Markets trade higher in early deals; Banks lead

Making a positive start, Indian equity markets have recovered all their previous session losses and are now trading in fine fettle, on account of sustained buying by funds and retail investors, in early deals. The sentiment got a boost with Finance Ministry’s statement that India will continue to attract investments because of the inherent strength and the return it offers to investors.  Besides, buying in banking stock too supported the sentiment. ICICI Bank, SBI and Axis Bank were trading higher after the Rajya Sabha on Wednesday passed the Insolvency and Bankruptcy Code Bill. However, gains remained capped on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 362.19 crore yesterday as per provisional data released by the stock exchanges. Further, caution likely to prevail in the markets ahead of the key macro data- March IIP and April CPI numbers due to be unveiled today.    

On the global front, US markets ended lower on Wednesday as feeble quarterly reports from Walt Disney, Macy's and Fossil undermined confidence across the consumer sector. Asian markets were trading mostly in red after US stocks closed lower overnight. Meanwhile, crude oil prices slipped in Asian trades after hitting a new 2016 high overnight.

Back home, in the scrip specific development, Tyche Industries was locked in upper circuit of 20 per cent on the BSE after the small-sized pharmaceuticals company received the US Food and Drug Administration’s (FDA’s) approval for a plant in Andhra Pradesh.

All the sectoral indices on the BSE were trading in green led by Bankex, Realty, IT, Power and Capital Goods. The market breadth on BSE was positive in the ratio of 1201:316, while 58 scrips remained unchanged.

The BSE Sensex is currently trading at 25799.12, up by 202.10 points or 0.79% after trading in a range of 25676.32 and 25813.44. There were 28 stocks advancing against 2 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.67%, while Small cap index gained 0.76%.

The top gaining sectoral indices on the BSE were Bankex up by 1.15%, Realty up by 0.95%, IT up by 0.88%, Power up by 0.83% and Capital Goods up by 0.82%.

The top gainers on the Sensex were ICICI Bank up by 2.63%, Asian Paints up by 2.10%, Adani Ports &Special up by 1.55%, Axis Bank up by 1.52% and TCS up by 1.46%. On the flip side, Hindustan Unilever down by 0.65% and HDFC Bank down by 0.00% were the top losers.

Meanwhile, for the first time in the country, ensuring a time-bound process of winding-up a company or limited liability entity, a fresh start for debt-laden individuals under a certain threshold and temporary transfer of management of the troubled entity into the hands of resolution professionals, the Rajya Sabha passed the Insolvency and Bankruptcy Code Bill, enabling a single law to deal with distressed companies, their promoters, creditors, employees and other stakeholders. The bill has already been cleared by the Lok Sabha, lower house of the Parliament and will come into force when it receives president's assent.

The bill seeks to bring a host of regulatory changes to build a robust and faster insolvency resolution mechanism besides setting up of an Insolvency and Bankruptcy Board of India. The new law will provide an overarching framework for dealing with bankruptcies, replacing multiple laws dealing with the issue, including the Companies Act. It will cover individuals, companies, limited liability partnerships and partnership firms.

The bill proposes the creation of a new class of insolvency professionals that will specialize in helping sick companies. It also provides for creation of information utilities that will collate all information about debtors to prevent serial defaulters from misusing the system. The bill also proposes to set up the Insolvency and Bankruptcy Board of India to act as a regulator of these utilities and professionals.

Minister of state for finance Jayant Sinha said that this bill will help creditors lend at lower rates due to protection and will create a robust safety net for workers. It will also enable workmen to initiate the insolvency process and strengthen rights of creditors. He further added that the law will also impact cases which have been going on before this pre-Bankruptcy code and the company revival process can kick off before it goes into bankruptcy. Public sector undertakings (PSUs) will be subject to the same laws like other companies under the Bankruptcy law.

The CNX Nifty is currently trading at 7906.10, up by 57.25 points or 0.73% after trading in a range of 7871.45 and 7912.00. There were 46 stocks advancing against 5 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 2.63%, Asian Paints up by 2.08%, Adani Ports &Special up by 1.61%, Axis Bank up by 1.54% and Tech Mahindra up by 1.52%. On the flip side, Zee Entertainment down by 0.81%, Hindustan Unilever down by 0.61%, Aurobindo Pharma down by 0.40%, HDFC Bank down by 0.08% and Coal India down by 0.02% were the top losers.

Asian markets were trading mostly in red, Hang Seng decreased 90.16 points or 0.45% to 19,965.13, Nikkei 225 decreased 33.01 points or 0.2% to 16,546.00, Shanghai Composite decreased 8.12 points or 0.29% to 2,828.92, Taiwan Weighted decreased 7.07 points or 0.09% to 8,128.49, FTSE Bursa Malaysia KLCI decreased 1.19 points or 0.07% to 1,643.39 and KOSPI Index decreased 0.04 points or 0% to 1,980.06.

On the flip side, Jakarta Composite increased 14.2 points or 0.3% to 4,814.16.