Barometers trade in narrow range; breadth remains negative

Key indices traded sideways in a narrow range in early afternoon trade. Sentiments were boosted after SC gave a verdict in favour of lenders in Essar Steel Case. The Nifty was trading above the 11,900 level. At 12:27 IST, the barometer index, the S&P BSE Sensex, was up 207.29 points or 0.51% at 40,494.86. The Nifty 50 index was up 59.95 points or 0.5% at 11,932.05.

In the broader market, the S&P BSE Mid-Cap index was up 0.59%. The S&P BSE Small-Cap index trading near the flat line.

The market breadth, indicating the overall health of the market, was negative. On the BSE, 1054 shares rose and 1221 shares fell. A total of 120 shares were unchanged. In Nifty index, 27 stocks advanced while 23 stocks declined.

The Supreme Court (SC) on Friday said the National Company Law Appellate Tribunal (NCLAT) should not interfere with the decisions of the committee of creditors (CoC) in the Essar Steel insolvency case. Accordingly, SC gave more weightage to the financial creditors.

The SC decision overruled NCLAT's 5 July 2019 judgment that operational creditors should be treated on a par with financial creditors for distribution of funds from ArcelorMittal's bid in the Essar Steel insolvency case. The verdict paves the way for Arcelor's takeover of the bankrupt company. The CoC had filed petitions against NCLAT's judgment, challenging that they should recover more than operational creditors in the bankruptcy resolution process.

The Ahmedabad bench of NCLAT in March 2019 approved global steel-giant ArcelorMittal's bid for Essar Steel. ArcelorMittal had offered an upfront cash payment of about Rs 42,000 crore to the financial creditors and capital infusion of Rs 8,000 in the next few years. ArcelorMittal's offer did not cover operational creditors to Essar Steel.

Derivatives:

The NSE's India VIX, a gauge of market's expectation of volatility over the near term, declined 2.97% to 15.1850. The Nifty November 2019 futures were trading at 11,959.65, a premium of 25.8 points compared with the spot at 11,933.85. The November 2019 F&O contracts expire on 28 November 2019.

On the options front, the Nifty option chain for 28 November 2019 expiry showed maximum call open interest (OI) of 22.28 lakh contracts at the 12,000 strike price. Maximum put OI of 21.67 lakh contracts was seen at 11,600 strike price. The option chain indicates that Nifty will stay between 11,600 and 12,000 in November expiry.

Stocks in Spotlight:

Fortis Healthcare slumped 7.59% to Rs 144.25 after the country's apex court reportedly held the company guilty of contempt along with Malvinder Singh and his brother Shivinder Singh in a case filed by Japanese firm Daiichi Sankyo. As per reports, the apex court said that Malvinder and Shivinder Singh, who were arrested and jailed in October 2019, can get away from contempt by depositing Rs. 1,175 crore each. The top court said the Singh brothers violated its order asking them not to divest their shares in Fortis Healthcare, news agencies reported. Daiichi has sought enforcement of Rs 3500-crore arbitration award granted to it by Singapore tribunal in case against Singh brothers.

Divi's Laboratories jumped 3.21% after the USFDA successfully completed cGMP inspection of company's Unit-I facility at Lingojigudem, Telangana. The company received zero 483 observations from USFDA. The inspection was carried out from 11 November 2019 to 15 November 2019.

HEG declined 3.27% after announcing a dismal Q2 result after market hours yesterday. On consolidated basis, company's net profit declined 77.6% to Rs 202.3 crore in Q2 2019 over Q2 2018. The consolidated revenue from operations also declined 68.5% to Rs 564.4 crore on YoY basis.

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