Local equities pare early gains to trade flat

Local equity benchmarks pared all their early gains and started trading in flat in the morning session, both Sensex and Nifty were trading below their crucial 35,600 and 10,650 marks, respectively. Selling was witnessed in Realty, FMCG and Oil & Gas sector stocks while, traders were piling positions in Bankex, Telecom and Capital Goods sector. Traders took note of a private report that India will likely defer its plan for a fifth time to impose retaliatory tariff worth close to $235 million on 29 American products, in response to the Trump administration’s extra levy on supplies of steel and aluminium. However, the downfall is arrested with India Ratings' report that it expects the interim budget to announce an income support scheme for the poor which may at least cost the Centre Rs 1.5 trillion per annum or 0.7 percent of the GDP for the Centre and states combined and is better than any farm loan waivers. Beside, ICRA report stated that while the number of insolvency cases are expected to pile up over the next few quarters, timely conclusion of cases within the law mandated 180-270 days can free up as much as Rs 67,000 crore to the system.

On the global front, Asian markets were trading mostly in green, as traders awaited a Federal Reserve policy meeting and US-China talks, though Japan’s benchmark declined. Back home, on the sectoral front Gems and Jewellery industry stock were in focus, as a report stated that gems and jewellery has sought reduction of gold import duty to 4 per cent, cut and polished diamonds and cut and polished gem stones to its 2.5 per cent and relaxation of credit norms for working capital requirements in the forthcoming budget.

The BSE Sensex is currently trading at 35599.33, up by 6.83 points or 0.02% after trading in a range of 35573.45 and 35850.41. There were 15 stocks advancing against 16 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index slipped 0.09%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Bankex up by 0.99%, Telecom up by 0.84%, Metal up by 0.42%, Capital Goods up by 0.41% and Industrials was up by 0.37%, while Realty down by 0.80%, Oil & Gas down by 0.66%, FMCG down by 0.49%, Utilities down by 0.45% and Energy was down by 0.25% were the top losing indices on BSE.

The top gainers on the Sensex were Axis Bank up by 4.10%, ICICI Bank up by 3.93%, Bajaj Finance up by 2.73%, HCL Tech up by 2.54% and Tata Steel was up by 2.34%. On the flip side, HDFC down by 1.90%, ONGC down by 1.27%, HDFC Bank down by 1.17%, Kotak Mahindra Bank down by 1.11% and Hero MotoCorp was down by 1.03% were the top losers.

Meanwhile, ICRA, Indian independent and professional investment information and credit rating agency, in its latest report has said that timely resolution of insolvency cases can free up as much as Rs 67,000 crore to lenders, which is equivalent to about 6.5 percent of gross non-performing assets (NPAs) in the system.  The agency stated that while the number of insolvency cases are expected to pile up over the next few quarters, timely conclusion of cases within the law mandated 180-270 days can free up as much as Rs 67,000 crore to the system.

The report highlighted that since the bankruptcy law came into being from May 2016, close to 3,000 companies have been sent to various NCLTs for resolutions of which only 586 have been closed so far while 63 have been withdrawn after the law was amended last year under which Section 12A has been inserted into the original law. The report also mentioned that as of December 2018, as many as 898 corporate insolvency cases are awaiting a resolution as against 768 cases as in September 2018. Up to December 2018, only 79 cases have yielded a resolution while 302 cases have entered into liquidation which is a very high proportion.

Besides, it said ‘almost 68 percent of the NCLT cases have already exceeded the 270-day timeline allowed under the law. Moreover those cases already resolved as of the December quarter have taken an average 354 days compared to 340 days taken in the September quarter. In fact, over the past one year, the resolution time has gone up’.

The CNX Nifty is currently trading at 10647.65, down by 4.55 points or 0.04% after trading in a range of 10636.80 and 10710.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Axis Bank up by 4.06%, ICICI Bank up by 3.92%, Tata Steel up by 2.61%, Bajaj Finance up by 2.60% and HCL Tech was up by 2.32%. On the flip side, Indiabulls Housing Finance down by 3.34%, JSW Steel down by 2.51%, HDFC down by 2.09%, Tech Mahindra down by 1.59% and Adani Ports was down by 1.56% were the top losers.