Benchmarks trade lower in morning deals; Rail budget eyed

Pressurized by sluggish global cues, Indian equity indices have made a lackluster start on Tuesday with Sensex breaching its crucial 19,250 mark. The US markets tumbled with the start of new week, though the indices got a positive start but uncertainty about the outcome of elections in Italy led the sharp selling in the markets. While, most of the Asian equity markets were trading lower at this point of time after signs of an inconclusive general election in Italy sparked worries that another chapter in Europe’s debt crisis could be opening. The Japanese market was suffering a cut of over two percent as the companies that do business in Europe dropped.

Back home, investors remained cautious awaiting the debut Rail Budget of Pawan Kumar Bansal, on whether he yields to pressure of hiking passenger fares yet again or looks at other measures to mobilise resources to offset the burden of the recent diesel price hike. Railways stock like, Kernex Microsystems, Zicom Electronic, Titagarh Wagons and Kalindee Rail all were trading lower ahead of the Rail Budget. Bucking the trend, shares of telecom companies have rallied on the bourses in otherwise weak market on hopes of further lowering of reserve price for the spectrum after the government once again failed to find takers for 1,800-MHz spectrum.

On the sectoral front, technology, software and fast moving consumer goods remained the few gainers on the BSE sectoral index while, auto, capital goods and oil and gas remained the top losers on the BSE sectoral space. The broader indices too were struggling to get some traction while, the market breadth on the BSE was negative; there were 600 shares on the gaining side against 1,185 shares on the losing side while 78 shares remain unchanged.

The BSE Sensex opened at 19,290.66; about 41 points lower compared to its previous closing of 19,331.69, and has touched a high and a low of 19,293.49 and 19,186.02 respectively.

The index is currently trading at 19,213.51, down by 118.18 points or 0.61%. There were 6 stocks advancing against 24 declines on the index.

The overall market breadth has made a week start with 30.73% stocks advancing against 65.16% declines. The broader indices were trading in-line with benchmarks; the BSE Mid cap and Small cap indices decline 0.88% and 0.76% respectively.

The top gaining sectoral indices on the BSE were, TECk up by 0.64%, IT up by 0.18%  and FMCG up by 0.05% while, Auto down by 1.36%, Capital Goods down by 1.16%, Oil & Gas down by 1.05%, Bankex down by 0.98% and  Metal down by 0.94% were the losers on the index.

The top gainers on the Sensex were Bharti Airtel up by 4.20%, BHEL up by 0.79%, ITC up by 0.53%, TCS up by 0.47% and Infosys up by 0.44%.

On the flip side, Maruti Suzuki was down by 2.51%, ICICI Bank was down by 1.73%, Hindalco Industries was down by 1.69%, Tata Motors was down by 1.67% and L&T was down by 1.47% were the top losers on the Sensex.

Meanwhile, setting the stage for corporate giants to enter the highly regulated banking space as the Reserve Bank of India (RBI) on February 22 floated the much awaited guidelines for issuing new bank licences. Accommodating the Government’s viewpoint, the central bank reversed the stand it had taken in the draft guidelines of not allowing broking and real-estate companies in the banking space.

The RBI unveiled that Entities / groups in the private sector, public sector and Non-Banking Financial Companies (NBFCs) shall be eligible to set up a bank through a wholly-owned Non-Operative Financial Holding Company (NOFHC).

As per the final guidelines, the minimum capital requirement for opening a bank was set at Rs 500 crore, while the foreign shareholding was capped at 49%.It also specified that entities applying for the new bank licences should have past records of 'sound credentials and integrity, be financially sound with a successful track record of 10 years. For this purpose, the banking regulator may seek feedback from other regulators and enforcement and investigative agencies.  Further, the new lenders would be required to open at least 25 percent of their branches in unbanked rural centres, whose population is less than 10,000.

Thus, interested firms are expected to apply for the new bank licences to the central bank till July 1, 2013. At the first stage, the applications will be screened by the Reserve Bank India. Thereafter, the applications will be referred to a High Level Advisory Committee, the constitution of which will be announced shortly.

The S&P CNX Nifty opened at 5,838.30; about 16 points lower as compared to its previous closing of 5,854.75, and has touched a high and a low of 5,838.85 and 5,810.45 respectively.

The index is currently trading at 5,818.70, lower by 36.05 points or 0.62%. There were 10 stocks advancing against 40 declines on the index.

The top gainers of the Nifty were Bharti Airtel up by 4.10%, BHEL up by 0.67%, DLF up by 0.50%, TCS up by 0.48% and Grasim up by 0.43%.

On the flip side, Maruti Suzuki down by 2.69%, ICICI Bank down by 1.91%, Lupin down by 1.74%, Tata Motors down by 1.70% and Hindalco Industries down by 1.59%, were the major losers on the index.

Most of the Asian equity indices were trading in the red; Hang Seng declined 174.86 points or 0.77% to 22,645.22, Jakarta Composite dropped 40.69 points or 0.87% to 4,655.42, KLSE Composite dipped 2.15 points or 0.13% to 1,625.20, Nikkei 225 tumbled 226.26 points or 1.94% to 11,436.26, Straits Times contracted 14.91 points or 0.45% to 3,273.85, KOSPI Composite decreased 11.28 points or 0.56% to 1,998.24 and Taiwan Weighted was down by 29.80 points or 0.37% to 7,917.88.

On the flip side, Shanghai Composite was up by 8.08 points or 0.35% to 2,333.90.