Benchmark continues to trade in green; Nifty holds 6300 mark

Indian equities continued firm trade in the late afternoon session on account of buying in frontline counters and taking cues from global counterparts. The sentiments were on positive mood despite RBI Governor Raghuram Rajan, concerned over the deteriorating macro-economic indicators of the economy stated that high inflation is limiting the central bank’s ability to boost growth. Traders were seen piling positions in Power, Oil & Gas and PSU stocks while selling was witnessed in Metal, Bankex and FMCG sector stocks. Hectic activity was witnessed in banking stocks after the Reserve Bank of India (RBI) warned of difficult times for the country’s banking sector if macroeconomic conditions do not improve going forward. In scrip specific development, Trent was trading in green as the Foreign Investment Promotion Board (FIPB) has approved Tesco- Trent JV in multi-brand retail. Apollo Tyres was trading firm as US-based Cooper Tire decided to terminate $2.5 billion merger agreement.

On the global front, most of the Asian markets were trading in green, while the European markets were too trading on optimistic note.  Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,300 and 21,100 levels respectively. The market breadth on BSE was positive in the ratio of 1331:1003 while 156 scrips remained unchanged.

The BSE Sensex is currently trading at 21167.99, up by 24.98 points or 0.12% after trading in a range of 21,230.88 and 21,122.68. There were 16 stocks advancing against 13 stocks declining while 1 stock remained unchanged on the index.

The broader indices were too trading in green; the BSE Mid cap index was up by 0.44%, while Small cap index up by 0.30%.

The gaining sectoral indices on the BSE were Power up by 0.67%, Oil & Gas up by 0.62%, PSU up by 0.28%, Consumer Durables up by 0.25% and Auto up by 0.23% while, Metal down by 0.08%, Bankex down by 0.07%, FMCG down by 0.06% and TECK down by 0.03% were the only losers on the index.

The top gainers on the Sensex were Tata Power up by 3.38%, Reliance Industries up by 1.30%, Bajaj Auto up by 0.87%, Tata Motors up by 0.65% and TCS up 0.60%. On the flip side, BHEL down by 1.25%, HDFC Bank down by 0.77%, Maruti Suzuki down by 0.72%, HUL down by 0.53% and Infosys down by 0.48%.

Meanwhile, the Reserve Bank of India (RBI) has allowed banks to sanction loans of up to Rs 1 lakh against pledge of gold ornaments and jewellery. Earlier in May, the central bank had imposed restrictions on banks and NBFCs for providing loans against gold coins as well as units of gold ETFs and mutual funds. Meanwhile, the banks were asked to ensure that the amount of loan granted to any customer against gold ornaments, gold jewellery and gold coins weighing up to 50 grams should be within the board-approved limit.

Further, the RBI noted that the period of the loan should not exceed 12 months from the date of sanction and the interest will be charged to the account monthly but will become due for payment along with principal only at the maturity. Further, the RBI has decided to permit bullet repayment of loans extended against pledge of gold ornaments and jewellery for other than agricultural purposes. Bullet repayment refers to the lump sum payment for the entire loan amount paid at the time of maturity.

The central bank further notified that banks will recognize interest income on such loans in their profit and loss account only on collection and prescribed a minimum margin to be maintained for such loans. Banks should fix the loan limit taking into account the market value of the security such as gold ornaments, expected price fluctuations, interest that will accrue during the tenure of the loan etc. The RBI cautioned the banks that the account would be classified as non-performing asset (sub-standard category) even before the due date of repayment, if the prescribed margin is not maintained.

The CNX Nifty is currently trading at 6,301.25, up by 10.15 points or 0.16% after trading in a range of 6,317.30 and 6,287.30. There were 32 stocks advancing against 17 declining on the index, while 1 stock remained unchanged.

The top gainers of the Nifty were IDFC up by 3.91%, Tata Power up by 3.38%, JP Associates up by 2.94%, Ultratech Cement up 1.08% and RIL up by 1.03%. On the flip side, BHEL down by 1.39%, Maruti Suzuki down by 0.72%, HDFC Bank down by 0.67%, HUL down by 0.65% and Jindal Steel down by 0.65% were the major losers on the index.

The Asian equity indices were trading mostly in green; Shanghai Composite up by 0.88%, Hang Seng up 0.26%, KLSE Composite up 0.10% and Straits Times up 0.45%.

On the other hand, KLSE Composite down by 0.01% was the sole loser. The markets in South Korea, Japan and Indonesia are closed for New Year’s Eve.

The European markets were trading in green; France’s CAC 40 was up 0.27%, and UK’s FTSE 100 gained 0.23%. Germany’s DAX was closed on account of New Year's Eve.