At 11:33 IST, the barometer index, the S&P BSE Sensex, was down 493.88 points or 0.83% at 59,173.82. The Nifty 50 index fell 110.9 points or 0.62% at 17,638.70.
The broader market outperformed. The S&P BSE Mid-Cap index was up 0.52% while the S&P BSE Small-Cap index rose 0.16%.
The market breadth, indicating the overall health of the market, was positive. On the BSE, 1697 shares rose and 1370 shares fell. A total of 163 shares were unchanged.
COVID-19 Update:
Total COVID-19 confirmed cases worldwide stood at 232,730,064 with 4,764,388 deaths. India reported 282,520 active cases of COVID-19 infection and 447,751 deaths according to the data from the Ministry of Health and Family Welfare, Government of India.
In the last 24 hours, India reported 18,870 new cases daily new cases. Active cases account for less than 1% of total cases, currently at 0.84%; Lowest since March 2020. Active caseload stood at 2,82,520; lowest in 194 days. Recovery Rate currently stood at 97.83%.
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SEBI Framework For Gold And Social Stock Exchanges:
Stock market regulator Securities Exchange Board of India (SEBI) has approved the frameworks for gold exchange and Social Stock Exchange. The market regulator also approved amendments to delisting framework for equity shares at the board meeting held yesterday.
A gold exchange is being set up to trade the yellow metal in the form of electronic gold receipts, which will help in having a transparent domestic spot price discovery mechanism. The instrument representing gold is to be called Electronic Gold Receipt (EGR), and will be having trading, clearing and settlement features akin to other securities.
In a statement, SEBI said the Gold Exchange, encompassing the entire ecosystem of trading of EGR and physical delivery of gold, is expected to create a vibrant gold ecosystem in the country. The Gold Exchange would be a national platform for buying and selling EGRs with underlying standardized gold in India and also create a national pricing structure for gold.
SEBI has also allowed the introduction of silver exchange traded funds (ETFs) in India. The Sebi board approved the amendment to Sebi (Mutual Funds) Regulations, 1996 to enable the introduction of Silver ETFs. These will be in line with the regulatory mechanism for gold ETFs.
Under the creation of Social Stock Exchange (SSE), the SEBI board said it will be used for purpose of fund raising by social entrepreneurs. SSE will be a separate segment of the existing stock exchanges.
Buzzing Index:
The Nifty PSU Bank index added 2.51% to 2,458.60, rising for third trading session. The PSU Bank index has rallied 4.28% in three days.
Bank of India (up 4%), J&K Bank (up 3.96%), Indian Overseas Bank (up 3.44%), Canara Bank (up 3.42%), Indian Bank (up 3.26%), Punjab Sindh Bank (up 3.24%) and Punjab National Bank (Up 3%) were top gainers in PSU bank space.
The buying interest was triggered by media reports suggesting that lenders led by State Bank of India (SBI) are set to recover Rs 37,400 crore this week as Piramal Capital and Housing Finance's (PCHF) acquisition of Dewan Housing Finance (DHFL) should be completed this month itself. DHFL has been undergoing insolvency proceedings at National Company Law Tribunal (NCLT) in Mumbai since 3 December 2019.
DHFL had gone bankrupt with more than Rs 90,000 crore in debt to various lenders, including banks, mutual funds and individual investors who kept fixed deposits with the company. The lenders of the company had classified the account as a fraud on alleged fund diversion by promoters Kapil Wadhawan and his brother Dheeraj Wadhawan.
In January 2021, Piramal Capital and Housing Finance, a subsidiary of Piramal Enterprises, had won a bid for acquiring DHFL. Piramal made Rs 37,250-crore bid to acquire the housing finance company. The resolution plan received approvals from RBI in February 2021 and the Competition Commission of India (CCI) in April 2021. The resolution plan was approved by the Mumbai bench of the National Company Law Tribunal in June.
The resolution plan involves Piramal Capital taking over DHFL and making payments to lenders, which can be implemented in full only after 90% of the financial creditors sign the execution documents.
Creditors led by SBI had admitted claims worth over Rs 87,000 crore. In this, SBI had exposure of Rs 7,267 crore to Dewan Housing Finance. Bank of India claimed Rs 4,125 crore while Union Bank of India had an exposure of Rs 3,605 crore, reports added.
Global markets:
Asian stocks declined on Wednesday, following an overnight tumble on Wall Street and bond yields spiked on concerns about inflation.
U.S. stocks fell sharply on Tuesday, with tech names dragging down the broader markets as Treasury yields traded near three-month highs and lawmakers in Washington continued their budget stalemate.
Also weighing on sentiment was a budget showdown in Washington. Senate Republicans blocked a House-passed bill Monday that would have funded the government into December and suspended the debt ceiling until December of 2022.
Congress must approve government funding by Friday to avoid a shutdown, and Treasury Secretary Janet Yellen warned Congress in a letter on Tuesday that lawmakers need to raise the debt limit by October 18 to avoid a government default. President Biden's massive infrastructure plan also faces an uncertain future.
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