Markets add losses in late afternoon session

Indian equity markets widened their losses in late afternoon session ahead of monthly F&O expiry later in the day. Sell off also witnessed in the broader indices i.e., the BSE Mid cap index and Small cap index. TECK, IT and banking sectors’ stocks witnessed notable losses. Besides, traders were cautious ahead of upcoming Union Budget. Sector wise, steel sector remained in focused after Union Minister Jyotiraditya Scindia said the government is aiming to increase the share of scrap in steel making process to 50 per cent by 2047. The steel minister emphasised on usage of scrap in steel making as manufacturing the metal through scrap and other waste products is less polluting and termed it as a step ‘towards green steel initiative’. On the global front, Asian markets were trading mostly in green as traders awaited fresh pledges of stimulus from Chinese officials a day after they announced a measure to boost bank lending. European markets were trading lower as investors prepare for the latest monetary policy decision from the European Central Bank. 

The BSE Sensex is currently trading at 70413.84, down by 646.47 points or 0.91% after trading in a range of 70319.04 and 71049.46. There were 8 stocks advancing against 22 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index declined 0.68%, while Small cap index was up by 0.40%.

The top gaining sectoral indices on the BSE were Utilities up by 1.31%, Power up by 1.05%, PSU up by 0.33%, Industrials up by 0.21% and Realty was up by 0.14%, while TECK down by 1.58%, IT down by 1.44%, Healthcare down by 1.29%, Bankex down by 1.27% and FMCG was down by 1.24% were the top losing indices on BSE.

The top gainers on the Sensex were NTPC up by 1.89%, Indusind Bank up by 0.71%, Reliance Industries up by 0.61%, Bajaj Finserv up by 0.27% and ICICI Bank up by 0.22%. On the flip side, Tech Mahindra down by 6.66%, Bharti Airtel down by 2.50%, HCL Tech down by 2.17%, Axis Bank down by 2.16% and ITC down by 2.09% were the top losers.

Meanwhile, the Government has allowed direct listing of securities by public Indian companies on International Exchanges of GIFT IFSC. This policy initiative will reshape the Indian capital market landscape and offers Indian companies, especially start-ups and companies in the sunrise and technology sectors, an alternative avenue to access global capital beyond the domestic exchanges. This is expected to lead to better valuation of Indian companies in line with global standards of scale and performance, boost foreign investment flows, unlock growth opportunities and broaden the investor base. The public Indian companies will have the flexibility to access both markets i.e. domestic market for raising capital in INR and the international market at IFSC for raising capital in foreign currency from the global investors.

In pursuance of the announcement on July 28, 2023 by Union Minister for Finance and Corporate Affairs Nirmala Sitharaman to enable direct listing of Indian Companies at GIFT- IFSC exchanges in the first phase, the Department of Economic Affairs (DEA), Ministry of Finance, has amended Foreign Exchange Management (Non-debt Instruments) Rules, 2019, and notified the ‘Direct Listing of Equity Shares of Companies Incorporated in India on International Exchanges Scheme’. Simultaneously, the Ministry of Corporate Affairs (MCA) has issued Companies (Listing of Equity Shares in Permissible Jurisdictions) Rules, 2024.

These, together, provide an overarching regulatory framework to enable public Indian companies to issue and list their shares in permitted international exchanges. As of now, the framework allows unlisted public Indian companies to list their shares on an international exchange. SEBI is in the process of issuing the operational guidelines for listed public Indian companies. The international stock exchanges at GIFT-IFSC under the regulatory supervision of IFSCA namely, India International Exchange and NSE International Exchange have been, currently, prescribed as permitted stock exchanges under the Rules and the Scheme.

Earlier, through the Companies (Amendment) Act, 2020, enabling provisions were included in the Companies Act, 2013, to allow direct listing of prescribed class (es) of securities of prescribed class (es) of public companies incorporated in India on permitted stock exchanges in permissible foreign jurisdictions or other prescribed jurisdictions. The enabling provisions of the Companies (Amendment) Act, 2020 were, accordingly, brought into force with effect from October 30, 2023.

The CNX Nifty is currently trading at 21267.50, down by 186.45 points or 0.87% after trading in a range of 21247.05 and 21459.00. There were 12 stocks advancing against 38 stocks declining on the index.

The top gainers on Nifty were Bajaj Auto up by 4.61%, NTPC up by 2.02%, Coal India up by 1.83%, Adani Ports up by 0.77% and Indusind Bank up by 0.63%. On the flip side, Tech Mahindra down by 6.64%, Cipla down by 4.07%, SBI Life down by 2.66%, Divi's Lab down by 2.54% and Bharti Airtel down by 2.47% were the top losers.

Asian markets were trading mostly in green; Hang Seng advanced 312.09 points or 1.93% to 16,211.96, Taiwan Weighted added 126.79 points or 0.7% to 18,002.62, Shanghai Composite strengthened 85.34 points or 2.94% to 2,906.11, Nikkei 225 surged 9.99 points or 0.03% to 36,236.47 and KOSPI was up by 0.65 points or 0.03% to 2,470.34. On the flip side, Straits Times fell 7.23 points or 0.23% to 3,146.10 and Jakarta Composite was down by 37.37 points or 0.52% to 7,190.45.

European markets were trading lower; UK’s FTSE 100 decreased 4.25 points or 0.06% to 7,523.42, France’s CAC fell 7.12 points or 0.1% to 7,448.52 and Germany’s DAX was down by 48.1 points or 0.28% to 16,841.82.