The market snapped its two-day winning run and ended with modest losses on Thursday. Investors booked profits after the Union Cabinet announced several measures on Wednesday. Negative global cues also dented trading sentiment. Trading was volatile due to weekly expiry of index options.
The barometer index, the BSE Sensex, fell 76.47 points or 0.19% to 40,575.17. The Nifty 50 index fell 30.70 points or 0.26% to 11,968.40.
The broader market tumbled. The S&P BSE Mid-Cap index fell 0.73% while the S&P BSE Small-Cap index declined 0.43%.
The market breadth was negative. On the BSE, 1098 shares rose and 1459 shares fell. A total of 204 shares were unchanged.
The Nifty opened higher, but it immediately pared gains in early trade. Selling pressure gripped the index as it struggled to regain the 12,000 mark in mid-morning trade. Buying was witnessed in mid-afternoon trade, but profit booking emerged at higher levels which dragged the index at the day's low in the final hour of the trading session.
In the previous two session, the Sensex rose 0.91% while the Nifty increased 0.88%.
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Economy:
The Cabinet Committee on Economic Affairs, chaired by Prime Minister Narendra Modi on Wednesday accorded 'in-principle' approval for strategic disinvestment in select central public sector enterprises (CPSEs).
The government will sell its 53.29% stake in Bharat Petroleum Corporation (BPCL) after taking out Numaligarh refinery from its portfolio. The government will also sell 63.75% stake in Shipping Corporation of India (SCI), and a 30.8% stake sale in Container Corporation of India. Besides, the government will divest its stake in THDC India and North Eastern Electric Power Corporation (NEEPCO) to state-owned NTPC.
BPCL fell 5.66%. Shipping Corporation of India fell 6.29%. Container Corporation of India fell 0.49%. NTPC fell 1.71%.
The cabinet has also approved cutting government's stake in select PSUs below 51% while retaining management control.
Further, the Cabinet approved the proposal for mitigating financial stress being faced by the telecom sector. The Department of Telecommunication (DoT) will give an option to the telcos to defer payment of the spectrum auction instalments due for 2020-21 & 2021-22, either for one or both years. These deferred amounts bill be spread equally in the remaining instalments to be paid by TSPs. Interest as stipulated while auctioning of the concerned spectrum will however be charged so that net present value (NPV) is protected.
Vodafone Idea fell 6.08%. It surged 139.66% in the past four trading sessions.
Bharti Airtel fell 2.52%. The telecom major climbed over 20% in the past four sessions.
For the infrastructure sector, the Cabinet approved amendments in the Toll-Operate-Transfer road monetization model of the National Highways Authority of India (NHAI).
HCC (up 19.9%), IRB Infrastructure Developers (up 12.24%), Man Infraconstruction (up 10.94%), Patel Engineering (up 4.94%), KNR Constructions (up 3.58%), Gammon Infrastructure Projects (up 3.57%), Tarmat (up 2.35%), Dilip Buildcon (up 1.5%) and NCC (up 1.47%) advanced.
Under Toll-Operate-Transfer (TOT) model, the highest bidder wins the rights to operate and maintain operating roads for 30 years, with rights to toll revenues from these road assets.
The Cabinet has now allowed NHAI to monetize under TOT all those public-funded national highway projects which are operational and have toll revenue generation history of one year after the Commercial Operations Date. Earlier, the highways had to be operational for at least two years to enable participation in TOT.
Around 75 operational National Highway (NH) projects have been identified for potential monetization using the TOT Model, and bundled into 10 separate bids to attract economics of scale for the private sector.
Stocks in Spotlight:
Network 18 Media & Investments surged 7.78%. Japan's Sony Corp is reportedly in talks to acquire a stake in Indian billionaire Mukesh Ambani's TV business, Network18 Media & Investments.
Zee Entertainment Enterprises (ZEEL) surged 12.40%. The Essel Group (Group) is planning to sell about 16.5% stake in ZEEL to financial investors in order to repay loan obligations to certain lenders of the group for whose benefit such shares are currently encumbered. Out of the aforesaid the group seeks to sell about 2.3% stake in ZEEL to OFI Global China Fund, LLC and/or its affiliates. Pursuant to the aforementioned transactions, the post-transaction overall holdings of the Group in ZEEL will be about 5%, out of which encumbered holdings of the Group will reduce to about 1.1% of ZEEL.
Reliance Capital was locked in a lower circuit of 5% at Rs 17.15. The Delhi High Court has passed an order placing restrictions on any sale, disposal or creation of any encumbrance on any assets of the company, which inter-alia include the company's 4.28% shareholding in Reliance Nippon Life Asset Management, till 16 December 2019.
Union Bank of India fell 1.29%. The Reserve Bank of India has found that the bank has under-reported bad loans by Rs 589 crore in the year ended 31 March 2019. The divergence is the difference in bad loans reported by the bank and the assessment done by RBI. RBI also reported a divergence in provision by Rs 1587.7 crore. After adjusting divergence, net loss now stands at Rs 3978 crore.
Dewan Housing Finance Corporation (DHFL) jumped 4.96%. The Reserve Bank of India has superseded the board of the company. The RBI has appointed R. Subramaniakumar as company's Administrator with immediate effect. DHFL further informed that RBI has exercised powers on the backdrop of defaults committed by the company in meeting various repayment obligations and serious concerns emanating from the inspection conducted by National Housing Bank.
Cadila Healthcare rose 2.07% after the company said it received final approvals from the US drug regulator for Isosorbide Dinitrate tablets and Desonide Cream.
Jubilant Life Sciences spurted 3.96% after the company announced that China has decided to terminate the 17.6% anti‐dumping duty on imported pyridine originating in India.
Pyridine is an organic compound used as an important raw material and solvent in the production of pesticides, drugs, animal feed, food additives and other chemicals. China had imposed five-year anti-dumping tariffs on Indian and Japanese imports on 21 November 2013.
Foreign Markets:
Shares in Europe and Asia declined on Thursday amid concerns 'phase one' US-China trade deal may not be signed in 2019 as China seeks more extensive tariff rollbacks.
US stocks ended lower Wednesday after a report that a trade deal might not be completed this year and after China condemned a U.S. Senate resolution supporting human rights in Hong Kong.
Minutes of the October meeting of the Federal Reserve's interest-rate-setting committee suggested the bank will not change interest rates soon.
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