Key indices continue to hover around the neutral line

The key equity indices continued to hover around the neutral line with a slight up-tick in the mid-morning session. Investors opted to remain on the sidelines tracking mixed cues from the Asian counterparts and modest gains on the US index futures in screen trade. Back home, the BSE Sensex and the NSE Nifty were moving within a narrow range of around 80 points and 24 points, respectively. Meanwhile, both indices were holding their neck above the crucial levels of 20,000 (Sensex) and 6,000 (Nifty). Shares representing metal, technology and healthcare sectors were edging higher in trade while oil & gas, auto and capital goods counters were witnessing some selling pressure from marketmen. Index heavyweight, Reliance Industries (RIL), shed around half a percent in trade. The small-cap pocket, however, managed to outperform its larger peers at this point of time. The market breadth on the BSE was strong; there were 1285 shares on the gaining side against 1038 shares on the losing side while 116 shares were unchanged.

The BSE Sensex rose 21.78 points or 0.11% to 20,050.71. The index touched a high and a low of 20,090.41 and 20,008.16, respectively.

The BSE Mid-cap and Small-cap indices gained 0.10% and 0.36%, respectively.

The main gainers in the BSE sectoral space were Metal up 0.61%, TECk up 0.57%, Healthcare (HC) up 0.47%, Information Technology (IT) up 0.47% and Realty up 0.34%.

On the other hand, Oil & Gas down 0.35%, Auto down 0.20%, Capital Goods (CG) down 0.19% and Bankex down 0.06% were the only losers in the BSE sectoral space.

Meanwhile, the Reserve Bank of India (RBI) on Monday lowered the Statutory Liquidity Ratio (SLR) requirement for the regional rural banks (RRBs) by 1% to 24%. The SLR refers to obligation on part of a financial institution to keep a portion of deposits in approved securities, cash and gold so as to reduce the risk of default.

The move is very much in line with the similar cut announced for the commercial banks in the mid-quarterly review of monetary policy announced in December in order to infuse some liquidity into the system amidst very tight cash conditions. "It has been decided to reduce the SLR for RRBs from 25 per cent of their Net Demand and Time Liabilities to 24% with effect from December 18," said the central bank in a notification.

Liquidity conditions in the Indian money market have remained in the deficit mode since mid-September with average daily injection increasing significantly in following months. In order to alleviate frictional liquidity pressure, the RBI had earlier announced a second LAF, letting the banks to avail of additional liquidity support to the extent of up to 1.0% of their NDTL, which was later increased to 2% .

The major gainers on the Sensex were Wipro up 1.74%, RCom up 1.68%, Bharti Airtel up 1.20%, Cipla up 1.11% and Hindalco Inds up 0.95%.

The major losers on the index were Tata Motors down 0.89%, ICICI Bank down 0.56%, ONGC down 0.43%, HUL down 0.42% and RIL down 0.35%.

The government said on Monday that allocation for welfare schemes will be hiked in the budget for next fiscal in order to meet the targets of financial inclusion and inclusive growth. Union finance minister Pranab Mukherjee said that there will be considerable hike in allocation for social sector schemes in the fiscal 2011-12. 

"It increased from Rs 2,33,000 crore in 2009 to Rs 3,25,000 crore this year. With the rise in government revenues, we are raising this allocation further. The government income will increase once investment increases," said Mukherjee adding that social sector schemes were a must for achieving inclusive growth.

The government was also confident of extending banking services to all villages with a population above 2,000 by 2012. The Reserve Bank of India (RBI) has already released a roadmap for the same and was working to achieve the objective of financial inclusion. Apart from this, mobile banking services are also being launched for take financial services to every corner of the country, said the finance minister.

The S&P CNX Nifty added 5.05 points or 0.08% to 6,003.15. The index touched a high and a low of 6,010.90 and 5,986.85, respectively. 

The top gainers on the Nifty were Wipro up 1.77%, RCom up 1.57%, Ranbaxy up 1.35%, ACC up 1.13% and Rel Cap up 1.11%.

The top losers on the index were Tata Motors down 0.84%, Axis Bank down 0.81%, ICICI Bank down 0.76%, Cairn down 0.62% and BPCL down 0.56%.

Other Asian markets were mixed in trade. Shanghai Composite dropped 1.10%, Hang Seng trimmed 0.91%, Nikkei 225 shed 0.44% and Taiwan Weighted declined 0.26% while Jakarta Composite advanced 1.13%, KLSE Composite gained 0.59%, Straits Times added 0.30% and Seoul Composite jumped 0.80%. 

Unit-8, 3rd Floor, First Mall, The Mall, Ludhiana-141001, Punjab (INDIA).

To unsubscribe or change subscriber options visit: http://www.aweber.com/z/r/?TJzsLEwstCyc7OysHMyctEa0HGysbJys7A==