Indian bourses trade marginally higher in noon deals

In an extremely choppy session, the local barometer gauges were trading marginally higher in afternoon session, as Telecom, Auto, Metal and Consumer Durables shares witnessed buying despite weak trend in other Asian markets. Traders took support with Commerce and Industry minister Suresh Prabhu’s statement that India seeks US partnership to boost various sectors and grow the bilateral trade to $ 500-600 billion from $ 125 billion currently, with a good strategy under a stipulated time. Some relief also came in with report that India and the US on September 6, pledged to expand their bilateral trade and economic partnership with a view to promoting investment and job creation. However, gains were limited as anxiety remained among the local traders with NITI Aayog CEO Amitabh Kant’s statement that India needs to cut down on oil imports and switch towards electric mobility, and stressed on the Centre’s focus towards urban mobility. On the sectoral front, select power stocks were trading lower after the Reserve Bank of India (RBI) has refused the Power Ministry's request to give certain concessions for setting up of an Asset Reconstruction Company (ARC) for warehousing stressed assets to prevent distress sale of these plants.

On the global front, Asian markets were trading mostly in red, as investors were cautious in view of an ongoing trade war between the US and China and preferred to log gains after yesterday's strong comeback. Back home, the BSE Sensex is currently trading at 38266.13, up by 23.32 points or 0.06% after trading in a range of 38067.22 and 38331.19. There were 19 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.79%, while Small cap index was up by 0.32%.

The top gaining sectoral indices on the BSE were Telecom up by 1.42%, Auto up by 1.11%, Metal up by 0.98%, Consumer Durables up by 0.76% and Basic Materials up by 0.73%, while Bankex down by 0.40%, PSU down by 0.28% and Power down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Bajaj Auto up by 3.39%, Tata Motors up by 2.61%, Tata Motors - DVR up by 2.49%, Hero MotoCorp up by 2.44% and Wipro up by 1.79%. On the flip side, Yes Bank down by 3.33%, Sun Pharma down by 3.20%, Power Grid down by 1.78%, SBI down by 1.75% and Adani Ports &SEZ down by 1.48% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has refused the Power Ministry's request to give certain concessions for setting up of an Asset Reconstruction Company (ARC) for warehousing stressed assets to prevent distress sale of these plants. The RBI framework provided for strict timeline for resolution of these bad loans where debt is Rs 2,000 crore or more. It mandates insolvency proceedings to start in case no resolution plan is provided by lenders within 180 days of default. Setting up an ARC is a legal option available to avoid insolvency proceedings for these stressed power assets.

Power Secretary A K Bhalla said ‘an upfront valuation is required for taking assets into ARC. We have sought exemption from that. The ARC is required to make 15 per cent upfront payment to lenders. We were asking for exemption from that. These type of concession are not in the scheme of RBI.’ About setting up of the ARC by state-run lender Rural Electrification Corporation (REC) with other lenders to power projects, he said that the REC and lenders together will set up this ARC.

After setting up of the ARC, the stressed assets would be taken over by it to avoid insolvency proceedings under the Insolvency and Bankruptcy Code in the National Company Law Tribunal (NCLT) for five years to avoid any distress sale of these projects. Besides, the assets already moved to the NCLT under the code can also be resolved by the ARC. The REC had proposed to bring about 25,000 MW of stressed power projects under this ARC.

The CNX Nifty is currently trading at 11553.20, up by 16.30 points or 0.14% after trading in a range of 11484.40 and 11566.45. There were 32 stocks advancing against 18 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 3.31%, Lupin up by 3.16%, Tata Motors up by 2.82%, Bharti Infratel up by 2.51% and Hero MotoCorp up by 2.40%. On the flip side, Sun Pharma down by 3.45%, Yes Bank down by 3.35%, Power Grid down by 1.81%, SBI down by 1.70% and Adani Ports &SEZ down by 1.51% were the top losers.

Asian markets were trading mostly in red; Straits Times decreased 12.99 points or 0.41% to 3,134.70, Taiwan Weighted shed 77.31 points or 0.71% to 10,846.99, Hang Seng was down by 26.25 points or 0.1% to 26,948.57, KOSPI fell 6.03 points or 0.26% to 2,281.58 and Nikkei 225 decreased 180.88 points or 0.81% to 22,307.06.

On the flip side, Shanghai Composite increased 6.52 points or 0.24% to 2,698.11 and Jakarta Composite was up by 20.22 points or 0.35% to 5,796.32.