Markets trade near day’s low after UPA’s II last railway budget

Indian equity markets were trading little above the day’s low after Railway Minister Mallikarjun Kharge presented UPA’s II last Rail Budget in Parliament, which lacked any major announcements, though neither fright rates nor passenger fares were changed. Nevertheless, the overall sentiment continued to remain upbeat thanks to mostly positive global set-up. Sensex and Nifty were holding above the crucial 20,450 and 6,050 levels respectively, with gains of close to half a percent, mainly supported by gains in the stocks of Oil & Gas, Capital Goods and Banking counters. Meanwhile, broader indices were also trading in green, with gains in the range of 0.25%-0.40%.

On the global front, Asian markets were trading higher on Wednesday after US Federal Reserve Chairwoman Janet Yellen suggested that there would be no major change in the central bank’s policy, while stronger-than-expected trade data pushed Hong Kong market higher.

Closer home, the BSE Sensex is currently trading at 20458.09, up by 94.72 points or 0.47% after trading in a range of 20516.60 and 20429.83. There were 20 stocks advancing against 10 stocks declining on the index. The overall market breadth on BSE was in the favour of advances which were outnumbering declines in the ratio of 1218:1011, while 147 shares remained unchanged.

The broader indices were trading in green; the BSE Mid cap index was up by 0.26%, while Small cap index gained 0.41%.

The gaining sectoral indices on the BSE were Oil & Gas up by 1.17%, Capital Goods up by 0.96%, Bankex up by 0.92%, Teck up by 0.61% and IT up by 0.59%. While, Metal down by 1.53% and FMCG down by 0.51% were the only losing indices on the BSE.   

The top gainers on the Sensex were Gail India up by 2.49%, ICICI Bank up by 1.85%, ONGC up by 1.79%, RIL up by 1.52% and BHEL up by 1.48%. On the flip side,  Tata Steel down by 3.63%, SSLT down by 1.56%, Hindalco down by 1.38%, Coal India down by 1.15% and Dr Reddys Lab down by 1.08%.

Meanwhile, in a bid to create a level playing field for existing banks and new players that may soon get the banking license, the Reserve Bank of India (RBI) has imposed curbs on banks investing in their group companies. As per the norms, banks cannot lend more than 5% of their paid-up capital and reserves to a single non-financial company or unregulated financial company belonging to the same group, while their aggregate group exposure should not exceed 20%.

However, in a case where bank’s current intra-group exposure is more than the limits stipulated, it would be required to bring it down before March 31, 2016. Nevertheless, exposure through equity and other capital instruments would be exempted from this norm. 

The measures, which would ensure banks maintaining arm's length relationship in dealings with their own group entities, meeting minimum requirements with respect to group risk management and group-wide oversight, and adhering to prudential limits on intra-group exposures, would come into effect in October, 2014. Almost all existing commercial banks, including foreign banks operating in India, will have to adhere to these norms.

Further, the central bank has also mandated banks not to enter into cross-default clauses i.e. clauses that trigger automatically when a lender declares that a loan is in default. It has barred banks from selling their bad loans to group entities other than asset reconstruction companies.

The CNX Nifty is currently trading at 6,087.80, up by 25.10 points or 0.41% after trading in a range of 6,106.60 and 6,080.35. There were 30 stocks advancing against 19 declining and one stock remained unchanged on the index.

The top gainers of the Nifty were BPCL up by 2.53%, Gail up by 2.30%, Bank of Baroda up by 2.14%, ICICI Bank up by 1.98% and ONGC up by 1.76%. On the flip side, Tata Steel down by 3.45%, Cairn down by 2.50%, Asian Paint down by 1.83%, Ranbaxy down by 1.82% and SSLT down by 1.46% were the major losers on the index.

Most of the Asian equity indices were trading in green; Shanghai Composite 0.20%, Hang Seng spurted 0.99%, Jakarta Composite gained 0.46%, Nikkei 225 increased by 0.56%, Straits Times strengthened by 0.44%, Seoul Composite rose 0.20% and Taiwan Weighted was up 0.95%.

On the flip side, KLSE Composite declined by 0.07%.