Lackluster trade continues on Dalal Street

Indian equity benchmarks continued their lackluster trade in afternoon session, amid negative signals from other Asian markets. Weak broader indices along with sell off at Realty, IT and Energy counters, dragged the markets lower. Sentiments were dampened as ICRA Ratings warned that the third wave of the pandemic is likely to shave 40 bps off the fourth quarter Gross Domestic Product (GDP) growth that may print in at 4.5-5 per cent. It said third wave of the pandemic has seen a massive spike in infections after the more infectious Omicron variant of the coronavirus appeared. Traders were also worried with report stating that the cost of debt-funds for the states has touched the highest level so far this fiscal with the weighted average cut-off crossing the 7.16 percentage points at the latest auctions, up 11 bps over the past week, reflecting the hardening yields even for the government securities. On the global front, Asian markets were trading mostly lower as extending a global slump after Federal Reserve meeting minutes pointed to a faster-than-expected rise in US interest rates due to concerns about persistent inflation.

The BSE Sensex is currently trading at 59327.19, down by 895.96 points or 1.49% after trading in a range of 59300.18 and 59781.86. There were 2 stocks advancing against 28 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.56%, while Small cap index was down by 0.28%.

The only gaining sectoral indices on the BSE were Telecom was up by 2.00%, while Realty down by 2.20%, IT down by 2.05%, Energy down by 1.62%, TECK down by 1.57% and Bankex was down by 1.25% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 2.44% and Maruti Suzuki was up by 0.92%. On the flip side, HCL Tech down by 2.40%, Infosys down by 2.36%, TCS down by 2.22%, Kotak Mahindra Bank down by 2.20% and Reliance Industries was down by 2.17% were the top losers.

Meanwhile, Department of Food and Public Distribution has issued guidelines for restructuring of loans taken by mills from the Sugar Development Fund (SDF), providing a moratorium for two years and then repayment in five years to eligible defaulting factories.

The guidelines for restructuring has been issued to facilitate rehabilitation of financially weak but economically viable sugar mills which have availed loans under the Sugar Development Fund Act, 1982. The outstanding amount of default of SDF loans is Rs 3,068.31 crore (as on November 30, 2021) which include Rs 1249.21 crore as principal amount, Rs 1,071.30 crore as interest and Rs 747.80 crore as additional interest due to default. Waiver of additional interest in full will be given to the eligible sugar factories.  

These guidelines will be uniformly applicable for SDF loans availed by all types of concerns, including Co-operative Societies, Private Ltd Companies and Public Ltd Companies. The rate of interest will be changed to the interest rate as per the prevailing bank rate on the date of approval of the rehabilitation package. These points will facilitate reduction of the debt burden over these defaulting sugar mills.

The CNX Nifty is currently trading at 17668.75, down by 256.50 points or 1.43% after trading in a range of 17661.75 and 17797.95. There were 6 stocks advancing against 44 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 2.41%, UPL up by 1.78%, Maruti Suzuki up by 0.83%, Bajaj Auto up by 0.78% and Hindalco was up by 0.62%. On the flip side, Adani Ports down by 3.03%, JSW Steel down by 2.45%, HCL Tech down by 2.40%, Infosys down by 2.33% and Reliance Industries was down by 2.29% were the top losers.

Asian markets were trading mostly lower; Jakarta Composite lost 29.10 points or 0.44% to 6,633.20, KOSPI fell 33.44 points or 1.13% to 2,920.53, Taiwan Weighted dropped 132.04 points or 0.71% to 18,367.92, Shanghai Composite declined 7.98 points or 0.22% to 3,587.20, Hang Seng decreased 89.19 points or 0.39% to 22,818.06 and Nikkei 225 was down by 844.29 points or 2.88% to 28,487.87.

On the flip side, Straits Times was up by 18.79 points or 0.59% to 3,182.23.