MARKETS TRADE IN GREEN

The Indian equity markets are trading in a positive note after making a flat-to-negative start tracking mixed cues from the global indices. Most of the Asian equity indices were trading in the negative terrain at this point of time as fresh worries over high levels of radiation weighed on cautious investors' mood. However, the US markets continued their winning streak overnight after government reported that the economy grew at a faster rate than expected.  Back home, benchmarks turn positive after making a flat to negative start as continued buying was witnessed by foreign funds and retail investors amid expectations of better Q4 earnings. On the sectoral front, capital goods, banking and fast moving consumer goods were the top gainers in the trade; on the other hand software, technology and metal were the major losers on the BSE sectoral space. The broader indices are going neck to neck with benchmarks. The market breadth on the BSE was positive; there were 986 shares on the gaining side against 693 shares on the losing side while 79 shares remained unchanged.

The BSE Sensex opened at 18,799.71; about 16 points lower compared to its previous closing of 18,815.64, and has touched a high and a low of 18,905.34 and 18,799.57 respectively.

The index is currently trading at 18,868.15, up by 52.51 points or 0.28%. There were 19 stocks advancing against 11 declines on the index.

The overall market breadth started in the positive terrain, with 56.09% stocks advancing against 39.42% declines. The broader indices were trading in line with benchmarks; the BSE Mid cap and Small cap indices were up by 0.25% and 0.39%, respectively.

The top gaining sectoral indices on the BSE were, CG up by 0.94%, Bankex up by 0.94%, FMCG up by 0.86%, Auto up by 0.80% and CD up by 0.49%. While, IT down by 0.61%, TECk down by 0.52%, Metal down by 0.18%, HC down by 0.15% and Oil and Gas down by 0.13% were the major losers on the index.

The top gainers on the Sensex were Tata Motors up by 1.68%, Cipla up by 1.49%, HUL up by 1.48%, L&T up by 1.30% and ICICI Bank was up by 1.04%.

Sterlite Industries down by 1.51%, Jaiprakash Associates down by 1.38%, Infosys down by 1.21%, Reliance Communication down by 1.08% and NTPC down by 0.58% were the top losers on the index.

Meanwhile, despite the Economic Survey arguing for allowing the foreign direct investment (FDI) in multi-brand retail space year-after-year, the government of India has yet not made up its mind, neither is it in any hurry to do so. In fact, the government stated on Friday that there will be no decision in haste on the matter.

Union Finance Minister Pranab Mukherjee said on Friday in the lower house of Indian Parliament that the government will not take an 'off the cuff' decision on the contentious issue of allowing multinationals to set up retail stores that sell goods of different brands. The Indian government currently allows up to 51% of FDI in single brand retail but foreign players have not been permitted so far to participate in the multi-brand retail space.

The minister made it clear that in wake of the complex nature of the issue, the government will take into account the views of state governments as well as retailers and small shopkeepers and arrive at a larger consensus before making a final move. Mukherjee was responding to a calling attention motion in the Lok Sabha by some legislators. "The government has not taken any decision in this regard so far," Mukherjee added.

Economists have been pointing out that one of the reasons behind high inflation in the food goods space is the large gap between the retail and wholesale level prices. This indicates poor efficiency of distribution. By bringing in more money into the organized retail through foreign companies, greater investment into farm infrastructure can be made which will help improve the efficiency of distribution, lower the gap between farm gate and retail prices, and bring down the surging food inflation.

Earlier, the department of industrial policy and promotion (DIPP) too had floated a consultation paper seeking the views of various government agencies and other stake holders on allowing the FDI into the multi-brand space. The DIPP advocated the move saying it would help push investment into back-end infrastructure, besides logistics and agro-processing. The Planning Commission has already supported the move and some other key cabinet ministers are now also in favour of the move. Any announcement on the matter however will have to wait for a politically more suitable time.

The S&P CNX Nifty opened at 5,645.25; about 9 points lower compared to its previous closing of 5,654.25, and has touched a high and a low of 5,676.95 and 5,643.20, respectively.

The index is currently trading at 5,667.95, up by 13.70 points or 0.24%. There were 33 stocks advancing against 17 declines on the index.

