Key equity benchmarks closed at record high levels for second session in a row on Wednesday. Pharmaceuticals, metal and IT stocks contributed to the gains. Most Tata Group stocks declined after NCLAT restored Cyrus Mistry as executive chairman of Tata Group.
The barometer index, the BSE Sensex, rose 206.4 points or 0.5% to 41,558.57, as per the provisional closing data. The Nifty 50 index gained 59.6 points or 0.49% to 12,224.60, as per the provisional closing data.
The broader market slipped. The S&P BSE Mid-Cap index fell 0.19% and the S&P BSE Small-Cap index declined 0.05%.
The market breadth was negative. On BSE, 1192 shares advanced while 1299 shares declined. A total of 212 shares were unchanged. In Nifty 50 index, 33 stocks advanced and 17 stocks declined.
Economy:
The International Monetary Fund (IMF) will significantly lower India's growth forecast from the earlier number of 6.1% for FY20 on 20 January 2020, given the fall in consumption, lack of private investments and sluggish exports.
As late as October, IMF had forecast India growing at 6.1% for 2019 and 7% for the next year. "But looking at recent incoming data, we will be revising the numbers and it will be a significant downward revision," IMF chief economist Gita Gopinath said on Tuesday.
India's gross domestic product (GDP) grew 4.5% in Q2 September 2019, the lowest since Q4 March 2013.
Meanwhile, Finance Minister Nirmala Sitharaman will chair the 38th goods and services tax (GST) Council meeting today, 18 December 2019. Investors are keenly waiting for the outcome of the meeting to get any cues on the government's plan to overcome revenue shortfall. Concerns on fiscal path may influence government to hike tax slabs.
Buzzing Segment:
Most Tata Group stocks reversed early trend after the National Company Law Appellate Tribunal (NCLAT) ruled in favour of Cyrus Mistry on petition challenging his removal as Chairman of Tata Sons. The tribunal restored Mistry as the Executive Chairman of Tata Group, holding the appointment of N Chandrasekaran as executive chairman illegal.
Tata Global Beverages (down 5.24%), Tata Coffee (down 3.88%), Tata Motors (down 3.72%), Tata Chemicals (down 2.67%), Tata TeleServices Maharashtra (down 1.64%), Tata Power (down 1.43%) and Tata Investment Corporation (down 1.4%) declined.
Tata Steel (up 0.16%), Tata Metaliks (up 1.15%), Tata Communications (up 1.34%), Tinplate Company of India (up 1.61%), Tata Steel Long Products (up 1.85%) and Rallis India (up 1.88%) advanced.
Stocks in Spotlight:
Zee Entertainment was down 0.02% after credit rating agency, Brickwork Ratings India, downgraded the company's cumulative redeemable non-convertible preference shares & the issuer rating.
Shares of NMDC were up 2.82% at Rs 117.95. NMDC said on Tuesday it received a 20-year extension for four mines in its biggest mining project in Chhattisgarh. In a statement, NMDC said Chhattisgarh's government had extended four mining leases in state's Bailadila area upto the year 2035. The mining leases were valid upto 31 March 2020. The disclosure was made by the company after market hours yesterday, 17 December 2019. In a separate announcement on Tuesday, NMDC said it received allocation of 'Rohne' coal block. This allocation would ensure the coking coal requirement of NMDC's upcoming steel plant at Nagarnar, Chattisgarh to some extent. This is an important step for raw material security for the steel plant and also to some extent reduces the import of coking coal.
Bank of Baroda declined 3.18% after Reserve Bank of India found that the bank show a divergence in bad loans by Rs 5250 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. Bank of Baroda had reported a net loss of Rs 8,339 crore in the year ended March 2019. The adjusted (notional) net loss for the year ended 31 March 2019, after taking into account the divergence in provisioning, was at Rs 10,998 crore. According to recent guidelines by the Securities and Exchange Board of India (Sebi), banks are now required to disclose divergence in the asset classification and provisioning immediately upon receipt of RBI's final Risk Assessment Report (RAR). For the year ended March 2019, the gross non-performing assets (NPAs) assessed by RBI was at Rs 75,174 crore compared with Rs 69,924 crore in gross NPA reported by the bank.
NBCC (India) rose 0.14% to Rs 35.65. The Committee of Creditors (CoC) of Jaypee Infratech has selected state-run NBCC (India) as the winner in the race to acquire the debt-hit realty developer after the lenders and home buyers concluded their voting on Monday night.
Sunteck Realty gained 2.76% to Rs 415.85 after the company said it has sold 125 apartments out of the recently launched 225 apartments in Mumbai, generating sales worth more than Rs 200 crore.
PC Jeweller was down 5.21% to Rs 24.55 after market regulator Sebi on Tuesday ordered to impound Rs 8 crore from the company's promoters in insider trading case.
Prestige Estates Projects jumped 9.42%. The company said its board will meet on 20 December 2019 to consider and approve raising of funds through preferential issue to an identified allottee.
Foreign Markets:
European markets were trading mixed as investor caution returned following U.K. Prime Minister Boris Johnson's vow to block an extension of EU trade talks beyond 2020, reviving fears of a "cliff-edge" Brexit.
A cliff-edge Brexit would immediately remove Britain from the single market, meaning it would lose its privileges for free movement of goods, services, capital and people with the member states of the European Union.
Asian markets ended mixed amid profit booking after recent rally triggered by a recent phase one trade deal reached between Beijing and Washington.
In US, stock indexes closed at records again on Tuesday supported by positive economic data and relief over a truce in President Trump's trade war with China.
In US economic data, home builders increased new construction at an annual pace of 1.365 million in November, an increase of 3.2% from October's pace and a 13.6% increase on a year ago. Industrial production rose 1.1% in November, the largest monthly increase in two years, but is down 0.8% for the past year.
The US reportedly said China agreed to increase imports of goods in 2020 and 2021 by a total of $200 billion more than the total in 2017, including about $40 billion of US farm goods. The deal also included Chinese action to protect American intellectual property and vague assurances not to manipulate its currency.
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