Benchmarks exhibit volatile trade in tandem with global equities

Indian markets are showing volatile trend in the late morning session of trade. On the global front, Asian equity indices are exhibiting mixed trade after a gauge of China's manufacturing unexpectedly fell, though the Japanese market were trading up on some good earnings and a weaker yen. Back home, the traders were seen piling up position in Consumer Durables, Health Care and Metal while selling was seen in Realty, FMCG and TECk sectors. In scrip specific development, Jet Airways shares surged on hopes of a deal with Etihad. Bajaj Auto soared ahead of reporting its January sales. Cummins India gained on robust Q3 earnings. India's biggest telecom operator Bharti Airtel slipped on reporting decline in consolidated net profit by 60.6% on quarter-on-quarter (higher than expected) to Rs 284 crore in Q3FY13 as against Rs 721.2 crore in previous quarter, impacted by finance cost and foreign exchange fluctuation losses of Rs 216 crore for the quarter. The NSE Nifty and BSE Sensex were managing to hold their psychological 6,000 and 19900 levels respectively.

The market breadth on BSE was positive; advances: declines in the ratio of 1246:738.

The BSE Sensex is currently trading at 19915.99 up by 21.01 points or 0.11% after trading in a range of 19966.69 and 19888.56. There were 22 stocks advancing against 8 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 0.47%.

The top gaining sectoral indices on the BSE were, Consumer Durables up by 2.19%, Health Care up by 0.78%, Metal up by 0.64%, Oil & Gas up by 0.59% and Capital Goods up by 0.55% while, Realty down by 0.55% , FMCG down by 0.46% , TECk down by 0.16% and  Bankex down by 0.02% were the top losers on the index.

The top gainers on the Sensex were Bajaj Auto up by 1.71%, Cipla up by 1.65%, Tata Steel up by 1.05%, Maruti Suzuki up by 1.05% and Gail India up by 0.98%.

On the flip side, Hindustan Unilever was down by 1.47%, Bharti Airtel was down by 1.36%, Hero MotoCorp was down by 1.02%, HDFC Bank was down by 0.79%, and ITC was down by 0.68% were the top losers on the Sensex.

Meanwhile, Reserve Bank of India (RBI), concerned over rising bad debts in the banking system, has proposed a steep hike in the provisioning requirement for loan restructuring, raising it to 5% from April 1, against the current 2.75%. For accounts restructured prior to March 31, 2013, banks would have to make provision of 3.75 per cent in the first phase effective March 31, 2014.

The announcement comes less than three months after the apex bank raised provisioning on restructured accounts to 2.75 per cent to 2 per cent to mitigate risk attached with such loans. RBI in the notification said that “It has now been decided to increase the provision to five per cent in respect of new restructured standard accounts (flow) with effect from April 1, 2013 and in a phased manner for the stock of restructured standard accounts as on March 31, 2013”.

The increase of one per cent additional provisioning in case of restructured accounts prior to March 31, 2013 will be spread over the four quarters of 2013-14 and in next phase it will be 5 per cent with effect from March 31, 2015, would be spread over the four quarters of 2014-15. Corporate guarantee can be accepted in those cases where the promoters of a company are not individuals but other corporate bodies or where the individual promoters cannot be clearly identified.

This stipulation is the minimum and banks may decide on a higher sacrifice by promoters depending on the riskiness of the project and promoters' ability to bring in higher sacrifice amount, as such higher sacrifice may invariably be insisted upon in larger accounts, especially CDR (corporate debt restructuring) accounts.

All these decisions are based on recommendations made by Working Group headed by B Mahapatra to review the existing prudential guidelines on restructuring of advances. The group also recommended that RBI may do away with the regulatory forbearance regarding asset classification, provisioning and capital adequacy on restructuring of loan and advances in line with the international prudential measures.

The S&P CNX Nifty is currently trading at 6,037.85 up by 3.10 points or 0.05% after trading in a range of 6,052.95 and 6,032.10. There were 32 stocks advancing against 18 declines on the index.

The top gainers of the Nifty were Lupin up by 2.37%, Bajaj-Auto up by 1.84%, Cipla up by 1.73%, GAIL up by 1.39% and BPCL up by 1.22%.

On the flip side, Jaiprakash Associates down by 3.51%, DLF down by 3.12%, Bharti Airtel down by 2.37%, Hindustan Unilever down by 1.66% and Hero Moto Co down by 1.15%, were the major losers on the index.

Asian equity are showcasing mixed trade; Jakarta Composite surged 64.11 points or 1.44% to 4,517.82, Nikkei 225 was up by 89.18 points or 0.80% to 11,227.84, Straits Times was up by 3.95 points or 0.12% to 3,286.35 and KOSPI Composite increased 2.41 points or 0.12% to 1,964.71

On the flip side, Shanghai Composite slipped 0.40 points or 0.02% to 2,385.02, Hang Seng declined 93.04 points or 0.39% to 23,636.49, and Taiwan Weighted was down by 1.01 points or 0.01% to 7,849.01.

KLSE Composite remained closed for trade today.