The top gainers of the Nifty were IDFC up by 3.18%, Tata Motors up by 1.69%, HUL up by 1.58%, Cipla up by 1.43% and L&T up by 1.39%.

The top losers of the index were Sun Pharma down by 1.69%, JP Associates down by 1.55%, Sesa Goa down by 1.43%, Sterlite Industries down by 1.42% and Infosys was down by 1.22%.

Asian equity indices were trading mostly in the red; Hang Seng was down 167.85 points or 0.72% to 22,990.82, Jakarta Composite was down 10.28 points or 0.29% to 3,596.83, KLSE Composite was down 1.67 points or 0.11% to 1,513.88, Nikkei 225 was down 87.00 points or 0.91% to 9,449.13, Straits Times was down 23.12 points or 0.75% to 3,047.72 and Seoul Composite was down 5.91 points or 0.29% to 2,048.13 and Taiwan Weighted was down by 39.23 points or 0.46% to 8,571.16.

On the flip side, Shanghai Composite was up by 20.97 points or 0.70% to 2,998.78.

TOP PICKS FOR 28th MARCH

Markets continued its positive journey last week & are above 5EMA & 10EMA with a decent margin, may move up to 5680 - 5788 & on the downside may slip to 5560 - 5528. Long positions can be taken in BANKBARODA for a target of 970, BHARTIARTL for a target of 352, GESHIP for a target of 297, HDFC for a target of 700, TATASTEEL for a target of 656.
                                                   HAPPY INVESTING .......... CHEERS !!!

NORTH BOUND JOURNEY

Indian frontline indices vivaciously rallied over two and a quarter percentage points on the last trading day of the week as they conquered a lot of psychological levels on their northbound journey and quadrupled the joy of closing in the green trajectory. Bullishness seemed to be returning to the markets as investors aggressively piled up positions in key heavyweight stocks ahead of the result season as they speculated a lot of headwinds have already been factored in. The spurt in benchmarks not only was due to sanguine leads from the global markets but encouraging local cues, like the overall growth in the farm sector being pegged at 5.4% along with finance minister's statement of 9% growth in the next fiscal in the upper house of Parliament stoked investor sentiments. While skeptics doubted the recent strong run of Indian markets as they believed obstacles like towering inflation numbers, political uncertainties, spiraling oil prices due to lingering turbulences in the middle-east and euro-zone worries are going to make it difficult for an emerging market like India to log higher than expected growth, regardless of scoring higher on the GDP scale. The NSE's 50-share broadly followed index Nifty, reclaimed the 5650 mark, an important psychological level, after slamming a century while Bombay Stock Exchange's Sensitive Index, Sensex that skyrocketed by close to five hundred points and conquered the crucial 18,800 level. The broader markets too traded on healthy note but failed to perform in tandem with their larger peers nevertheless the BSE's midcap index went home with gains of 1% while the smallcap index surged 1.02% points. On the sectoral front, IT counter topped of the table after rising a massive 4.02% led by heavyweights like Infosys and Wipro which surged 5.23% and 3.68% respectively after IT lobby Nasscom requested the Centre to extend the Software Technology Parks of India (STPI) scheme for one year. STPI benefits are coming to an end this month. Encouraging earnings from technology companies in US too boosted Indian information technology (IT) stocks. Also, hefty position build up was witnessed in the rate sensitive Bankex index which jumped 2.72% after Axis Bank and ICICI Bank zoomed 3.74% and 3.61% respectively. DLF was the top gainer on the Sensex, rising 6.17% followed by Infosys up 5.23% and NTPC up 3.82%.

On the global front, majority of Asian equity indices finished in the positive terrain led by Japanese stocks which rose more than a percent supported by bargain hunting amid reports that few of Japan's biggest companies are closer to resuming production after the March 11 earthquake and tsunami. The European markets also moved higher in line with peers as France's CAC, Germany's DAX and Britain's FTSE traded in the green zone though with moderate gains of around a quarter percent. On the other hand, the screen trading for US index futures also indicated that the Dow could open on a positive note.

