Benchmarks trade in fine fettle in early deals

Indian equity indices have made a positive start with both the frontline gauges re-capturing their crucial 5,950 (Nifty) and 19,700 (Sensex) levels as investors opted to buy beaten down but fundamentally strong stocks in previous two sessions of bloodbath. Some support also came in after select non-banking financial companies which are likely to foray into the banking space gained in early trades after the Reserve Bank of India on Monday allowed new banking licenses to set up banks. The central bank said applicants getting permits to set up new banks would have to do so within 18 months. The earlier guidelines said aspirants would get a year after in-principle approval to do so, failing which the licenses were to be withdrawn.

Global cues remain mixed as US markets ended modestly higher after a volatile day of trade overnight. Some weak economic reports raised concerns about the economic outlook but at the same time eased worries about outlook for the Federal Reserve’s asset purchase program. However, most of the Asian equity indices were trading in red at this point of time led by Chinese Shanghai Composite which crumbled over a percent as investors continued selling on concerns about weak Chinese manufacturing data.

Back home, on the sectoral front, healthcare witnessed the maximum gain in trade followed by capital goods and realty, while software and technology remained the only losers on the BSE sectoral space. The broader indices too were trading in-line with benchmarks, while the market breadth on the BSE was positive; there were 870 shares on the gaining side against 372 shares on the losing side while 54 shares remain unchanged.

The BSE Sensex opened at 19,605.68; about 4 points lower compared to its previous closing of 19,610.48, and has touched a high and a low of 19,736.93 and 19,576.18 respectively. The index is currently trading at 19,731.67, up by 121.19 points or 0.62%. There were 25 stocks advancing against 5 declines on the index.

The overall market breadth has made a strong start with 67.13% stocks advancing against 28.70% declines. The broader indices were trading in green; the BSE Mid cap and Small cap indices up by 0.77% and 0.73% respectively. 

The top gaining sectoral indices on the BSE were, Health Care up by 1.89%, Capital Goods up by 1.86%, Realty up by 1.44%, Oil & Gas up by 1.04% and Power up by 0.97% while, IT down by 0.33% and Teck down by 0.06% were the only losers on the sectoral index.

The top gainers on the Sensex were L&T up by 2.45%, Cipla up by 2.44%, Hero MotoCorp up by 2.07%, Dr Reddys Lab up by 1.84% and ICICI Bank up by 1.44%.

On the flip side, Infosys was down by 0.83%, TCS was down by 0.51%, Tata Motors was down by 0.41%, Hindustan Unilever was down by 0.13% and  Bajaj Auto was down by 0.07% were the only losers on the Sensex.

Meanwhile, the Financial Stability and Development Council (FSDC) panel is likely to discuss on a range of issues relating to the financial sector development and stability, which includes issues relating to inter-regulatory coordination. The panel would also discuss issues like asset quality of banks and fraudulent investment scheme.

The FSDC’s sub-committee, headed by RBI Governor D Subbarao, would also consider the views of other sector regulators including Securities and Exchange Board of India (SEBI), Insurance Regulatory and Development Authority (IRDA) and Pension Fund Regulatory and Development Authority (PFRDA).

The agenda for the meeting include rising NPA in the banking sector and restructuring of loans. The gross NPAs of PSU banks have risen to Rs 1.55 lakh crore as on December 2012 from Rs 71,080 crore as on March 2011, in which corporate accounts constitute 53.68 percent. Further, about 172 corporate accounts constitute NPAs of more than Rs 100 crore each at the end of December 2012 and the amount involved in such cases is to the tune of Rs 37,194 crore.

Recently, concerned over the rising NPAs of Indian banks, the Reserve Bank of India (RBI) has tightened rules for restructuring of most types of loans in line with global practices. The central bank has also directed the banks to disclose details of all capital instruments issued at least on a half-yearly basis along with financial earnings report to meet the Basel III requirement to provide a description of the main features of capital instruments.

The CNX Nifty opened at 5,941.10; about 1 points lower as compared to its previous closing of 5,939.30, and has touched a high and a low of 5,979.30 and 5,932.85 respectively.

The index is currently trading at 5,978.70, up by 39.40 points or 0.66%. There were 44 stocks advancing against 6 declines on the index.

The top gainers of the Nifty were Cipla up by 2.72%, L&T up by 2.52%, Ranbaxy up by 2.50%, DLF up by 2.38% and Hero MotoCorp up by 2.01%.

On the flip side, Infosys down by 0.80%, UltraTech Cement down by 0.54%, HCL Technologies down by 0.50%, Tata Motors down by 0.45% and TCS down by 0.30% were the major losers on the index.

Most of the Asian equity indices were trading in red; Shanghai Composite tumbled 26.60 points or 1.16% to 2,272.65, Hang Seng slipped 62.71 points or 0.28% to 22,219.48, Jakarta Composite dropped 23.99 points or 0.48% to 4,947.37, Straits Times declined 12.80 points or 0.39% to 3,278.28, KOSPI Composite contracted 9.21 points or 0.46% to 1,980.36 and Taiwan Weighted was down by 6.58 points or 0.08% to 8,194.44.

On the flip side, KLSE Composite rose 2.62 points or 0.15% to 1,768.95 and Nikkei 225 was up by 121.23 points or 0.91% to 13,383.05.