Benchmarks edge higher on recovery in rupee and ahead of IIP data

The key Benchmarks continue to trade higher in the late-morning session despite paring some of the gains, after the central bank announced more measures to support the domestic currency. The Reserve Bank announced that it will sell government bonds worth Rs 22,000 crore every Monday to check volatility in the forex market. Indian Rupee, the worst currency of Asia this year, inched up in early trades but gains were modest on back of dollar buying by the banks. The currency traded at 60.76 a dollar from Friday's close of 60.88 at the Interbank Foreign Exchange Market. Investors are keeping a close tab on the industrial output data scheduled later in the day. On the global front, firm trade in Asian counters as sentiments remained buoyed by positive economic data out of China late last week. China reported industrial growth for July reached a five-month high, easing fears that the world’s second largest economy was heading towards a slowdown. Back home, traders were buying Metal, Health Care and Consumer Durables stocks, while selling was seen in Bankex, Power and Oil & Gas on the BSE.

Meanwhile, the NSE Nifty and BSE Sensex were trading near the psychological 5,550 and 18,800 levels respectively. The market breadth on BSE was showing positive trend with advances to declines in the ratio of 970:553.The BSE Sensex is currently trading at 18855.66, up by 66.32 points or 0.35% after trading in a range of 18951.99 and 18796.01. There were 21 stocks advancing against 9 declines on the index. The broader indices were trading in green; the BSE Mid cap index was up by 0.56% and Small cap index gained 0.89%.

The top gaining sectoral indices on the BSE were, Metal up by 2.68%, Health Care up by 2.16%, Consumer Durables up by 0.88%, Auto up by 0.77% and Capital Goods up by 0.54%, while Bankex down by 1.03%, Power down by 0.46% and Oil & Gas down by 0.35%were the top losers on the BSE.

The top gainers on the Sensex were Sun Pharma up by 6.74%, Tata Steel up by 5.24%, Jindal Steel up by 3.95%, Sterlite Inds up by 3.54% and Cipla up by 2.70%, On the flip side, SBI was down by 2.69%, Dr Reddys Lab was down by 2.18%, HDFC Bank was down by 1.52%, BHEL was down by 1.32%, and TCS was down by 1.29% were the top losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI), which just got its new governor- Raghuram Rajan, is now gearing up for setting a high-level panel of eminent experts from the banking and financial sector to screen applications of 26 aspirants for new banking licences.

It is expected that financial regulators like IIRDA, SEBI and PFRDA could represent this committee. While, some top officials from the government too may be invited to join the High Level Advisory Committee (HLAC). India’s Apex bank currently is screening the prima facie eligibility of the applicants including ‘fit and proper’ criteria and other relevant parameters.

However, RBI will have first and final say on selecting the applicants. Given that application will first be screened by RBI, post to which it shall be referred to the high level panel for the scrutiny. The panel will have its own procedures for screening the applications. It will reserve the right to call for more information as well as have discussions with any applicants and seek clarification on any issue as may be required by it. However, post the scrutiny the committee will submit its recommendations to RBI, who will take a final decision on issue of an in-principle approval for setting up of a bank.

Tata Sons along with firms controlled by billionaires Anil Ambani and Kumar Mangalam Birla are among the 26 companies who have applied for banking licence last month.  Among public sector entities, India Post and IFCI have submitted applications. Micro finance institutions like Bandhan Financial Services, Janalakshmi Financial too expressed their intention to set up a bank.

The CNX Nifty is currently trading at 5,574.85 up by 9.20 points or 0.17% after trading in a range of 5,610.65 and 5,557.10. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Sun Pharmaceuticals up by 7.47%, Tata Steel up by 4.94%, Jindal Steel up by 3.98%, NMDC up by 3.39% and Cipla up by 2.93%, On the flip side, IndusInd Bank down by 3.03%, SBI down by 2.97%, PNB down by 2.57%, Asian Paints down by 2.41% and Dr. Reddy's Laboratories down by 2.31% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite surged 26.99 points or 1.32% to 2,079.23, Hang Seng strengthened 365.46 points or 1.67% to 22,170.72, KLSE Composite rose 5.91 points or 0.33% to 1,785.23, Straits Times increased 3.62 points or 0.11% to 3,235.01, Seoul Composite added 6.45 points or 0.34% to 1,887.16 and Taiwan Weighted was up by 40.38 points or 0.51% to 7,896.52.

On the flip side, Jakarta Composite decreased 30.74 points or 0.66% to 4,610.04 and Nikkei 225 was down by 117.08 points or 0.86% to 13,498.11.