NIFTY HOLDING 4700

Indian equity markets continued to trade in a narrow range with cuts of around a percent in Friday afternoon trades as investors continued to square off positions across the board. The psychological 4,700 (Nifty) and 15,650 (Sensex) levels proved as strong supports for the frontline indices which have pared some part of their hefty losses and are showing signs of recovery ahead of European market opening. The European futures are pointing at a flat start for the markets there amid the strong batch of macroeconomic reports from the US on one hand and renewed tensions over Spain and Italy on the other. Moreover, all the Asian markets too exhibited somber trends barring the Chinese benchmark which bounced back to close with half a percent gains on reports of major government institutions buying banking stocks to support the weak stock market. Back home, investors overlooked reports that RBI reduced the minimum maturity period for ECB up to $20 million to three years as against the previous five years while it also raised the annual limit of FCCBs for companies to $750 million as against $500 million in a fiscal year under the automatic route that does not require prior regulator's approval. On the BSE sectoral front, the Capital Goods index plummeted about two percent followed by the Metal counter that slipped with similar losses. On the other hand on the Oil & Gas counter managed to keep its head above the water thanks the resilient efforts put by heavyweight stocks like Reliance Industries and BPCL.
Moreover, the broader markets traded with moderate cuts of around half a percent, performing better than their larger peers. The bourses slipped on good volumes of over Rs 0.50 lakh crore. The market breadth on BSE was in favor of declines in the ratio of 1368:1010 while 103 scrips remained unchanged.
The BSE Sensex is currently trading at 15,698.46 down by 158.62 points or 1% after trading as high as 15,846.29 and as low as 15,664.91. There were 3 stocks advancing against 27 declines on the index.
The broader indices were trading on a negative note; the BSE Mid cap index slipped 0.68% and Small cap eased 0.31%.
On the BSE sectoral space, Oil & Gas up 0.20% was the only gainer while Capital Goods down 1.98%, Metal down 1.96%, Power down 1.45%, Consumer Durables down 1.44% and Bankex down 1.28% were the only losers in the space.
RIL up 1.11%, Maruti up 0.96% and Sun Pharma up 0.27% were the only gainers on the Sensex, while Hero Moto down 4.32%, Bharti Airtel down 4.25%, JP Associates down 4.22%, BHEL down 3% and Jindal Steel down 2.85% were the major losers in the index.
Meanwhile, the Union Cabinet has approved the proposal for transfer of the Reserve Bank of India's (RBI) stake in the National Housing Bank (NHB) to the government and the further course is likely to be concluded by March-end. NHB Chairman and Managing Director R V Verma on the sidelines said, 'the cabinet has approved the amendment to the National Housing Bank Act, 1987, for transferring RBI's stake in the NHB to government.'
The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh deliberated upon the proposal on January 5, and the process of stake transfer is likely to be over within two months. NHB is looking at increasing its capital base and would start discussion on the matter with the government soon.
Currently, NHB is wholly-owned by the RBI with a paid-up capital of Rs 450 crore. In the last Budget for meeting the expenditure for acquiring RBI's holding in NHB, the government had made Budget provision of Rs 450 crore. NHB was formed to promote a sound, healthy, viable and cost effective housing finance system to cater to all segments of the population and to integrate the housing finance system with the overall financial system.
Earlier, the government has already acquired stake of State Bank of India (SBI) and National Bank of Agriculture and Rural Development (NABARD) from RBI. In 2007, the government acquired the 59.73% stake held by RBI in SBI, for Rs 35,531.33 crore. Though, NABARD stake transfer happened in 2010. The RBI divested 71.5% equity in NABARD, worth Rs 1,430 crore.

In order to differentiate the apex bank's position as the owner of banks and the sector regulator, the Narasimhan Committee had recommended the transfer of RBI's stake in SBI, NABARD and NHB to the government. Further, after receiving rights of NHB, the government would also have a greater role in the boards of these institutions and the flexibility to issue directions to meet its credit objectives for the priority sector.

The S&P CNX Nifty is currently trading at 4,696.90, lower by 53.05 points or 1.12% after trading as high as 4,740.50 and as low as 4,686.85. There were 7 stocks advancing against 43 declines on the index.
The top gainers on the Nifty were BPCL up 2.21%, Reliance up 1.12%, Maruti up 0.96%, HCL Tech up 0.77% and Kotak Bank up 0.55%.1
Hero Moto down 4.40%, Bharti Airtel down 4.34%, JP Associates down 4.30%, IDFC down 3.68% and Jindal Steel down 3.21% were the major losers on the index.
Asian markets traded on a negative note; Hang Seng plunged 1.12%, Jakarta Composite sank 0.95%, Nikkei 225 plummeted 1.16%, Straits Times slipped 0.25%, Seoul Composite receded 1.11% and Taiwan Weighted eased 0.15%.
On the flipside, Shanghai Composite climbed 0.48%.