Benchmarks continue weak trade in late afternoon session

Indian equity markets extended their weakness to continue trading in red in the late afternoon session on account of selling in front line blue chip counters. Traders were seen piling position in Consumer Durables, Realty and Oil & Gas stocks while selling was witnessed in IT, FMCG and TECK sector stocks.  Telecom stocks gained some strength after the government stated that it will not take any coercive action against telecom service providers for call drops till 6 January. In the scrip specific development, Anil Ambani-controlled Reliance Communications (RCom) was trading in green after it entered into talks with Aircel to consider the potential combination of their Indian wireless business. Uttam Galva Steels was trading in green on reports that the company’s unit Uttam Galva Metallics has signed a memorandum of agreement (MOA) with Posco and South Korea. PVR was trading in green after a foreign brokerage firm maintained its buy call on the stock stating that it expects strong outlook to remain.

On the global front, the Asian markets were trading mostly in green while the European markets were trading on optimistic note. Back home, the NSE Nifty and BSE Sensex were trading below the psychological 7,850 and 25,700 levels respectively. The market breadth on BSE was positive in the ratio of 1462:1078 while 222 scrips remained unchanged.

The BSE Sensex is currently trading at 25664.02, down by 71.88 points or 0.28% after trading in a range of 25485.17 and 25787.21. There were 10 stocks advancing against 20 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.02%, while Small cap index up by 0.21%.

The gaining sectoral indices on the BSE were Consumer Durables up by 0.60%, Realty up by 0.42%, Oil & Gas up by 0.18%, Power up by 0.17% and Bankex up by 0.02%, while IT down by 0.92%, FMCG down by 0.70%, TECK down by 0.68%, Auto down by 0.38% and Metal down by 0.26% were the losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 1.16%, Bharti Airtel up by 1.14%, ICICI Bank up by 1.03%, Sun Pharma up by 0.95% and NTPC up by 0.70%.

On the flip side, Infosys down by 1.53%, Mahindra & Mahindra down by 1.34%, TCS down by 1.16%, ITC down by 1.11% and SBI down by 0.96% were the top losers.

Meanwhile, the government has introduced a Bill in the Lok Sabha to consolidate and amend all laws relating to insolvency resolution so as to tackle the issue of undue delays. The ‘Insolvency and Bankruptcy Code, 2015’ provides for resolution of insolvency in a speedier and time-bound manner and aims at promoting investments, freeing up banks’ resources for other productive uses, boosting credit markets and improving ease of doing business in India. The important thing of the Bill is that it has been introduced as a money Bill, which means Rajya Sabha cannot reject or amend it once it is passed by the Lower House.

The Bill proposes the setting up of an Insolvency and Bankruptcy Board of India to regulate insolvency regulate professionals, agencies and information utilities engaged in resolution of insolvencies of companies, partnership firms and individuals. It also proposes the setting up of a fund dubbed the ‘Insolvency and Bankruptcy Fund of India’. The Code seeks to provide for designating National Company Law Tribunal (NCLT) and Debt Recovery Tribunal (DRT) as the adjudicating authorities for corporate persons and firms and individuals, respectively, for resolution of insolvency, liquidation and bankruptcy.

As per the proposed legislation, the corporate insolvency would have to be resolved within a period 180 days, extendable by 90 days. It also provides for fast-track resolution of corporate insolvency within 90 days. The Code also seeks to balance the interest of all the stakeholders including alteration in the priority of payment of government dues.

Earlier Economic Affairs Secretary Shaktikanta Das has said that “Next to GST, bankruptcy legislation will be the biggest reform”. CII Director General, Chandrajit Banerjee too has said that the proposed Bill aims for a complete renovation of the current insolvency and bankruptcy system in India, which will help streamline the procedure of revival of companies facing financial distress.

The CNX Nifty is currently trading at 7811.60, down by 22.85 points or 0.29% after trading in a range of 7802.00 and 7846.30. There were 20 stocks advancing against 30 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 1.31%, Tata Power up by 1.15%, Axis Bank up by 1.12%, ICICI Bank up by 1.05% and Asian Paints up by 1.02%.

On the flip side, Infosys down by 1.62%, TCS down by 1.41%, ITC down by 1.33%, Mahindra & Mahindra down by 1.31% and Hindalco down by 0.92% were the top losers.

The Asian markets were trading mostly in green; Jakarta Composite increased 5.78 points or 0.13% to 4,496.46, Shanghai Composite increased 9.3 points or 0.26% to 3,651.77, FTSE Bursa Malaysia KLCI increased 9.61 points or 0.59% to 1,638.70, Taiwan Weighted increased 10.57 points or 0.13% to 8,292.74, KOSPI Index increased 11.37 points or 0.57% to 1,992.56 and Hang Seng increased 38.34 points or 0.18% to 21,830.02.

On the other hand, Nikkei 225 decreased 29.32 points or 0.16% to 18,886.70.

The European markets were trading in green; UK’s FTSE 100 increased 39.72 points or 0.66% to 6,074.56, France’s CAC increased 6.03 points or 0.13% to 4,571.20 and Germany’s DAX increased 59.2 points or 0.56% to 10,556.97.