The local equity benchmarks continued their trade in green in late afternoon session, tracking firm opening in European markets. Traders were taking encouragement with positive wholesale price inflation (WPI) data. According to the latest data released by the government, the WPI stood at 2.84% in January as against 3.58% for the previous month and 4.26% during the corresponding month of the previous year. Some support also came with CRISIL’s latest report stating that the Reserve Bank of India’s revised framework for quicker and time-bound resolution of stressed assets is a long-term positive for banks. The report further noted that the new framework has the potential to bring about a big change in the approach of banks to monitor their exposures and resolution of non-performing assets (NPAs). Further, major industry gainers like ICICI Bank, Infosys and Power Grid Corporation, were aiding the sentiments. However, some gains got trimmed in late noon deals, on the back of heavy selling in Telecom and Consumer Durables stocks. Besides, the broader markets lost the gaining momentum to trade in red terrain.
On the global front, European markets were trading in green, tracking firm cues from Wall Street and Asia as investors took in their stride signs of inflation pickup in the US and the possibility of an interest rate increase at next month's Fed policy meeting. Asian markets were also trading in green. Back home, in scrip specific development, Shree Cement traded in green after the company commissioned new Cement Grinding Unit namely Bangur Cement Unit.
The BSE Sensex is currently trading at 34340.26, up by 184.31 points or 0.54% after trading in a range of 34194.67 and 34535.08. There were 20 stocks advancing against 9 stocks declining, while 2 stock remained unchanged on the index.
The broader indices were trading in red; the BSE Mid cap index was down by 0.31%, while Small cap index was down by 0.96%.
The top gaining sectoral indices on the BSE were Metal up by 0.94%, Oil & Gas up by 0.89%, IT up by 0.74%, Energy up by 0.58% and TECK up by 0.52%, while Telecom down by 0.73%, Consumer Durables down by 0.61%, Industrials down by 0.48%, Realty down by 0.45% and Healthcare down by 0.42% were the top losing indices on BSE.
The top gainers on the Sensex were ICICI Bank up by 3.31%, Infosys up by 1.79%, Power Grid Corporation up by 1.28%, HDFC up by 1.04% and Bajaj Auto up by 0.96%. On the flip side, Hero MotoCorp down by 1.45%, Kotak Mahindra Bank down by 1.03%, Bharti Airtel down by 0.91%, Indusind Bank down by 0.68% and Tata Steel down by 0.60% were the top losers.
Meanwhile, days after the Reserve Bank of India (RBI) notified a revised framework for expeditious resolution of bad loans, credit ratings agency, Crisil Ratings in its latest report has stated that the Central Bank’s revised framework is a long-term positive for banks and has the potential to bring about a big change in the approach of banks to monitor exposures and resolution of Non-Performing Assets (NPAs). It believes that the upshot of the strong statement of intent by RBI will be structural streamlining, standardising and harmonising of the resolution process leading to greater transparency, credibility and efficiency.
According to the report, the RBI is establishing an ecosystem where NPAs would get recognised on time and their resolutions will be structurally quicker than before, by mandating weekly information on large delinquent accounts, by directing that a resolution plan be scripted immediately after default, and by setting stringent timelines for referring an account to the Insolvency and Bankruptcy Code process. It added that independent credit evaluation of the residual debt in resolution plans, and minimum investment grade rating for any upgrade of NPAs, will improve investor and other stakeholder confidence over the long term.
Crisil also said that in order to resolve the stressed assets situation, several steps such as corporate debt restructuring (CDR), sustainable structuring of stressed assets (S4A), strategic debt restructuring (SDR) were conceived in recent years, but to limited success. It highlighted that the RBI’s move has come at the right hour because the asset quality pressures are near their peak and it will improve the ability of banks to transit to the new regime. Besides, the Central Bank had discontinued programmes for banks to restructure their defaulted loans such as CDR, S4A, SDR, among others, and made the Insolvency and Bankruptcy Code as the main tool to deal with defaulters.
The CNX Nifty is currently trading at 10559.20, up by 58.30 points or 0.56% after trading in a range of 10518.65 and 10618.10. There were 30 stocks advancing against 20 stocks declining on the index.
The top gainers on Nifty were Hindalco up by 3.47%, ICICI Bank up by 3.25%, Vedanta up by 2.93%, BPCL up by 2.81% and HPCL up by 2.26%. On the flip side, Indiabulls Housing Finance down by 1.78%, Hero MotoCorp down by 1.49%, Aurobindo Pharma down by 1.30%, Cipla down by 1.17% and Bharti Airtel down by 1.15% were the top losers.
Asian markets were trading in green; FTSE Bursa Malaysia KLCI increased 3.35 points or 0.18% to 1,838.28, Nikkei 225 increased 310.81 points or 1.47% to 21,464.98. On the flip side, Jakarta Composite decreased 3.87 points or 0.06% to 6,590.53.
All European markets were trading in green; UK’s FTSE 100 increased 39.56 points or 0.55% to 7,253.53, France’s CAC increased 67.08 points or 1.3% to 5,232.34 and Germany’s DAX increased 93.68 points or 0.76% to 12,432.84.
