Local equities magnify losses in morning deals

Local equity benchmarks extended losses to continue their sluggish trade in the morning session, with Sensex and Nifty losing around one third a percent. A level of pressure was seen on frontline stocks, especially TCS, HCL Tech and Infosys. Traders remained concerned with a private report stating that new project investments have been the lowest in 12 quarters at about Rs 1 lakh crore for the three months ended December 31, 2018, indicating a slowdown in the Indian economy. This number is lowest in 14 years, and has been lowest since mid-2004. The markets also remained under pressure with India Ratings and Research’s report that Indian central bank’s decision to allow a one-time restructuring of some loans to small businesses is bound to foster indiscipline among borrowers. This dispensation may encourage some of the MSME borrowers, which are otherwise operating satisfactorily, to opt for the scheme and impair the credit discipline. However, losses remained restricted as traders were getting support with a private report stating that India’s economy grew at a faster pace than most major nations in 2018, and this year, it’s poised to overtake the UK to become the World’s fifth-biggest.

On the global front, Asian markets were trading mostly in green. However, Japan slumping in its first trading day of the year, after weak economic data added to anxiety about global growth and Apple Inc.’s sales outlook cut sunk US stocks. Treasuries and the yen were steady after gains. Back home, Finance Minister Arun Jaitley stated that Rs 80,000 crore has been recovered by creditors in 66 cases resolved by NCLT and around Rs 70,000 crore more is likely to be realised by March-end.

The BSE Sensex is currently trading at 35417.54, down by 96.17 points or 0.27% after trading in a range of 35393.18 and 35704.85. There were 18 stocks advancing against 13 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index slipped 0.23%, while Small cap index was down by 0.41%.

The top gaining sectoral indices on the BSE were Telecom up by 1.44%, Oil & Gas up by 0.46%, PSU up by 0.41%, Metal up by 0.28% and Utilities up by 0.21%, while IT down by 2.20%, TECK down by 1.73%, Capital Goods down by 0.69%, Consumer Durables down by 0.58% and Industrials was down by 0.37% were the top losing indices on BSE.

The top gainers on the Sensex were Tata Motors up by 2.41%, Tata Motors - DVR up by 1.96%, Bharti Airtel up by 1.60%, Axis Bank up by 1.09% and ONGC was up by 1.01%. On the flip side, TCS down by 2.63%, Infosys down by 2.07%, HCL Tech down by 2.02%, ICICI Bank down by 1.00% and Yes Bank was down by 0.92% were the top losers.

Meanwhile, Finance Minister Arun Jaitley said enacting the Insolvency and Bankruptcy Code (IBC) has helped lenders get Rs 80,000 crore in 66 cases. It is expected that Rs 70,000 crore will be realised by end of current financial year (FY19).

He further said National Company Law Tribunal (NCLT) had started receiving corporate insolvency cases by the end of 2016 and so far 1,322 cases have been admitted by it. A total of 4,452 cases have been disposed at pre-admission stage and 66 have been resolved after adjudication. 260 cases have been ordered for liquidation. He added that NCLT has become a trusted forum of high credibility.

Besides, he asserted that the increase in conversion of NPAs into standard accounts and decline in new accounts falling in NPA category show a definite improvement in the lending and borrowing behaviour. The early harvest through the IBC process has been extremely satisfactory. It has changed the debtor - creditor relationship. The creditor no longer chases the debtor.

The CNX Nifty is currently trading at 10643.45, down by 28.80 points or 0.27% after trading in a range of 10632.90 and 10729.40. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Bharti Infratel up by 2.65%, Tata Motors up by 2.44%, ONGC up by 1.54%, Bharti Airtel up by 1.52% and BPCL was up by 1.12%. On the flip side, TCS down by 2.80%, Infosys down by 2.32%, HCL Tech down by 2.11%, Tech Mahindra down by 2.10% and Wipro was down by 1.54% were the top losers.

Asian markets were trading in mostly in green; Hang Seng increased 321.91 points or 1.28% to 25,386.27, Shanghai Composite gained 44.66 points or 1.81% to 2,509.02, Jakarta Composite soared 35.48 points or 0.57% to 6,256.49, Straits Times advanced 27.46 points or 0.91% to 3,040.34 and KOSPI was up by 11.78 points or 0.59% to 2,005.48.

On the other side, Taiwan Weighted dropped 136.98 points or 1.44% to 9,355.44, Nikkei 225 was down by 563.92 points or 2.82% to 19,450.85.