The market declined after lackluster trading session on Thursday as investors booked profits after the government approved stake sales in select PSU firms. Zee Entertainment Enterprises surged on the promoter group's plan to pare stake. The Nifty gave up the crucial 12,000 mark and closed below that level.
The barometer index, the BSE Sensex, fell 76.47 points or 0.19% to 40,575.17, as per the provisional closing data. The Nifty 50 index fell 36 points or 0.3% to 11,963.10, as per the provisional closing data.
The broader market tumbled. The S&P BSE Mid-Cap index fell 0.79% while the S&P BSE Small-Cap index declined 0.42%.
The market breadth was negative. On the BSE, 1103 shares rose and 1453 shares fell. A total of 205 shares were unchanged. In Nifty 50 index, 14 stocks advanced while 36 stocks declined.
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.
Economy:
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The Cabinet Committee on Economic Affairs yesterday, 20 November 2019 accorded 'In-principle' approval for strategic disinvestment in select CPSEs including Bharat Petroleum Corporation (BPCL), Shipping Corporation of India (SCI), Container Corporation of India, Tehri Hydro Development Corporation India and North Eastern Electric Power Corporation.
The Union Cabinet also approved the proposal for Mitigating financial stress being faced by the Telecom Services Sector. Department of Telecommunication will give an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction installments due for 2020-21 & 2021-22, either for one or both years. The decision for deferring spectrum payment installments for two years will be implemented within a fortnight.
Further, the Cabinet allowed National Highways Authority of India (NHAI) to monetize under Toll Operate Transfer (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.
Buzzing Index:
Telecom stocks corrected after the Cabinet approved the proposal for mitigating financial stress on telcos. The S&P BSE Telecom index was down 1.76% at 1,061.17 amid profit booking in telecom shares.
Vodafone Idea (down 6.51%), Bharti Airtel (down 2.5%) and Reliance Industries (down 0.64%) tumbled.
As per the Union Cabinet's proposal, the Department of Telecommunication will give an option to the Telecom Service Providers (TSPs) to defer payment of the spectrum auction installments due for 2020-21 & 2021-22, either for one or both years. These deferred amounts bill be spread equally in the remaining installments to be paid by TSPs. Interest as stipulated while auctioning of the concerned spectrum will however be charged so that NPV (net present value) is protected.
Stocks in Spotlight:
Shares of Zee Entertainment Enterprises (ZEEL) surged 12.57%. 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 1.37% to Rs 57.55. 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.
DHFL jumped 4.96% to Rs 21.15. Debt ridden DHFL announced that the Reserve Bank of India has superseded the board of the company. The RBI also intends to put DHFL through newly introduced insolvency window for NBFCs. 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 was up 2.31% to Rs 254.80 after Zydus Cadila has received the final approval from the USFDA to market lsosorbide Dinitrate tablets. The drug is used to prevent attacks of chest pain and it dilates blood vessels, making it easier for blood to flow through them and easier for the heart to pump. lsosorbide Dinitrate Tablets will be manufactured at the group's formulations manufacturing facility at Baddi.
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.
In Spain, a court on Wednesday ruled budget carrier Ryan Air's policy of charging a fee for hand luggage was 'abusive' and could no longer be levied in the country.
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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