Local bourses slip deeper into red; crude oil price weigh

The Indian equity markets have made a lacklustre start to the new week as key benchmark indices slipped in negative territory just after few minutes of initial trade since investors turned wary of surging crude oil price impact on inflation and the overall economy in India leading to further losses in the mid-morning session. Brent climbed more than $2 on Monday to top $116 after western forces launched a military campaign against Libya, stoking fears that violence will intensify in North Africa and the Middle East, source of more than a third of the world's oil. Apart from global uncertainty domestic political rumblings and further a very little participation from retail investors amid stock-specific speculative bouts of buying and selling have further took the market lower. On the global front, Asian shares were trading higher on Monday amid growing optimism over progress in resolving Japan's nuclear crisis, while energy stocks benefited from higher oil and commodity prices on heightened geopolitical concerns in the Middle East and North Africa. The US future indices too are showing an uptick on the screen trade. Back home, on the BSE Sectoral front, all the sectors were reeling under pressure, however, languishing at the bottom were stocks from Realty, Information Technology (IT), TECk counters. The fall of the Market Bellwether --RIL-- and ADAG stocks were also pressurizing the upside of the markets. Both the barometer indices were trading below their physiological level of 18000 and 5400 mark respectively. The broader indices however, were underperforming their larger peers and were down with notable losses of 0.27% (BSE Midcap Index) and 0.06% ( BSE Small cap Index) respectively. The overall market breadth on BSE was in the favour of declines which outnumbered advances in the ratio of 1202:1034, while, 92 shares remained unchanged.

The BSE Sensex is currently trading at 17,837.10, down by 41.71 points or 0.23%. The index has touched a high of 17,837.10 and a low of 17,792.17 respectively. There were 12 stocks advancing against 18 declines on the index.

The broader indices too were trading in negative terrain; the BSE Mid cap index was down 0.27%, while Small cap index was up by 0.06%. 

None of the sectoral indices on BSE were trading in green. However, Realty down by 1.20%, IT down by 0.77%, TECk down by 0.62%, Metal down 0.42% and  Power down 0.37% were the losers on the index.

The top gainers on the Sensex were HDFC up by 0.89%, Sterlite Industries up by 0.66%, Tata Motors and Tata Steel up were up by 0.41% and Hero Honda up by 0.37%.

Hindalco Industries down by 2.31%, Reliance Communication down by 1.72%, Tata Power down 1.71%, Maruti Suzuki down by 1.09% and Infosys down by 1.04% 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 is currently trading at 5,360.85, down by 12.85 points or 0.24%. The index has touched a high of 5413.30 and a low of 5348.20 respectively. There were 21 stocks advancing against 29 declines on the index.

The top gainers of the Nifty were Sun Pharma up by 1.13%, HDFC up by 0.93%, Suzlon up by 0.88%, Cairn India up by 0.77% and Dr Reddy up by 0.68%.

The top losers of the index were Ranbaxy down by 4.70%, Hindalco down by 2.26%, Reliance Communication down by 1.72%, Tata Power down 1.58% and Reliance power down by 1.48%.

Ranbaxy declined over 4% on reports that Mylan has sued US FDA for Lipitor. The company is seeking to block Ranbaxy's lipitor copy. Lipitor was estimated to add USD 500-600 million to Ranbaxy's sales.

All the Asian equity indices were trading in the positive terrain at this point of time; Shanghai Composite gained 1.10%, Hang Seng surged 1.23%, Jakarta Composite added 0.37%, KLSE Composite inched up 0.07%, Straits Times increased 0.94%, Seoul Composite rose 0.60% and Taiwan Weighted was up by 0.81%.

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