Markets maintain gains; Nifty reclaims 9350 level

Indian markets bucking the global trends have strengthened further and are trading near the day’s high. Sensex rising around 200 points was comfortably above the 30000 mark, while the broader Nifty reclaimed its crucial psychological level of 9,350. The gains are mainly propelled by the strong numbers from country's largest private sector lender ICICI Bank, which reported over three fold jump in its fourth quarter standalone profit. The whole banking sector stocks are in jubilant mood since morning, as the Union Cabinet has cleared an ordinance to empower the Reserve Bank of India (RBI) to reduce bad debts of public sector banks. The framework includes the promulgation of an Ordinance to amend the Banking Regulation Act to give more teeth to the Reserve Bank of India and its oversight committees to act on behalf of banks while deciding on NPAs. The rupee though has made a marginally weak start against the US dollar after the US Federal Reserve kept interest rates unchanged and also signaled a further rate hike. The domestic steel stocks too are showing signs of strength despite the global metal stocks remaining under pressure amid inventory concerns in industrial metals. The government has approved a new policy that envisages Rs 10 lakh crore investment to create more capacity in the steel sector. The policy aims at increasing supply of domestic coking coal to cut dependence on imports by half and production of 300 million tonnes of the alloy by 2030-31.

The BSE Sensex is currently trading at 30085.00, up by 190.20 points or 0.64% after trading in a range of 30027.41 and 30098.82. There were 22 stocks advancing against 8 stocks declining on the index.

The broader indices too were going neck-in-neck to the benchmarks; the BSE Mid cap index was up by 0.53%, while Small cap index gained 0.57%.

The top gaining sectoral indices on the BSE were Bankex up by 1.63%, Consumer Durables up by 1.19%, Capital Goods up by 0.74%, Healthcare up by 0.48%, PSU up by 0.47%, while Metal down by 0.93%, Realty down by 0.30%, Oil & Gas down by 0.22%, Auto down by 0.22%, IT down by 0.13% were the losing indices on BSE.

The top gainers on the Sensex were ICICI Bank up by 8.47%, SBI up by 1.83%, Adani Ports & SEZ up by 1.71%, HDFC up by 1.18% and Lupin up by 1.08%. On the flip side, Tata Motors down by 1.26%, HDFC Bank down by 0.63%, Mahindra & Mahindra down by 0.53%, TCS down by 0.53% and Tata Steel down by 0.43% were the top losers.

Meanwhile, with an aim to tackle the rising non-performing assets (NPAs) of public sector banks, the Union Cabinet, led by Prime Minister Narendra Modi, has cleared an ordinance empowering the Reserve Bank of India (RBI) to act against top loan defaulters. The ordinance has been sent to the president for approval.

The ordinance will allow the RBI to deal with bad loans on a case-to-case basis as opposed to following a set of broad guidelines and rules for all non-performing assets (NPAs). The amended law will also empower RBI to set up oversight panels that will shield bankers from later action by probe agencies looking into loan recasts as a lot of discretion will be involved in the process. In addition, the central bank will be able to give specific solutions for specific cases.

Public-sector banks are burdened with NPA or bad loans to the tune of a staggering Rs 6 lakh crore. Bad loans rose by over Rs 1 lakh crore in the first nine months of last fiscal to Rs 6.07 lakh crore by December 31, 2016. Public sector banks' gross bad loans stood at Rs 5.02 lakh crore at the end of March 2016, up from Rs 2.67 lakh crore at the end of March 2015.

The CNX Nifty is currently trading at 9350.55, up by 38.60 points or 0.43% after trading in a range of 9341.25 and 9361.40. There were 26 stocks advancing against 25 stocks declining on the index.

The top gainers on Nifty were ICICI Bank up by 8.71%, Bank Of Baroda up by 1.90%, Indiabulls Housing up by 1.90%, SBI up by 1.74% and Aurobindo Pharma up by 1.71%. On the flip side, Hindalco down by 2.49%, Kotak Mahindra Bank down by 1.39%, BPCL down by 1.29%, Tata Motors down by 1.25% and Indian Oil Corp. down by 1.03% were the top losers.

Most of the Asian markets were in red, Hang Seng decreased 101.43 points or 0.41% to 24,594.70, FTSE Bursa Malaysia KLCI declined by 14.58 points or 0.82% to 1,757.93, Shanghai Composite was lower by 1.6 points or 0.05% to 3,133.75 and Taiwan Weighted was down by 1.48 points or 0.01% to 9,953.85.

On the other hand, KOSPI Index was up by 16.1 points or 0.73% to 2,235.77 and Jakarta Composite gained 16.59 points or 0.29% to 5,663.95.