Benchmarks pair some early gains in afternoon session

Indian equity benchmarks paired some early gains and were trading in a narrow range with a positive bias in afternoon session led by gains in auto, banking and capital goods stocks. Rate sensitive stocks were trading higher amid hopes that the RBI will keep interest rates unchanged in its monetary policy review on January 28 after inflation eases last month. Sentiments got support as FIIs were net buyers of Indian stocks in previous session with investment of Rs 384.89 crore. Further, firm Asian cues and gain in rupee value against the dollar also provided support to the market sentiments. However, gains were offset by the selling witnessed in IT, teck and oil and gas stocks. On stock specific movements, Tata Motors, ICICI Bank and Maruti Suzuki were trading up by over 1.50%, while, TCS, Coal India and NTPC were trading down by over 0.90% on BSE.

Among other stocks, Asian Paints is trading lower by 3% at Rs 475 after reporting 1.8% year-on-year (yoy) decline in consolidated net profit at Rs 329 crore for Q3FY14. On the other hand, Aurobindo Pharma, extending its previous day’s rally, was trading higher by around 4% at nearly Rs 426, after the company has signed a binding offer to acquire the commercial operations, excluding the manufacturing assets, from Actavis in seven western European countries. Sasken Communication Technologies has surged around 6% to Rs 208 after its board declared a special dividend of Rs 22.50 per share (225%), in celebration of its 25th year since incorporation.

On global front, Asian shares were trading in green  with Shanghai Composite up by 0.67% and KLSE Composite up by 0.42%. Back home, the NSE Nifty and BSE Sensex were trading up their psychological 6,300 and 21,000 levels respectively. The market breadth on BSE was positive, out of 2,189 stocks traded, 1,177 stocks advanced, while 868 stocks declined on the BSE.

The BSE Sensex is currently trading at 21,250.75 up by 45.70 points or 0.22% after trading in a range of 21,302.52 and 21,204.82. There were 17 stocks advancing against only 13 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.57%, while Small cap index up by 0.40%.

The gaining sectoral indices on the BSE were Auto up by 1.53%, Bankex up by 1.30%, Capital Goods up by 1.07%, Realty up by 0.70% and Consumer Durable up by 0.59%. While, IT down by 0.87%, Teck down by 0.76%, Oil and Gas down by 0.26%, Power down by 0.13% and FMCG down by 0.08% were the losing indices on BSE.  

The top gainers on the Sensex were Tata Motors up by 2.96%, ICICI Bank up by 2.40%, Maruti Suzuki up by 1.56%, Tata Steel up by 1.49% and L&T up by 1.38%. On the flip side, TCS down by 2.11%, Coal India down by 1.74%, NTPC down by 0.91%, Bharti Airtel down by 0.73% and BHEL down by 0.66%.

Meanwhile, in order to put banks under the scanner on a range of governance parameters, the Reserve Bank of India (RBI) has set up an eight-member expert panel for reviewing the function of board of banks and examines 'fit and proper' criteria for directors, including their tenure. The panel to be headed by former Axis Bank Chairman P J Nayak and is expected to submit its report within three months from the date of its first meeting.

As per the RBI, the panel will review the regulatory compliance requirements of bank boards and examine their working including whether adequate time is devoted to issues of growth, strategy governance and risk management. The panel will also investigate possible conflicts of interest in board representation, like among owner representatives and regulators. The panel will also examine guidelines on board compensation, which vary vastly between public sector banks, private banks and foreign banks.

Furthermore, the committee will also review central bank regulatory guidelines on bank ownership, ownership concentration and representation in the board and also judge what can be rationalised and where requirements need to be enhanced.

The central bank’s recent move will help to strength the domestic banking industry, which is the most dominant segment of the country’s financial sector. Banks help channel savings to investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns. The Indian banking industry’s contribution to GDP moves along with growth in the Indian economy.

The CNX Nifty is currently trading at 6,316.80 up by 12.85 points or 0.20% after trading in a range of 6,330.30 and 6,304.50. There were 28 stocks advancing against 22 declining on the index.

The top gainers of the Nifty were Tata Motors up by 3.03%, Bank of Baroda up by 2.58%, ICICI Bank up by 2.45%, JP Associates up by 2.43% and PNB up by 2.10%. On the flip side, Asian Paints down by 2.88%, Kotak Bank down by 2.25%, TCS down by 2.00%, Coal India down by 1.56% and Ultratech Cement down by 1.04% were the major losers on the index.

The Asian equity indices were trading in green; Seoul Composite up by 0. 55%, Jakarta Composite up by 0.36%, Shanghai Composite up by 0.67%, KLSE Composite up by 0.42%, Nikkei 225 up by 1.02%, Straits Times up by 0.30% and Hang Seng up by 0.64%. While, Taiwan Weighted down by 0.25%.