Local bourses after getting a cautious start are now trading in a range bound manner as investors' confidence seem to be shaken after Tuesday's serial bomb blasts in the country's financial capital, amid a weakening overseas trend. On the global front, U.S. stock indices halting a three-day slide, ended well on Wednesday after Fed Chairman Ben Bernanke suggested the Fed would consider additional measures to support the economy if the outlook gets worse. However, the Asian stocks have lugged the markets lower. Asian bourses dropped after Moody's warned that the United States may lose its top-notch credit rating in the coming weeks, thereby casting its shadow over the Indian equity markets. The US future indices are showing a downtick in the screen trade. Back home, the sentiment is also vigilant as investors await the monthly Inflation data along with the weekly one for cues on RBI's move in its upcoming monetary policy review on July 26, 2011. Meanwhile, the indices that have cut short some losses incurred in the morning deal are Consumer Durables, Realty and Healthcare. On the flip side, stocks from Information Technology, TECk and Capital Goods are the ones' that are taking on the maximum beating. The 30 scrip sensitive index- Sensex- after losing over a 100-points is currently trading sub 18500 mark, while the widely followed 50 share index-Nifty- offloading over 25 points is currently trading near its 5500 level. The broader indices however are trading on a mixed note. The overall market breadth has slightly improved and remains in the favour of advances which have outpaced declines in the ratio of 1057:940, while 89 shares remained unchanged.
The BSE Sensex is currently trading at 18,480.98, down by 115.04 points or 0.62%. The index has touched a high and low of 18,563.69 and 18,449.23 respectively. There were just 2 stocks advancing against 28 declines on the index.
The broader indices were trading mixed; the BSE Mid cap index was up by 0.18% and Small cap index was down by 0.01%.
On the BSE sectoral front, Consumer Durables (CD) up by 0.35%, Realty up by 0.29% and Healthcare up by 0.21% were the only gaining sectoral index, while IT down by 1.20%, TECK down by 0.88%, Capital Goods (CG) down by 0.60%, Oil & Gas down by 0.46% and Power down by 0.44% were the indices languishing at the bottom
Maruti Suzuki up by 1.00% and Tata Motors up by 0.71% were the only gainers, while Mahindra & Mahindra down by 1.71%, Infosys down by 1.66%, Hero Honda down by 1.19%, Reliance Communication down by 1.17% and Wipro down by 0.92% were the top losers on the 30 scrip sensitive index-Sensex-on BSE.
Meanwhile, banks on expressing their displeasure on deregulating the interest rate of saving bank deposits have written to the Reserve Bank of India (RBI) stating that they are not in favour of a deregulated savings rates regime, saying such a move would hurt everybody in the system. The Indian Bank Association (IBA) Chief Executive K Ramakrishana said, 'It is the view of our members that it is not an appropriate time to deregulate the savings rate because of the upward bias in the interest rates currently and the general high rate scenario.'
K Ramakrishana said that the RBI's recent moves to calculate interest rate on a daily basis and increase the interest rate on savings accounts to 4% is already hurting the banks, by adding further he said, the IBA recently wrote to the RBI about its reservations on the subject.
Deregulation of the savings rate will hurt everybody, and by giving stress on the possibility of the rate going down from the present 4% cannot be ruled out if deregulation were to happen. The savings bank rate is the only regulated rate presently and a source of low cost funds for banks. It is feared that a competition within lenders to grab the low-cost deposits will result in the rates going up, K Ramakrishana said.
In April, regulator had floated a discussion paper on the issue of deregulating interest rates, in order to prepare a ground for deregulation; RBI has already increased the interest rate by 50 basis points to 4% in May. K Ramakrishana said that if the deregulation were to happen, it should be in 'totality' and not restricted to the rates alone.
'We should be allowed to charge for the transactions which are free presently. Let the market decide that as well. Nowhere else do we have facilities like ATMs, cheque books, fund transfers which come free,' K Ramakrishana added.
The S&P CNX Nifty is currently trading at 5,555.40, down by 30.05 points or 0.54%. The index has touched a high and low of 5,572.05 and 5,541.70 respectively. There were 11 stocks advancing against 39 declines on the index.
The only gainers of the Nifty were Ambuja Cement up by 2.11%, Kotak Bank up by 1.48%, ACC up by 1.22%, IDFC up by 0.94% and Ranbaxy up by 0.92%.
Infosys down by 1.47%, ONGC down by 1.13%, Reliance Communication down by 1.12%, GAIL and Hero Honda were down by 1.10% were the major losers on the index.
Most of the Asian equity indices were trading in the red; Hang Seng declined 0.76%, KLSE Composite dropped 0.11%, Nikkei 225 slid 0.54%, Straits Times descended 0.23%, Seoul Composite plunged 1.00% and Taiwan Weighted was down with a cut of 0.69%.
On the flip side, Shanghai Composite gained 0.14% and Jakarta Composite added 0.18%
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