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Indices cut most of gains in late morning deals
Apr-20-2021

Indian equity benchmarks cut most of their gains in late morning deals but managed to trade in green terrain, amid mixed cues from other Asian markets. Traders were getting relief, as Minister of Railways, Commerce & Industry, Consumer Affairs and Food & Public Distribution Piyush Goyal launched the Startup India Seed Fund Scheme (SISFS). The Fund aims to provide financial assistance to startups for proof of concept, prototype development, product trials, market-entry, and commercialization.

However, gains got trimmed in the market, as market participants got cautious, after the Reserve Bank of India (RBI) has said it has decided not to activate countercyclical capital buffer (CCyB) framework as the current situation does not warrant such an action. The RBI in February 2005 had put in place CCyB guidelines with the overall objective of strengthening the banking sector. It was envisaged that the CCyB would be activated as and when the circumstances warranted.

On the global front, Asian markets were trading mixed, after China kept its benchmark lending rates unchanged, as widely expected. The one-year loan prime rate was retained at 3.85 percent and the five-year loan prime rate was maintained at 4.65 percent. The one-year and five-year loan prime rates were last lowered in April 2020. The one-year loan prime rate was cut by 20 basis points and five-year rate by 10 basis points last April.

The BSE Sensex is currently trading at 48052.29, up by 102.87 points or 0.21% after trading in a range of 48022.02 and 48478.34. There were 21 stocks advancing against 9 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 1.23%, while Small cap index was up by 1.02%.

The top gaining sectoral indices on the BSE were Telecom up by 1.29%, Utilities up by 1.27%, Healthcare up by 1.26%, Consumer Durables up by 1.23% and Auto up by 1.19%, while IT down by 0.77%, TECK down by 0.56% and Basic Materials down by 0.11% were the only losing indices on BSE.

The top gainers on the Sensex were Dr. Reddy’s Lab up by 4.18%, Bajaj Finserv up by 4.02%, Bajaj Finance up by 3.84%, Indusind Bank up by 2.87% and Titan Company up by 2.14%. On the flip side, Ultratech Cement down by 2.63%, HCL Tech down by 2.50%, Tech Mahindra down by 1.53%, HDFC down by 1.07% and TCS down by 1.01% were the top losers.

Meanwhile, the Reserve Bank of India (RBI) has set up a committee to undertake a comprehensive review of the working of asset reconstruction companies (ARCs) in the financial sector ecosystem and recommend suitable measures for enabling them to meet the growing requirements.  The six-member committee will be headed by Sudarshan Sen, former Executive Director, Reserve Bank of India. Earlier this month, the Reserve Bank had announced setting up of a committee to undertake a comprehensive review of the working of ARCs.

As per the terms of reference of the committee, the panel will review the existing legal and regulatory framework applicable to ARCs and recommend measures to improve efficacy of ARCs. It will also review role of ARCs in resolution of stressed assets including under Insolvency and Bankruptcy Code (IBC), and give suggestions for improving liquidity in and trading of security receipts. Besides, it has also been asked to review business models of the ARCs.

The central bank said ‘The committee will submit its report within three months from the date of its first meeting. Department of Regulation, Reserve Bank of India, will provide the necessary secretarial support to the Committee’. After enactment of Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act in 2002, regulatory guidelines for Asset Reconstruction Companies (ARCs) were issued in 2003 to enable development of this sector and to facilitate smooth functioning of ARCs. Since then, while ARCs have grown in number and size, their potential for resolving stressed assets is yet to be realised fully.

The CNX Nifty is currently trading at 14400.40, up by 40.95 points or 0.29% after trading in a range of 14385.80 and 14526.95. There were 34 stocks advancing against 15 stocks declining, while 1 stock remained unchanged on the index.

The top gainers on Nifty were Dr. Reddy’s Lab up by 4.64%, Bajaj Finserv up by 4.01%, Bajaj Finance up by 4.00%, HDFC Life Insurance up by 2.87% and Tata Consumer Products up by 2.86%. On the flip side, Ultratech Cement down by 2.56%, HCL Tech down by 2.36%, Shree Cement down by 1.96%, Tech Mahindra down by 1.69% and HDFC down by 1.23% were the top losers.

Asian markets were trading mixed; Nikkei 225 fell 518.43 points or 1.75% to 29,166.94, Straits Times lost 2.85 points or 0.09% to 3,206.87, Jakarta Composite dropped 44.43 points or 0.73% to 6,008.11 and Hang Seng declined 4.40 points or 0.02% to 29,101.75. On the flip side, Taiwan Weighted jumped 34.00 points or 0.20% to 17,297.28, KOSPI gained 20.37 points or 0.64% to 3,219.21 and Shanghai Composite was up by 10.61 points or 0.31% to 3,488.16.

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