Indian benchmarks shoot up and are currently trading near the high points of the day with strong gains, as the Reserve Bank of India slashed cash reserve ratio by 50 basis points to 5.5% for the first time since 2009. The Sensex and the Nifty have crossed 16,900 mark and 5,100 levels, respectively. This stunt by the central bank will infuse Rs 32,000 crore into the financial system, which will help the banks to lend more but interest rate change may not happen as policy rates remained unchanged. Meanwhile central bank, which has left repo rate unchanged at 8.5%, has retained inflation projection for March 2012 at 7% and expects inflation to moderate in financial year 2013 only. However, rate sensitive's gained strength post this policy announcement as shares of country's largest lenders ICICI Bank and SBI gained 2.3-2.7% while HDFC Bank rose 0.7% and HDFC was up 1.3%. On sectoral front all the sectors were trading in green post the RBI's credit policy, with banking sector leading the rally. On the global front Asian markets were trading in green. Back home, the market breadth was favoring the positive trend; there were 1337 shares on the gaining side against 928 shares on the losing side while 104 shares remained unchanged.
The BSE Sensex is currently trading at 16,968.94, up by 217.21 points or 1.30%. The index has touched a high and a low of 16,976.62 and 16,770.01 respectively. There were 26 stocks advancing against just 4 declines on the index.
The broader indices also following the benchmark; the BSE Mid cap and Small cap index gained by 0.83% and 0.47% respectively.
The top gaining sectoral indices on the BSE were, Bankex up by 2.50%, CG up by 2.41%, Metal up by 1.23%, CD up by 1.16% and Oil and Gas up by 1.12%. While, there was no loser on the index.
The top gainers on the Sensex were L&T up by 3.92%, ICICI Bank up by 3.00%, SBI up by 2.87%, Hindalco up by 2.29% and Mahindra & Mahindra up by 1.93%.
On the flip side, Maruti Suzuki down by 1.85%, Bajaj Auto down by 0.39%, GAIL India down by 0.26% and DLF down by 0.16% were the top losers on the Sensex.
Meanwhile, Prime Minister, Manmohan Singh has expressed his concern over the state of skill development in the country. He said that there was an urgent need to provide skill training to India's growing youth population and asked ministers to step up their efforts and set ministry-wise targets for skill development in the run-up to the Union Budget in mid-March and propose ambitious skilling initiatives in the 12th Plan (2012-17). He asked the ministers to especially consider the skilling needs of people belonging to SC, ST, backward classes, minorities, women and those with disabilities and focus on sectors like infrastructure, real estate, auto and auto components, textile, healthcare, retail and logistics.
The Prime Minister was of the view that any social and economic policy of inclusive development could not ignore the fact that a significant proportion of India's citizens were forced to take up unskilled work because they lacked the education and skills required for taking up economically and professionally rewarding employment. In his opinion the country could reap a demographic dividend only if the youth was educated and possessed skills required for earning a decent livelihood.
Skill requirement studies estimate that India will require around 26 crore skilled people by 2018 and around 34 crore by 2022 which means that there would be a need to provide quality training to around eight crore people in the next five years. This requires a focused and target oriented approach from the Central and State governments backed by matching outlays. The PM is all for it and has said that any such proposal will be looked at 'favourably' by the government and announcements could be made in the budget for next fiscal, to be unveiled in March.
Dilip Chenoy, Managing Director of National Council on Skill Development (NSDC) opined that, "if there is a service tax exemption (for NSDC and other training providers) it will help bring down fees for skill training programmes and thereby incentivise more students to enroll for such programmes". If the proposals go through, students enrolling in courses like software, retail and fashion can expect to pay a lower course fees.
The S&P CNX Nifty is currently trading at 5,121.10, higher by 74.85 points or 1.48%. The index has touched a high and a low of 5,121.20 and 5,049.80 respectively. There were 42 stocks advancing against 7 declining ones and one remained unchanged on the index.
The top gainers of the Nifty were L&T up by 4.57%, SBI up by 3.94%, IDFC up by 3.90%, PNB up by 3.84% and Hindalco up by 3.60%.
Maruti Suzuki down by 1.41%, Powergrid down by 0.50%, GAIL down by 0.26%, DLF down by 0.23% and Bajaj Auto down by 0.13% were the major losers on the index.
In Asia, majority of bourses remained closed for Lunar New Year holiday, while the benchmarks in Indonesia and Japan are trading on a positive note; Jakarta Composite was up 0.34% and Nikkei 225 gained 0.18%.
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