Benchmarks trade higher ahead of macro-economic data

Indian equity benchmarks made optimistic start and are trading firm in early deals on Thursday ahead of the industrial production data for the month of October and CPI inflation for November which will be released later in the day. All the sectoral indices were trading in green, led by gains in Metal, Basic Materials and Healthcare stocks. Some support came as the Union Cabinet approved changes to the insolvency law, including a provision to ring-fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company. The amendments to the Insolvency and Bankruptcy Code (IBC) are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business. Besides, Former President Pranab Mukherjee said that ‘certain things’ that are happening would have its impact and he was not worried over the economic slowdown. Mukherjee, further said there is nothing wrong in public sector banks needing capital infusion. Traders took note of a US diplomat’s statement that India needs to demonstrate to the international community its willingness to become a part of the global supply chain by taking steps towards resolving larger market access issues. Market participants overlooked a report that with pressure on revenue collection, the goods and services tax (GST) rates and slabs may be raised during the GST Council meeting next week.

Global cues also remained supportive with most of the Asian markets were trading in green following the positive cues overnight from Wall Street after the US Federal Reserve announced its decision to leave interest rates unchanged and also signaled it expects interest rates to remain on hold throughout 2020. Investors also looked ahead to developments on the US-China trade front as a fresh round of US tariffs on Chinese goods are set to kick in on December 15. Back home, on the sectoral front, the banking stocks were in focus as the Union Cabinet approved a partial credit guarantee scheme for public sector banks (PSBs) to purchase high-rated pooled assets from financially sound NBFCs and housing finance companies. In scrip specific development, Reliance Industries gains as its arm acquires stake in NowFloats Technologies. Though, Adani Transmission tumbled after it sold 25.1 percent stake in its arm Adani Electricity Mumbai.

The BSE Sensex is currently trading at 40579.49, up by 166.92 points or 0.41% after trading in a range of 40496.82 and 40580.91. There were 23 stocks advancing against 8 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index gained 0.63%, while Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were Metal up by 1.30%, Basic Materials up by 1.01%, Healthcare up by 0.88%, Auto up by 0.86% and Industrials was up by 0.78%, while there were no losers on BSE sectoral front.

The top gainers on the Sensex were Yes Bank up by 3.97%, Tata Motors up by 2.44%, Vedanta up by 2.09%, Tata Steel up by 1.73% and Tata Motors - DVR up by 1.60%. On the flip side, ONGC down by 1.17%, Infosys down by 0.34%, Power Grid Corporation down by 0.25%, HDFC down by 0.21% and Bharti Airtel down by 0.20% were the top losers.

Meanwhile, with an aim to ease insolvency resolution process, the Union Cabinet has given green signal to changes in the insolvency law, including provision to ring- fence successful resolution applicants from criminal proceedings with regard to offences committed by previous promoters of a company. The amendments to the Insolvency and Bankruptcy Code (IBC) are aimed at removing certain difficulties being faced during insolvency resolution process to realise the objects of the Code and to further ease doing of business.

The IBC (Second Amendment) Bill, 2019, seeks to change various sections as well as insert a new section in the law. The amendments would remove bottlenecks, streamline the corporate insolvency resolution process and that protection of last mile funding would boost investment in financially-distressed sectors. Additional thresholds introduced for financial creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP).

In a significant move, there would be ring-fencing of corporate debtor resolved under the IBC in favour of a successful resolution applicant from criminal proceedings against offences committed by previous management/ promoters. The amended Act would also ensure that the substratum of the business of corporate debtor is not lost. It can continue as a going concern by clarifying that the licences, permits, concessions, clearances etc. cannot be terminated or suspended or not renewed during the moratorium period.

The CNX Nifty is currently trading at 11967.10, up by 56.95 points or 0.48% after trading in a range of 11934.00 and 11968.70. There were 42 stocks advancing against 8 stocks declining on the index.

The top gainers on Nifty were Yes Bank up by 3.27%, Cipla up by 2.61%, UPL up by 2.55%, Tata Motors up by 2.35% and Vedanta up by 1.99%. On the flip side, ONGC down by 1.29%, Zee Entertainment down by 1.06%, Infosys down by 0.31%, HDFC down by 0.30% and ICICI Bank down by 0.20% were the top losers.

Asian markets were trading mostly in green; Hang Seng increased 334.90 points or 1.26% to 26,980.33, Taiwan Weighted strengthened 147.13 points or 1.26% to 11,847.90, Nikkei 225 surged 75.22 points or 0.32% to 23,467.08, KOSPI rose 29.60 points or 1.41% to 2,135.22 and Straits Times advanced 27.10 points or 0.85% to 3,200.00. On the flip side, Shanghai Composite declined 3.99 points or 0.14% to 2,920.43 and Jakarta Composite was down by8.17 points or 0.13% to 6,171.93.