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Geo-political tensions subdue Indian equities

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Mumbai, April 7

Global geo-political tensions, outflow of foreign funds and heavy selling pressure in banking, healthcare and metal stocks pulled the Indian equity markets lower on Friday.

The wider 51-scrip Nifty of the National Stock Exchange (NSE) closed well below its important resistance mark of 9,200 points. It fell by 63.65 points or 0.69 per cent to 9,198.30 points.

The barometer 30-scrip sensitive index (Sensex) of the BSE, which opened at 29,850.71 points, closed at 29,706.61 points — down 220.73 points or 0.74 per cent from the previous close at 29,927.34 points.

The Sensex touched a high of 29,886.12 points and a low of 29,668.45 points during the intra-day trade.

The BSE market breadth was bearish — with 1,640 declines and 1,277 advances.

In terms of the broader markets, the S&P BSE mid-cap index fell by 0.30 per cent, while the small-cap index slipped by 0.47 per cent.

Anand James, Chief Market Strategist, Geojit Financial Services, said: “Risk-appetite took a hit after geo-political tensions pulled global equities down. Soaring oil prices and continuing strength in rupee also distorted the usual sectoral diversification themes.”

“But investors will have lot to look forward to as Q4 results start trickling in soon, and as NPA (non-performing assets) resolution measures are also expected shortly.”

On the currency front, the Indian rupee strengthened by 23 paise to 64.29 against a US dollar from its previous close of 64.52 to a greenback.

In terms of investments, provisional data with the exchanges showed that the foreign institutional investors (FIIs) sold scrip worth Rs 262.37 crore, while the domestic institutional investors (DIIs) purchased scrip worth Rs 414.94 crore.

According to Dhruv Desai, Director and Chief Operating Officer of Tradebulls, profit booking in index heavyweights such as Reliance Industries and Infosys pressurised the benchmark indices at higher levels.

“Among the sectors, oil-gas sector stocks outperformed bearishness in the market while almost all sector stocks witnessed selling pressure from higher levels in the second half of the session,” Desai told IANS.

Sector-wise, the S&P BSE banking index plunged by 236.57 points, followed by the healthcare index, which dipped by 220.07 points, and the metal index, which fell by 149.19 points.

On the other hand, the oil and gas index rose by 67.04 points, and the capital goods index inched up by 16.76 points.

Major Sensex gainers on Friday were: Tata Consultancy Services (TCS), up 1.14 per cent at Rs 2,427.10; Bajaj Auto, up 1.01 per cent at Rs 2,829.40; Bharti Airtel, up 0.83 per cent at Rs 344.50; Hero MotoCorp, up 0.58 per cent at Rs 3,224; and NTPC, up 0.27 per cent at Rs 167.70.

Major Sensex losers were: Sun Pharma, down 3.04 per cent at Rs 665.65; Lupin, down 2.61 per cent at Rs 1,410.35; Adani Ports, down 2.37 per cent at Rs 347.55; Reliance Industries, down 2.28 per cent at Rs 1,405.55; and Dr. Reddy’s Lab, down 1.97 per cent at Rs 2,657.70.

(IANS)

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Jio to invest Rs 10,000 crore in 3 years in UP: Mukesh Ambani

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mukesh-ambani

Lucknow, Feb 21: Reliance Jio will invest another Rs 10,000 crore in Uttar Pradesh over the next three years, Reliance Industries Limited Chairman Mukesh Ambani said here on Wednesday.

“Today I am happy to inform this audience that Jio is one of the largest investors in Uttar Pradesh with investments of over Rs 20,000 crore. Jio is providing the highest quality data at the lowest price in the world to over 2 crore citizens of Uttar Pradesh,” Ambani said while addressing the Uc.

“I have come to Lucknow to assure the Prime Minister and the Chief Minister that Jio’s Digital Revolution is here to make the maximum contribution to UP’s development revolution,” he added.

While talking about affordable handsets, JioPhone, Ambani said: “Jio will make available over two crore JioPhones in UP within the next two months on a priority basis.”

He mentioned that Jio has already created over 40,000 direct and indirect jobs in the state.

