Markets retract after hitting all time high levels in early deals

After hitting life time high levels in early deals and retracting a tad bit thereafter, local barometer gauges continued to trade firmly into positive territory, with decent gains of  around three tenths of a percent, which kept Sensex and Nifty above the psychologically crucial 26,100 and 7,750 levels respectively. Bout of profit-booking that triggered after markets scaled an all time high level pushed back barometer gauges to test their crucial resistance levels. Nevertheless, the mood continued to be upbeat on the back of optimistic global set-up. Meanwhile, broader indices trying to keep up with positive were trading with slender gains of above one tenth of a percent. On the global front, Asian markets rose Wednesday, adding to the previous day's rally, following a positive lead from Wall Street and easing concerns over the Ukraine air crash crisis.

Back home, strong buying interest was garnered by stocks from Information Technology, Consumer Durable and banking counters. While, IT stocks continued to remain investor’s favorites, banking stocks too added to gains after the Reserve Bank of India (RBI) unveiled a new framework on Tuesday for identifying and dealing with large banks in the country, termed domestic systemically important banks (D-SIB), which basically would be too big to fail and allowing its failure would cause a crisis in the financial system. However, prominent losses which were witnessed in stocks from Infra, Fast Moving Consumer Goods and Oil & Gas counters mainly ate into some bourses’ gains. The overall market breadth on BSE was in the favour of declines which thumped advances in the ratio of 944:900; while 40 shares remained unchanged.

The BSE Sensex is currently trading at 26127.99, up by 102.19 points or 0.39% after trading in a range of 26095.66 and 26188.64. There were 17 stocks advancing against 13 stocks declining on the index.

The broader indices were trading mixed; the BSE Mid cap index was up by 0.20%, while Small cap index down by 0.12%.

The gaining sectoral indices on the BSE were IT up by 1.62%, TECK up by 1.13%, Consumer Durables up by 0.78%, Bankex up by 0.77% and Capital Goods up by 0.68%. On the flip side, INFRA down by 0.18%, FMCG down by 0.14%, Oil & Gas down by 0.10%, Auto down by 0.05% and Realty down by 0.03% were the losing indices on BSE.

The top gainers on the Sensex were Hindalco up by 2.58%, Infosys up by 2.28%, TCS up by 1.77%, ICICI Bank up by 1.43% and SBI up by 1.35%. On the flip side, Tata Power down by 1.29%, NTPC down by 1.20%, Sun Pharma Inds. down by 0.69%, ITC down by 0.50% and Tata Motors down by 0.42% were the top losers.

Meanwhile, in a remedial measure to the problems faced during the global financial crisis of 2008, the Reserve Bank of India (RBI) unveiled a new framework on Tuesday for identifying and dealing with large banks in the country, termed domestic systemically important banks (D-SIB). These banks basically would be too big to fail and allowing its failure would cause a crisis in the financial system.

Further, in its guidelines, RBI has averred that it would classify around four to six large banks as 'systemically important' by the RBI from August 2015, which will be subject to higher capital requirement and intense regulation. It further clarified that amount of additional capital requirements for D-SIBs would be based on a mix of quantitative calibration and consideration of country-specific factors.

Besides, RBI has underscored that it would create four sub-categories of D-SIB lenders, each with different requirements for additional common equity tier-1 capital requirements that would range from 0.2%-0.8% of risk-weighted assets.

This categorization is part of the Basel III norms on risk supervision, which were put in place after the global credit crisis of 2008. The crisis showed that few of large, highly interconnected banks, once in stress, could lead to a system-wide collapse and may need to be bailed out with public money. The framework issued for Indian banks is a revised version of the existing norms by Basel Committee on Banking Supervision.  

The CNX Nifty is currently trading at 7789.10, up by 21.25 points or 0.27% after trading in a range of 7778.70 and 7809.20. There were 23 stocks advancing against 27 stocks declining on the index.

The top gainers on Nifty were Bank of Baroda up by 3.16%, Hindalco up by 2.71%, Infosys up by 2.36%, TCS up by 1.65% and ICICI Bank up by 1.47%. On the flip side, Ultratech Cement down by 2.81%, Ambuja Cement down by 2.17%, Grasim Industries down by 1.68%, ACC down by 1.55% and Tata Power down by 1.20% were the top losers.

Most of Asian markets were trading in green; FTSE Bursa Malaysia KLCI edging higher by 0.35 points or 0.02% to 1,871.71; Shanghai Composite rising by 6.83 points or 0.33% to 2,082.31; Straits Times adding 19.29 points or 0.58% to 3,336.20; Jakarta Composite advancing 24.16 points or 0.48% to 5,107.68; Taiwan Weighted gaining by 58.39 points or 0.62% to 9,499.36 and Hang Seng puffing up by 153.96 points or 0.65% to 23,936.07. On the flip side, Nikkei 225 lost 7.56 points or 0.05% to 15,335.72 and  KOSPI Index slid by 1.92 points or 0.09% to 2,027.01.