Benchmarks trade firm after a flat start; Nifty crosses 5,900 mark

After making a flat start the Indian equity markets are trading on a firm note tracking positive cues from strong Asian counterparts. All the Asian peers barring KLSE Composite were trading in the green at this point of time. Good jobs and retail sales data from US overnight also boosted the traders' sentiment. Back home, sustained buying in key heavyweights along with broader indices helped NSEs -- Nifty -- to cross 5,900 mark. Consumer durables witnessed the maximum gain in the trade followed by banking and fast moving consumer goods while, auto remained the lone loser on the BSE sectoral space. The broader indices were outperforming benchmarks. Shilpi Cable Technologies, new listing today, got good response from the investors and is trading with a gain of over 10 percent. However, PSU oil marketing companies viz., Bharat Petroleum Corporation, Hindustan Petroleum Corporation and Indian Oil Corporation were trading with a cut in a range of 1.5-2 percent after Brent crude crossed $123 a barrel. The market breadth on the BSE was positive; there were 1315 shares on the gaining side against 502 shares on the losing side while 52 shares remained unchanged.

The BSE Sensex opened at 19,602.81; about 11 points higher compared to its previous closing of 19,591, and has touched a high of 19,697.21 while low remain its opening.

The index is currently trading at 19,684.96, up by 93.78 points or 0.48%. There were 23 stocks advancing against 7 declines on the index.

The overall market breadth has made a strong start with 70.36% stocks advancing against 28.63% declines. The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.60% and 0.81% respectively. 

The top gaining sectoral indices on the BSE were, CD up by 1.04%, Bankex up by 0.88%, FMCG up by 0.87%, Metal up by 0.58% and Power was up by 0.49%. While Auto down by 0.24% was the lone loser on the index.

The top gainers on the Sensex were HDFC Bank up by 1.19%, HDFC up by 1.13%, Sterlite Industries up by 1.09%, ICICI Bank up by 1.07% and ITC was up by 1.01%.

On the flip side, Wipro down by 1.01%, Tata Motors down by 0.85%, Hero Honda down by 0.57%, Infosys down by 0.09% and Maruti Suzuki down by 0.09% were the top losers on the index.

Meanwhile, the Reserve Bank of India (RBI) will release first draft of guidelines for issue of new bank licenses in the next couple of weeks, said the finance ministry on Wednesday. Financial Services Secretary in the ministry of finance Shashikant Sharma said while talking to media persons that the new guidelines will be released in 10-15 days.

The RBI had earlier released a consultation paper for preparing the new guidelines and the same are now in final stages for preparation. The central bank will take into account views expressed by various stakeholders in drafting the guidelines, said the finance ministry. Once the RBI releases draft recommendations, various stakeholders including the finance ministry and existing banks as well as various industry bodies will give their comments based on which final guidelines will be finalized.

The discussion paper floated by the RBI had already raised a number of issues in context of grating new banking licenses including who should get the license, what should be the threshold capital requirement, should the new banks have complete freedom in branching like existing local banks in the country, and should the new banks have FDI ceiling at par with the current private sector banks etc.

The idea of new bank licenses took shape after the Union Finance Minister Pranab Mukherjee in FY11's Budget Speech announced that the RBI should consider giving new licenses to private sector players in order to increase the competition in the industry and to take banking services into currently unbanked areas. The government has taken up new banking licenses as a key channel through which it hopes to achieve its agenda of greater social inclusion.

At present, the country has 26 public sector banks which include 19 nationalized banks, the State Bank of India and its seven subsidiaries; seven new private sector banks; 15 old private sector banks and 31 foreign banks. Besides there are a number of regional rural and local area banks as well as various cooperative banks. However, the commercial banks enjoy a lion's share in financial services. This is the reason why the finance ministry is keen in expanding the reach of commercial banks rather than focusing on regional rural or cooperative banks.

The S&P CNX Nifty opened at 5,886.75; flat compared to its previous closing of 5,866.25, and has touched a high and a low of 5,913.45 and 5,885.80 respectively.

The index is currently trading at 5,909.45, higher by 23.75 points or 0.40%. There were 38 stocks advancing against 12 declines on the index.

The top gainers of the Nifty were Ranbaxy up by 1.61%, HDFC Bank up by 1.23%, ICICI Bank up by 1.18%, Sunpharma up by 1.08% and Sterlite Industries up by 1.06%.

BPCL down by 1.64%, Wipro down by 1.23%, Ambuja Cement down by 0.89%, Tata Motors down by 0.76% and Hero Honda was down by 0.54%, were the major losers on the index.

All the Asian counterparts barring KLSE Composite were trading in the green; Shanghai Composite was up 9.38 points or 0.31% to 3,017.29, Hang Seng was up 139.39 points or 0.57% to 24,421.19, Jakarta Composite was up 7.30 points or 0.20% to 3,737.89, Nikkei 225 was up 145.78 points or 1.52% to 9,736.71, Straits Times was up 2.57 points or 0.08% to 3,174.22, Seoul Composite was up 12.58 points or 0.59% to 2,134.72 and Taiwan Weighted was up by 24.39 points or 0.27% to 8,926.11.

On the flip side, KLSE Composite was down by 0.71 points or 0.05% to 1,561.22.

 

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