Benchmarks continue to trade in green; Sensex above 20500 mark

Indian equities extended firm trade in the late afternoon session on account of buying in frontline counters. The street took note of Foreign Direct Investment (FDI) inflows into India which rose 54.8% in November to $1.64 billion compared with $1.06 billion a year ago. India’s economy grew at its slowest pace in a decade last fiscal year largely due to a lack of corporate investment, now desperately needs to attract foreign investments to regain its growth momentum. Investors were however cautious ahead of fiscal deficit data for the April-December period and first revised GDP data for the fiscal year that ended in March 2013, scheduled to be announced later in the day. Traders were seen piling positions in TECK, Realty and IT stocks while selling was witnessed in Auto, Consumer Durables and HealthCare sector stocks. In scrip specific development, Oberoi Realty was trading firm after Supreme Court dismissed the previous Bombay High Court order that restricted several acres of forest land in suburban Mumbai for development.

On the global front, the Asian markets were closed today barring Nikkei 225 down by 0.62%, while the European markets were too trading on pessimistic note. Back home, the NSE Nifty and BSE Sensex were trading above their psychological 6,050 and 20,500 levels respectively. The market breadth on BSE was positive in the ratio of 1404:952 while 137 scrips remained unchanged.

The BSE Sensex is currently trading at 20532.13, up by 33.88 points or 0.17% after trading in a range of 20,572.32 and 20455.05. There were 19 stocks advancing against 11 stocks declining on the index.

The broader indices were too trading in green; the BSE Mid cap index was up by 1.22% while Small cap index was up by 1.21%.

The gaining sectoral indices on the BSE were TECK up by 1.51%, Realty up by 1.39%, IT up by 1.28%, Metal up by 1.07% and Oil & Gas up by 0.96%. While, Auto down by 0.66% and Consumer Durable down by 0.48% were the only losing indices on BSE.   

The top gainers on the Sensex were Tata Steel up by 2.61%, M&M up by 2.38%, TCS up by 1.81%, Bharti Airtel up by 1.80% and Tata Power up by 1.67%. On the flip side, Tata Motors down by 3.03%, HDFC down by 2.03%, NTPC down by 1.99%, Hero MotoCorp down by 1.79% and BHEL down by 1.74%.

Meanwhile, with an aim to adopt effective judiciary and bankruptcy systems to deal with the NPA menace, the Reserve Bank of India (RBI) has stressed that the framework to revitalise distressed loans in the economy will be fully effective from April 1. The RBI’s new framework will help the domestic banking system to recognise financial distress early, take prompt steps to resolve it, and ensure fair recovery for lenders and investors. The asset quality of Indian banks has been showing downward trend since global financial crisis, 2008.

In order to improve the current restructuring process, the RBI framework will mandate the independent evaluation of large-value restructurings with a focus on viable plans and a fair sharing of losses between the promoters and the creditors. The framework proposal also noted that if a loss is fully disclosed, lenders can spread the loss on sale over two years. The central bank emphasized that lenders are encouraged to start early implementation of framework that do not require issuance of any notifications, regulatory guidelines and development of systems at their end. RBI also highlighted that banks and specified non-bank lenders should put in place necessary systems and infrastructure to implement the framework effectively.

The RBI further noted that in case borrowers do not co-operate with lenders in resolution, borrowing could become more expensive for them. Further, refinancing or take-out financing will be possible over a longer period and will not be interpreted as restructuring. Lenders will be given more liberal regulatory treatment for asset sales. The proposal also include allowing leveraged buyouts for specialised entities for acquisition of ‘stressed companies’ and to encourage sector-specific companies / private equity firms to play an active role in the stressed assets market.

The CNX Nifty is currently trading at 6,086.15, up by 12.45 points or 0.20% after trading in a range of 6,097.30 and 6,068.35. There were 35 stocks advancing against 15 declining on the index.

The top gainers of the Nifty were PNB up by 5.13%, Bank of Baroda up by 2.66%, BPCL up by 2.58%, Tata Steel up by 2.55% and M&M up by 2.55%. On the flip side, Tata Motors down by 3.25%, HDFC down by 2.30%, NTPC down by 2.07%, BHEL down by 1.99% and Hero MotoCorp down by 1.84% were the major losers on the index.

Asian equity indices were closed today barring Japanese index Nikkei 225 down by 0.62%.    

The European markets were trading in red; France’s CAC 40 was down 0.33%, Germany’s DAX lost 0.47% and UK’s FTSE 100 dropped 0.12%.