Markets extend gains amid firm trade; Nifty at year’s fresh high

Indian benchmarks are continuing their firm trade in the noon session slowly adding up to their gains, though the major indices are following a tight range but there is no sense of any profit booking since morning. Nifty has hit its fresh 2014 highs amid continued buying by foreign investors who have extended their buying streak to a 14th consecutive session. The good global cues coupled with strong economic data at the domestic front has enthused the markets to extend their gains. India’s current account deficit (CAD) fell sharply to $4.2 billion, or 0.9 per cent of GDP, in the December quarter of 2013-14 on the back of rise in exports and gold imports curbs. However, the markets trend were getting major support from the surge in rupee, which was trading at over its two months high on sustained selling of the US dollar. Back on street, almost all the sectoral indices on the BSE were trading in green, while a mild weakness in the defensive FMCG sector was visible.

The BSE Sensex is currently trading at 21379.95, up by 103.09 points or 0.48% after trading in a range of 21398.56 and 21329.88. There were 23 stocks advancing against 7 stocks declining on the index.

The broader indices were outperforming the benchmarks with quiet a margin; the BSE Mid cap index was up by 1.15%, while Small cap index surged by 1.17%.

The top gaining sectoral indices on the BSE were Realty up by 3.35%, Power up by 2.15%, Metal up by 1.93%, Oil & Gas up by 1.25%, Capital Goods up by 1.22% and Consumer Durables was up by 1.19%. On the other hand, FMCG down by 0.10% was the only losing index on BSE.   

The top gainers on the Sensex were BHEL up by 3%, SSLT up by 2.53%, Hindalco up by 2.43%, Hero MotoCorp up by 1.98% and Dr Reddy’s lab up by 1.70%. On the flip side, Tata Motors down by 0.85%, Cipla down by 0.58%, ITC down by 0.42%, TCS down by 0.28% and Sun Pharma down by 0.27% were the major losers on Sensex.

Meanwhile, amid rising concerns over the increasing non-performing assets (NPAs) of the Indian banking industry, Finance Minister P Chidambaram asked public sector banks to focus on recovery of bad loans. Finance Minister held the 'Quarterly Performance Review Meeting' with the CEO’s of state owned banks on February 5 and discussed about the rising bad loans, measures needed for the recovery, ways to raise additional Tier I capital and capital infusion in PSU banks.

Highlighting NPAs and asset qualities as the biggest challenges for public sector banks, Chidambaram pointed out that NPAs were high in large corporate sectors and small industries. However, the credit disbursal to medium- sized industries has declined and was only satisfactory for the agricultural sector. NPAs or bad loans of PSU banks rose by 28.5 percent to Rs 2.36 lakh crore in September’ 2013 from Rs 1.83 lakh crore in March, 2013. Meanwhile, the banks recovered Rs 18,933 crore worth of bad loans during the April-December’2013 period. Regarding the capital infusion in PSU banks, Finance Minister stated that the government will provide more funds to banks if it mobilizes higher resources.

Rising NPA levels have become an issue for growth of the banking industry, which is the most dominant segment of the financial sector and plays an important role in the economic development of the country. Banks help to channel savings into investments and encourage economic growth by allocating savings to investments that have potential to yield higher returns.

The CNX Nifty is currently trading at 6,363.40, up by 34.75 points or 0.55% after trading in a range of 6,365.50 and 6,339.70. There were 42 stocks advancing against 8 declining ones on the index.

The top gainers of the Nifty were DLF up by 4.25%, JP Associates up by 3.50%, Jindal Steel up by 3.14%, BHEL up by 2.90% and SSLT was up by 2.44%. On the flip side, Tata Motors down by 0.85%, Cipla down by 0.70%, ITC down by 0.60%, Sun Pharma down by 0.43% and TCS down by 0.32% were the major losers on the index.

All the Asian indices were in green; Shanghai Composite was up by 0.32% and Hang Seng gained 0.58%, Jakarta Composite inched up by 0.29%, KLSE Composite added 0.22%, Nikkei 225 surged by 1.59%, Straits Times gained 0.42%, Seoul Composite was up by 0.22% and Taiwan Weighted advanced 0.94%.