Firm global cues lightens local bourses in early trade

Domestic benchmarks have joined the global rally with a gap-up opening supported by ebullient global cues. Overnight, Greece scrapped a referendum on unpopular budget cuts and the European Central Bank unexpectedly cut interest rates - moves that send global indices soaring. The US markets surged on Thursday while, all the Asian counterparts were trading in the green at this point of time. Back home, sustained buying in mostly all the key heavyweights along with broader indices supported BSE’s -- Sensex -- and NSE’s -- Nifty -- to reclaim their crucial 17,600 and 5,300 mark respectively. All sectoral indices on the BSE were trading in the green. Metal space remained the biggest gainers, rising over one and a half percent, as global macro environment improved. Auto, realty and software stocks were also trading with over a percent gain. Meanwhile, PSU oil marketing companies viz. IOC, BPCL and HPCL edged higher in the trade after implementing another rate hike in petrol prices. Oil companies have increased petrol prices by Rs 1.82 per litre from Thursday midnight; this is the fourth hike in prices this year. The broader indices were going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 1,362 shares on the gaining side against 339 shares on the losing side while 42 shares remained unchanged.

The BSE Sensex opened at 17,674.70; about 193 points higher compared to its previous closing of 17,481.93, and has touched a high and a low of 17,702.26 and 17,628.26 respectively.

The index is currently trading at 17,662.37, up by 180.44 points or 1.03%. There were 27 stocks advancing against just 3 declines on the index.

The overall market breadth has made a strong start with 78.14% stocks advancing against 19.45% declines. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices surged 1.03% and 1.02% respectively.

The top gaining sectoral indices on the BSE were, Metal up by 1.72%, Auto up by 1.47%, Realty up by 1.46%, IT up by 1.28% and CG was up by 1.18%. While, there were no losers on the index.

The top gainers on the Sensex were Sterlite Industries up by 2.44%, Hindalco up by 2.43%, Hero MotoCorp up by 2.21%, Tata Motors up by 2.07% and Tata Steel was up by 2.01%.

On the flip side, HUL was down by 0.63%, Bharti Airtel was down by 0.36% and Tata Power was down by 0.33% were the only losers on the Sensex.

Meanwhile, the government is likely to introduce Micro Finance bill which will mandate all micro-finance institutions (MFI) to register with the Reserve Bank of India (RBI) and entrusts the task of regulating the sector to the central bank in the winter session of parliament. The draft bill also proposes MFIs to have minimum net-owned funds of Rs 5 lakh.

The ministry of finance is in discussion with the all concerned stakeholders for modification of the draft Micro Financial Sector (Development and Regulation) Bill, 2011. The Finance Minister is hopeful to submit the same in upcoming winter session which starts from November 22.

Earlier in March 2007, the government had introduced the Micro Finance sector Bill in Parliament however it lapsed when the term of the 14th Lok Sabha expired in 2009. In July 2011, the government circulated draft Micro Finance Bill for the public comments.

Additionally, it also recommends creating a Micro Finance Development Council to advice government while making policies, schemes and other measures required in the interest of orderly growth and development of the sector and micro-finance institutions with a view to promote financial inclusion.

The recommended council will include members not below the rank of Executive Director from NABARD, National Housing Bank, RBI and SIDBI. Besides, joint secretaries from the Ministry of Finance and the Ministry of Rural Development will also be part of the council.

The draft bill also recommends that any MFIs which are not a registered company under the Companies Act, 1956 and becomes systemically important MFIs shall convert its institution into a company under the Companies Act, 1956, with or without a license, in Section 25 of the Act.   

This should happen within six months from the date of the balance sheet that shows the MFI has become a systematically important micro-finance institution in terms of the rules prescribed by the central government, the draft bill cited.

According to the draft Bill, the apex bank may pass an order guiding MFIs to cease and desist from execution of micro finance activities if it is found acting in manner prejudicial to the interest of its clients or depositors. The RBI will cancel the certificate of registration granted to MFIs if it fails to meet with the directives or condition.

The S&P CNX Nifty opened at 5,325.40; about 58 points higher compared to its previous closing of 5,265.75, and has touched a high and a low of 5,326.10 and 5,303.80 respectively.

The index is currently trading at 5,312.80, higher by 47.05 points or 0.89%. There were 46 stocks advancing against just 4 declines on the index.

The top gainers of the Nifty were Sterlite Industries up by 2.65%, Hindalco up by 2.43%, Hero MotoCorp up by 2.33%, Sesa Goa up by 2.11% and Tata Motors up by 2.07%.

On the flip side, HUL down by 0.67%, Bharti Airtel down by 0.55%, Tata Power down by 0.33% and Ranbaxy down by 0.22%, were the only losers on the index.

All the Asian markets were trading in the green; Shanghai Composite was up 19.56 points or 0.78% to 2,527.65, Hang Seng was up 637.84 points or 3.31% to 19,880.34, Jakarta Composite was up 86.79 points or 2.34% to 3,792.60, KLSE Composite was up 8.09 points or 0.55% to 1,470.46, Nikkei 225 was up 106.47 points or 1.23% to 8,746.89, Straits Times was up 46.94 points or 1.67% to 2,856.98, Seoul Composite was up 52.97 points or 2.83% to 1,922.93 and Taiwan Weighted was up by 169.68 points or 2.27% to 7,629.99.