Benchmarks pare early morning gains; trade below neutral line

Indian equities pared gains to trade below the previous closing level in the late morning session. On the global front, most of the Asian equity indices were trading in the green encouraged by the Chinese Premier’s statement ahead of report on gross domestic product that China’s economy was relatively good. Back home, traders were seen piling up position in, Realty, Auto and Power sector while selling was witnessed in Oil & Gas, TECk and Metal sector. DLF, Unitech, HDIL, Oberoi Realty, India bulls Real Estate and Sobha Developers from Realty pack were seen trading in green. Power Grid Corporation of India, Tata Power, Reliance Infrastructure, Reliance Power, Crompton Greaves, and ABB from Power pack were seen trading firm in green. Oil & Gas majors - Reliance Industries, Bharat Petroleum Corporation, Indian Oil Corporation, Hindustan Petroleum Corporation and Gujarat State Petronet were capping the markets’ gains. TECk majors Infosys, Bharti Airtel, Wipro and Idea Cellular too were pressurizing the markets.

Meanwhile, stocks such as Mphasis and Piramal Enterprises were edged lower on reporting that NSE will exclude from its derivative segment. PSU oil companies such as stocks like ONGC, Cairn India and Oil India edged higher on Finance Minister P Chidambaram’s statement signaling end to cheap fuel. He has said that the current pricing system of petroleum product is not conducive for economic policy decisions.

In the scrip specific development, IL&FS Transportation rose on inking financial tie-up for Rs 396 crore.  Rallis India gained on reporting 6% rise in Q2 net profit. Tecpro Systems soared on securing Balance of Plant package worth Rs 197.98 crore. Somany Ceramics jumped on reporting 39% rise in Q2 net profit. Hero MotoCorp edged higher on plans to roll out its independently developed bike by FY14.  Maruti Suzuki rose on expecting 10% sales growth in second half of current fiscal. Century Plyboards surged on launching first mobile NESTA Furniture Store in Kolkata.

The NSE Nifty and BSE Sensex were managing to hold their psychological 5,650 and 18500 levels. The market breadth on BSE was positive, in the ratio of 1159:909.

The BSE Sensex is currently trading at 18586.45 down by 24.32 points or 0.13% after trading in a range of 18667.02 and 18576.41. There were 16 stocks advancing against 14 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.37% and Small cap index was up by 0.18%.

On the BSE sectoral space, Realty up by 1.14%, Auto up by 0.43%, Power up by 0.33%, CD up by 0.33% and Bankex up by 0.17%, were the top gainers. While, Oil & Gas down by 0.46%, TECk down by 0.29%, Metal down by 0.28%, FMCG down by 0.16% and HC down by 0.12%, were the top loser.

The top gainers on the Sensex were Tata Power up by 2.36%, Tata Motors up by 0.62%, Dr Reddy’s Lab up by 0.51%, Hero MotoCorp up by 0.40% and Bajaj Auto up by 0.40%. On the other hand, Bharti Airtel down by 2.18%, Jindal Steel down by 1.61%, Wipro down by 1.30%, Sun Pharma down by 1.15% and RIL down by 0.92% were the top losers on the Sensex.   

Meanwhile , in a response to the demand of the banker’s, the Reserve Bank of India (RBI), easing the norms for Priority Sector Lending (PSL) by banks, has expanded the ambit of distribution of loans to agriculture and weaker sections of the society. These additions and amendments will be operational with effect from July 20, 2012.

As per the eased norms, loans to corporates including farmers’ producer companies of individual farmers, partnership firms and co-operatives of farmers directly engaged in Agriculture and Allied Activities, up to an aggregate limit of Rs 2 crore will be treated as lending for direct agriculture under priority sector lending (PSL) status. In case the loan limit per borrower is more than Rs 2 crore, the same should be treated as indirect finance to agriculture.

Further, bank loans to Micro and Small Enterprises (MSE) engaged in providing or rendering of services will be eligible for classification as direct finance to MSE Sector under priority sector up to an aggregate loan limit of Rs 2 crore per borrower/unit.

Moreover, loans to governmental agency for construction of dwelling units or for slum clearance and rehabilitation of slum dwellers up to Rs 10 lakh per dwelling unit also would come under the ambit of priority sector lending. Furthermore, loans to economically weaker sections and low-income groups, loans to housing finance companies for refinance, on-lending for purchase or construction or reconstruction up to a ceiling of Rs 10 lakh per dwelling would also be eligible for priority sector lending.

In the earlier guidelines issued in July, the central bank had completely of loans granted to Housing Finance Companies (HFCs) from priority sector lending tag. The decision was criticized by the stakeholders, including Deepak Parekh, the chairman of India’s largest HFC - HDFC.

However, RBI after holding discussions with CMD/CEOs of select banks and officers in-charge of PSL and receiving feedback, decided to make certain additions and amendments for priority sector lending.

 The S&P CNX Nifty is currently trading at 5,653.00, down by 7.25 points or 0.13% after trading in a range of 5,678.70 and 5,650.55. There were 25 stocks advancing against 24 declines while 1 stock remains unchanged on the index.

The top gainers of the Nifty were Tata Power up by 2.60%, Ambuja Cement up by 1.72% DLF up by 1.59%, HCL Tech up by 1.52% and JP Associates was up by 0.93%. While, Bharti Airtel down by 2.49%, Grasim down by 1.63%, Jindal Steel down by 1.48%, Sun Pharma  down by 1.05% and Wipro down by 1.04% were the losers on the index

Asian equity indices were trading mostly in the green; Kospi Composite was up by 0.07%, Shanghai Composite was up by 1.03%, Hang Seng was up by 0.66%, Jakarta Composite up by 0.30%, KLSE Composite was up by 0.17%, Nikkei 225 was up by 1.85% and Straits Times was up by 0.48% while Taiwan Weighted down by 0.11% was the lone loser.