Market ends flat; banks slide on NPA concerns after top court's AGR ruling

Mumbai, Jan 17 () Market gauges Sensex and Nifty gave up early gains to close on a flat note on Friday as investors moved to the sidelines amid concerns that the Supreme Court ruling on telecom AGR issue might further aggravate stressed assets problem in the banking sector.

At the closing bell, the BSE benchmark Sensex was up 12.81 points or 0.03 per cent at 41,945.37. The index also marked its new all-time high of 42,063.93 in intraday trading, before surrendering some of its gains.

The broader Nifty, however, settled 3.15 points or 0.025 per cent lower at 12,352.35. The NSE barometer too touched its life-time intraday peak of 12,385.45 in early deals before losing momentum.

During the week, the Sensex advanced 345.65 points or 0.83 per cent; while the Nifty rose 95.55 points or 0.77 per cent.

In a session marked by high volatility, gains in Reliance Industries offset losses in other heavyweights HDFC, ICICI Bank and TCS.

On the Sensex chart, Bharti Airtel was the top gainer, rallying 5.47 per cent, after experts said the Supreme Court's rejection of a review of its order that put Rs 1.47 lakh crore liability of past dues on telcos, will weaken Vodafone Idea's ability to compete in the Indian market; in turn, providing an opportunity for Bharti Airtel and Reliance Jio to gain market share.

Shares of Vodafone Idea plunged 25.21 per cent.

Ahead of their quarterly earnings, Reliance Industries and HCL Tech advanced up to 2.79 per cent, while TCS fell 0.79 per cent.

Heavyweight HDFC dropped 1.23 per cent.

In percentage terms, IndusInd Bank, SBI, HDFC, ICICI Bank and L&T were among the top losers.

On the contrary, Bharti Airtel, Reliance, Sun Pharma, HCL Tech and Maruti Suzuki emerged as major gainers.

Sectorally, BSE bankex, metal, finance, capital goods and IT indices fell up to 0.78 per cent. While energy, telecom, healthcare, consumer durables, power and auto indices rose up to 1.79 per cent.

In the broader market, BSE midcap and smallcap indices rose up to 0.54 per cent.

"As anticipated mid and small caps are outpacing the broader market... Main indices are impacted by Supreme Court verdict on AGR, having an effect on telecom and banking sectors which are already facing NPA problem. The pre-budget rally has been very solid on a month-on-month basis, market may consolidate in the short-term and take cues from the actual budget and on-going results," Vinod Nair, Head of Research, Geojit Financial Services, said.

The Supreme Court on Thursday dismissed review petitions filed by telecom companies against its October 24, 2019 order that asked for inclusion of non-telecom revenues for calculating statutory dues such as licence fee and spectrum usage charge.

Dues, which total to Rs 1.47 lakh crore for 15 telecom companies including Airtel and Vodafone Idea, as per the October order, have to be paid by January 23.

According to traders, domestic investors are awaiting directional cues from key corporate results for cues amid concerns over higher bank non-performing assets and a spike in retail inflation.

Bourses in Shanghai, Hong Kong, Tokyo and Seoul ended higher. European markets also started on a positive note.

Brent crude oil futures rose 0.36 per cent to USD 64.86 per barrel.

The Indian rupee depreciated 15 paise to 71.08 per US dollar.

"Global markets witnessed a strong rally as easing trade tensions and promising economic data buoyed the sentiments. Indian markets too ended the week with strong gains especially in midcaps and small caps. Midcap and small caps have significantly outperformed the Nifty... We are seeing strong traction in the broader market with revived risk appetite among investors ahead of Budget," Hemang Kapasi, Portfolio Manager - Equity Investment Products, Sanctum Wealth Management, said. ANS MKJ