Benchmarks trade in fine fettle in early deals

Indian equity benchmarks have made a positive start and are trading in fine fettle with the gains of above quarter a percent in early trade. Investor sentiment turned positive after the government dismissed the possibility of any material impact on the Indian economy from the developments in Greece, but it anticipates some impact on the rupee from investors pulling out in fear. Further, some support also came with Reserve Bank of India (RBI) Deputy Governor R Gandhi stating that public sector banks need more capital than budgeted to strengthen their balance sheets and deal with non-performing assets (NPAs). Appreciation in Rupee was also supporting the sentiments. Rupee rose 9 paise against dollar in morning trades today. At present, Sensex and Nifty were trading above the crucial 28,300 and 8,550 levels respectively. The session was proving equally positive for broader indices. In scrip specific development, L&T Finance Holdings was trading higher on media reports that American private equity fund Warburg Pincus is in talks to purchase stake in the company.

On the global front, the US markets ended lower as Greeks resoundingly backed their government in rejecting the austerity terms of a bailout. Asian markets were trading mostly in red. Chinese stocks declined on Tuesday despite official efforts to shore up slumping prices.

Back home traders were seen piling up position in Consumer Durables, Banking, Realty, PSU and FMCG, while selling was witnessed in Healthcare, Auto, TECK and Metal. The market breadth on BSE was positive in the ratio of 1321: 472, while 67 scrips remained unchanged.

The BSE Sensex is currently trading at 28310.35, up by 101.59 points or 0.36% after trading in a range of 28200.97 and 28335.23. There were 16 stocks advancing against 14 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.38%, while Small cap index added 0.61%.

The top gaining sectoral indices on the BSE were Consumer Durables up by 1.08%, Bankex up by 0.40%, Realty up by 0.31%, PSU up by 0.23%, FMCG up by 0.13%, while Healthcare  down by 0.40%, Auto down by 0.14%, TECK down by 0.06%, Metal down by 0.02%, Capital Goods down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Wipro up by 1.35%, HDFC up by 1.28%, Axis Bank up by 0.53%, Tata Steel up by 0.42% and SBI up by 0.41%. On the flip side, Lupin down by 1.01%, Hindalco down by 0.96%, Cipla down by 0.68%, Reliance Industries down by 0.67% and Hindustan Unilever down by 0.65% were the top losers.

Meanwhile, supporting the demand of more funds by the public sector banks (PSBs), Reserve Bank of India (RBI) Deputy Governor R Gandhi has said that public sector banks need more capital than budgeted to strengthen their balance sheets and deal with non-performing assets (NPAs). The Deputy Governor further elaborated that banks need capital infusion for three things – ‘to meet Basel III, better provisioning and improving banks business.'

Gandhi stated that follow-on public offers and capital infusion by the government are two ways to raise the capital. Recently, RBI Governor Raghuram Rajan too had stressed that banks should have enough capital so that they can clean up their balance sheet; he has also flagged concerns over inadequate capital infusion.For the current fiscal 2016, the government had allocated Rs 7,940 crore for state-owned banks. Later after Finance Minister Arun Jaitley assured to provide more than the budgeted amount current fiscal, the government announced its plan to infuse Rs 57,000 crore in PSBs in two years, with an infusion of about $3 billion in the current year and perhaps twice as much in the next year. The government has already assessed capital requirement of public sector banks. Public sector banks will need an additional capital of Rs 2.40 lakh crore by 2018 to meet the Basel III capital adequacy norms.

Earlier, Union cabinet in December 2014, keeping the huge capital requirements in mind, had allowed public sector banks to raise up to Rs 1.60 lakh crore from markets by diluting government holding to 52 per cent in phases.

The CNX Nifty is currently trading at 8551.00, up by 28.85 points or 0.34% after trading in a range of 8523.50 and 8561.35. There were 30 stocks advancing against 20 stocks declining on the index.

The top gainers on Nifty were Asian Paints up by 2.99%, HDFC up by 1.31%, Wipro up by 1.27%, Indusind Bank up by 0.97% and Bank Of Baroda up by 0.88%. On the flip side, HCL Tech. down by 1.23%, Vedanta down by 1.04%, Hindalco down by 1.01%, Cipla down by 0.93% and Zee Entertainment down by 0.78% were the top losers.

Asian markets were trading mostly in red; Hang Seng decreased 273.3 points or 1.08% to 24,962.98, Shanghai Composite decreased 120.27 points or 3.19% to 3,655.65, KOSPI Index decreased 24.67 points or 1.2% to 2,029.26, Jakarta Composite decreased 16.57 points or 0.34% to 4,900.17, FTSE Bursa Malaysia KLCI decreased 3.36 points or 0.2% to 1,713.69.

On the flip side, Nikkei 225 increased 278.25 points or 1.38% to 20,390.37, Straits Times increased 0.8 points or 0.02% to 3,333.74 and Straits Times increased 0.8 points or 0.02% to 3,333.74.