Benchmarks extend gains in afternoon session

Indian equity benchmarks extended gains to traded near their intra-day highs in the afternoon session amid buying in blue chip stocks such as HDFC, Sun Pharma, Coal India, Wipro and L&T. Sentiments got some support, as Reserve Bank of India (RBI) planned to take measures to support the flow of credit to productive sectors of the economy. Further, the report that the country’s indirect tax collections grew at 4.1 percent in the April-August period of FY14 also added to the optimistic sentiments. On sector specific movement, buying was witnessed in healthcare and capital goods indices were trading up, while selling was witnessed in Oil and Gas and Consumer durables indices were trading lower. On stock specific movement, Sun Pharma, BHEL and Wipro were trading up; while, Jindal Steel, NTPC and Gail India were trading lower on BSE.

On global front, Asian equity indices were trading mixed as investors worried over the latest battle over the US budget, while Japanese index Nikki 225 rallied as talk of a corporate tax cut resurfaced. Back home, the market breadth remained positive, out of 1,884 stocks traded, 967 stocks advanced, while 787 stocks declined on the BSE.    

The BSE Sensex is currently trading at 19,901.97 up by 45.73 points or 0.23% after trading in a range of 19,946.55 and 19,826.99. There were only 17 stocks advancing against 13 declines on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.17%, while Small cap index up by 0.53%.

The gaining sectoral indices on the BSE were Healthcare up by 0.97%, Capital Goods up by 0.88%, Metal up by 0.87% and IT up by 0.51%. While Oil and Gas down by 0.87%, Consumer Durables down by 0.79%, Realty down by 0.69% and Power down by 0.48% were remained the losing indices on BSE.

The top gainers on the Sensex were Sun Pharma up by 2.87%, BHEL up by 2.44%, Wipro up by 2.25%, Coal India up by 2.02% and Tata Steel up by 1.94%. On the flip side, Jindal Steel down by 1.94%, NTPC down by 1.38%, Gail India down by 1.34%, Reliance down by 0.91% and ONGC down by 0.89% were the only losers on the Sensex.

Meanwhile, the Reserve Bank of India (RBI) banned zero percent interest rate scheme offered by the banks for purchase of consumer goods, citing that such schemes is non-existent and only serve the purpose of alluring and exploiting the vulnerable customers. Under zero percent interest EMI schemes offered on credit card, the interest element is often camouflaged and passed on to the customer in the form of processing fee. As per the central bank regulations, banks should not resort to any practice that would distort the interest rate structure of a product as this violate the transparency in pricing mechanism which is very important for the customer to take informed decision.

The RBI notified that zero percent interest is non-existent and such schemes only misguided the vulnerable customers. Fair practice demands that the processing charge and interest charged should be kept uniform product or segment wise, irrespective of the sourcing channel, it added.

On the financial assistance to customers, the RBI said that the loan amount sanctioned for the purchase should be after taking into account the discount, rather than giving effect to the benefit by reducing the interest. The central bank’s notification also said that risk rating of the customers is the only factor that can justify differential rate of interest for the same product, which may not be applicable in case of retail products where the interest is generally kept flat and is indifferent to the customer risk profile.

The CNX Nifty is currently trading at 5,887.70 up by 13.85 points or 0.24% after trading in a range of 5,900.30 and 5,864.10. There were 28 stocks advancing against 22 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 2.94%, Coal India up by 2.22%, Tata Steel up by 2.10%, HDFC up by 1.96% and BHEL up by 1.47%. On the flip side, Jindal Steel down by 1.98%, Power Grid down by 1.54%, NTPC down by 1.44%, Reliance Infra down by 1.18% and Gail down by 1.12% were the major losers on the index.

The Asian equity indices were trading mixed; Straits Times up by 0.66%, Jakarta Composite up by 0.88%, Nikki 225 up by 1.22% and Seoul Composite up by 0.46%. While, KLSE Composite down by 0.37%, Shanghai Composite down by 1.58%, Taiwan Weighted down by 1.20% and  Hang Seng down by 0.09%.