Sensex, Nifty settle at new record closing highs

Indian equity benchmarks recovered from initial losses to register new record closing highs in a volatile session on Wednesday, amid largely positive cues from Asian markets and persistent foreign fund inflows. With this, local gauges extended their rise for the third straight session. After making cautious start, markets traded with minor losses, as investors remain concerned about rising cases of coronavirus worldwide. Selling further crept in amid report that the committee, comprising senior central and state tax officers, is looking to further tighten the Goods and Services Tax (GST) registration process and work out other legal measures including necessary law amendment required in the GST Act to curb the menace of fake invoicing. Also, the provisions related to deemed registration under GST law may be tightened to prevent the misuse of such provisions by fake dealers and the provisions related to the suspension of registration may also be streamlined to make the procedure of suspension and cancellation of registration more efficient and faster, so that such fraud operators can be prevented in time from continuing to pass on fake credit down the chain.

However, in late hour of trade, domestic markets erased all the losses to settle in green terrain, as 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. Market participants also took a note of Prime Minister Narendra Modi’s statement that his government will leave no stone unturned to make India a preferred global investment destination as he pitched for foreign investment to modernise urban centres, offering a business friendly climate and a huge market. As the nation rebuilds post pandemic, he said COVID-19 has given governments the chance to accelerate the 'process of making cities more liveable for people.

On the global front, Asian markets ended mostly higher on Wednesday, while European markets were trading mostly in green even as rising cases of coronavirus worldwide and growing tensions between the U.S. and China. Meanwhile, 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. Exports were down 0.2 percent on year at 6.566 trillion yen, beating expectations for a decrease of 4.5 percent following the 4.9 percent drop in the previous month. Imports were down an annual 13.3 percent at 5.693 trillion yen versus expectations for a fall of 9.9 percent following the 17.2 percent tumble a month earlier. Back home, on the sectoral front, sugar stocks were in focus as industry body ISMA said sugar production in India, the world's second-largest producer of the sweetener, surged nearly three-folds to 14.10 lakh tonnes in the 2020-21 season so far due to better crop output and timely commencement of the crushing operation.

Finally, the BSE Sensex rose 227.34 points or 0.52% to 44,180.05, while the CNX Nifty was up by 64.05 points or 0.50% to 12,938.25.

The BSE Sensex touched high and low of 44,215.49 and 43,785.78, respectively and there were 15 stocks advancing against 15 stocks declining on the index.

The broader indices ended in green; the BSE Mid cap index rose 1.22%, while Small cap index was up by 0.90%.

The top gaining sectoral indices on the BSE were Capital Goods up by 3.72%, Auto up by 3.11%, Industrials up by 2.97%, Realty up by 2.07% and Bankex up by 2.04%, while FMCG down by 1.10%, IT down by 1.04%, TECK down by 1.01%, Telecom down by 0.61% and Healthcare down by 0.52% were the top losing indices on BSE.

The top gainers on the Sensex were Mahindra & Mahindra up by 10.76%, Larsen & Toubro up by 6.15%, Indusind Bank up by 5.67%, Bajaj Finserv up by 5.62% and SBI up by 4.93%. On the flip side, Hindustan Unilever down by 2.07%, ITC down by 1.74%, Titan Company down by 1.69%, TCS down by 1.51% and Bharti Airtel down by 1.26% 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 traded in a range of 12,948.85 and 12,819.35 and there were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Mahindra & Mahindra up by 10.64%, Tata Motors up by 9.30%, Bajaj Finserv up by 6.44%, Larsen & Toubro up by 6.04% and Indusind Bank up by 5.92%. On the flip side, BPCL down by 2.85%, Hindustan Unilever down by 1.98%, Dr. Reddys Lab down by 1.70%, Titan Company down by 1.57% and TCS down by 1.50% were the top losers.

European markets were trading mostly in green; France’s CAC increased 14.95 points or 0.27% to 5,497.95 and Germany’s DAX increased 34.13 points or 0.26% to 13,167.60, while UK’s FTSE 100 decreased 5.09 points or 0.08% to 6,360.24.

Asian markets ended mostly higher on Wednesday. Chinese shares ended higher after the Chinese government hinted at additional policy measures to aid the economic recovery. Premier Li Keqiang said that China will promote economic growth to a reasonable range while pursuing higher quality development. Seoul stocks ended marginally higher, despite the South Korea would tighten physical distancing rules for Seoul and its surrounding areas from Thursday. The South Korean government saying its anti-corona virus efforts is facing a crisis as it works to contain increases in new cases in and around the capital. Though, Japanese shares ended down amid concerns over resurgence in corona virus infections, with the Nikkei business daily reported that the Tokyo government was considering raising its infection alert to the highest of four levels as early as Thursday.