Indian equities remain in red terrain

Indian equity benchmarks continued their trade in red territory in afternoon session, as selling momentum in the equities persisted. Investors awaited the Economic Survey and the Union Budget 2020, with high expectations of further stimulus to the economy. Sentiments remained downbeat with a report that the government’s efforts to drive ‘Make in India’ to success have not yet reflected in the country’s industrial output growth. India’s Index of Industrial Production (IIP) growth is expected to fall to 2 per cent in the current financial year 2019-20. Traders took note of India Ratings and Research (Ind-Ra) report stated that after a prolonged period of troubles with big-ticket exposures, it will be the loans to agriculture, micro, small and medium enterprises and unsecured retail debt which will become a concern for banks in 2020-21. On the sectoral front, telecom sector was in focus as the Cellular Operators' Association of India (COAI) urged the government to offer a 10-15 year payment schedule for telecom companies to pay their past statutory dues, starting with part-payment upfront and a two-year moratorium.

On the global front, Asian markets were trading mostly lower, as World Health Organization confidence in China's response to a rapidly-spreading new virus tempered worries over a jump in infections. Back home, the BSE Sensex is currently trading at 40752.19, down by 161.63 points or 0.40% after trading in a range of 40702.68 and 41154.49. There were 7 stocks advancing against 23 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell 0.49%, while Small cap index was down by 0.33%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 0.76%, Bankex up by 0.46%, Realty up by 0.34%, Telecom up by 0.24% and Consumer Discretionary Goods & Services up by 0.07%, while Oil & Gas down by 2.05%, Utilities down by 1.76%, PSU down by 1.76%, Energy down by 1.61% and Power down by 1.60% were the top losing indices on BSE.

The top gainers on the Sensex were Kotak Mahindra Bank up by 4.05%, Indusind Bank up by 2.73%, Bajaj Auto up by 2.04%, ITC up by 1.00% and Hero MotoCorp up by 0.99%. On the flip side, ONGC down by 4.46%, Power Grid down by 3.78%, HCL Technologies down by 2.48%, TCS down by 1.92% and Hindustan Unilever down by 1.42% were the top losers.

Meanwhile, the Cellular Operators' Association of India (COAI) has urged the government to offer a 10-15 year payment schedule for telecom companies to pay their past statutory dues, starting with part-payment upfront and a two-year moratorium. It noted that this formula of easier payment schedule to meet statutory obligations would offer the much-needed reprieve to telecom companies likes Bharti Airtel and Vodafone Idea, whose combined liabilities after the recent SC verdict run into billions of dollars. 

COAI has stated that the industry requires a debt package for payment of past statutory dues with a two-year moratorium, as in the case of payment made for spectrum bought in auctions. It said give telecom companies 10-15 years for payment of the full adjusted gross revenue (AGR) dues, a two-year moratorium and an interest rate at interbank borrowing rate levels that is at around 4-5 percent. It also said there could be an upfront payment of about 15 percent, which is equivalent of the principle AGR amounts. It added that the government will easily get Rs 15,000-20,000 crore only through upfront payments from large operators.

The industry body further said this will be a reasonable payment schedule for the crisis-ridden telecom industry, as it would allow them to invest money into network expansion and new technologies. It noted that fifteen telecom companies owe the government Rs 92,642 crore in unpaid licence fee and another Rs 55,054 crore in outstanding spectrum usage charges. It added that these liabilities arose after the Supreme Court in October 2019 held that non-core revenues have to be considered for calculating statutory dues from adjusted gross revenue (AGR).

The CNX Nifty is currently trading at 11969.60, down by 66.20 points or 0.55% after trading in a range of 11961.75 and 12103.55. There were 11 stocks advancing against 39 stocks declining on the index.

The top gainers on Nifty were Kotak Mahindra Bank up by 3.93%, Indusind Bank up by 2.63%, Bajaj Auto up by 1.86%, Britannia Industries up by 1.11% and Bharti Infratel up by 1.08%. On the flip side, ONGC down by 4.58%, Indian Oil Corporation down by 3.80%, Power Grid down by 3.70%, Tata Motors down by 3.60% and GAIL India down by 2.59% were the top losers.

Asian markets were trading mostly lower; Straits Times trembled 22.77 points or 0.72% to 3,147.91, KOSPI fell 28.99 points or 1.35% to 2,119.01, Jakarta Composite lost 90.73 points or 1.5% to 5,966.87, Taiwan Weighted strengthened 73.36 points or 0.64% to 11,495.10 and Hang Seng was down by 147.72 points or 0.56% to 26,301.41.

On the flip side, Nikkei 225 was up by 227.43 points or 0.99% to 23,205.18.