Benchmarks trade tad lower in early deals

Indian equity benchmarks made cautious start on Wednesday as investors remain concerned about rising cases of coronavirus worldwide amid mixed global cues. Markets are trading tad lower in early deals and hovering near neutral lines, as selling in IT, TECK and Consumer Durables stocks weighted on domestic indices. Traders were concerned as India reported 38,532 fresh Covid-19 cases in the past 24 hours. The total caseload now stands at 8,912,704. The country's death toll has mounted to 131,031. Delhi recorded 6,396 fresh Covid-19 cases taking the infection tally in the national capital to over 495,000 on Tuesday. However, downside remained limited after private report upgraded its India GDP forecast to a contraction of 10.3 per cent in FY21, as against its earlier estimate of a negative growth of 14.8 per cent. The US-based firm said developments on the vaccine front -- where two candidates have posted satisfactory progress -- will be very helpful in the recovery.

On the global front, most of the Asian markets were trading higher despite negative cues from Wall Street amid a surge in US coronavirus cases and disappointing retail sales. Optimism over potential COVID-19 vaccines continue to support sentiments in markets. Besides, the Ministry of Finance said Japan posted a merchandise trade surplus of 872.899 billion yen in October. That exceeded forecasts for a surplus of 250 billion yen following the surplus of 675 billion yen in September.

Back home, banking stocks were in focus after the central government put Lakshmi Vilas Bank under moratorium till December 16, 2020. That said, the RBI proposed to merge LVB with the India subsidiary of Singapore's DBS Bank. Furthermore, the Supreme Court is scheduled to hear the interest waiver case later today. In scrip specific development, Wipro shed after its shareholders approved a Rs. 9,500 crore share buyback plan.

The BSE Sensex is currently trading at 43931.97, down by 20.74 points or 0.05% after trading in a range of 43816.15 and 44051.66. There were 14 stocks advancing against 15 stocks declining, while 1 stock remain unchanged on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.63%, while Small cap index up was by 0.59%.

The top gaining sectoral indices on the BSE were Power up by 1.37%, Industrials up by 1.23%, Capital Goods up by 1.21%, Utilities up by 1.18%, Realty up by 1.09%, while IT down by 0.75%, TECK down by 0.67%, Consumer Durables down by 0.57%, FMCG down by 0.51%, Healthcare down by 0.26% were the top losing indices on BSE.

The top gainers on the Sensex were SBI up by 2.37%, Mahindra & Mahindra up by 1.66%, Larsen & Toubro up by 1.64%, Bajaj Finance up by 1.45% and Indusind Bank up by 1.33%. On the flip side, Tech Mahindra down by 1.37%, Hindustan Unilever down by 1.36%, Titan Company down by 1.26%, Nestle down by 1.23% and Tata Steel down by 1.08% were the top losers.

Meanwhile, with improvement in economic activities and expectation of recovery in the next fiscal, Crisil Ratings in its latest report has said that as many as 99 percent of non-MSME companies are unlikely to opt for the Reserve Bank of India's (RBI) one-time debt restructuring (OTDR). The analysis is based on 3,523 non-MSME companies that it rates. The RBI had announced the restructuring scheme in early August as a relief measure for non-MSME corporate borrowers having an aggregate exposure of greater than Rs 25 crore who were impacted due to the COVID-19 pandemic.

According to the report, improving business sentiment on account of increased economic activity over the past couple of months, and expectation of a sharp recovery next fiscal are persuading borrowers to skip OTDR. Another deterrent is the impact on the borrower's long-term credit history – accounts of those opting for OTDR would be classified as restructured advances by lenders, which could impact their ability to raise debt in future.

The report further said for around 44 percent of Crisil-rated corporates, more than three-fourths of their debt comprises short-term working capital facilities. It said so availing of OTDR would have negligible benefits, as the resolution plans under this scheme are focussed on deferring principal repayment of long-term debt. It added that such borrowers, instead of opting for debt recast, may prefer to seek additional working capital financing as announced by the RBI under its COVID-19 regulatory package.

The CNX Nifty is currently trading at 12867.90, down by 6.30 points or 0.05% after trading in a range of 12836.45 and 12901.75. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Tata Motors up by 3.04%, Adani Ports & SEZ up by 2.63%, SBI up by 2.58%, Larsen & Toubro up by 1.92% and Bajaj Finance up by 1.58%. On the flip side, BPCL down by 1.61%, Britannia Industries down by 1.57%, Hindustan Unilever down by 1.50%, Tech Mahindra down by 1.37% and Titan Company down by 1.24% were the top losers.

Asian markets were trading mostly in green; Straits Times rose 8.18 points or 0.29% to 2,786.73, Hang Seng jumped 157.57 points or 0.60% to 26,572.66, Taiwan Weighted surged 138.81 points or 1.02% to 13,731.82, KOSPI added 6.44 points or 0.25% to 2,545.59, Jakarta Composite soared 29.42 points or 0.53% to 5,559.36 and Shanghai Composite was up by 15.79 points or 0.47% to 3,355.69, while Nikkei 225 lost 179.37 points or 0.69% to 25,835.25.