“Jio will establish a Centre for the Fourth Industrial Revolution within the campus of a reputed university in Uttar Pradesh,” Ambani added.

IANS

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Moody’s places PNB’s ratings under review for downgrade

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New Delhi, Feb 20: Moody’s Investors Service on Tuesday placed under review for downgrade Punjab National Bank’s (PNB) local and foreign currency deposit rating of Baa3/P-3 and foreign currency issuer rating Baa3, an official statement said here.

It said “likely financial impact of the fraudulent transactions is the key driver for the review for downgrade.”

At the same time, Moody’s has placed the bank’s Baseline Credit Assessment (BCA) and adjusted BCA of ba3 and the Counterparty Risk Assessment (CRA) of Baa3(cr)/P-3(cr) under review for downgrade.

PNB, the second largest public sector bank in India, has detected a $1.8 billion fraud in one of its branches in Mumbai, which is being investigated by the Central Bureau of Investigation and the Enforcement Directorate. The amount of fraudulent transactions is equivalent to eight times the bank’s net income of about Rs 1,320 crore ($206 million).

“The primary driver for today’s rating action is the risk of weakening of the bank’s standalone credit profile, as a result of the discovery of a number of fraudulent transactions. On February 14, 2018, PNB announced to the Indian stock exchanges that the bank had discovered some fraudulent and unauthorized transactions amounting to Rs 113.9 billion ($1.8 billion),” Moody’s said.

The credit rating agency said the fraudulent transactions represent a contingent liability and the financial impact would be determined by the relevant law in India.

“Nevertheless, Moody’s expects that PNB will need to provide for at least a substantial portion of the exposure. As a result, the bank’s profitability will likely come under pressure, although the actual impact will depend on the timing and quantum of provisions that need to be made, as well as any prospects for recovery,” the statement said.

“The fraudulent transactions represent about 230 basis points of the bank’s risk-weighted assets as of 31 December 2017. As such, PNB’s capital position would deteriorate markedly, and fall below minimum regulatory requirements, if the bank is required to provide for the entire exposure. Consequently, PNB may need to raise capital externally – mainly from the government – to comply with the minimum Basel III capital requirement of an 8 per cent common equity tier 1 (CET1) ratio by March 31, 2019,” Moody’s said.

Moody’s said the review for downgrade will focus on: the timing and quantum of the financial impact of the fraudulent transactions; any management actions taken to improve the capitalisation profile of the bank, and any punitive actions taken by the regulator on the bank.

“Moody’s assumes a very high probability of government support for PNB in times of need, resulting in a three-notch uplift to its deposit and issuer ratings from its BCA. In the review for downgrade, Moody’s will also assess government support for the bank’s deposits and senior unsecured debt.”

Given the review for downgrade, Moody’s said it is unlikely to upgrade PNB’s ratings over the next 12-18 months.

“Nevertheless, Moody’s could affirm the ratings, if the financial impact of the fraudulent transactions is much smaller than what Moody’s anticipates in this rating action, and/or if the bank manages to strengthen its capital position to a level above the minimum regulatory requirements — including the capital conservation buffer — under Basel III standards, and/or the bank returns to profitability on a sustainable basis,” the statement added.

IANS

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Key Indian equity indices open flat

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 33,913.94 points, traded at 33,843.41 points (9.25 a.m.) — up 68.75 points or 0.20 per cent — from its previous session’s close.

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Mumbai, Feb 20: Key Indian equity indices traded on a flat note on Tuesday with marginal upward movement in both the indices.

The wider Nifty50 of the National Stock Exchange (NSE) traded at 10,392.90 points, up 14.50 points or 0.14 per cent from the previous close.

The barometer 30-scrip Sensitive Index (Sensex) of the BSE, which opened at 33,913.94 points, traded at 33,843.41 points (9.25 a.m.) — up 68.75 points or 0.20 per cent — from its previous session’s close.

The Sensex has so far touched a high of 33,931.90 points and a low of 33,753.50 points during the intra-day trade.

The BSE market breadth was bearish with 603 declines and 466 advances.

IANS

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