Sensex, Nifty trade in red terrain during late morning deals

Weak trade continued over the Dalal Street in late morning deals, with both Sensex and Nifty trading below their neutral lines with notable losses. Mixed cues from other Asian markets impacted sentiments over the Street. Traders overlooked reports that net new enrolments with retirement fund body EPFO rose by 56 per cent to 11.55 lakh in October compared to 7.39 lakh in the same month last year, according to its latest payroll data, providing a perspective on formal sector employment amid the coronavirus pandemic. The net payroll additions, however, have registered a slight dip in October compared to 14.19 lakh in September this year.

On the global front, Asian markets were trading mixed, after China's benchmark lending rates were left unchanged as the economy continued to recover strongly from the coronavirus driven downturn. The one-year loan prime rate was retained at 3.85 percent and the five-year loan prime rate was maintained at 4.65 percent. The one-year and five-year loan prime rates were last reduced in April. The one-year loan prime rate was lowered by 20 basis points and five-year rate by 10 basis points in April.

The BSE Sensex is currently trading at 46844.94, down by 115.75 points or 0.25% after trading in a range of 46693.95 and 47055.69. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.28%, while Small cap index  was down by 0.01%.

The top gaining sectoral indices on the BSE were IT up by 0.72%, TECK up by 0.55%, Realty up by 0.49%, Healthcare up by 0.42% and Energy up by 0.25%, while PSU down by 1.38%, Oil & Gas down by 1.28%, Auto down by 1.10%, Metal down by 1.08% and Utilities down by 1.06% were the top losing indices on BSE.

The top gainers on the Sensex were HCL Tech up by 1.40%, Sun Pharma up by 1.19%, Infosys up by 0.94%, Tech Mahindra up by 0.80% and Reliance Industries up by 0.77%. On the flip side, Mahindra & Mahindra down by 3.00%, ONGC down by 2.53%, Power Grid down by 2.06%, ICICI Bank down by 1.81% and SBI down by 1.77% were the top losers.

Meanwhile, with an aim to improve the health of the country's banking sector, Economic Affairs Secretary Tarun Bajaj has said that the government is exploring all options, including setting up of a bad bank. He added that the government has recapitalised public sector banks and continue to pump in capital as per requirements.

Bajaj said ‘we are looking at various options, including the option you mentioned (of bad bank), and it is still in the works... The RBI has been asking us, and we ourselves also feel that we need to recapitalise. We have recapitalised to a large extent and this year too, we have kept some money for recapitalisation so that commitment is there...’. Currently, banks sell their bad loans to ARCs as per the prudent norms of the Reserve Bank of India.

To help the MSME sector, Bajaj said the government has announced 100 per cent guarantee for the smaller industries so that the banks could lend to them. Recently, the finance ministry, said that banks have sanctioned loans worth Rs 2,05,563 crore to about 81 lakh accounts under the Rs 3-lakh crore Emergency Credit Line Guarantee Scheme (ECLGS) for the MSME sector that was impacted by disruptions caused due to the coronavirus pandemic. Of this 40 lakh MSME accounts have received Rs 1,58,626 crore till December 4.

The CNX Nifty is currently trading at 13722.70, down by 37.85 points or 0.28% after trading in a range of 13674.40 and 13777.50. There were 19 stocks advancing against 31 stocks declining on the index.

The top gainers on Nifty were Cipla up by 2.07%, HCL Tech up by 1.50%, Sun Pharma up by 1.24%, Infosys up by 1.03% and Tech Mahindra up by 0.81%. On the flip side, Mahindra & Mahindra down by 3.09%, ONGC down by 2.68%, Tata Motors down by 2.58%, Indian Oil Corporation down by 2.45% and GAIL India down by 2.44% were the top losers.

Asian markets were trading mixed; Nikkei 225 declined 135.63 points or 0.51% to 26,627.76, Straits Times lost 4.44 points or 0.16% to 2,844.54, Hang Seng fell 54.41 points or 0.21% to 26,444.19 and KOSPI slipped 8.35 points or 0.30% to 2,763.83. However, Taiwan Weighted added 65.09 points or 0.46% to 14,315.05, Jakarta Composite surged 78.17 points or 1.28% to 6,182.49 and Shanghai Composite was up by 19.82 points or 0.58% to 3,414.72.