for 54,71,312 shares against the total issue size of 2,02,15,966 shares, data available with the NSE showed.

The portion set aside for qualified institutional buyers (QIBs) was subscribed 69 per cent and retail investors 15 per cent.

GTPL Hathway IPO Subscribed 27% On Day 1

GTPL Hathway yesterday raised over Rs. 145 crore from anchor investors.

The initial share sale offer of GTPL Hathway, a part of Hathway Cable and Datacom, will close on June 23.

The company plans to garner up to Rs. 485 crore through the IPO, which comprises fresh issue of shares worth Rs. 240 crore and the remaining through OFS of up to 1.44 crore shares in the price band of Rs. 167-170 a share.

Proceeds from the IPO will be utilised towards repayment of loan and other general corporate purposes.

JM Financial Institutional Securities, BNP Paribas, Motilal Oswal Investment Advisors and Yes Securities are managing the issue.

The shares will be listed on BSE and NSE.

 

Sensex, Nifty Fall; ONGC Down Over 2%

Indian shares fell on Wednesday, tracking Asian peers, as investors waited for minutes of a policy meet by the central bank to gauge the direction of interest rates in the months ahead.

The minutes are likely to delve into details of interest rates, with a high likelihood that more members softened their inflation outlook, said DBS Group Research in a note.

The broader NSE Nifty was down 0.32 percent at 9,621.9 as of 12:10 pm, while the benchmark BSE Sensex was 0.20 percent lower at 31,234.70.

Sensex, Nifty Fall; ONGC Down Over 2%

“Markets are just consolidating after seeing a steep run-up, as every now and then markets have hit fresh highs,” said Saurabh Jain, assistant vice-president of research at SMC Global Securities.

Oil explorers fell after global oil prices hit seven-month lows, with Oil and Natural Gas Corp falling as much as 2.54 percent and Oil India down as much as 1.91 percent.

Airlines stocks however rose on expectations of lower jet fuel prices, with Spicejet Ltd and Jet Airways up about 2.5 percent, and InterGlobe Aviation, parent of IndiGo Air, climbing 1.6 percent.

Price of aviation fuel is the biggest cost factor for low-budget carriers.

Financial stocks also dragged the NSE index lower for the second straight session, with the Nifty Financial Services Index down as much as 0.5 percent.

Larsen & Toubro Ltd rose as much as 1.8 percent after the government’s Specified Undertaking of the Unit Trust of India (SUUTI) sold a 2.5 percent stake in the company for more than Rs. 4,000 crore.

Plummeting oil prices put Asian investors on edge, overshadowing a decision by U.S. index provider MSCI to add mainland Chinese stocks to its global emerging markets benchmark index.

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.8 percent.

 

Sensex Edges Lower On Weak global Cues, Nifty Below 9,650

Indian shares edged lower on Wednesday tracking weak global markets, which fell tracking overnight slump in crude oil prices. The Sensex fell over 50 points to 31,235, while the Nifty50 index shed nearly 25 point to 9,625. IT, banks, metal and energy shares were among the biggest losers today.

Among Nifty stocks, HCL Technologies was the top loser, down 1.61 per cent followed by Ambuja Cements, Vedanta, ONGC and Gail India, which fell between 1.1-1.6 per cent.

Meanwhile, L&T was the top gainer in Nifty, up 1.34 per cent. Hundustan Unilever, Asian Paints, Sun Pharma and Bank of Baroda were the other major gainers in the Nifty rising between 0.12-0.9 per cent.

As of 9:27 am, Sensex was down 47 points at 31,250.55 while Nifty traded 24.40 points or 0.25 per cent lower at 9,629.10.

Meanwhile, A renewed slump in oil prices to seven-month lows put Asian investors on edge on Wednesday, overshadowing a decision by U.S. index provider MSCI to add mainland Chinese stocks to one of its popular benchmarks.

Sensex Edges Lower On Weak global Cues, Nifty Below 9,650

MSCI’s broadest index of Asia-Pacific shares outside Japan slipped 0.7 percent, with Australia’s commodity-heavy market down 1.1 percent. Japan’s Nikkei eased 0.2 percent.

Oil had shed 2 percent on Tuesday as increased supply from several key producers overshadowed high compliance by OPEC and non-OPEC producers on a deal to cut global output.

Overnight, the Dow Jones index fell 61.85 points, or 0.29 percent, to 21,467.14, the S&P 500 lost 0.67 per cent and the Nasdaq Composite dropped 0.82 percent.