The market further pared gains in mid-morning trade. At 11:23 IST, the barometer index, the S&P BSE Sensex, was up 166.21 points or 0.42% at 39,782.11. The Nifty 50 index was up 49.10 points or 0.41% at 11,919.75.
Indices opened higher and hit fresh intraday high in early trade. Benchmarks trimmed gains in morning trade as profit booking emerged at higher level.
The market breadth, indicating the overall health of the market, turned negative from positive. On BSE, 969 shares rose and 1200 shares fell. A total of 136 shares were unchanged.
Broader market reversed early gains. Among secondary barometers, the BSE Mid-Cap index was up 0.1%. The BSE Small-Cap index was down 0.22%. Both these indices underperformed the Sensex.
Most metals shares were trading higher. Tata Steel (up 2.07%), Hindustan Zinc (up 1.32%), Vedanta (up 1.13%), Jindal Stainless (up 1.08%), Welspun Corp (up 0.78%), Hindalco (up 0.44%), Moil (up 0.07%), Jindal Steel (up 0.03%), increased. While, Sail (down 0.62%), Coal India (down 0.85%) and Hindustan Copper (down 1.52%), decreased.
Jammu & Kashmir Bank plummeted 14.39%. The bank announced that its board has appointed R. K. Chhibber as the interim chairman cum managing director for a period of three months with effect from 10 June 2019. The bank has received an approval from the Reserve Bank of India in this regard.
Reliance Power was down 10.86% after the company reported a consolidated net loss of Rs 3558.51 crore in Q4 March 2019 over a net profit of 189.21 crore in Q4 March 2018. Consolidated total income fell by 27.30% to Rs 1687.86 crore during the period under review.
Meanwhile, the Reserve Bank of India on 7 June 2019 announced introduction of prudential framework for resolution of stressed assets with immediate effect. The regulator made these provisions applicable to non-banks and small finance banks.
The early stress recognition guidelines specify that borrowers must be categorized into special mention accounts based on their delay in repayment. These categories are special mention account-0 (SMA-0) loans, where the repayment overdue is between 1-30 days, SMA-1 (31-60 days) and SMA-2 (61-90 days).
All lenders must put in place board-approved policies for resolution of stressed assets, including the timelines for resolution. Since default with any lender is a lagging indicator of financial stress faced by the borrower, it is expected that the lenders initiate the process of implementing a resolution plan (RP) even before a default.
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