Markets continue to trade in positive terrain

Indian stock markets continued to trade in positive terrain in the noon session due to buying in Healthcare, IT, and TECK stocks. Sentiments were getting support with Commerce and Industry Minister Piyush Goyal’s statement that the proposed free trade agreements (FTAs) with countries, including Australia, the UK and the UAE, are moving at a fast pace and these pacts, when implemented, would help provide greater market access to domestic goods. However, upside remain capped as WPI inflation in October surged to 12.54% from 10.66% a month ago and 1.31% in October 2020. The high rate of inflation in October 2021 is primarily due to rise in prices of mineral oils, basic metals, food products, crude petroleum & natural gas, chemicals and chemical products etc as compared the corresponding month of the previous year.

On the global front, Asian markets were trading mostly higher amid Chinese economic data surprised on the high side, with annual growth in retail sales and industrial output both handily beating forecasts. Back on street, among market debutants, SoftBank-backed PolicyBazaar's parent PB Fintech opened at a premium 17% to the IPO price. Refined wood pulp maker Sigachi Industries made bumper listing at Rs 570 over its IPO price of Rs 163.  S.J.S. Enterprises listed with 0.37% discount on the BSE.

The BSE Sensex is currently trading at 60739.49, up by 52.80 points or 0.09% after trading in a range of 60635.63 and 61036.56. There were 15 stocks advancing against 15 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index rose 0.15%, while Small cap index was down by 0.30%.

The top gaining sectoral indices on the BSE were Healthcare up by 1.58%, IT up by 0.62%, TECK up by 0.49%, Oil & Gas up by 0.47% and FMCG was up by 0.39%, while Metal down by 1.67%, Basic Materials down by 0.67%, Telecom down by 0.60%, Auto down by 0.50% and Industrials was down by 0.30% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid up by 2.58%, Asian Paints up by 1.19%, ITC up by 1.12%, Infosys up by 0.87% and Nestle was up by 0.80%. On the flip side, Tata Steel down by 1.81%, Bajaj Auto down by 1.55%, Mahindra & Mahindra down by 1.30%, Bajaj Finserv down by 1.05% and Bajaj Finance was down by 0.93% were the top losers.

Meanwhile, Ministry of Power has affirmed that insolvency proceedings can be initiated against state-owned electricity distribution as well as generation firms in case of default of payment by the creditors. As far as state-owned (power) distribution and generation company like TANGEDCO is concerned, it is clear that it a government company as defined under section 2 (45) of the Companies Act and would fall under Insolvency Code (IBC).

The ministry also stated that TANGEDCO cannot be categorised as a government body formed by way of a statute for performing sovereign government function. In fact, it is a government company formed under Companies Act 2013 and very much under the ambit of IBC as per Section 3(7) of the Insolvency Code. Therefore, a state-owned power distribution company can be taken to the National Company Law Tribunal (NCLT) under the IBC for default in payment.

It said CIRP can be initiated against any state-owned discom but they generally make payment of the default amount before admission of the case in NCLT. The outstanding dues of discoms have been a perennial issue plaguing the power sector for decades. According to the PRAAPTI portal, the outstanding dues of power distribution firms are to the tune of Rs 1,21,830 lakh crore in November 2021 which includes overdues of Rs 99,385 crore.

The CNX Nifty is currently trading at 18105.80, up by 3.05 points or 0.02% after trading in a range of 18082.35 and 18210.15. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Power Grid up by 2.53%, UPL up by 2.15%, ONGC up by 2.13%, Cipla up by 1.42% and Asian Paints was up by 1.23%. On the flip side, Coal India down by 3.83%, Hindalco down by 2.21%, Tata Steel down by 1.98%, Bajaj Auto down by 1.46% and JSW Steel was down by 1.39% were the top losers.

Asian markets were trading mostly higher; Hang Seng increased 2.96 points or 0.01% to 25,330.93, Straits Times advanced 0.14 points or 0% to 3,228.59, Nikkei 225 surged 166.83 points or 0.56% to 29,776.80, KOSPI rose 32.26 points or 1.09% to 3,001.06 and Taiwan Weighted was up by 116.34 points or 0.66% to 17,634.47.

On the other hand, Shanghai Composite declined 4.87 points or 0.14% to 3,534.23 and Jakarta Composite was down by 21.25 points or 0.32% to 6,629.80.