Equity indices continued to trade in a narrow range in early afternoon trade. The Nifty continued to hover near the 11,950 level. The sentiment was buoyed by multiple announcements by the Union Cabinet on Wednesday. Global cues were positive after the US Federal Reserve kept interest rates unchanged, as expected, at its policy meeting on Wednesday and signaled rate settings were likely to remain accommodative.
At 12:26 IST, the barometer index, the S&P BSE Sensex, was up 102.91 points or 0.25% at 40,515.48. The Nifty 50 index was up 36.1 points or 0.3% at 11,946.25.
The broader market traded higher. The S&P BSE Mid-Cap index was up 0.37%. The S&P BSE Small-Cap index was up 0.42%.
The market breadth favored the buyers. On the BSE, 1160 shares rose and 924 shares fell. A total of 144 shares were unchanged. In Nifty 50 index, 35 stocks advanced while 15 stocks declined.
Derivatives:
The NSE's India VIX, a gauge of market's expectation of volatility over the near term, rose 0.95% to 13.5050. The Nifty December 2019 futures were trading at 11,995, a premium of 47 points compared with the spot at 11,948.
On the options front, the Nifty option chain for 26 December 2019 expiry showed maximum call open interest (OI) of 28.08 lakh contracts at the 12,000 strike price. Maximum put OI of 34.03 lakh contracts was seen at 11,500 strike price.
The option chain indicates that the Nifty will stay between 11,500 to 12,000 level till December expiry.
Buzzing Index:
The Nifty Metal index was up 2.18% at 2,564.30, snapping two-day losing streak after the media reported that US China Trade Deal could happen before tariffs kick in on 15 December 2019.
Vedanta (up 3.5%), Steel Authority of India (up 3.01%), Hindustan Copper (up 2.9%), Tata Steel (up 2.61%), Hindalco Industries (up 2.57%), JSW Steel (up 2.46%), National Aluminium Company (up 1.3%), Hindustan Zinc (up 0.9%), NMDC (up 0.67%) and Jindal Steel & Power (up 0.2%) were top gainers in metal segment.
Stocks in Spotlight:
Vodafone Idea was up 2.54%. The company denied reports about negotiations are taking place with Brookfields or Edelweiss to sell some assets. The fact that the company intends to monetize its optic fibre business and data centre was disclosed in the quarterly report sent to the stock exchanges on 14 November 2019, it added.
Cadila Healthcare rose 0.44%. The company launched affordable oral anti-diabetic tablet Vinglyn. The drug belongs to the class of oral anti-diabetic agents, known as DPP4 inhibitors, which have shown promise in achieving glycaemic control without deterioration in beta cell function and are one of the recent advancements in diabetes care and management. Vinglyn and Vinglyn M will be marketed by Zydus Healthcare.
Prakash Industries rose 3.87% after the company emerged as the highest bidder for the Bhaskarpara Coal Mine in Chhattisgarh. The company is now required to execute the Coal Mine Development and Production Agreement with the Nominated Authority, subsequent to which the Vesting order will be issued to the company. Availability of coal from the Bhaskarpara Coal Mine will substantially enhance the operating margins of the company.
Economy:
The Union Cabinet, chaired by the Prime Minister Narendra Modi, gave an approval for setting up Infrastructure Investment Trust and monetize National Highway Projects. The Cabinet gave an approval authorizing National Highways Authority of India (NHAI) to set up Infrastructure Investment Trust(s) (InvIT) as per InvIT Guidelines issued by SEBI. This will enable NHAI to monetize completed National Highways that have a toll collection track record of atleast one year and NHAI reserves the right to levy toll on the identified highway. This move will also attract patient capital (for say 20-30 years) to the Indian highway market, as these investors are averse to construction risk and are interested in investment in assets which provide long-term stable returns.
Further, the Cabinet approved the proposal to make amendments in the Insolvency and Bankruptcy Code, 2016 (code), through the Insolvency and Bankruptcy Code (Second Amendment) Bill, 2019. The amendments aim to remove certain difficulties being faced during insolvency resolution process to realise the objects of the code and to further ease doing of business. Amendments to the Code to remove bottlenecks, streamline the CIRP and protection of last mile funding will boost investment in financially distressed sectors. Additional thresholds introduced for Financial Creditors represented by an authorized representative due to large numbers in order to prevent frivolous triggering of Corporate Insolvency Resolution Process (CIRP).
The Cabinet also approved a partial credit guarantee scheme for public sector banks (PSBs) to purchase high-rated pooled assets from financially sound Non-Banking Financial Companies (NBFCs)/Housing Finance Companies (HFCs), with the amount of overall guarantee provided by government till the first loss of up to 10% of fair value of assets being purchased by banks or Rs 10,000 crore, whichever is lower. The scheme would cover NBFCs/HFCs that may have slipped into SMA-0 category during the one year period prior to 1 August 2018, and asset pools rated "BBB+" or higher.
Politics:
The Rajya Sabha on Wednesday approved the Citizenship (Amendment) Bill, completing the legislative procedure for giving Indian citizenship to non-Muslim migrants from Pakistan, Afghanistan and Bangladesh. The Bill was passed with 125 votes in favour and 105 against it. The Bill was passed by Lok Sabha on Monday. It will now go to the President for his assent.
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