Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in early noon session, after Iran launched a missile attack on US-led forces in Iraq, pushing crude oil prices. Depreciation in Indian rupee too weighed down sentiments. The rupee was trading lower by 24 paise at 72.06 against the American currency at this point of time, as the dollar strengthened overseas. Weakness in Asian markets too dampened sentiments. All the regional counterparts were trading lower, in line with negative cues from Wall Street overnight in midst of flared global geo political concerns.

Back home, oil-linked stocks across segments, such as oil marketing companies, paints, tyres and aviation firms, came under pressure as Iran's missile attacks on the Ain Al-Asad air base and another in Erbil, Iraq, after the funeral of an Iranian commander whose killing in a US drone strike has raised fears of a wider war in the Middle East. Meanwhile, the broader indices too were trading lower, while the market breadth on the BSE was negative; there were 656 shares on the gaining side against 1400 shares on the losing side while 123 shares remain unchanged.

The BSE Sensex is currently trading at 40613.39, down by 256.08 points or 0.63% after trading in a range of 40476.55 and 40866.36. There were 4 stocks advancing against 26 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.60%, while Small cap index was down by 0.25%.

The losing sectoral indices on the BSE were Capital Goods down by 1.41%, PSU down by 1.14%, Metal down by 1.10%, Oil & Gas down by 1.05% and Realty was down by 1.04%, while there were no gaining sectoral indices.

The top gainers on the Sensex were TCS up by 1.17%, Ultratech Cement up by 0.97%, HCL Tech up by 0.33% and Tech Mahindra was up by 0.16%. On the flip side, Infosys down by 2.08%, Larsen & Toubro down by 1.97%, Titan Company down by 1.60%, Kotak Mahindra Bank down by 1.49% and Hero MotoCorp was down by 1.45% were the top losers.

Meanwhile, in an important change in the liquidation framework, the Insolvency and Bankruptcy Board of India (IBBI) has forbidden secured creditors from selling or transferring assets of a company, which is subject to security interest, to any person who is not eligible under the code to submit a resolution plan for insolvency resolution of the corporate debtor. The move will close doors on promoters regaining control of their insolvent firms during liquidation proceedings. The IBBI has notified changes to the regulations with effect from January 6. The amendment also provides for a stakeholder to withdraw from the corporate liquidation account.

The amendment clarifies that a person, who is restricted from submitting an insolvency resolution plan, shall not be a party in any manner to a compromise or arrangement of the corporate debtor under section 230 of the Companies Act, 2013. The IBC provides for time-bound and market-linked resolution process for stressed firms. In case the resolution process does not materialise, then the entity goes for liquidation. Section 230 allows for promoters or any class of creditors to reach an arrangement with other stakeholders to take control of the company once it is sent for liquidation.

The amendment allows a secured creditor, who proceeds to realise its security interest, to contribute its share of the insolvency resolution process cost, liquidation process cost and workmen's dues, within 90 days of the liquidation commencement date. Also, the secured creditor has to pay excess of realised value of the asset, which is subject to security interest, over the amount of its claims admitted, within 180 days of the liquidation commencement date. When the secured creditor fails to pay the amount to the liquidator within 90 days or 180 days, as the case may be, the asset should become part of the Liquidation Estate.

The CNX Nifty is currently trading at 11964.05, down by 88.90 points or 0.74% after trading in a range of 11929.60 and 12044.95. There were 7 stocks advancing against 43 stocks declining on the index.

The top gainers on Nifty were TCS up by 1.12%, Ultratech Cement up by 0.92%, Yes Bank up by 0.78%, Dr. Reddys Lab up by 0.37% and HCL Tech wsa up by 0.32%. On the flip side, Eicher Motors down by 2.52%, Zee Entertainment down by 2.22%, Infosys down by 2.17%, Larsen & Toubro down by 2.06% and BPCL was down by 1.74% were the top losers.

All Asian markets were trading lower, Hang Seng decreased 296.16 points or 1.05% to 28,025.90, KOSPI fell 19.39 points or 0.89% to 2,156.15, Shanghai Composite declined 27.03 points or 0.87% to 3,077.77, Straits Times trembled 25.03 points or 0.77% to 3,222.83, Nikkei 225 slipped 377.73 points or 1.6% to 23,197.99, Taiwan Weighted dropped 39.51 points or 0.33% to 11,840.81 and Jakarta Composite was down by 48.68 points or 0.78% to 6,230.67.