The local equity markets are trading higher in the late morning session on the back of some buying interests in sectors like Banks; pharmaceuticals and capital goods that have led the up move. On the other hand most of the Asian markets were trading in green while US index futures were showing down tick in the screen trade. Back home, on the BSE sectoral front the auto stocks are witnessing some selling pressure. Maruti Suzuki trades lower; the stock has been under pressure since Japan's quake that has led to an appreciation in Yen and threatened imports. M&M fell 0.10 per cent and Tata Motors down 0.07% were trading lower. While Bankex, Metal, Fast Moving Consumer Goods, Realty and Health Care counters were attracting investors. The banking stocks continued to witness buying as the banking amendment bill which aims at amending Banking Regulation Act, 1949, the Banking Companies Act, 1970 and Banking Companies Act, 1980 was tabled in the parliament yesterday. The bill aimed at hiking voting rights to 10% a move that will make investment in state-owned banks more attractive. The broader markets were also trading higher ; the BSE Mid cap and Small cap indices were up 0.65% and 0.64% respectively .The overall market breadth on BSE was in the favour of advances which thrashed declines in the ratio of 1582:945, while, 108 shares remained unchanged.
The BSE Sensex advanced 167.45 points or 0.93% at 18,155.75. The index has touched a high of 18,188.16 and a low of 17,950.17 respectively.
The BSE Mid cap and Small cap indices were up 0.65% and 0.64% respectively.
All the sectoral indices were trading in green. The top gaining sectoral indices on the BSE were, Bankex up by 1.38%, Metal up by 1.11%, Fast Moving Consumer Goods up by 1.07%, Realty up by 0.97% and Health Care up 0.96%.
The top gainers on the Sensex were ICICI Bank up by 2.71%, Jaiprakash Associates up by 2.42%, Sterlite Industries up by 1.98%, BHEL up by 1.94%, and Cipla up by 1.90%.
Jindal Steel down 0.42%, TCS down by 0.26%, Maruti Suzuki down 0.17%, Mahindra and Mahindra down by 0.10% and Tata Motors down 0.07% were the top losers on the index.
Union Finance Minister Pranab Mukherjee on Tuesday tabled the Banking Laws (Amendment) Bill - 2011 in the lower house of the Parliament. The main aim of the Bill is to improve the regulatory powers of the central bank and reform the norms governing voting rights in both the public sector and private sector banks.
In case of the nationalized banks, the Bill proposes to raise the ceiling on voting rights of shareholders from 1% prevailing currently to 10%. It also proposes to enable the nationalized banks to increase or decrease their authorized capital with approval from central government and RBI. Presently, the nationalized banks are subjected to a ceiling of Rs 3,000 crore authorized capital.
In case of private banks it proposes to remove the voting right restriction of 10% for private sector banks in the total voting rights of all the shareholders of the banking company. It is proposed to "remove the existing restriction on voting rights limited to 10% of the total voting rights of all the shareholders of the banking company," said the statement of objects and reasons of the bill.
The Bill also includes provisions to further empower the central bank. Such a step was felt necessary before new banking licenses were issued so that the central bank is in a better position to regulate the industry. Once the bill is passed, it will be mandatory for anyone to obtain prior approval from RBI to acquire 5% or more of the share capital of a bank and the central bank will have the right to impose whatever conditions it deems fit for such acquisitions.
The bill will also exempt bank mergers and acquisitions from provisions of competition act. This is being done to ensure that bank mergers and acquisitions are exempted from scrutiny of competition commission of India (CCI) and continue to be overseen by the RBI only. This point was request by the central bank itself as bank mergers also often have to be evaluated from point of view of stability of overall banking industry. Many times a bank merger might become necessary to rescue an ailing bank even if it leads to significant increase in market share of acquiring bank.
The S&P CNX Nifty surged 49.75 points or 0.92% at 5,463.60. The index has touched a high of 5,473.20 and a low of 5,401.95 respectively.
The top gainers of the Nifty were Sesa Goa up 3.46%, Kotak Bank up by 2.85%, GAIL up by 2.78%, ICICI Bank up 2.61% and Cipla up 2.19%.
The main losers of the index were BPCL down 0.88%, Jindal Steel down 0.67 %,M&M down by 0.52%, Siemens down 0.34% and Maruti Suzuki down 0.26%.
Most of the other Asian markets are trading green; Shanghai Composite was up by 0.55%, Jakarta Composite gained 0.55%, KLSE Composite added 0.04%, Straits Times rose 0.43% and Taiwan Weighted increased 0.44%.
On the flip side, Seoul Composite declined 0.07%, Hang Seng shed 0.36% and Nikkei 225 was down by 1.65%.
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