Bloodbath continues over Dalal Street

A bloodbath continued over the Dalal Street in early afternoon deals, with both Sensex and Nifty witnessing a sharp selling pressure, as a closer fight between the two major alliances, NDA and INDIA, leading to a downturn in investor confidence. Adding more worries among traders, credit rating agency India Ratings and Research (Ind-Ra) in its latest report has predicted that FY24 was a bittersweet year for the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC), with the average resolution time jumping to a four-year high and the recovery levels at their lowest for corporate debtors (CDs) and financial creditors (FCs) in the past four years.

On the global front, Asian markets were trading mostly in red, even after the manufacturing sector in Thailand bounced back up into expansion territory in May, with a manufacturing PMI score of 50.3. That's up from 48.6 in April and it moves above the boom-or-bust line of 50 that separates expansion from contraction.

The BSE Sensex is currently trading at 70747.64, down by 5721.14 points or 7.48% after trading in a range of 70234.43 and 76300.46. There were 1 stock advancing against 29 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index fell by 11.55%, while Small cap index was down by 10.22%.

The top losing sectoral indices on the BSE were PSU down by 19.28%, Power down by 17.45%, Utilities down by 17.06%, Oil & Gas down by 16.10% and Capital Goods down by 15.30%, while there were no gaining sectoral indices on the BSE.

The only gainer on the Sensex was Hindustan Unilever up by 3.38%. On the flip side, NTPC down by 19.67%, SBI down by 18.04%, Power Grid Corp down by 17.03%, Larsen & Toubro down by 14.43% and Indusind Bank down by 10.13% were the top losers.

Meanwhile, with the average resolution time jumping to a four-year high and the recovery levels at their lowest for corporate debtors (CDs) and financial creditors (FCs) in the past four years, credit rating agency India Ratings and Research (Ind-Ra) in its latest report has predicted that FY24 was a bittersweet year for the corporate insolvency resolution process (CIRP) under the Insolvency and Bankruptcy Code (IBC).

However, as per the report, there was a sharp rise in the recovery for operational creditors (OCs) and the number of cases closed under CIRP has outpaced the cases admitted first time since FY21. The number of cases closed through the resolution plan route has seen a steady improvement, as reflected by the improving ratio of resolution orders to liquidation orders. 

But, the rating agency noted that the lengthening timeline to achieve resolution has led to a significant fall in the recovery rate. It said that the recovery efficiency of cases closed within 333 days is 49% which falls sharply to 26% once the period crosses 600 days. 

The CNX Nifty is currently trading at 21568.30, down by 1695.60 points or 7.29% after trading in a range of 21281.45 and 23179.50. There were 3 stocks advancing against 47 stocks declining on the index.

The top gainers on Nifty were Hindustan Unilever up by 4.19%, Britannia up by 0.72% and Nestle up by 0.43%. On the flip side, Adani Ports & SEZ down by 25.00%, Adani Enterprises down by 22.57%, ONGC down by 19.99%, Coal India down by 17.86% and SBI down by 16.13% were the top losers. 

Asian markets were trading mostly in red; Shanghai Composite weakened 1.64 points or 0.05% to 3,076.85, Straits Times fell 8.06 points or 0.24% to 3,340.81, KOSPI dropped 19.87 points or 0.75% to 2,662.65, Nikkei 225 slipped 85.57 points or 0.22% to 38,837.46 and Taiwan Weighted lost 180.14 points or 0.84% to 21,356.62, while Hang Seng advanced 92.86 points or 0.5% to 18,495.90 and Jakarta Composite gained 93.32 points or 1.31% to 7,129.51.