Benchmarks turn flat after a firm start

The Indian equity markets are trading on a flat note after making a firm start tracking supportive global cues. The US markets managed to close in green on Friday as the Libyan tension eased a bit and all the Asian peers were trading in the positive terrain at this point of time, indicating strong investors' sentiment. Back home, the key benchmark indices pared most of their early gains on concern of higher crude prices after the Gaddafi violated cease fire and air bombardment from American, French and British forces took place to protect Libyan civilians from government troops. On the sectoral front, fast moving consumer goods, healthcare and power stocks were witnessing maximum gains in trade, while realty, software and technology were the top losers on the BSE sectoral space. The broader indices too were trading flat at this point of time. Meanwhile, PSU oil marketing companies viz; BPCL, HPCL and IOC all were trading lower as the Prime Minister's Economic Advisory Council (PMEAC) has said that the government would wait for inflationary pressure to calm down before freeing the diesel prices. The market breadth on the BSE was negative; there were 877 shares on the gaining side against 647 shares on the losing side while 65 shares remained unchanged.

The BSE Sensex opened at 17,984.72; about 106 points higher compared to its previous closing of 17,878.81, and has touched a high and a low of 18,007.73 and 17,869.34, respectively.

The index is currently trading at 17,870.78, down by 8.03 points or 0.04%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth has made a negative start with 55.19% stocks advancing against 40.72% declines. The broader indices too were trading flat with negative bias; the BSE Mid cap index was down 0.02% , while Small cap index was up by 0.19%. 

The top gaining sectoral indices on the BSE were, FMCG up by 0.45%, HC up by 0.21%, Power up by 0.03%, CG up by 0.03% and Metal was up by 0.02%. While, Realty down by 0.66%, IT down by 0.56%, TECk down by 0.36%, Oil and Gas down by 0.33% and CD down by 0.18% were the losers on the index.

The top gainers on the Sensex were HDFC up by 1.14%, ITC up by 0.80%, Jindal Steel up by 0.80%, Sterlite Industries up by 0.73% and Bharti Airtel up by 0.66%.

Hindalco down by 1.34%, Maruti Suzuki down by 0.89%, Infosys down by 0.73%, Reliance Industries down by 0.66% and Reliance Infra down by 0.63%, were the top losers on the index.

Meanwhile, India is moving towards making available banking services at affordable cost to disadvantaged and low-income groups, as government is mulling over granting more power to Reserve Bank of India (RBI) to tackle the problems faced by banking sector before its gives permission for new private banking licenses, the norms for which has already been drafted by RBI and given to Finance Ministry.

Hence, the government is considering amending the Banking Regulation Act through which RBI would be empowered to seek information from an entity running bank and other businesses like insurance and asset management as well, as the risks of these companies can slip into banks by virtue of same parentage. As per the current practice, India follows subsidiary model where non-banking business of a bank like insurance and asset management are subsidiaries. By virtue of this, risks attached with this can impact the banking entity.

The Banking Regulation Amendment Bill is likely to be presented in the Monsoon session of Parliament and if the bill is cleared, RBI will be authorized to supersede the board of a private sector bank in consultation with the central government. It would be empowered to inspect associate companies of an enterprise or a banking entity; associate companies could include subsidiaries, a holding company or any joint-venture of a bank to protect interest of depositors.

Meanwhile, the RBI is already planning an inclusive development plan as per which financial services will be available at affordable costs to sections of disadvantaged and low income segments of society, before granting banking license to new companies. 'One of the criteria for evaluating application (for new bank licence) that we will get in due course of time, will indeed be their business plan for financial inclusion,' RBI Governor D Subbarao had said earlier this month.

The S&P CNX Nifty opened at 5,408.75; about 35 points higher compared to its previous closing of 5,373.70, and has touched a high and a low of 5,413.30 and 5,373.45 respectively.

The index is currently trading at 5,376.60, up by 2.90 points or 0.05%. There were 31 stocks advancing against 19 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 3.09%, Cairn up by 2.52%, HDFC up by 2.24%, Jindal Steel up by 1.91% and Ambuja Cement up by 1.65%.

The top losers of the index were Ranbaxy down by 3.10%, Hindalco down by 1.24%, Kotak Bank down by 1.05%, Reliance Capital down by 0.82% and Maruti Suzuki was down by 0.78%.

All the Asian equity indices were trading in the positive terrain at this point of time; Shanghai Composite was up 4.62 points or 0.16% to 2,911.51, Hang Seng was up 273.78 points or 1.23% to 22,574.01, Jakarta Composite was up 13.86 points or 0.40% to 3,507.93, KLSE Composite was up 0.15 points or 0.01% to 1,504.04, Straits Times was up 29.69 points or 1.01% to 2,965.47, Seoul Composite was up 18.55 points or 0.94% to 1,999.68 and Taiwan Weighted was up by 66.68 points or 0.79% to 8,461.43.

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