Benchmarks continue to trade in red in noon session

Indian equity benchmarks continued to trade in red in noon session as funds and retail investors engaged in reducing positions amid a weak trend in global markets.  Sentiments remained subdued with report that despite many efforts, India moved up only one position in the International Finance Corporation's (IFC) ease of doing business rankings. The Doing Business 2017 report showed that India was placed 130th among 190 countries that had been surveyed for the annual rankings, with Russia, Bhutan, South Africa, China, Nepal, Sri Lanka and Brazil ranking higher. Disappointing earnings by some heavyweights too dampened sentiments. Axis Bank's quarterly net profit plunged 83 percent in the September quarter, while IDBI Bank reported a 53 percent decline in quarterly net profit. However, investors got some confidence with the Economic Affairs Secretary Shaktikanta Das’s statement that the GDP growth will be around 8 percent this fiscal, while the agriculture sector is expected to grow over 4 percent. Market participants will be eyeing the quarterly results whereby in all a total of 83 companies would announce September quarter results scheduled for the day. The list includes many banks besides FMCG major ITC, two-wheeler maker Hero MotoCorp, Exide Industries and Dabur India. Meanwhile, shares of Power companies came under pressure after the report that Power sector growth during July-September quarter is expected to be muted mainly on account of poor demand from distribution companies (discoms).

On the global front, Asian markets were trading mostly in red on Wednesday following the weak cues from Wall Street and the fall in crude oil prices overnight. US stocks edged lower on Tuesday, as results and forecasts from companies in sectors, including housing and consumer products missed expectations.  Back home, stocks from Consumer Durables, Realty and Metal counters were supporting the markets, while those from Banking, FMCG and IT counters were adding to the underlying cautious undertone. In scrip specific development, Axis Bank has plunged after the bank reported a sharp 83% year on year drop in net profit to Rs 319 crore for the quarter ended September 30, 2016 due to higher provisioning of bad loans. On the other hand, PI Industries rallied after the company reported 77.98% rise in its net profit at Rs 101.38 crore for the quarter ended September 30, 2016 as compared to Rs 56.96 crore for the same quarter in the previous year.

The market breadth remained optimistic as there were 1311 shares on the gaining side against 1082 shares on the losing side, while 201 shares remained unchanged.

The BSE Sensex is currently trading at 27866.32, down by 225.10 points or 0.80% after trading in a range of 27840.34 and 28050.55. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.10%, while Small cap index was up by 0.39%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.86%, Realty up by 0.65%, Metal up by 0.40%, Auto up by 0.17% and Capital Goods up by 0.15%, while Bankex down by 1.34%, FMCG down by 0.89%, IT down by 0.48%, Oil & Gas down by 0.40% and Power down by 0.20% were the top losing indices on BSE.

The top gainers on the Sensex were Hero MotoCorp up by 2.68%, Bharti Airtel up by 2.64%, Bajaj Auto up by 1.43%, Maruti Suzuki up by 1.11% and Mahindra & Mahindra up by 1.05%. On the flip side, Axis Bank down by 7.95%, ICICI Bank down by 3.08%, Tata Motors down by 2.18%, ITC down by 1.74% and Adani Ports &Special down by 1.52% were the top losers.

Meanwhile, Economic Affairs Secretary Shaktikanta Das has raised his hopes that the Bankruptcy and Insolvency law is expected to become operational by the end of this year, leading to further ease of doing business. He said that the government has a definite roadmap to implement the Bankruptcy law and the Ministry of Corporate Affairs is working on it. The law ministry, the legislative department is also working on finalizing the regulation. Therefore they expect the entire bankruptcy and insolvency law to become operational by end of December.

The government has already set up Insolvency and Bankruptcy Board of India (IBBI) and floated draft norms to take views of the stakeholders. The views of stakeholders have been sought till October 31 on these draft norms. The board will have 10 members and apart from the chairman, currently there are four government-nominated members and the rest are expected to be appointed in coming months. The ministry had issued draft regulations pertaining to registration of insolvency professionals, agencies and model bye-laws. A working group of experts, set up by the ministry, has prepared these regulations.

The Economic Affairs Secretary said that their expectation is that the Bankruptcy Law together with the GST will really bring a lot of dynamism and efficiency to the Indian economy. He added that the GST will happen, Bankruptcy Law has happened and both these pieces of legislation together with amendments to the Arbitration Law, SARFESAI, DRT related laws and the Company Law, have the potential of creating a very vibrant and dynamic economy in India. As per the government notification, the Insolvency and Bankruptcy Code seeks to consolidate and amend laws relating to reorganization as well as insolvency resolution of corporate persons, partnership firms and individuals in a time-bound manner.

The CNX Nifty is currently trading at 8633.05, down by 58.25 points or 0.67% after trading in a range of 8617.90 and 8657.30. There were 19 stocks advancing against 32 stocks declining on the index.

The top gainers on Nifty were Idea Cellular up by 4.05%, Kotak Mahindra Bank up by 2.92%, Hero MotoCorp up by 2.64%, Bharti Airtel up by 2.41% and Bajaj Auto up by 1.29%. On the flip side, Axis Bank down by 8.10%, ICICI Bank down by 3.20%, Tata Motors - DVR down by 2.82%, Tata Motors down by 2.43% and Adani Ports &Special down by 1.69% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 0.78%, KOSPI Index declined 1.19%, Taiwan Weighted dipped 0.25%, Shanghai Composite shed 0.46%, Jakarta Composite slipped 0.11% and FTSE Bursa Malaysia KLCI was down by 0.19%. On the flip side, Nikkei 225 was up by 0.1%.