Bulls roar over Dalal Street

Bulls were roaring over the Dalal Street in late afternoon deals, with both Sensex and Nifty trading near intraday high points, aided by positive cues from European markets. Heavy buying at IT and TECK counters helped indices to hold strong gains. Sentiments remained positive, as the Central Board of Direct Taxes (CBDT) said the net direct tax collection so far this fiscal rose 19.41 per cent to Rs 14.70 lakh crore from the corresponding period of last year. Traders overlooked Reserve Bank of India's (RBI) latest report showing that India’s outward foreign direct investment (OFDI) commitments fell sharply to $2.25 billion in December 2023, compared to over $4.12 billion in December 2022, down by 45.39% year on year.  

On the global front, European markets were trading higher, after the UK economy recovered as expected in November underpinned by services and production. The Office for National Statistics said that real gross domestic product expanded 0.3 percent in November, offsetting the 0.3 percent decrease in October. 

Back home, auto industry stocks were in watch, as the the latest data issued by the Society of Indian Automobile Manufacturers (SIAM) showed that domestic passenger vehicle (PV) wholesales grew by 4 per cent to 2,86,390 units last month. The total number of  PV dispatches by car manufacturers to dealers were 2,75,352 units in December 2022.

The BSE Sensex is currently trading at 72615.03, up by 893.85 points or 1.25% after trading in a range of 71982.29 and 72652.68. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.47%, while Small cap index was up by 0.63%.

The top gaining sectoral indices on the BSE were IT up by 5.09%, TECK up by 4.43%, Realty up by 2.12%, Oil & Gas up by 1.62% and PSU up by 1.14%, while Healthcare down by 0.36%, Auto down by 0.18% and Utilities down by 0.10% were the few losing indices on BSE.

The top gainers on the Sensex were Infosys up by 7.44%, Tech Mahindra up by 4.18%, Wipro up by 4.06%, TCS up by 3.85% and HCL Tech. up by 2.75%. On the flip side, Power Grid down by 0.87%, Ultratech Cement down by 0.86%, Bajaj Finserv down by 0.79%, Titan down by 0.42% and Maruti Suzuki down by 0.31% were the top losers.

Meanwhile, Reserve Bank of India (RBI) Governor Shaktikanta Das has said that lenders have recovered 32 per cent of their total claims under the Insolvency and Bankruptcy Code (IBC) but the learnings suggest the need for ‘some course correction’ with respect to the law. He said the major criticisms of the IBC are on two fronts -- the time taken for resolution and the extent of haircuts as against the admitted claims. The IBC, which came into force in 2016, is a key legislation aimed at resolving stressed in a time-bound and market-linked manner.

Das said in terms of realisation of value, the creditors have realised Rs 3.16 lakh crore out of the admitted claims of Rs 9.92 lakh crore as of September 2023, which works out to a recovery rate of 32 per cent. Highlighting the positive aspects, he said in terms of the nature of resolution since its inception, 7,058 corporate debtors have been admitted for bankruptcy resolution, of which 5,057 cases have been closed as of September 2023. Das said 2,001 corporate debtors are under various stages of resolution. Quoting data from the Insolvency and Bankruptcy Board of India (IBBI), as of September 2023, of the cases that have been closed, about 16 per cent have yielded successful resolution plans, while 19 per cent have been withdrawn under Section 12A of the IBC where largely the debtors agreed for full or partial settlement with creditors. About 21 per cent have been closed on appeal or review; and in 44 per cent of the cases, liquidation orders have been passed.

However, the RBI governor said a fine-combing of the data would indicate that 77 percent of liquidations were inherited from the earlier Board for Industrial and Financial Reconstruction (BIFR) regime or were already defunct units where substantial value erosion had taken place before their admission under the IBC. A total of 38 per cent of the cases that yielded a successful resolution were earlier with the BIFR and/or were defunct; and if not for the IBC, their fate would have perhaps remained uncertain.

The CNX Nifty is currently trading at 21903.70, up by 256.50 points or 1.18% after trading in a range of 21715.15 and 21908.25. There were 33 stocks advancing against 17 stocks declining on the index.

The top gainers on Nifty were Infosys up by 7.99%, Tech Mahindra up by 4.90%, ONGC up by 4.51%, LTIMindtree up by 4.50% and Wipro up by 4.03%. On the flip side, Apollo Hospital Ent. down by 1.43%, Cipla down by 1.21%, Ultratech Cement down by 1.09%, Bajaj Finserv down by 1.03% and Power Grid down by 0.89% were the top losers.

European markets were trading higher; UK’s FTSE 100 increased 55.33 points or 0.73% to 7,631.92, France’s CAC increased 66.48 points or 0.9% to 7,454.10 and Germany’s DAX gained 137.93 points or 0.83% to 16,684.96.

Asian markets were trading mostly in red; Hang Seng declined 57.46 points or 0.35% to 16,244.58, Taiwan Weighted lost 32.49 points or 0.19% to 17,512.83, KOSPI dropped 15.22 points or 0.6% to 2,525.05, Straits Times fell 9.9 points or 0.31% to 3,191.51 and Shanghai Composite weakened 4.67 points or 0.16% to 2,881.98, while Jakarta Composite gained 3.3 points or 0.05% to 7,223.26 and Nikkei 225 surged 527.25 points or 1.48% to 35,577.11.