Indices off day’s lows during late noon deals

A mild recovery witnessed over the Dalal Street during late afternoon deals, with both Sensex and Nifty coming off their intraday low points, aided by buying at IT and TECK counters. Some relief came, as the Union Cabinet approved the continuation of its flagship initiative, the Atal Innovation Mission (AIM), under the aegis of NITI Aayog, with an enhanced scope of work and an allocated budget of Rs 2,750 crore for the period till March 31, 2028. AIM 2.0 is a step towards Viksit Bharat that aims to expand, strengthen, and deepen India’s already vibrant innovation and entrepreneurship ecosystem. However, trade remained below neutral lines, following negative cues from European and other Asian markets. 

On the global front, European markets were trading lower, after UK shop prices dropped at a slower pace in November, signalling that shoppers are set to face rising price pressures. The British Retail Consortium revealed that the shop price index declined 0.6 percent on a yearly basis in November, slower than October's 0.8 percent decrease. Asian markets were trading mostly in red, as Singapore's industrial production growth moderated markedly in October. The preliminary data from the Economic Development Board revealed that industrial production expanded 1.2 percent year-on-year in October, much slower than the 9.0 percent surge in September. 

The BSE Sensex is currently trading at 80007.14, down by 102.71 points or 0.13% after trading in a range of 79798.67 and 80482.36. There were 13 stocks advancing against 17 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index rose by 0.43%, while Small cap index was up by 0.61%.

The top gaining sectoral indices on the BSE were IT up by 1.27%, TECK up by 0.99%, Telecom up by 0.82%, FMCG up by 0.72% and Realty up by 0.60%, while Utilities down by 1.55%, Auto down by 1.22%, Power down by 1.12%, Oil & Gas down by 0.68% and Energy down by 0.53% were the top losing indices on BSE.

The top gainers on the Sensex were Asian Paints up by 2.22%, Infosys up by 2.00%, Titan up by 0.85%, Tech Mahindra up by 0.69% and TCS up by 0.67%. On the flip side, Adani Ports & SEZ down by 3.24%, Ultratech Cement down by 2.94%, Sun Pharma down by 2.53%, Mahindra & Mahindra down by 2.06% and NTPC down by 1.71% were the top losers.

Meanwhile, the CRISIL Ratings in its latest report has said that asset reconstruction companies (ARCs) will see their cumulative recovery rate for stressed road projects rise 700-1,000 basis points (bps) this fiscal (FY25) after doubling to 50-55% last fiscal. This will be driven by faster completion or descoping of pending construction resulting in start of annuities by the National Highways Authority of India (NHAI), thereby enabling quicker resolutions or restructuring of debt. Further, a healthy increase in toll collections should also support recoveries.

An analysis of the security receipts (SRs) rated by CRISIL Ratings, covering around 2,500 lane km of underlying stressed road projects with total principal debt of around Rs 6,000 crore (60% of road assets with ARCs) indicates as much. These encompass projects under build operate and transfer model (toll assets) and hybrid annuity model under NHAI which were acquired at average haircut of 40% by ARCs. Most of the projects in the CRISIL Ratings SR portfolio had turned stressed between 2017 and 2019 due to delays in land acquisition and obtaining Right of Way (RoW) by government and/or lower toll collection than initially estimated. Of these, half have seen completion of construction while descoping of pending RoW was done for rest of the assets. 

Analysing these projects now reveals that stabilising annuity payments due to faster completion of pending work or descoping of pending RoW post-acquisition by ARCs have improved liquidity for them with annuity payments adequate for servicing of restructured debt. Furthermore, traffic growth for toll assets is likely to hold steady at 4-6% this fiscal with healthy macroeconomic markers (growth in industrial capex, rapid urbanisation, rising exports and tourism). This should lead to a growth of 7-9% in toll revenues this fiscal which will support the recoveries from such roads.

The CNX Nifty is currently trading at 24201.45, down by 20.45 points or 0.08% after trading in a range of 24125.40 and 24343.30. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Shriram Finance up by 3.14%, Britannia up by 2.47%, Asian Paints up by 2.26%, Infosys up by 2.12% and Bharat Electronics up by 2.02%. On the flip side, Adani Enterprises down by 3.95%, Adani Ports & SEZ down by 3.27%, Ultratech Cement down by 2.93%, Bajaj Auto down by 2.67% and Sun Pharma down by 2.17% were the top losers.

European markets were trading lower; UK’s FTSE 100 decreased 33.65 points or 0.41% to 8,258.03, France’s CAC fell 51.75 points or 0.71% to 7,205.72 and Germany’s DAX lost 109.6 points or 0.56% to 19,295.60.

Asian markets were trading mostly in red; Jakarta Composite plunged 38.83 points or 0.53% to 7,275.28, Shanghai Composite weakened 4 points or 0.12% to 3,259.76, Straits Times fell 15.92 points or 0.43% to 3,715.47, KOSPI dropped 13.98 points or 0.55% to 2,520.36, Nikkei 225 slipped 338.14 points or 0.88% to 38,442.00 and Taiwan Weighted lost 269.61 points or 1.19% to 22,678.76, while Hang Seng advanced 8.21 points or 0.04% to 19,159.20.