Indian equities continue firm trade; CG, FMCG and HC leads

Indian equities gain strength to continue firm trade in green in the late afternoon session as supportive cues from the global markets were propelling the domestic markets to edge higher. Besides, speculations that the Reserve Bank of India in its mid-quarter policy review on June 18 will be compelled to cut key interest rates irrespective of what the headline inflation number may show on June 14, kept investors sentiment in cheerful mood. Traders were seen piling up position in Capital Goods (CG), FMCG and Health Care (HC) sector while selling was witnessed in Auto, Realty and Consumer Durables sector. Further, data on first installment of the advance tax payment which is due on June 15, 2012 could provide cues on Q1 2012 corporate earnings and provide further directions to the market.

In the scrip specific development, Prism Informatics was locked at upper circuit ahead of board meeting for issuing compulsory convertible debentures. Nagarjuna Agrichem was too locked at upper circuit on launching R&D Center in Andhra Pradesh. On the global front, the Asian markets were trading in green barring Straits Times while the European markets were trading on a mixed note. The anxiety over Greek general elections scheduled later this week kept investors on the sidelines. Also, Fitch Ratings yesterday downgraded 18 Spanish banks less than a week after the agency cut the country's sovereign debt rating. On the home turf, the NSE Nifty and BSE Sensex were trading above their psychological 5,100 and 16,800 levels respectively. The market breadth on BSE was positive in the ratio of 1316:1192 while 149 scrips remained unchanged.

The BSE Sensex is currently trading at 16,882.76 up by 19.96 points or 0.12% after trading as high as 16,944.11 and as low as 16,792.87. There were 12 stocks advancing against 18 declines on the index.

The broader indices were trading on a mixed note; the BSE Mid cap index lost 0.11% while Small cap index gained 0.23%.

On the BSE sectoral space, Capital Goods up 2.09%, FMCG up 0.68%, Health Care up 0.63%, IT up 0.54% and TECk up 0.40% were the major gainers, while Auto down 1.44%, Realty down 1.12%, Consumer Durables down 0.98%, Power down 0.60% and Oil & Gas down 0.32% were the major laggards in the space.

L&T up 3.38%, HUL up 2.15%, Sun Pharma up 1.61%, ONGC up 1.40% and Jindal Steel up 1.16% were the major gainers on the Sensex, while Maruti Suzuki down 3.17%, Sterlite Industries down 2.16%, M&M down 2.06%, Tata Motors down 1.79% and NTPC down 1.71% were the major losers in the index.

Meanwhile, Pranab Mukherjee, the Union Finance Minister, in his review meeting of the Chief Executive Officers (CEOs) of Public Sector Banks (PSBs) and Financial Institutions (FIs), urged public sector banks and financial institutions to employ various measures at their command and keep a tight control over their non-performing assets (NPAs) in accordance with the guidelines of the Reserve Bank of India. Appreciating their performance in the last quarter ending March 2012, he directed them to keep up the momentum and continue to take efforts to reduce the bad loans, known as NPAs in industry parlance.

While cautioning the financial institutions to check the steep rise of bad loans in their portfolio, the finance minister also instructed them not to choke the flow of credit to the sectors which require the uninterrupted flow of credit. Commending PSBs’ pro-activeness and good performance, Mukherjee cited recent decisions on restructuring of loans to the textile sector and power distribution companies are good examples of NPA management.

Stating that banks have managed to bring down their NPAs to 3.1 percent in the January-March period of 2011-12 from 3.18 percent in the previous quarter, the finance minister also underscored that priority sector lending grew by 16.37% as against 13.49% last year; recovery against outstanding dues in the last quarter of year 2011-12 was unprecedented; net profit grew to Rs.49,512 crores as against Rs.44,900 crore last year, registering an increase of 10.27%.

Highlighting Oriental Bank of Commerce’s recent decision to waive charges for electronic banking transactions like real time gross settlement (RTGS) and national electronic fund transfer (NEFT), Pranab Mukherjee also called other PSBs to follow this initiative and waive all charges for electronic banking transactions.

The S&P CNX Nifty is currently trading at 5,125.40, higher by 9.50 points or 0.19% after trading as high as 5,144.90 and as low as 5,095.45. There were 24 stocks advancing against 25 declines while 1 stock remained unchanged on the index.

The top gainers on the Nifty were L&T up 3.78%, HUL up 2.38%, Ambuja Cement up 2.30%, Sun Pharma up 2.05% and PNB up 1.45%.

Maruti Suzuki down 3.11%, Sterlite Industries down 2.35%, Tata Motors down 2.16%, M&M down 2.09% and Hero MotoCorp down 1.55% were the major losers on the index.

In the Asian space, Shanghai Composite surged 1.27%, Hang Seng advanced 0.82%, Jakarta Composite added 0.30%, KLSE Composite rose 0.15%, Nikkei 225 climbed 0.60%, KOSPI Composite Index gained 0.25% and Taiwan Weighted increased 0.24%. On the other hand, Straits Times Index eased 0.43%.

The European markets were trading on a mixed note with, France’s CAC 40 dropped 0.33%, Germany’s DAX rose 0.29% and the United Kingdom’s FTSE 100 added 0.39%.