The domestic equity indices turned positive in late-afternoon trades as investors rushed for bottom fishing at lower levels. The BSE's 30-share Sensex reclaimed the crucial level of 20,000 in trade while the NSE's 50-share Nifty was tad below the psychological 6,000-mark. The recovery in the main indices was triggered by over one percent gain in index heavyweight L&T. Another index biggie -- RIL -- also trimmed its early losses to turn positive at this point of time. Barring auto, oil & gas and public sector undertaking counters of the BSE, all other sectoral indices were trading in the green. Consumer durables, metal and fast moving consumer goods counters topped the gainers list in trade. Metals makers -- Hindalco Industries and Sterlite Industries -- and FMCG major ITC were the major gainers on the main index. On the other hand, Tata Motors, BHEL and ICICI Bank languished at the bottom. The broader indices mirrored the benchmark indices in trade. The market breadth on the BSE was in favour of advances; there were 1500 shares on the gaining side against 1238 shares on the losing side while 107 shares were unchanged.
The BSE Sensex rose 41.39 points or 0.21% to 20,024.27. The index touched a high and a low of 20,036.42 and 19,880.36, respectively.
The BSE Mid-cap and Small-cap indices advanced 0.11% and 0.21%, respectively.
The main gainers in the BSE sectoral space were Consumer Durables (CD) up 1.50%, Metal up 1.18%, Fast Moving Consumer Goods (FMCG) up 0.98%, Capital Goods (CG) up 0.65% and Healthcare (HC) up 0.61%.
On the flip side, Auto down 0.67%, Oil & Gas down 0.19% and Public Sector Undertaking (PSU) down 0.17% were the only losers in the BSE sectoral space.
Meanwhile, The Reserve Bank of India (RBI) has on Thursday released a compilation of the feedback and comments it received from various stakeholders on the discussion paper for entry of new banks in the private sector. Going by the feedback, it appears that the central bank's task of granting additional bank licences will not be easy as the views of key stakeholders on the matter do not indicate consensus on any of the six issues flagged by RBI.
The biggest difference seems to be on the issue of allowing industrial/business houses to promote new banks, Existing banks have strongly opposed the idea as the large capital buffer that would be available to banks sponsored by industrial/ business houses would create an uneven playing field. Moreover, having financial licence and having industrial activity implies that there could be connected lending.
According to banking industry, allowing industrial houses to own banks will exacerbate the concentration of economic power and political influence. India already has a concentrated wealth structure, which influences political decisions. Allowing industrial houses to own banks will exacerbate the concentration of economic power and political influence. "The ownership structure of large industrial / business groups may open opportunities for regulatory arbitrage. In cases where the apex entity of a financial conglomerate is an unregulated entity, there could be gaps in risk assessment and supervision, and associated contagion risk within the financial conglomerate concerned and the wider system," the RBI stated while listing arguments against giving corporates a banking lecense.
The major gainers on the Sensex were Hindalco Inds up 2.05%, Sterlite Inds up 1.69%, ITC up 1.41%, Tata Steel up 1.31% and L&T up 1.12%.
The major losers on the index were Tata Motors down 2.75%, BHEL down 1.15%, ICICI Bank down 1%, Maruti Suzuki down 0.73% and ONGC down 0.58%.
The government has finally come to the rescue of tyre industry after it lowered the import duty on natural rubber on Thursday amidst surging prices of the commodity. Rubber prices in Indian as well as global markets have been on the rise and hovering close to record high levels in recent months because of a tight demand-supply scenario.
On Thursday the natural rubber prices touched a new record at Rs 207 per kg in Kerala on concerns over the domestic supply. There have been untimely rains in Kerela which have raised concerns on domestic output. Besides, global production too has been hit by weather related problems in some of the key producer countries. The two factors together have been fuelling rubber prices.
The tyre industry in this wake has been demanding a cut in import duty for quite some time. The government has been levying a 20% duty on import of natural rubber. However, the user industry has been contending that since there was significant demand supply gap in the domestic market, 100,000 tonne of the commodity should be allowed to be imported at lower import duty. After consultations with the industry bodies, the government has now cut down the import duty to 7.5%. The new levy will only be applicable for shipments of up to 40,000 tonne until 31 March.
The S&P CNX Nifty added 14.10 points or 0.24% to 5,994.10. The index touched a high and a low of 5,999.60 and 5,940.25, respectively.
The top gainers on the Nifty were Siemens up 4.54%, Sun Pharma up 3.10%, Sesa Goa up 2.50%, Ambuja Cements up 2.35% and Suzlon up 2.13%.
The top losers on the index were Tata Motors down 2.95%, BPCL down 2.36%, SAIL down 1.18%, IDFC down 1.04% and BHEL down 1.02%.
Among other Asian peers, Shanghai Composite decreased 0.70%, Hang Seng shed 0.30%, KLSE Composite dipped 0.19%, Nikkei 225 slid 0.65%, Seoul Composite trimmed 0.39% and Taiwan Weighted slipped 0.42%, while Straits Times added 0.19%.
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