Markets continue lackluster trade in late afternoon session

Indian benchmark indices continued lackluster trade in late afternoon session on the back of selling in IT, TECK and auto counters. Traders shrugged off positive data on industrial output and retail inflation as well as robust earnings from TCS and Infosys. Sentiments remained subdued with the private report indicating that India’s GDP growth numbers are expected to see a decline of 2% in the third and fourth quarters of the current fiscal, as effective currency in circulation has contracted significantly. The report stated that the government’s decision to abolish old stock of high denomination currency (demonetisation) and issue new notes (remonetisation) could have a mixed impact on the macro economy over a year. Depreciation in Indian rupee against the dollar too weighed down sentiments. Investors also remained cautious ahead of WPI data to be released on January 16, 2017.

On the global front, European markets were trading in green as the dollar edged up and oil extended overnight gains on data showing record Chinese imports of oil in December. Asian markets were trading in red as disappointing Chinese trade data dented already bleak investor sentiment following U.S. President-elect’s Donald Trump’s news conference. Back home, in scrip specific development, TCS declined despite reporting 11% rise in Q3 consolidated net profit and Infosys was trading in red despite reporting 7% rise in Q3 consolidated net profit.

The BSE Sensex is currently trading at 27184.95, down by 62.21 points or 0.23% after trading in a range of 27143.07 and 27459.75. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.24%, while Small cap index was down by 0.07%.

The top gaining sectoral indices on the BSE were FMCG up by 0.62%, Bankex up by 0.19% and Oil & Gas up by 0.14%, while IT down by 1.98%, TECK down by 1.78%, Auto down by 0.95%, Power down by 0.66% and Metal down by 0.66% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 3.71%, GAIL India up by 2.26%, HDFC up by 1.81%, Sun Pharma up by 1.25% and ITC up by 1.04%. On the flip side, TCS down by 3.79%, Infosys down by 2.50%, NTPC down by 1.58%, Tata Motors down by 1.51% and Maruti Suzuki down by 1.47% were the top losers.

Meanwhile, describing the aim of new Bankruptcy and Insolvency Code, Insolvency and Bankruptcy Board of India (IBBI) said that the new code would not deal with corporate frauds and inter managerial disputes but will allow creditors and other stakeholders to go for a health check of the corporate at the first available opportunity. The code aims at time bound resolution for insolvency and exit as part of the ease of doing business.

Noting over the newly enacted code, IBBI chairman M S Sahoo has said that any creditor or even employee can trigger the process if debt repayment default is Rs 1 lakh or above. He added that the code will drive growth of debt market in India, which hardly exists in corporate and business financing. Though the country has a matured and bullish equity market, the debt market in India was yet to develop. The board was not concerned with default in bank credits or about the rising NPAs. It would mainly look into private creditors interest if their money got locked.

Sahoo also said that the board is also working on a framework for direct liquidation by passing insolvency resolution and the framework would be ready by February- March. But to begin the process on code a company has to address to the National Company Law Tribunal (NCLT), while for personal insolvency, a claimant will have to go to the Debt Recovery Tribunal (DRT). But the framework for personal insolvency was not yet ready and it would take some time before a party could move the DRT.

The CNX Nifty is currently trading at 8388.20, down by 19.00 points or 0.23% after trading in a range of 8373.65 and 8461.05. There were 18 stocks advancing against 33 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 3.86%, GAIL India up by 2.26%, Aurobindo Pharma up by 1.90%, HDFC up by 1.81% and Sun Pharma up by 1.32%. On the flip side, TCS down by 3.83%, Hindalco down by 2.54%, Infosys down by 2.42%, Idea Cellular down by 2.22% and Hero MotoCorp down by 1.62% were the top losers.

Asian markets were trading mostly in red; KOSPI Index decreased 10.35 points or 0.5% to 2,076.79, Shanghai Composite decreased 6.52 points or 0.21% to 3,112.76, FTSE Bursa Malaysia KLCI decreased 4.09 points or 0.24% to 1,673.67 and Jakarta Composite decreased 3.83 points or 0.07% to 5,288.92. On the flip side, Taiwan Weighted increased 16.82 points or 0.18% to 9,392.68, Hang Seng increased 108.36 points or 0.47% to 22,937.38 and Nikkei 225 increased 230.9 points or 1.23% to 18,996.37.

All European markets were trading in green; France’s CAC increased 23.63 points or 0.49% to 4,887.60, UK’s FTSE 100 increased 31.35 points or 0.43% to 7,323.72 and Germany’s DAX increased 51.09 points or 0.44% to 11,572.13.