The Sensex and the Nifty on Friday snapped out of their 6-day-long losing streak, to offer some respite on the last day of the week. Sensex closed 51 points higher at 37,882.79 from its Thursday’s close of 37,830.98, while the broader Nifty settled 32.15 points higher at 11,284.30.

The gains could have been higher but for the IT companies. The Nifty IT index was the only sectoral index closing in the red. NIIT Technologies Limited, Tata Elxsi Limited and Tech Mahindra Limited contributed most to its fall.

“The investor sentiment dampened after disappointing quarterly corporate results, the IMF lowering India’s growth outlook, and no rollback of surcharge for foreign portfolio investments (FPIs) registered as trusts or association of persons (AoPs),” said Sanjeev Zarbade, VP PCG Research, Kotak Securities.

“The FPIs sold equities worth US$1.2 billion over the past five trading sessions while domestic institutional investors (DIIs) invested US$1.1 billion,” Zarbade added.

Vedanta was the top loser among the Nifty50 stocks. It closed 4.29 per cent lower ahead of its quarterly results.

Yes Bank on Friday advanced as much as 10.55 per cent on the BSE, before settling 9.64 per cent higher at Rs 96.10 apiece over reports of capital infusion by certain institutional investors. The country’s largest commercial vehicle (CV) maker Tata Motors’ shares closed nearly 2 per cent higher at Rs 147.20 apiece despite reporting double the losses in the June quarter than what it incurred in the same quarter last year.

However, it did succumb to heavy selling pressure on Thursday, ahead of its result announcement.

Country’s second-largest lender, the Punjab National Bank, on Friday reported a surprise profit of Rs 1,018.63 crore for the quarter ended June 30 on a big drop in provisioning for NPAs, thereby returning to black once again but with asset quality deteriorating.

The PSU lender had a loss of Rs 940 crore in the corresponding quarter last year. Shares of PNB were up at 3.18 per cent, to Rs 68.15 at the close, on the BSE.

In the last quarter of the fiscal ended March 2019, PNB had registered a net loss of Rs 4,749.64 crore.

The huge profit was possible as the lender was able to cut down on provisions and contingencies by 64.86 per cent on a yearly basis to Rs 2,023.31 crore over Rs 5,758.16 crore. The decline in provisions was 80 per cent sequentially.

“Provisions and contingencies stood at Rs 2,023.31 crore, down 64.8 per cent against 5,758.16 crore in the year-ago period. Sequentially, the numbers dropped 79.9 per cent. In the March quarter, the figures stood at Rs 10,071.1 1 crore,” MD and CEO Sunil Mehta said.

PNB generated fresh business of Rs 80,000 crore in Q1 FY20.

Mehta said its CASA (Curent Account Savings Account) was up by 27 bps y-o-y to 42.85 per cent in June 19 at Rs 2.78 lakh crore. Its retail credit growth was up 22 per cent to touch Rs 91,248 crore year-on-year. Housing loans grew to Rs 54,451 crore, a year-on-year growth of 29.64 per cent.

Mehta told IANS that the bank could hope to better its profits at the year end. Asked if that could be Rs 5,000 crore as one quarter has Rs 1,000 crore already, he said: “We would hope to get so.” He also said the bank board has approved raising Rs 5,000 crore which can be through rights issue or via QIPs. On the non-core asset sale of the PNB, he said there is no distress sale of any of these assets, be it the housing finance arm or insurance arm.

“Everything including funds raising from market depend on the market conditions. We have just taken board approvals.” Mehta also said that there is no internal discussion on merger or consolidation in the banking space, “but given the opportunity, the bank would certainly look at it”.

On the recent budget announcement of Rs 70,000 crore recap for PSBs, he said that the PNB has not sought any capital but it is the government’s prerogative. He also said that the bank would like to reduce the NPAs to 10-12 per cent by the fiscal-end.

The bank’s provision coverage ratio (PCR) stood at 74.63 per cent as of June 30. However, on the flip side its asset quality deteriorated with percentage of gross non-performing assets (NPA) rising to 16.49 per cent against 15.5 per cent on a quarterly basis. Net NPA too increased to 7.17 per cent from 6.56 per cent during the same period but on yearly basis, Gross NPA declined to 16.49 per cent in June quarter from 18.26 per cent a year ago and Net NPA fell to 7.17 per cent from 10.58 per cent in June 18. There was a whopping rise in domestic deposits to Rs 649,210 crore in June 19 from Rs 48,645 crore a year ago.

Net interest income (NII) declined 11.73 per cent on a yearly basis to Rs 4,141.36 crore as against Rs 4,691.86 crore in the same period last year. In terms of absolute figures, gross NPAs declined to Rs 77,267.29 crore from Rs 82,888.79 crore.

Indo-Asian News Service