Markets continue to trade in red in early noon deals

Indian bourses continued to trade in red in early noon session as selling momentum in the equities persisted. Sentiments remained downbeat with report that the Central GST collection fell short of the budged estimate by nearly 40 per cent during the April-November period of 2019-20. On the Global front, Most of the Asian equity benchmarks are trading lower as investors’ sentiment weighed after the release of Chinese inflation data indicating a surge in consumer prices in November. Back on street, IT stocks dip as rupee hit around one month-high against the US dollar. At this point of time, domestic currency was trading at 70.90, 14 paise stronger from its previous close of 71.04 on Monday. In stock specific development, Yes Bank slipped ahead of the board meeting slated for later today to finalize and approve the details of the preferential allotment. The market breadth on BSE was negative, out of 2,202 stocks traded, 770 stocks advanced, while 1,309 stocks declined on the BSE. 

The BSE Sensex is currently trading at 40385.58, down by 101.85 points or 0.25% after trading in a range of 40342.13 and 40588.81. There were 9 stocks advancing against 21 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.52%, while Small cap index was down by 0.30%.

The only gaining sectoral indices on the BSE was Consumer Durables up by 0.45%, while IT down by 0.99%, TECK down by 0.90%, Realty down by 0.90%, Energy down by 0.65% and Oil & Gas was down by 0.63% were the top losing indices on BSE.

The top gainers on the Sensex were Hindustan Unilever up by 1.45%, Sun Pharma up by 0.68%, ONGC up by 0.67%, HDFC Bank up by 0.57% and SBI was up by 0.38%. On the flip side, Tata Motors - DVR down by 2.56%, Yes Bank down by 2.31%, TCS down by 2.06%, Indusind Bank down by 1.39% and Axis Bank was down by 1.35% were the top losers.

Meanwhile, domestic ratings agency Crisil in its latest report has said that the steep tariff hikes of up to 50% being implemented by the debt-laden telecommunication companies (telcos) which held prices at rock bottom levels for nearly five years, may double the industry's operating profit to Rs 60,570 crore in FY21 from Rs 29,450 crore in FY19. It noted that it is a structural positive for the sector which has been weighed down by weak cash flows and rising debt levels and added that the tariff hikes offers opportunity for the industry to repair its financials and become sustainable.

According to the report, the crucial part now is pricing discipline and extent of down-trading from current plans to cheaper ones by subscribers. That will determine the kind of net gains that telcos will make in the near-term. It also stated that the industry's debt to operating profit ratio will come down to 4.6 times from the present 7.5 times, if the operating profit improvements indeed happen as expected.  It added that the top three players presently owe Rs 3.3 lakh crore to the system.

The agency further stated that the average revenue per user (ARPU), arguably the most widely tracked number by analysts, will go up by 25 percent following the price hikes to Rs 145 next fiscal from Rs 116 earlier. It said 80 percent of the additional revenue will flow straight into the operating profit given the high operating leverage at which the companies operate. It added that the tariff hikes would accelerate SIM consolidation and curb subscriber additions.

The CNX Nifty is currently trading at 11899.70, down by 37.80 points or 0.32% after trading in a range of 11894.40 and 11953.20. There were 16 stocks advancing against 34 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 1.53%, Grasim Industries up by 1.27%, Titan Company up by 1.10%, Cipla up by 1.07% and UPL was up by 1.07%. On the flip side, Yes Bank down by 2.40%, Bharti Infratel down by 2.38%, Zee Entertainment down by 2.18%, TCS down by 2.18% and GAIL India was down by 2.02% were the top losers.

Asian markets were trading mostly in red, Nikkei 225 slipped 13.98 points or 0.06% to 23,416.72, Hang Seng decreased 11.46 points or 0.04% to 26,483.27, Jakarta Composite lost 7.84 points or 0.13% to 6,185.95, Shanghai Composite declined 3.36 points or 0.12% to 2,911.12 and Taiwan Weighted was down by 32.48 points or 0.28% to 11,628.29.

On the other hand, KOSPI rose 8.95 points or 0.43% to 2,097.60 and Straits Times was up by 0.06 points or 0% to 3,179.88.