Post Session: Quick Review

Indian markets suffered sharp setback on Thursday with major averages losing their crucial psychological levels, Nifty slipped even below the 8000 mark in a near three digit loss. The markets remained under pressure from the very beginning tailing the weakness in most of the Asian peers after Federal Reserve Chair Janet Yellen hinted a December interest rate hike in the United States. Traders continued treading cautiously throughout the day ahead of the outcome of Bihar assembly elections, the results of which will be out on Sunday. Though the actual movement can be seen on Monday, the exit poll results after the completion of the final phase of the elections today, were driving the momentum. If the outcome is in favour of the NDA, the market will be up 1-1.5 per cent, while it can correct at a similar magnitude if the results are against it.

The US markets made a modestly lower closing, setting stage for the Asian markets on Thursday, which ended on a mixed note and while some of the indices posted good gains others snapped a two-day rising streak after Federal Reserve Chair Janet Yellen signaled a possible interest rates increase next month. The European markets made modestly lower start ahead of the Bank of England announcement of its rate decision. Sentiments were also weighed down by a report showing German factory orders unexpectedly fell for a third month in September.

Back home, the selling intensified in the final hours, with broader markets along with bluechips suffering sharp cuts. Traders largely ignored Finance Minister Arun Jaitley’s statement that first tranche of corporate tax reduction will be made when the next Finance Bill comes. He also hinted at a possible consensus on land acquisition bill and said the government is making efforts in that direction so that it could be taken up in the upcoming Winter Session. Meanwhile, Prime Minister Narendra Modi on Thursday launched three schemes related to gold. The gold montetisation scheme, sovereign gold bonds and also launched first-ever national gold coin minted in India. Earlier, the Reserve Bank of India (RBI) had issued operational guidelines for Sovereign Gold Bonds, 2015-16 and said application forms from investors will be received at branches during normal banking hours from November 5 to 20. Regarding interest on application money, RBI said applicants will be paid interest at prevailing savings bank rate from the date of realisation of payment to the settlement date. Most of the jewellary stocks ended in red, PC Jeweller was down by 0.15%, Gitanjali Gems lost 2.45%, SRS lost 2.65% and Rajesh Exports was down by 1.79%. Some disappointing results too dampened the mood, Bata India reported a lower than expected 38.74 per cent rise in net profit at Rs 54.11 crore for the second quarter ended September 30. JK Lakshmi Cement reported a net loss of Rs 14.95 crore for the quarter ended September 30, 2015 as compared to net profit of Rs 30.61 crore for the same quarter in the previous year. Power stocks too ended lower despite the Finance Minister stating that the government in the next couple of days will announce a major policy for the stressed power sector, which has been reeling under high debt.

The BSE Sensex ended at 26251.32, down by 301.60 points or 1.14% after trading in a range of 26243.20 and 26557.80. There were just 6 stocks in green against 24 stocks in red on the index. (Provisional)

The broader indices too ended in red; the BSE Mid cap index was down by 1.57%, while Small cap index lost 1.67%. (Provisional)

All the sectoral indices ended in red on the BSE, the top losing sectoral indices were Realty down by 2.60%, TECK down by 1.61%, IT down by 1.45%, Bankex down by 1.42%, Power down by 1.22%. (Provisional)

The top gainers on the Sensex were Coal India up by 1.95%, NTPC up by 1.00%, Hero MotoCorp up by 0.90%, Maruti Suzuki up by 0.32% and ITC up by 0.13%. On the flip side, Sun Pharma Inds. down by 4.79%, Vedanta down by 4.71%, Tata Steel down by 4.26%, BHEL down by 3.56% and Bharti Airtel down by 3.28% were the top losers. (Provisional)

Meanwhile, a government-appointed Bankruptcy Law Reform Committee (BLRC), headed by T K Vishwnathan, former Law Secretary has presented the report to the finance ministry, suggesting a modern bankruptcy law to deal with insolvency cases within 180 days that may arise on account of business failures or economic downturns, with a view to promoting ease of doing business and spur economic activities. The draft bill has been put for public comment till 19 November.

The report said that the Bill seeks to improve the handling of conflicts between creditors and debtors, avoid destruction of value, distinguish malfeasance vis-a-vis business failure and clearly allocate losses in macroeconomic downturns and has prescribed 'a swift process and timeline of 180 days' for dealing with applications for insolvency resolution. The bankruptcy panel has suggested setting up of different insolvency adjudicating authority for different entities, which would have the jurisdiction to hear and dispose of cases by or against a debtor.

The draft Bill also proposes establishment of an insolvency regulator to exercise regulatory oversight over insolvency professionals, insolvency professional agencies and informational utilities. Other proposals of the government panel include application dealing with insolvency could be extended by 90 days on approval from adjudicating authority in exceptional cases. During this period, the management of the debtor would be in the hands of an 'interim resolution professional'. The National Company Law Tribunal (NCLT) should be the Adjudicating Authority with jurisdiction over companies, and limited liability entities, it added.

The Bill includes a transfer of proceedings, where pending cases before the Appellate Authority for Industrial and Financial Reconstruction (AAIFR) or the Board for Industrial and Financial Reconstruction (BIFR) under the Sick Industrial Companies Act (SICA), 1985, immediately before the commencement of this law would stand abated. Finance Minister Arun Jaitley, has said that he would try to introduce the bill on bankruptcy law in the forthcoming Winter Session of Parliament.

The CNX Nifty ended at 7947.95, down by 92.25 points or 1.15% after trading in a range of 7944.10 and 8031.20. There were 9 stocks on gainers side against 41 stocks on decliners’ side on the index. (Provisional)

The top gainers on Nifty were Coal India up by 1.62%, NTPC up by 0.63%, Hero MotoCorp up by 0.61%, Asian Paints up by 0.47% and BPCL up by 0.23%. On the flip side, Sun Pharma Inds. down by 4.79%, Vedanta down by 4.66%, Tata Steel down by 4.57%, BHEL down by 3.95% and Bharti Airtel down by 3.41% were the top losers. (Provisional)

European markets were showing a mixed trend, France’s CAC gained 21.15 points or 0.43% to 4,969.44, Germany’s DAX was up by 29.13 points or 0.27% to 10,874.37 and UK’s FTSE 100 was lower by 32.5 points or 0.51% to 6,380.38.