Sealing of the long-awaited agreement for a crucial second bailout package for debt-stricken Greece, ahead of the first release of the new annual CPI inflation data propped up the sentiment at Dalal Street from the start of the trade. However, sustained buying by funds and retail investors despite muted reaction of Asian pacific markets have led to the additional traction in Indian equity markets.
India will release its first ever annual inflation data based on the consumer price index (CPI) on Tuesday, a move to monitor retail prices that is expected to make monetary policy more effective in addressing demand-driven pressures.
The barometer 30 share index of Bombay Stock Exchange (BSE)-Sensex- after gaining a century of points was seen flirting with 18400 level, while the widely followed 50 share index of National Stock Exchange (NSE)- too gaining over 15 points was at a sniffing distance of 5600 mark. Stocks from Realty, Power and Metal counters were topping the list of gainers. Gains were also led by frontliners in likes of Hindalco, Tata Steel, SAIL, Cairn India, SBI, ITC, and ONGC. BHEL rose 3% reports that 19% import duty is likely on power equipment for mega projects However, stocks from Consumer Durable, Information Technology counters were the top losers on the BSE sectoral chart.
In stocks specific news, Kingfisher Airlines tanked 18% as company's bank accounts have been frozen suddenly. While, Essar Oil too plunged by 4.5% as company reported net loss of Rs 3,986 crore in Q3FY12 versus profit of Rs 273 crore Y-o-Y. Back on the BSE sectoral chart, broader too showcased an enthralling performance as midcap index captured gains close to 0.75%, while the Small cap index rallied over a percent. The overall market breadth on BSE was in the favour of advances which thumped declines in the ratio of 1468:862, while 110 shares remained unchanged.
On the global front, Euro zone finance ministers concluded 13 hours of talks by sealing a bailout for the country that will resolve its immediate financing needs with a 130-billion-euro rescue package and measures to cut its debt to 121 percent of GDP by 2020.
Indian and US equity markets remained closed on account of local holiday yesterday. Meanwhile, Asian markets pricing in the optimism of Greek bailout agreement, failed to show any footing. The US future indices, however, were showing an uptick in the screen trade.
The BSE Sensex after rallying by 109.80 points or 0.60% is currently trading at 18,399.15. The index has touched a high and a low of 18,414.11 and 18,293.80 respectively. There were 22 stocks advancing against 8 declines on the index.
The broader indices were outperforming benchmarks; the BSE Mid cap and Small cap indices surged 0.75% and 1.11% respectively.
The top gaining sectoral indices on the BSE were, Realty up by 2.06%, Power up by 1.88%, Metal up by 1.74%, CG up by 1.36% and Public Sector Undertaking up by 1.23%. While, Consumer Durable down by 1.36%, Information Technology down by 0.55%, TECk down by 0.23% were the only losers on the index.
The top gainers on the Sensex were ONGC up by 4.09%, BHEL up by 3.94%, Tata Steel up by 2.98%, Hindalco Industries up by 2.78% and Tata Power up by 2.23%.
On the flip side, TCS down by 1.32%, Wipro down by 0.60%, HDFC Bank down by 0.56%, Gail India down by 0.54% and Tata Motors down by 0.47% were the top losers on the Sensex.
Meanwhile, Finance Minister, Pranab Mukherjee has recently stated that the government is keen to bring Indian public sector unit (PSU) banks at par with their global peers while catering to the needs of our economy. He has appreciated the resilience shown by Indian banks during the global economic crisis but has cautioned that there is no room for complacency as the global environment is still uncertain. The minister further said that the government is taking steps to ensure that public sector banks have adequate capital to meet global risk norms.
By adding further, the finance minister said, the government was committed to maintain a minimum of 8% Tier-I capital (equity capital) in all public sector banks (PSBs), which is over and above the regulatory requirement of 6%. He said the government had provided capital to state- owned banks last fiscal, and it was taking necessary steps to keep banks adequately capitalised in 2012-13 as well. He said the Basel III capital regulations would be implemented from the beginning of next year.
BASEL III is a global regulatory standard on bank capital adequacy, stress testing and market liquidity risk agreed upon by the members of the Basel Committee on Banking Supervision in 2010-11. Basel III strengthens bank's capital requirements and introduces new regulatory requirements on bank liquidity and bank leverage. The draft guidelines on Basel III capital regulations was released December 30, 2011 and it is scheduled to be implemented from January 1, 2013.
In 2010-11, the government provided capital support to the tune of Rs 20,157 crore to public sector banks. They include Bank of Baroda, Union Bank of India, Oriental Bank of Commerce, UCO Bank and Dena Bank. This fiscal, the government will infuse over Rs 7,900 crore in SBI. It is further slated to capitalise more banks by March.
On the government's financial inclusion programme, the finance minister said that banking services to un-banked villages with a population of 1,000 or more will be provided within a couple of years. He added that banks can play a very major role through inclusive programmes like Swabhimaan, and by extending facilities to the large number of rural population. Commenting on the leakages due to subsidies the minister said that if these subsidies are provided through the banking network and institutional financial networks, the leakage will be reduced substantially.
Mukherjee said the government was in the process of implementing an e-payment system for direct credit of dues from the central government to the beneficiaries and the new payment system would bring transparency and expedite direct payments for subsidies from central paying units to the targeted beneficiaries of fertiliser, kerosene and cooking gas.
The S&P CNX Nifty is currently trading at 5,593.90, higher by 29.60 points or 0.53%. The index has touched a high and a low of 5,601.45 and 5,561.75 respectively. There were 38 stocks advancing against 12 declines on the index.
The top gainers of the Nifty were ONGC up by 4.36%, BHEL up by 3.76%, Sesa Goa up by 3.13%, Tata Steel up by 2.96% and Hindalco Industries up by 2.32%.
HCL Tech down by 1.07%, TCS down by 1%, Tata Motors down by 0.88%, HDFC Bank down by 0.63% and IDFC down by 0.61% were the major losers on the index.
Most of the Asian equity indices were trading in the red, barring Jakarta Composite; Shanghai Composite declined 0.37%, Hang Seng shed 0.47%, KLSE Composite inched lower by 0.06%, Nikkei 225 trimmed 0.31%, Straits Times inched lower by 0.08%, Seoul Composite surrendered 0.52% and Taiwan Weighted descended by 0.48%.
On the flip side, Jakarta Composite gained 0.46% was the lone gainer amongst the Asian pack.
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