Bourses manage to trade above neutral lines in afternoon deals

Key Indian benchmarks managed to trade above their neutral lines in afternoon session, on account of buying in frontline blue chip counters. Traders were taking support from Moody’s Investors Service in its latest report stating that the government’s proposed seven amendments to the Insolvency and Bankruptcy Code (IBC) will improve its effectiveness and three of the seven proposals are credit positive in general and particularly for Indian banks as they restore the primacy of secured creditors. Some support also came in with the Employees' State Insurance Corporation (ESIC) payroll data showing that around 12.66 lakh jobs were created in May, a tad higher than 11.15 lakh jobs in April this year. However, losses in global markets capped gains. Traders also remain concerned with a private report that deal activity remained subdued in the first half of calendar year 2019 that saw deals worth $32.1 billion, compared with $74.4 billion in the same period last year. 

On the global front, Asian markets were trading mostly in red, as investors continued to watch the brewing trade conflict between China and the U.S., and any signs of what’s in store from central banks. Back home, the BSE Sensex is currently trading at 37875.14, up by 44.16 points or 0.12% after trading in a range of 37690.47 and 37978.07. 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 0.55%, while Small cap index up by 0.20%.

The top gaining sectoral indices on the BSE were Auto up by 1.71%, Capital Goods up by 0.99%, Healthcare up by 0.92%, Industrials up by 0.86% and Bankex was up by 0.82%, while IT down by 1.04%, Energy down by 0.91%, TECK down by 0.83%, Oil & Gas down by 0.58% and Utilities was down by 0.33% were the top losing indices on BSE.

The top gainers on the Sensex were Yes Bank up by 8.33%, Bajaj Finance up by 5.99%, Hero MotoCorp up by 3.55%, Mahindra & Mahindra up by 2.66% and Tata Motors - DVR was up by 2.22%. On the flip side, Vedanta down by 2.83%, Bharti Airtel down by 1.46%, Infosys down by 1.34%, Reliance Industries down by 1.26% and Tech Mahindra was down by 0.99% were the top losers.

Meanwhile, Global rating agency Moody’s Investors Service in its latest report has said that the government’s proposed seven amendments to the Insolvency and Bankruptcy Code (IBC) will improve its effectiveness and three of the seven proposals are credit positive in general and particularly for Indian banks as they restore the primacy of secured creditors.  Recently, the government had cleared seven amendments to the IBC that will enforce a strict 330-day timeline for corporate resolution process, including litigation and other judicial processes, as well as make resolution plan binding on all stakeholders.  

The rating agency has stated that cases in the IBC have taken much longer to resolve than the originally envisaged 270 days, in large part because concerned parties have repeatedly appealed to higher courts. However, it said the poor track record of resolving cases on time means that actual implementation will be required before the process can be said to have been definitively speeded up. It noted that the amendments also give the committee of creditors explicit authority over the distribution of proceeds in the resolution process, thereby maintaining the accepted hierarchy of creditors.

Under the IBC, the report said homebuyers in a real estate project are treated on a par with secured creditors, which means that their approval is required before the committee can approve the resolution plan. It noted that because homebuyers in a large project are likely to be relatively numerous, obtaining the approval of all the affected homebuyers has proved a logistical challenge. With the proposed change, it said only the approval of a majority of those present will be required for the resolution to be approved. 

The CNX Nifty is currently trading at 11278.40, up by 26.25 points or 0.23% after trading in a range of 11210.05 and 11307.60. There were 34 stocks advancing against 16 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 8.50%, Bajaj Finance up by 5.95%, Bajaj Finserv up by 4.39%, Eicher Motors up by 4.37% and Indiabulls Housing Finance was up by 3.91%. On the flip side, Vedanta down by 2.95%, Indian Oil Corp. down by 2.86%, Bharti Airtel down by 1.36%, Infosys down by 1.30% and Britannia Industries was down by 1.20% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 164.93 points or 0.58% to 28,429.37, Nikkei 225 slipped 98.40 points or 0.45% to 21,658.15, Jakarta Composite lost 77.09 points or 1.2% to 6,324.28, Taiwan Weighted dropped 49.43 points or 0.45% to 10,891.98, Straits Times trembled 26.42 points or 0.78% to 3,354.84 and KOSPI was down by 8.22 points or 0.4% to 2,066.26.

On the flip side, Shanghai Composite was up by8.44 points or 0.29% to 2,945.80.