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Sensex, Nifty turns green in noon deals

Local equity benchmarks erased all the losses to turn positive in noon session, both Sensex and Nifty were trading above 54,400 and 16,250 marks, respectively. Buying in frontline stocks such as Bharti Airtel, HCL Tech and Tech Mahindra were aiding sentiment, while selling in SBI, Indusind Bank and ICICI Bank kept the gains in the markets in check. Adding optimism, Rajya Sabha passed the Limited Liability Partnership (Amendment) Bill, which seeks to encourage the start-up ecosystem and further boost ease of doing business, amid uproar by the opposition on Pegasus snooping row and other issues. Traders also took support with report that foreign portfolio investors (FPIs) stood as buyers of domestic stocks to the tune of Rs 2,828.57 crore. On the global front, Asian markets were trading mostly higher, shrugging off the worries about coronavirus infections and mixed overnight trade on Wall Street.

Back home, in scrip specific development, Vodafone Idea continued to tumble as Kumar Mangalam Birla stepped down as the non-executive director and non-executive chairman of Vodafone Idea (Vi). This move comes at a time when Vi is struggling to keep afloat due to its enormous amounts of debt. Birla offered to give up his stakes in the company upon stepping down as well.

The BSE Sensex is currently trading at 54447.05, up by 77.28 points or 0.14% after trading in a range of 54230.89 and 54576.64. There were 12 stocks advancing against 18 stocks declining on the index.

The broader indices were trading in red; the BSE Mid cap index lost 0.34%, while Small cap index was down by 0.63%.

The top gaining sectoral indices on the BSE were Telecom up by 4.52%, TECK up by 0.98%, IT up by 0.50%, Energy up by 0.36% and Metal was up by 0.33%, while Realty down by 1.05%, PSU down by 0.91%, Consumer Discretionary down by 0.55%, Utilities down by 0.45% and Industrials was down by 0.43% were the top losing indices on BSE.

The top gainers on the Sensex were Bharti Airtel up by 6.32%, HCL Tech up by 2.33%, Tech Mahindra up by 2.32%, Kotak Mahindra Bank up by 1.46% and HDFC Bank was up by 1.24%. On the flip side, SBI down by 2.67%, Indusind Bank down by 2.27%, ICICI Bank down by 1.55%, Bajaj Finance down by 1.50% and Bajaj Finserv was down by 0.89% were the top losers.

Meanwhile, succeeding reports of small businesses being hit with account freezes in the last few days, the Reserve Bank of India (RBI) has allowed time to banks till October 31 to implement changes on the current account front. This extended timeline shall be utilised by banks to engage with their borrowers to arrive at mutually satisfactory resolutions within the ambit of the circular. The central bank said the circular is aimed at enforcing credit discipline amongst the borrowers as well as to facilitate better monitoring by the lenders, but made it clear that a ‘graded approach’ had been prescribed to banks on opening and operating of current accounts and cash credit/overdraft CC/OD facilities.

The RBI said ‘Banks were required to implement these instructions in a non-disruptive manner while keeping the bonafide business requirements of the borrowers in mind’. It can be noted that over last few days, small businesses have complained about freezing of accounts by their banks, as they implemented the slew of circulars on the issue, the last one being on December 14, 2020. The RBI has received requests from the banks for some more time to resolve the operational issues while implementing the circular in letter and spirit for which it is now extending the date of implementation.

The RBI said if a bank is unable to resolve any issue, it can be escalated to the Indian Banks Association (IBA) for guidance and residual issues can be taken up with the RBI by the industry lobby grouping for being redressed. Accounts of White Label ATM operators and their agents are exempt from the provisions of the Current Account circular dated August 6, 2020, it said, adding that as cash-in-transit (CIT) companies or cash replenishment agencies (CRAs) essentially carry out a similar activity, the exemption would be applicable to these entities as well. It also asked banks to put in place a monitoring mechanism, both at head office and regional/zonal office levels to monitor non-disruptive implementation of the circular and to ensure that customers are not put to undue inconvenience during the implementation process. The RBI also made it clear that banks are not permitted to open current accounts for borrowers who have availed agricultural/personal OD or OD against deposits.

It reiterated that in the case of borrowers who have not availed CC/OD facility from any bank, there is no restriction on opening of current accounts by any bank if exposure of the banking system to such borrowers is less than Rs 5 crore, while for those in this category who have a banking system exposure of up to Rs 50 crore, lenders can create current acocunts. It said the restriction applies to borrowers in case they avail of CC/OD facility since all operations that can be carried out from a current account can also be carried out from a CC/OD account as banks in a CBS environment follow a one-bank-one-customer model as against a one-branch-one-customer model.

The CNX Nifty is currently trading at 16280.20, up by 21.40 points or 0.13% after trading in a range of 16210.30 and 16294.65. There were 22 stocks advancing against 28 stocks declining on the index.

The top gainers on Nifty were Bharti Airtel up by 6.29%, Eicher Motors up by 2.84%, HCL Tech up by 2.43%, Tech Mahindra up by 2.35% and Kotak Mahindra was Bank up by 1.46%. On the flip side, SBI down by 2.64%, Indusind Bank down by 2.34%, ICICI Bank down by 1.52%, Bajaj Finance down by 1.47% and UPL was down by 1.34% were the top losers.

Asian markets were trading mostly higher; Shanghai Composite declined 14.83 points or 0.43% to 3,462.39, Hang Seng decreased 222.79 points or 0.84% to 26,203.76, Straits Times trembled 9.45 points or 0.3% to 3,173.45, Taiwan Weighted dropped 20.77 points or 0.12% to 17,603.12 and KOSPI was down by 4.25 points or 0.13% to 3,276.13.

On the other hand, Jakarta Composite soared 48.35 points or 0.79% to 6,207.39 and Nikkei 225 was up by 144.04 points or 0.52% to 27,728.12.

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