Sensex, Nifty continue to trade in green

Indian benchmarks- Sensex, Nifty were trading over 0.20% higher in the late morning session mainly on the back of a rally in IT-sector stocks after Infosys posted 'better-than-expected' third quarter earnings. On the global front, most of the Asian equity indices were trading in the red. Back home, in a positive surprise, India's annual industrial output growth measured by index of industrial production (IIP), contracted by just 0.1% at 167.3 for the month of November 2012 against growth of 8.2% in the previous month. The figure was much higher against the street’s expectation of -0.6%. The cumulative growth for the period April-November 2012-13 over the corresponding period of the previous year stands at 1.0%. Meanwhile, October IIP figure was revised to 8.3 v/s 8.2% (Provisional).The indices of industrial production for the mining, manufacturing and electricity sectors for the month of November 2012 stands at 121.7, 178.3 and 149.1 respectively, with the corresponding growth rates of (-) 5.5%, 0.3% and 2.4% as compared to November 2011.The traders were seen piling up position in IT, TECk and Consumer Durables while selling was seen in FMCG, Capital Goods and Oil & Gas. In scrip specific development, Infosys spurted after the company raised both revenue and earnings guidance in rupee terms for the fiscal year ending March 2013. GMR Infrastructure was trading in red after reporting that the NHAI may bar the company from bidding for road projects in future. Indian Oil Corporation, BPCL and HPCL edged lower despite reports that the government is all set to raise diesel and cooking gas rates. The Congress Core group will meet in the national capital on January 11, 2013 to take a final call on fuel price hike. The NSE Nifty and BSE Sensex were managing to hold their psychological 5950 and 19700 levels respectively. The market breadth on BSE was negative; advances: declines in the ratio of 936:1220.

The BSE Sensex is currently trading at 19738.42 up by 74.87points or 0.38% after trading in a range of 19839.80 and 19727.12. There were 7 stocks advancing against 23 declines on the index.

The broader indices were trading in red; the BSE Mid cap index was down by 0.41% and Small cap index was down by 0.18%.

The top gaining sectoral indices on the BSE were, IT up by 7.47%, TECk up by 5.44%, Consumer Durables up by 1.33% and  Metal up by 0.33%   while, FMCG down by 1.41%, Capital Goods down by 0.92%, Oil & Gas down by 0.81%, Power down by 0.77%, and PSU down by 0.73% were the losers on the index.

The top gainers on the Sensex were Infosys up by 13.41%, TCS up by 3.20%, Wipro up by 3.06%, Sterlite Industries up by 1.77% and Maruti Suzuki up by 0.90%.

On the flip side, Hindustan Unilever was down by2.05%, ONGC was down by 1.77%, ITC was down by 1.64%, Tata Power was down by 1.43% and Sun Pharma was down by 1.18% were the top losers on the Sensex

Meanwhile, In order to strengthen the capital base of public sector banks, the Union Cabinet on Jan 10 approved capital infusion of Rs 12,517 crore in around 10 state-owned banks over the next three months. This will help the bank to enhance the lending activity and meet the capital adequacy norms. It will also allow them to maintain their Tier-l CRAR at comfortable level, so that they remain compliant with the stricter capital adequacy norms under BASEL-III as well as to support internationally active PSBs for their national and international banking operations undertaken through their subsidiaries and associates.

The cabinet also gave in-principle approval for providing need-based recapitalization to public sector banks till 2018-19 for compliance with the stiffer Basel-III capital adequacy norms, which will implemented from 1 April, 2013. The requirement of core equity (Tier 1 capital) will also increase due to increase in the Risk Weighted Assets of banks under Basel-III, as risk weights in the areas of credit risk, including counterparty credit risk, external credit assessments and market risk, are higher than those in the present regime of Basel-II norms.

Finance minister P Chidambaram said ‘pursuant to the Budget announcement made by the finance minister in March 2012, we are infusing additional capital into the public sector banks. It will be done before the end of this fiscal.’ Further, the name of the banks, the amount for each bank and terms of the conditions will be decided in consultation with them at the time of infusion.

By adding further he said, this move would cater to the credit needs of productive sectors and help withstand the impact of stress in the economy. It would also support the national and international banking operations of public sector banks and boosting the confidence of investors, as well as the market sentiment.

However, earlier this week, global regulators gave four more years to banks and greater flexibility to be compliant with Basel-III norms, as advanced economies have been struggling to recover from economic slowdown. Banks had also complained that even they could not meet the January 2015 deadline. So, the global banking oversight committee agreed to phase in the rule over four more years.  The S&P CNX Nifty is currently trading at 5,980.55 up by 11.90 points or 0.20% after trading in a range of 6,018.85 and 5,975.55. There were 12 stocks advancing against 38 declines on the index.

The top gainers of the Nifty were Infosys up by 13.25%, TCS up by 3.31%, Wipro up by 3.01%, Sesa Goa up by 1.50% and HCL Tech up by 1.31%.

On the flip side, HUL down by 2.00%, BPCL down by 1.93%, Reliance Infra down by 1.92%, ONGC down by 1.82%, and ITC down by 1.71% were the major losers on the index.

Most of the Asian equity indices were trading in the red; Shanghai Composite declined 12.31 points or 0.54% to 2,271.35, Hang Seng slipped 28.25 points or 0.12% to 23,325.96, KLSE Composite decreased 3.23 points or 0.19% to 1,686.70, Straits Times dipped 11.11 points or 0.34% to 3,215.42, KOSPI Composite tumbled 6.38 points or 0.32% to 2,000.70, Jakarta Composite increased 1.02 points or 0.02% to 4,316.25 and Taiwan Weighted was down 1.46 points or 0.02% to 7,810.44.

On the flip side Nikkei 225 was up by 174.67 points or 1.64% to 10,824.04.