The Indian equity markets were trading at days high on the back of short coverings in the heavyweights. The market is looking very strong and trading with huge gains as political worries took a backseat and modest recovery in global markets have helped to improve the sentiments. The 30-share BSE Sensex surges over 400 points and the 50-share NSE Nifty inches towards 4,900 level. Investors went on a buying spree in early trade despite the US Federal Reserve Chairman Ben Bernanke not announcing any fresh stimulus to the boost the U.S. economy, his statement that the economy was not moving slowly enough to need a booster at present, appears to have eased fears about a slowdown to an extent. Meanwhile, RBI unveils report on NBFC sector, where it has insisted on a minimum asset size of more than Rs 50 crore for registering any new NBFC. On sectoral front all sectoral indices are in the green while information technology stocks, led by sector heavyweights Infosys, Tata Consultancy Services and Wipro, are leading the charge up north at present. Several stocks from metal, banking, realty, capital goods, oil and automobile sectors have rallied sharply. Power, PSU and FMCG stocks too are mostly up with impressive gains. On the global front, Asian markets continued to trade in positive. Back home, the market breadth favoring the positive trend; there were 1,915 shares on the gaining side against 523 shares on the losing side while 82 shares remained unchanged.
The BSE Sensex is currently trading at 16,272.89, up by 424.06 points or 2.68%. The index has touched a high and low of 16,281.92 and 16,068.73 respectively. 28 stocks were advancing against 2 declining stock on the index.
The broader indices added further ground as both the BSE Mid cap and Small cap index rose by 1.86% and 1.61% respectively.
The top gaining sectoral indices on the BSE were, IT up by 3.93%, TECk up by 3.35%, Metal up by 3.30%, Bankex up by 3.29% and Realty up by 2.95%. There were no losers on the index.
The top gainers on the Sensex were Jindal Steel up by 6.13%, TCS up by 5.46%, Tata Motors up by 3.68%, Hindalco Industries up by 3.56% and Tata Steel up by 3.51%. While, Maruti Suzuki down by 0.85% and Cipla down by 0.16% were the losers in the 30 share pack.
Meanwhile, to boost funding for roads, ports and highways, the government is planning to draw in the country's biggest insurer - Life Insurance Corporation (LIC) - into infrastructure project financing. The government is aiming to spend over $1 trillion over the 12th Five-Year Plan (2012-17) on building new and upgrading the existing infrastructure. The plan to include LIC in infrastructure funding was discussed at a meeting convened by the Finance Ministry recently.
Under the infrastructure project financing, LIC is likely to tie up with India Infrastructure Finance Company (IIFCL) to buy out long-tenure loan portfolios of commercial banks. The practice, called take-out financing, seeks to free up the capital of banks so that they can lend to new projects. It is reported that the issue will be discussed in the investment committee of LIC, to see whether the insurance firm has the scope under the sectoral exposure norm.
The projected venture will allow LIC and IIFCL to buy out 40 percent of a bank's loan by taking an exposure of 20 percent each. On the other hand, IIFCL will carry out the due diligence for the venture and risk factors associated with it, as it has built an expertise in this area. The rules also mandate that exposure to a single company should not exceed 10 percent of the insurer's funds, or 10 percent of the paid up capital of investee.
The Insurance Regulatory and Development Authority (IRDA) guidelines also require life insurers to invest at least 15 percent of their controlled funds in infrastructure and social sectors. However, LIC and IIFCL will have to work out the proportion of liability, in case the loan turns bad or non-performing. On the contrary, the venture may not take off if banks do not participate.
Earlier last week, it was reported that the government would now push banks to sell their infrastructure portfolio to IIFCL through take-out financing to create space for them to lend to the sector again. The take-out financing scheme has remained largely grounded with only Rs 70 crore of funds disbursed so far. IIFCL, the dedicated infrastructure financier created by the government, is sitting on a cash pile of about Rs 8,000 crore to buy out loan portfolios of banks.
Take-out financing allows banks to discard their loan portfolios after retaining them on their books for a few years. This frees them to fund more projects. IIFCL has also customized its take-out finance scheme recently to make it more attractive. It now proposes to take on projects immediately after their commercial operation date, as against the earlier norm of one-year waiting period. It has also scrapped the 0.3 percent take-out fee, which it used to charge the lender using the scheme. The company has so far sanctioned Rs 3,000 crore spread over 15 projects.
The S&P CNX Nifty is currently trading at 4,876.70, higher by 128.90 points or 2.71%. The index has touched a high and low of 4,878.70 and 4,806.05 respectively. There were 44 stocks advancing against only 6 declining ones on the index.
