Firm trade prevails at D-street; rate sensitive’s lead

Benchmark equity indices continue to perform exceptionally well in today’s trade mainly led by rate sensitive’s counters, which have rallied on hopes of rate cut, bolstered by comments of RBI’s official. India’s central bank governor Duvvuri Subbarao, said, ‘the Reserve Bank of India will take note of falling inflation when discussing potential interest rate cuts.’ 30-share index, Sensex, trading higher over 350 points, was comfortably cruising past the 20,000 level, while 50-share widely followed index, Nifty, to adding over century of points, was oscillating above the 6,100 level, its highest level in 28 months. However, broader indices have pared off some gains.

A flat opening of European markets to some extent has limited bourses’ gains. On the global front, European markets opened lower after growth data from the top two euro-zone economies deflated sentiments in early trade. France entered recession while Germany's growth rate was lower-than- expected.

Closer home, the BSE Sensex is currently trading at 20,113.38, up by 391.09 points or 1.98% after trading in a range of 20,142.23 and 19,798.18. There 29 stocks advancing against 1 stock declining stock on the index.  The overall market breadth on BSE is in the favour of advances, which are outnumbering declines in the ratio of 1095:542; while 75 stocks remained unchanged.

The broader indices too pared some gains; the BSE Mid cap and Small cap index were trading up by 1.36% and 0.88% respectively.

The gaining sectoral indices on the BSE were, Realty up by 3.14%, Bankex up by 2.86%, Auto up by 2.57%, Capital Goods up by 2.18% and PSU up by 1.97%, while there was no loser on the BSE sectoral space.

The top gainers on the Sensex were HDFC up by 4.26%, Mahindra & Mahindra up by 3.65%, SBI up by 3.43%, Hindalco Inds up by 2.89% and Tata Motors up by 2.83%, while Wipro down by 0.14% was the lone loser on the Sensex.

Meanwhile, in its probe into the issues raised by the Cobrapost sting operation, the Reserve Bank of India has revealed various discrepancies in banking operations, including non-compliance of KYC norms and fictitious PAN cards. After the Cobrapost expose that alleged money laundering by banks, RBI has completed the investigation into the working of banks. CobraPost altogether had named about 33 public and private sector banks in its various money laundering operations.

The RBI report has pointed string of violations on several counts by these banks, which include the usage of identity cards of unknown NRIs and dummy PAN, unauthorized gold sales and non-compliance of know your customer norms. Further, the central bank also revealed that banks’ staffs were also engaged in giving suggestions to customers on ways to bypass regulatory norms.

In its the annual policy review last week, the central bank had said that it will take systemic action to deal with the problem. RBI’s governor D Subbarao had said that firstly the action will be taken against individual institutions involve in practices which are not consistent with the banking regulation and prudential banking.

The CNX Nifty is currently trading at 6,111.55, up by 116.15 points or 1.94% after trading in a range of 6,125.50 and 6,018.85. There were 49 stocks advancing against 1 decline on the index.

The top gainers of the Nifty were PNB up by 5.07%, HDFC up by 4.06%, IDFC up by 4.00%, DLF up by 3.80% and JP Associate up by 3.76%. On the flip side, Ambuja Cement down by 0.05% was the only loser on the index.

Most of the Asian markets were trading in green; Hang Seng rose 0.42%, Jakarta Composite rose by 0.26%, Nikkei 225 surged 2.29%, Straits Times added 0.35%, Shanghai Composite gained0.25% KOSPI Composite was trading in green by 0.12% and Taiwan Weighted was up by 0.81%. 

On the flip side, KLSE Composite down by 0.25% was the lone losers amongst Asian pack.

European markets started on a quiet note; with CAC 40 declining by 0.15%, FTSE 100 sliding 0.15%, however, DAX added 0.10%.