Earlier on Dalal Street, the benchmark got off to a gap up start as investors piled up positions tracking buoyant leads from Wall Street overnight which went for a smart rally on the back of confident corporate earnings and signs of a stronger job market. Thereafter, the frontline indices traded in a narrow band through the first half of trade and IT and capital goods stocks were among the prominent gainers. However, buying gathered greater momentum in software and banking companies along with other blue chip stocks in the second half of trade and the indices sailed beyond a lot psychological levels on the upside as they eventually snapped fourth straight session in the positive territory around the high point of the day. The markets registered strong volumes of over Rs 1.85 lakh crore while the turnover for NSE F&O segment too remained on the higher side compared to Thursday at over Rs 1.70 lakh crore. Market breadth remained positive as there were 1727 shares on the gaining side against 1199 shares on the losing side while 114 shares remained unchanged.

Finally, the BSE Sensex zoomed by 464.90 points or 2.53% to settle at 18815.64 while the S&P CNX Nifty shoots up 131.85 points or 2.39% to end at 5,654.25.

The BSE Sensex touched a high and a low of 18,858.30 and 18,480.69 respectively. The BSE Mid-cap and Small-cap indices increased by 1.00% and 1.02%, respectively.

DLF up 6.17%, Infosys up 5.23%, NTPC up 3.82%, Wipro up 3.68% and Tata Power up 3.67% were the major gainers on the Sensex. There were no losers on the index.

The ongoing crisis in the Middle East and resulting surge in crude oil prices has got the government worried. International crude oil prices continue to remain above the $110 a barrel mark causing substantial under-recoveries for the government controlled fuel retailers in the country.

However, indications from the government so far suggests that it is not going to exercise any of the two options that can help cut oil marketing companies' revenue loss and its subsidy outgo. That is, neither is it willing to hike retail prices of fuels in line with the surging global crude oil prices, nor is it in any mood to restructure the duty on oil products. Bringing down duty can cut the difference between cost and revenue for OMCs hence cutting their losses. But it will also have a significant impact on government's revenue.

Finance Minister Pranab Mukherjee voiced a strong concern on the rise in crude oil prices and the uncertainty it could create for the Indian economy, particularly for managing country's fiscal deficit.  ''The oil is on a slippery slope. The fluctuation in prices is very high. I don't know what will happen,'' the finance minister said in upper house of Indian Parliament on Thursday. He however assured the house that all necessary and possible precautions were being taken by the government to ensure undisrupted oil supplies. He however ruled out any immediate step to align domestic retail prices with global prices.

The issues of under recoveries of the three state-owned oil marketing companies (OMCs) Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum Corp has taken a lot of importance after the commodity price shock of 2008. Since the OMCs are asked to sell fuels at subsidized prices, these need to be compensated. This is done partially by upstream companies like ONGC and partially by the finance ministry.

However, as the under recoveries have been on the rise in recent years with increase in average international crude prices far exceeding the increase in domestic retail fuel prices, the burden of compensation has been increasing for the government. In case the crude oil prices remain at elevated levels for another couple of quarters, it will beat all estimates for the fiscal deficit out of shape as subsidy burden then could be much higher than what the government is hoping for now.

IT up 4.02%, TECk up 3.49%, Bankex up 2.72%, Realty up 2.72%, and Capital goods up 2.23% were the major gainers in the BSE sectoral space, while, there were no losers in the BSE sectoral space.

Deputy Governor of the Reserve Bank of India (RBI) said on Thursday that the sudden reversal in non-food manufacturing inflation in the month of February was a key concern for the Indian central bank which so far has only been worried about the elevated levels of food and primary goods' inflation.

In an interview given to a business news channel, Gokarn said that the RBI has been trying to do a balancing act between growth and inflation and has so far been successful in not disrupting growth prospects while tightening the monetary stance. However, he added that there is a need to be watchful the emerging inflationary trends, particularly the unexpected jump in manufacturing inflation is quite concerning.

In the month of February, WPI inflation in the primary articles declined from 17.28% to 14.79% while the same in the food commodities also came down from nearly 15% to about 10%. However, in case of manufacturing commodities, inflation went up from 3.75% to 4.94%. This indicates that while improved supply of food and other primary commodities in wake of a strong Kharif harvest has eased prices, the strong domestic demand scenario in case of manufactured products is causing supply bottlenecks.

Further, manufacturing inflation sans manufactured food items, generally called as core inflation, showed even sharper increase in February. The core inflation increased from around 4% to 6%, clearly indicating that capacities were coming under pressure. What is worse is that as the central bank continues to tighten its monetary policy to fight inflation, it will have a dampening impact on investment and capital formation. This will in turn slow down the adjustment in capacities to surging demand and thereby growth in the economy.