The top gainers of the Nifty were Jindal Steel up by 6.12%, TCS up by 5.80, Kotak Bank up by 4.86%, Reliance Infra up by 4.55% and IDFC up by 4.39%.
On the flip side, Ranbaxy down by 1.28%, Maruti down by 0.97%, Cipla down by 0.32%, Ambuja Cement down by 0.26% and ONGC down by 0.20% remained the top losers on the index.
The BSE Sensex is currently trading at 16,272.89, up by 424.06 points or 2.68%. The index has touched a high and low of 16,281.92 and 16,068.73 respectively. 28 stocks were advancing against 2 declining stock on the index.
The broader indices added further ground as both the BSE Mid cap and Small cap index rose by 1.86% and 1.61% respectively.
The top gaining sectoral indices on the BSE were, IT up by 3.93%, TECk up by 3.35%, Metal up by 3.30%, Bankex up by 3.29% and Realty up by 2.95%. There were no losers on the index.
The top gainers on the Sensex were Jindal Steel up by 6.13%, TCS up by 5.46%, Tata Motors up by 3.68%, Hindalco Industries up by 3.56% and Tata Steel up by 3.51%. While, Maruti Suzuki down by 0.85% and Cipla down by 0.16% were the losers in the 30 share pack.
Meanwhile, to boost funding for roads, ports and highways, the government is planning to draw in the country's biggest insurer - Life Insurance Corporation (LIC) - into infrastructure project financing. The government is aiming to spend over $1 trillion over the 12th Five-Year Plan (2012-17) on building new and upgrading the existing infrastructure. The plan to include LIC in infrastructure funding was discussed at a meeting convened by the Finance Ministry recently.
Under the infrastructure project financing, LIC is likely to tie up with India Infrastructure Finance Company (IIFCL) to buy out long-tenure loan portfolios of commercial banks. The practice, called take-out financing, seeks to free up the capital of banks so that they can lend to new projects. It is reported that the issue will be discussed in the investment committee of LIC, to see whether the insurance firm has the scope under the sectoral exposure norm.
The projected venture will allow LIC and IIFCL to buy out 40 percent of a bank's loan by taking an exposure of 20 percent each. On the other hand, IIFCL will carry out the due diligence for the venture and risk factors associated with it, as it has built an expertise in this area. The rules also mandate that exposure to a single company should not exceed 10 percent of the insurer's funds, or 10 percent of the paid up capital of investee.
The Insurance Regulatory and Development Authority (IRDA) guidelines also require life insurers to invest at least 15 percent of their controlled funds in infrastructure and social sectors. However, LIC and IIFCL will have to work out the proportion of liability, in case the loan turns bad or non-performing. On the contrary, the venture may not take off if banks do not participate.
Earlier last week, it was reported that the government would now push banks to sell their infrastructure portfolio to IIFCL through take-out financing to create space for them to lend to the sector again. The take-out financing scheme has remained largely grounded with only Rs 70 crore of funds disbursed so far. IIFCL, the dedicated infrastructure financier created by the government, is sitting on a cash pile of about Rs 8,000 crore to buy out loan portfolios of banks.
Take-out financing allows banks to discard their loan portfolios after retaining them on their books for a few years. This frees them to fund more projects. IIFCL has also customized its take-out finance scheme recently to make it more attractive. It now proposes to take on projects immediately after their commercial operation date, as against the earlier norm of one-year waiting period. It has also scrapped the 0.3 percent take-out fee, which it used to charge the lender using the scheme. The company has so far sanctioned Rs 3,000 crore spread over 15 projects.
The S&P CNX Nifty is currently trading at 4,876.70, higher by 128.90 points or 2.71%. The index has touched a high and low of 4,878.70 and 4,806.05 respectively. There were 44 stocks advancing against only 6 declining ones on the index.
The top gainers of the Nifty were Jindal Steel up by 6.12%, TCS up by 5.80, Kotak Bank up by 4.86%, Reliance Infra up by 4.55% and IDFC up by 4.39%.
On the flip side, Ranbaxy down by 1.28%, Maruti down by 0.97%, Cipla down by 0.32%, Ambuja Cement down by 0.26% and ONGC down by 0.20% remained the top losers on the index.
All the Asian counterparts barring Shanghai Composite and Jakarta Composite were trading in the green; Hang Seng was up 1.27%, KLSE Composite was up by 0.17%, Nikkei 225 was up by 0.49%, Straits Times was up by 1.34%, Seoul Composite was up by 2.90% and Taiwan Weighted was up by 1.79%.
On the flip side, Shanghai Composite was down by 1.22% and Jakarta Composite plunged 0.07%. 
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