Key indices extend losses in late morning deals

Indian equity benchmarks continued their weak trade in late morning deals, with both Sensex and Nifty extending their losses. Sentiments over the street remained negative, despite positive cues from other Asian markets. Traders were seen taking a note of reports that COVID-19 has drastically affected the investment climate in all economies of the world, causing a sharp decline in the demand and supply equilibrium everywhere. India has been no exception to this unprecedented economic shock. Yet, investment sentiment in the Indian economy has been buoyed by the frequent and active intervention of the Government of India despite being hit by a world-wide pandemic.

On the global front, Asian markets were trading mostly higher, even after consumer prices in South Korea were up 0.6 percent on year in November. The Statistics Korea said that missed forecasts for an increase of 0.9 percent but was up from 0.1 percent in the previous month. On a monthly basis, inflation eased 0.1 percent - again shy of expectations for an increase of 0.2 percent but improving from the 0.6 percent contraction in October. Core CPI, which excludes volatile food costs, gained an annual 0.6 percent after slipping 0.3 percent a month earlier.

The BSE Sensex is currently trading at 44494.82, down by 160.62 points or 0.36% after trading in a range of 44454.88 and 44729.64. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Metal up by 2.99%, Realty up by 2.88%, Basic Materials up by 1.41%, Consumer Durables up by 1.40% and Oil & Gas up by 1.35%, while Bankex down by 0.65%, IT down by 0.48% and TECK down by 0.36% were the only losing indices on BSE.

The top gainers on the Sensex were Tata Steel up by 3.42%, Asian Paints up by 2.53%, Bajaj Auto up by 2.18%, Titan Co up by 2.08% and Maruti Suzuki up by 1.17%. On the flip side, HDFC Bank down by 1.53%, Kotak Mahindra Bank down by 1.33%, HDFC down by 1.21%, Tech Mahindra down by 1.21% and Infosys down by 1.12% were the top losers.

Meanwhile, ICRA in its latest report has said that debt resolution through the insolvency and bankruptcy code (IBC) and the resultant realisation for financial creditors has taken a hit so far this fiscal due to the pandemic that led to suspension of fresh proceedings. It said at best, financial creditors may realise Rs 60,000-65,000 crore through IBC in FY21, significantly lower than Rs 1,00,000 crore they realised in FY20. It added that better realisation looks uncertain even in FY22 due to the suspension of the code for a one-year period due to the pandemic.

The rating agency said the number of admitted cases declined 82 per cent to 161 in the first half of the current fiscal from 889 cases in the year-ago period, while the number of cases resolved during the reporting period declined by 61 per cent over the year-ago period as the case backlog jumped due to the pandemic-driven lockdowns. For the first six months of FY21, only 42 cases undergoing insolvency process have been resolved/plan approved, yielding just about Rs 12,600 crore for financial creditors.

ICRA said ‘The pandemic has sort of ensured that the IBC resolution process may continue to get impacted in the second half due to the decline in cases yielding a resolution plan as well as an increase in haircuts that lenders would have to take’. It noted ‘Even the expected realisation of Rs 60,000-65,000 crore for the year would largely depend on the successful resolution of a large housing finance firm (DHFL) currently underway’. It also said ‘the realisation may continue to suffer next fiscal as fresh insolvency cases are suspended till December 25 this year, which may be further extended by three months or more’.

The CNX Nifty is currently trading at 13068.00, down by 41.05 points or 0.31% after trading in a range of 13066.45 and 13128.50. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 4.34%, Indian Oil Corporation up by 3.38%, JSW Steel up by 3.16%, Tata Steel up by 3.06% and Tata Motors up by 2.73%. On the flip side, HDFC Bank down by 1.63%, Tech Mahindra down by 1.42%, Kotak Mahindra Bank down by 1.41%, HDFC down by 1.36% and Infosys down by 1.35% were the top losers.

Asian markets were trading mostly higher; Nikkei 225 surged 40.86 points or 0.15% to 26,828.40, Taiwan Weighted gained 73.17 points or 0.53% to 13,958.84, KOSPI surged 33.65 points or 1.28% to 2,667.90, Jakarta Composite added 42.51 points or 0.74% to 5,767.25 and Shanghai Composite was up by 3.02 points or 0.09% to 3,454.96. On other hand, Straits Times slipped 12.40 points or 0.44% to 2,801.72 and Hang Seng lost 88.39 points or 0.33% to 26,479.29.