Key indices remain near neutral lines

Weak trade continued over the Dalal Street in late morning deals, with both Sensex and Nifty trading near their neutral lines. Domestic sentiments were negative on the back of negative cues from other Asian markets. Traders also got worried, after India's services sector activity expanded at a slower pace in December as rates of growth in sales eased to a three-month low and staff hiring came to a halt amid weak business optimism. The seasonally adjusted India Services Business Activity Index fell from 53.7 in November to 52.3 in December. The index was above the critical 50 mark that separates growth from contraction for the third month in a row during December, but pointed to the slowest pace of expansion in the three-month sequence.

On the global front, Asian markets were trading lower, after the services sector in China continued to expand in December, albeit at a slower pace, the latest survey from Caixin showed on Wednesday with a services PMI score of 56.3. That's down from 57.8 in November, although it remains well above the boom-or-bust line of 50 that separates expansion from contraction. Individually, the softer rise in overall activity coincided with a slower expansion of total new work at the end of 2020. Although rising solidly overall, the latest increase in new business was the least marked since September.

The BSE Sensex is currently trading at 48426.36, down by 11.42 points or 0.02% after trading in a range of 48329.57 and 48616.66. 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 0.94%, while Small cap index was up by 0.70%.

The top gaining sectoral indices on the BSE were Telecom up by 1.93%, Metal up by 1.58%, Consumer Durables up by 1.43%, PSU up by 1.41% and Utilities up by 1.36%, while Energy down by 1.11% and FMCG down by 0.58% were the only losing indices on BSE.

The top gainers on the Sensex were ONGC up by 3.37%, Bharti Airtel up by 2.08%, Tech Mahindra up by 1.79%, Larsen & Toubro up by 1.76% and SBI up by 1.58%. On the flip side, ITC down by 1.80%, Reliance Industries down by 1.68%, Bajaj Finance down by 1.15%, Bajaj Finserv down by 1.11% and Axis Bank down by 0.78% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has said that entities making transactions of Rs 50 crore and above using the RBI-run centralised payment systems Real Time Gross Settlement (RTGS) and National Electronic Funds Transfer (NEFT) will have to quote the 20-digit unique Legal Entity Identifier (LEI)  from April 1, 2021. The LEI is a 20-digit number used to uniquely identify parties to financial transactions worldwide. It was conceived as a key measure to improve the quality and accuracy of financial data systems for better risk management post the global financial crisis.

LEI has been introduced by the Reserve Bank in a phased manner for participants in the over the counter (OTC) derivative and non-derivative markets as also for large corporate borrowers. The central bank said ‘It has now been decided to introduce the LEI system for all payment transactions of value Rs 50 crore and above undertaken by entities (non-individuals) using Reserve Bank-run Centralised Payment Systems viz. RTGS and NEFT’. It added that the directions shall be effective from April 1, 2021.

In preparation for the wider introduction of LEI across all payment transactions, RBI has asked the banks concerned to advise entities who undertake large value transactions to obtain LEI in time, if they do not already have one. Banks have also been asked to maintain records of all transactions of Rs 50 crore and above through RTGS and NEFT. Entities can obtain LEI from any of the Local Operating Units (LOUs) accredited by the Global Legal Entity Identifier Foundation (GLEIF), the body tasked to support the implementation and use of LEI. In India, LEI can be obtained from Legal Entity Identifier India Ltd (LEIL), which is also recognised as an issuer of LEI by the Reserve Bank under the Payment and Settlement Systems Act, 2007.

The CNX Nifty is currently trading at 14211.20, up by 11.70 points or 0.08% after trading in a range of 14174.70 and 14244.15. There were 36 stocks advancing against 14 stocks declining on the index.

The top gainers on Nifty were GAIL India up by 3.79%, ONGC up by 3.63%, Indian Oil Corporation up by 2.47%, Bharti Airtel up by 2.02% and Wipro up by 1.99%. On the flip side, ITC down by 1.73%, Reliance Industries down by 1.67%, Bajaj Finserv down by 1.09%, Bajaj Finance down by 1.09% and Hindustan Unilever down by 0.84% were the top losers.

Asian markets were trading lower; Nikkei 225 slipped 84.33 points or 0.31% to 27,074.30, Hang Seng decreased 239.31 points or 0.87% to 27,410.55, Straits Times trembled 6.10 points or 0.21% to 2,853.58, KOSPI fell 2.74 points or 0.09% to 2,987.83, Shanghai Composite declined 5.96 points or 0.17% to 3,522.72, Jakarta Composite lost 48.97 points or 0.8% to 6,088.37 and Taiwan Weighted dropped 16.24 points or 0.11% to 14,983.79.