Markets trade slightly in red

Indian equity markets were trading marginally lower in late morning deals amid weak cues from global markets on concerns surrounding surging dollar and rising bond yields with yield on the benchmark ten-year US note soaring to a twelve-year high. However, downside remained capped as Chief Economic Advisor (CEA) V Anantha Nageswaran said the Indian economy is showing resilience and on the path to recovery. He added that private demand and the services sector are doing better than expected.  On the BSE sectoral front, Oil & Gas, Energy, Telecom, FMCG and TECK witnessed maximum gains in trade, while Metal, Realty, Auto, Consumer Durables and Capital Goods remained the top losers.

On the global front, Asian markets were trading mostly in red following negative cues from US markets overnight, with traders remaining cautiously optimistic as they believe the heavy selling in recent sessions has been overdone. Back home, stock specific development, Mahindra Logistics surged after it acquired the B2B express business of Gurugram-based logistics firm Rivigo Services.

The BSE Sensex is currently trading at 57060.19, down by 85.03 points or 0.15% after trading in a range of 56950.52 and 57704.57. There were 11 stocks advancing against 19 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.85%, while Small cap index down by 0.32%.

The top gaining sectoral indices on the BSE were Oil & Gas up by 0.99%, Energy up by 0.62%, Telecom up by 0.55%, FMCG up by 0.39% and TECK up by 0.26%, while Metal down by 1.69%, Realty down by 1.28%, Auto down by 1.07%, Consumer Durables down by 1.00% and Capital Goods down by 0.91% were the top losing indices on BSE.

The top gainers on the Sensex were Power Grid Corp up by 1.66%, Hindustan Unilever up by 0.98%, ITC up by 0.89%, Nestle up by 0.79% and HCL Tech. up by 0.71%. On the flip side, Tata Steel down by 2.70%, Titan Co down by 1.75%, Kotak Mahindra Bank down by 1.38%, Maruti Suzuki down by 0.84% and Axis Bank down by 0.72% were the top losers.

Meanwhile, domestic rating agency India Ratings and Research (Ind-Ra) in its latest report has said that the draft Indian Telecommunication Bill may not help accelerate the resolution process for insolvent companies in the sector. It said the bill stipulates that the ownership of spectrum remains with the government, and hence implies that the value of spectrum cannot be sold by creditors under the Insolvency and Bankruptcy Code.

According to the report, the draft law also mentions that the government reserves the right to take back the spectrum if the ailing telecom operator fails to pay government dues, which further adds concerns to the operational viability of such telcos. It further said even the National Company Law Appellate Tribunal had ruled that government dues must be cleared before a stressed telco is admitted to insolvency proceedings in an order passed in July 2021. It stated that impact of the bill on the resolution process needs to be seen, given that the ailing telcos may not have the financial flexibility to clear government dues and/or have the operational cash flows to service the ongoing regulatory charges. It added that the bill provides for a framework for placing revenues in a separate designated account for the telcos under insolvency, which are unable to pay government dues, but the implementation of the same remains to be seen.

The agency also said the bill intends to provide one-stop clarity on several key aspects that have affected the telecom industry over the past two years. It aims to remove ambiguities over the ownership of spectrum for the corporates under insolvency/stress as well as the regulating body for over-the-top (OTT) and internet service providers. It added that the bill also empowers the government to provide relief to stressed telecom companies through waiver/deferment/restatement of regulatory dues.

The CNX Nifty is currently trading at 17009.50, down by 6.80 points or 0.04% after trading in a range of 17007.40 and 17176.45. There were 26 stocks advancing against 24 stocks declining on the index.

The top gainers on Nifty were Britannia Inds up by 1.93%, Power Grid Corp up by 1.64%, Hindustan Unilever up by 1.51%, Nestle up by 1.40% and Cipla up by 1.32%. On the flip side, Adani Ports &Special down by 2.80%, Hero MotoCorp down by 2.73%, Tata Steel down by 2.10%, Tata Motors down by 1.53% and Maruti Suzuki down by 1.50% were the top losers.

Asian markets are trading mostly in red; Straits Times fell 19.05 points or 0.60 % to 3,162.92, Hang Seng slipped 154.82 points or 0.87% to 17,700.32, KOSPI lost 18.64 points or 0.84% to 2,202.30 and Jakarta Composite was down by 34.77 points or 0.49% to 7,092.73. However, Nikkei 225 rose 108.63 points or 0.41% to 26,540.18, Taiwan Weighted added 71.47 points or 0.52% to 13,849.66 and Shanghai Composite was up by 12.46 points or 0.50% to 3,066.41.