Benchmarks extend losses in early noon session

Indian bourses extended their losses in early noon session with Sensex and Nifty trading down by 110 and 38 points respectively. Stocks from Power, Utilities and PSU counters were trading lower, while IT, TECK and Healthcare counters were supporting the markets. Besides, broader indices were trading in mixed with the BSE Mid cap index lost 0.09%, while Small cap index was up by 0.20%. Sentiments remain dented with a report that direct tax collections till January 15 stood at Rs 7.3 lakh crore, down 5.2% from the year-ago period. Gross direct tax collections - after refunds but before devolution to states - for FY20 is budgeted to grow at 17.4% to Rs 13.35 lakh crore. Investors failed to draw any solace with the report that with Union Minister Piyush Goyal’s statement that India is working on ways to have fairer and more equitable terms in its trade relationships with various countries. On global front, Asian markets were trading mostly higher as China’s response to a virus outbreak tempered some fears of a global pandemic. Back on street, in scrip specific development, shares of HCL Technologies jumped on launching Microsoft Business Unit focused on Microsoft technologies.

The BSE Sensex is currently trading at 41214.22, down by 109.59 points or 0.27% after trading in a range of 41197.71 and 41532.29. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index lost 0.09%, while Small cap index was up by 0.20%.

The top gaining sectoral indices on the BSE were IT up by 1.35%, TECK up by 0.94%, Healthcare up by 0.63% and Basic Materials was up by 0.45%, while Power down by 1.55%, Utilities down by 1.27%, PSU down by 1.26%, Bankex down by 0.77% and Auto was down by 0.75% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 1.69%, Infosys up by 1.65%, TCS up by 1.29%, Ultratech Cement up by 0.87% and Nestle was up by 0.71%. On the flip side, ONGC down by 3.79%, NTPC down by 3.03%, Power Grid Corporation down by 2.47%, Maruti Suzuki down by 2.07% and Kotak Mahindra Bank was down by 1.54% were the top losers.

Meanwhile, the Confederation of Indian Industry (CII) has suggested easing of certain norms for enhancing liquidity for non-banking financial companies (NBFCs) and housing finance companies (HFCs). It has suggested to ease external commercial borrowing (ECB) norms with a higher limit for investment grade-rated companies equivalent to sovereign rating up to maybe $1,500 million from the current uniform limit of $750 million for all NBFCs.

Industry body also asked for relaxation of end-use norms of ECBs for HFCs to facilitate credit flow to the entire housing finance sector. Currently, end-use is limited to affordable housing. Further, it said a framework should be defined for NBFCs and HFCs having an asset book size of more than Rs 25,000 crore being the lenders of last resort. Unlike banks, it said these types of companies do not have the repo window facility to borrow in times of need.

CII has suggested that the RBI should look at creating a separate classification within the systemically important NBFCs based on asset book size. It said NBFCs and HFCs have played a complementary role to banks in supplying credit to the underserved segments of the economy. It also noted that NBFCs and HFCs are important source of financing and will play a key role in making India a $5 trillion economy. According to the RBI data, the share of credit from banks, NBFCs and HFCs was in the ratio of 70:30 for 2018-19.

The CNX Nifty is currently trading at 12132.10, down by 37.75 points or 0.31% after trading in a range of 12125.50 and 12225.05. There were 24 stocks advancing against 26 stocks declining on the index.

The top gainers on Nifty were Grasim Industries up by 2.05%, HCL Tech up by 1.61%, Infosys up by 1.50%, TCS up by 1.28% and Cipla was up by 1.16%. On the flip side, ONGC down by 3.83%, Coal India down by 3.64%, NTPC down by 2.99%, Zee Entertainment down by 2.94% and Power Grid Corporation was down by 2.52% were the top losers.

Asian markets were trading mostly higher; KOSPI rose 24.18 points or 1.08% to 2,263.87, Straits Times advanced 4.40 points or 0.14% to 3,251.57, Nikkei 225 surged 159.32 points or 0.67% to 24,023.88, Hang Seng increased 324.73 points or 1.16% to 28,310.06 and Shanghai Composite was up by 5.13 points or 0.17% to 3,057.27. On the flip side, Jakarta Composite was down by 6.69 points or 0.11% to 6,231.46