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Local bourses maintain upbeat trend in afternoon deals
Feb-19-2019

The local barometer gauges continue to maintain their upbeat trend in afternoon session, on sustained buying in select bluechips by domestic investors, tracking global cues. Sentiments remained positive with Reserve Bank of India’s (RBI) statement that it would inject Rs 12,500 crore into the system through purchase of government securities on February 21 to increase liquidity. The purchase will be made through open market operations (OMOs). Trader also took note of Finance Minister Arun Jaitley’s statement that India needs fewer and mega banks which are strong because in every sense, from borrowing rates to optimum utilisation, the economies of scale as far as banking sector is concerned are of great help. On the sectoral front, select Pharma stocks were trading higher with rating firm India Ratings and Research’s statement that domestic pharmaceutical sector's outlook will remain stable on the back of an expected recovery in margins, improved cash generation and growth in the domestic market.

On the global front, Asian markets were trading mostly in green, on hopes that Sino-US trade talks were making progress and expectations of policy stimulus from central banks. Back home, the BSE Sensex is currently trading at 35639.77, up by 141.33 points or 0.40% after trading in a range of 35477.47 and 35698.08. There were 24 stocks advancing against 7 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose 0.88%, while Small cap index was up by 0.65%.

The top gaining sectoral indices on the BSE were Realty up by 2.01%, Telecom up by 1.97%, Metal up by 1.51%, Oil & Gas up by 1.47% and PSU up by 1.35%, while IT down by 1.48% and TECK down by 1.02% were the only losing indices on BSE.

The top gainers on the Sensex were Vedanta up by 2.84%, Bharti Airtel up by 2.58%, ICICI Bank up by 2.41%, ONGC up by 2.01% and Bajaj Finance up by 1.97%. On the flip side, TCS down by 2.05%, Infosys down by 1.99%, NTPC down by 1.72%, Hindustan Unilever down by 1.02% and Indusind Bank down by 0.44% were the top losers.

Meanwhile, the rating agency ICRA in its latest report has said that there is need to strengthen the corporate insolvency resolution process to ensure that the resolution plans approved by the National Company Law Tribunal (NCLT) are firmly implemented so that the sanctity of the process is maintained. It noted that in the last two years, Insolvency and Bankruptcy Code (IBC) was implemented, three concluded corporate insolvency resolution process (CIRPs) being brought back to the National Company Law Tribunals (NCLTs).

According to the report, the government should set up strong deterrents to ensure that the resolution applicants do not default on their proposed plans, through measures like a penalty amount linked to the realization promised to the creditors under the resolution plan or barring the resolution applicant from participating in any future CIRPs. It pointed out that such deterrents would make resolution applicants more cautious as well as sincere at the time of submission of their resolution plans. It would also reduce the instances of completed CIRPs being brought back to the NCLT benches that are already overburdened with cases.

The rating agency further said that in cases which go into liquidation like the three ones, recovery for the creditors is most likely to be lower than the amount that would have been envisaged if the resolution application would have materialized. Thus, it becomes imperative that post the approval of the resolution plan by the NCLT, the resolution applicant puts the plan in action within the prescribed timelines so that there is a fruitful outcome of the entire process.

The CNX Nifty is currently trading at 10676.95, up by 36.00 points or 0.34% after trading in a range of 10635.25 and 10694.70. There were 35 stocks advancing against 15 stocks declining on the index.

The top gainers on Nifty were Vedanta up by 2.84%, BPCL up by 2.73%, Bharti Airtel up by 2.35%, ICICI Bank up by 2.32% and Zee Entertainment up by 2.07%. On the flip side, Infosys down by 2.26%, NTPC down by 2.26%, TCS down by 2.08%, Dr. Reddy’s Lab down by 1.74% and Tech Mahindra down by 1.59% were the top losers.

Asian markets were trading mostly in green; Nikkei 225 surged 20.80 points or 0.1% to 21,302.65, Jakarta Composite soared 12.12 points or 0.19% to 6,509.94, Taiwan Weighted strengthened 6.98 points or 0.07% to 10,152.26 and Straits Times advanced 4.20 points or 0.13% to 3,270.17.

On the flip side, KOSPI fell 5.26 points or 0.24% to 2,205.63, Shanghai Composite declined 6.17 points or 0.22% to 2,748.19 and Hang Seng was down by 68.08 points or 0.24% to 28,278.93.

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