Sensex, Nifty trade marginally in green

Indian benchmarks - Sensex, Nifty were trading flat with positive bias in the late morning session. While, most of the Asian equity indices were trading in the green at this point of time as investors took cues from better-than-expected economic data from China and the United States that raised hopes of pick-up in growth momentum. On the home turf, the traders were seen piling up position in Realty, Power and Bankex, while selling was seen in Metal, and FMCG sector. In the scrip specific development, Wipro was trading in green on reporting that it has acquired a Singapore-based consumer goods company. Shares of Sesa Goa edged lower after a panel appointed by India's top court recommended scrapping 42 iron ore mining leases in Goa until mining companies submit plans to deal with the environmental impact and the legal details involved. Cairn India was trading under pressure after Goldman Sachs downgraded the stock to 'neutral' from 'buy', citing expectations of flat to declining earnings growth. The NSE Nifty and BSE Sensex were managing to hold their psychological 5,900 and 19400 levels respectively. The market breadth on BSE was positive, in the ratio of 1328:815.

The BSE Sensex is currently trading at 19446.61 up by 22.51 points or 0.12% after trading in a range of 19478.01 and 19393.68. There were 18 stocks advancing against 12 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.49% and Small cap index was up by 0.54%.

The top gaining sectoral indices on the BSE were, Realty up by 1.29%, Power up by 0.41%, Bankex up by 0.33%, CD up by 0.32% and IT up by 0.19%. While, Metal down by 0.42% and FMCG down by 0.14%, were only the losers on the index.

The top gainers on the Sensex were Wipro up by 1.57%, HDFC up by 1.34%, Gail India up by 1.08%, Coal India up by 1.07% and Tata Steel up by 0.86%.

On the flip side, Sterlite Industries was down by 1.82%, TCS was down by 0.90%, Hindalco Inds was down by 0.85%, ITC was down by 0.81%, and Bharti Airtel was down by 0.78%, were the top losers on the Sensex.

 Meanwhile, criticizing banks showing higher profits without providing adequately for bad loans, Reserve Bank of India (RBI) Deputy Governor K C Chakrabarty said, if needed, the central may hike provision coverage ratio (PCR) levels. Speaking about NPAs of banks, Chakrabarty attributed banks’ poor administration and risk management practices to the rising NPA levels.

On the sidelines he said, why banks need to show profits as high as 25%, they can show 5% growth in their profits. If banks are not focusing on provision ratio, RBI will increase it provision coverage ratio. The RBI had done away with its earlier requirement of forcing banks to maintain the PCR, or the ratio of provision to gross non-performing assets (NPAs), at 70%. The apex bank had increased the PCR to 70 per cent after the Lehman crisis in 2008 and this was applicable till September, 2011.

While almost all private banks have higher PCR, but majority of the state-run lenders especially the smaller ones, have shown a drop in PCR in the second quarter earnings and posted a good jump in profits as a result.

The RBI Deputy Governor further said that we have to make the administration functioning and change in the administration has to come in a slew of areas, which would be internal as well as external. He added that RBI has floated a discussion paper to explore having dynamic provisioning which requires banks to keep aside money during good times for a rainy day, rather than providing after an account has gone bad.

The S&P CNX Nifty is currently trading at 5,911.25, up by 3.85 points or 0.07% after trading in a range of 5,919.95 and 5,894.20. There were 26 stocks advancing against 24 declines on the index.

The top gainers of the Nifty were Reliance Infra up by 1.66%, HCL Tech up by 1.65%, DLF up by 1.63%, Wipro up by 1.33%, and HDFC up by 1.33%.

On the flip side, Sesa Goa down by 2.37%, IDFC down by 2.11%, Cairn down by 1.35%, ITC down by 0.86% and Ultra Cement down by 0.81%, were the major losers on the index.

Most of the Asian equity indices were trading in the green; Shanghai Composite was up by 9.92 points or 0.48% to 2,071.70, Hang Seng gained 90.64 points or 0.41% to 22,281.81, Jakarta Composite was higher by 7.97 points or 0.19% to 4,298.76, KLSE Composite was up by 11.37 points or 0.70% to 1,629.14, Nikkei 225 gained 1.54 points or 0.01% to 9,528.75, Seoul Composite was marginally up by 0.34 points or 0.02% to 1,958.10 and Straits Times was up by 22.48 points or 0.70% to 3,128.48.

On the other hand, Taiwan Weighted was trading lower by 30.35 points or 0.40% to 7,612.70.