Markets pare early gains in afternoon session

Indian equity benchmarks pared early gains and were trading near the neutral line as fresh selling appeared in power, tech and IT stocks. Though, profit booking emerging in some blue chip stocks dragged down the major indices, firm buying in auto, consumer durables and capital goods stocks provided much needed support to local markets and restrained them in positive territory. Apart from sustained capital inflows, encouraging manufacturing output data for December and hopes of further push to economic reforms buoyed trading sentiments.  Industry and top government officials have suggested the government to make easier land acquisition norms, duty cuts and fiscal incentives for R&D in some sectors to boost manufacturing growth under 'Make in India' programme. Buying was broad based as both mid cap and small cap indices were trading up by over 0.35%.

In stocks specific movement, shares in Saksoft are locked in upper circuit of  around 10% at Rs 211 after the information technology (IT) firm announced that it has acquired a majority stake in ThreeSixty Logica Testing Services Private Limited. Shares of Ashiana Housing were up over 8% at Rs 228 after the company said that credit rating agency CARE has upgraded its credit rating.

On global front, most of Asian markets were trading in red with Straits Times down 1.05% and Jakarta Composite down 0.66%.  Back home, the NSE Nifty and BSE Sensex were trading above their psychological 8,300 and 27,500 levels respectively. The market breadth on BSE was positive, out of 2,610 stocks traded, 1,502 stocks advanced, while 1,003 stocks declined on the BSE.

The BSE Sensex is currently trading at 27906.74, up by 18.84 points or 0.07% after trading in a range of 27879.83 and 28064.49. There were 18 stocks advancing against 12 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.35%, while Small cap index up by 0.49%.

The gaining sectoral indices on the BSE were Auto up by 1.30%, Consumer Durables up by 0.99%, Capital Goods up by 0.82%, Metal up by 0.29% and Oil & Gas up by 0.19%. On the other hand, Power down by 0.46%, TECK down by 0.38%, IT down by 0.30%, Realty down by 0.15% and PSU down by 0.06% were the losing indices on BSE.

The top gainers on the Sensex were Maruti Suzuki up by 2.75%, Larsen & Toubro up by 1.57%, Tata Motors up by 1.44%, Tata Steel up by 1.44% and ONGC up by 1.22%. On the flip side, Bharti Airtel down by 1.77%, Dr. Reddys Lab down by 1.53%, HDFC down by 1.35%, BHEL down by 1.33% and NTPC down by 0.90% were the top losers.

Meanwhile, concerned over the high Non- Performing Assets (NPAs) of public sector banks, Reserve Bank Governor Raghuram Rajan made a strong case for cleaning up bad debts of banks and restructure other possible NPAs within the next 12 months to put the economy back on track. Total Gross Non Performing Assets of public sector banks stood at over Rs 2.43 lakh crore as on September 2014. The top 30 NPAs account for Rs 87,368 crore or 35.9 percent of total gross NPAs of PSBs.

Stressing the need for consolidation in ownership, improvement in governance and enhancement of management capability, Raghuram Rajan said that one of the greatest challenges was to improve the governance structure of PSBs banks. He further highlighted that banks should develop differentiated products and recruit young talent, train and retain them through campus recruitment which at present is banned because of Supreme Court ruling. With the licensing of the small banks and the payment banks, there would be new players in the industry and competition amongst the PSBs will also grow to meet these challenges. The Governor also favored channelising full savings of the households into the financial system so that necessary resources for growth are made available.

Indian banking industry is the most dominant segment of the country’s financial sector and plays an important role in the economic development of the country. Banks help to boost economic growth by allocating savings to investments that have potential to yield higher returns.

The CNX Nifty is currently trading at 8400.65, up by 5.20 points or 0.06% after trading in a range of 8400.20 and 8445.60. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Maruti Suzuki up by 2.81%, IDFC up by 1.73%,  Larsen & Toubro up by 1.68%, Tata Steel up by 1.63% and Tata Motors up by 1.46%. On the flip side, DLF down by 2.73%, Bharti Airtel down by 1.96%, Dr. Reddys Lab down by 1.62%, BHEL down by 1.34% and HDFC down by 1.32% were the top losers.

Most of the Asian Markets were trading mixed, Hang Seng up by 53.45 points or 0.22% to 23,911.27 and Shanghai Composite up by 91.87 points or 2.84% to 3,326.54. While, Straits Times down 35.47 points or 1.05% to 3,335.12, Jakarta Composite down 34.6 points or 0.66% to 5,208.17, Taiwan Weighted down 33.15 points or 0.36% to 9,274.11, FTSE Bursa Malaysia KLCI down 12.9 points or 0.74% to 1,739.87, KOSPI Index down 10.69 points or 0.55% to 1,915.75 and Nikkei 225 down 8.18 points or 0.05% to 17,442.59.