Gokarn added that there had been a concern regarding possible slowdown in capital formation and growth and that is why the central bank has been looking to calibrate its policy tightening. All the rate hikes by the RBI in current monetary tightening cycle have been in the quantum of 25 basis points only. The Deputy Governor pointed out that a very aggressive action against inflation by raising rates much higher than what central bank did could have had negative fallout. However, he did accept that even calibrate tightening will have some impact on demand, but added that that was the motive when the target variable was inflation. 

The S&P CNX Nifty touched a high and a low of 5,667.10 and 5,560.95 respectively.

The top gainers on the Nifty were DLF up 5.72%, Infosys Technology up 4.97%, Wipro up 3.86%, NTPC up 3.84% and Axis Bank up 3.53%.

The only losers on the index were Ranbaxy down 0.81%, GAIL down 0.32%, and Siemens down 0.13%.

The Indian government will be borrowing Rs 2.5 lakh crore in the first half of the next financial year beginning April 1. The information was shared with media persons by the Economic Affairs Secretary in the Ministry of Finance R. Gopalan on Friday.

The borrowing target for the first half is slightly on the lower side as compared with the market expectations. At Rs 2.5 lakh crore, it represents around 60% of the full fiscal borrowing target of Rs 4.17 lakh crore. Markets on the other hand have been expecting first half borrowing of around Rs 2.70 lakh crore, or around 65% of the full fiscal target.

In the last couple of years the government has been frontloading the borrowings as it expected the private sector credit demand to pick up with passage of time. Also, frontloading leaves some months at the end of the year when state governments can complete their borrowing plans without crowding the market too much. In the last fiscal, first half borrowing target was close to 67% of the full fiscal target of government.

European markets were trading in green on Friday. France's CAC 40 gained 0.16%, Germany's DAX increased 0.40% and Britain's FTSE 100 surged by 0.42%.

All the Asian equity indices, barring Jakarta Composite, finished the trade in positive terrain on last trading day of the week tracking positive cues from smart rally on Wall Street overnight on the back of confident corporate earnings and signs of a stronger job market. Japanese Nikkei rose more than a percent in today's trade supported by bargain hunting witnessed in some key stocks amid signs that few of Japan's biggest companies are closer to resuming production after the March 11 earthquake and tsunami. Moreover, Seoul shares surged about one percent led by technology stocks including Samsung Electronics and Woori Finance Holdings.

MARKETS TRADE STEADY

The domestic markets are firmly holding their gains in the mid morning session, the good going is getting all-round support with IT and technology stocks leading the pack. The global cues remain sanguine for the local markets as other Asian markets have strengthened further, however the fund buying has provided the maximum fillip to the local markets and the BSE Sensex is comfortably trading above the 18500 mark while the NSE Nifty has scaled past 5550 mark. The inflation numbers again returning to the double digit has hardly made any impact on the rate sensitives and they are moving higher for the second consecutive day. The PSU oil marketing companies too are not looking in a mood to give up despite the continuous rise in international crude prices and the governments not in mood to go for a price hike nod. The good part of the day's rally is that the broader indices too have participated equally. Sectorally, IT and Tech have gained over two percent till now, National Association of Software and Services Companies (Nasscom) President Som Mittal has said that the information technology industry is likely to register an overall growth of 16-18 per cent in the next financial year, while the industry is set to register an 18.7 per cent growth in the current fiscal in spite of concerns over the European markets.
The BSE Sensex is currently trading at 18,535.89, up by 185.15 points or 1.01%. The index has touched high of 18,548.57 and a low of 18,480.69 respectively. There were 28 stocks advancing against just 2 declining ones on the index.
The broader indices too are performing well in the trade; the BSE Mid cap and Small cap indices gained 0.81% and 0.92% respectively. 
The top gaining sectoral indices on the BSE were, IT up by 2.36%, TECk up by 2.01%, Capital Goods (CG) up by 1.46 %, Consumer Durable (CD) up by 0.92% and Realty was up by 0.87%. While there were no losers on the index.
The top gainers on the Sensex were Infosys up by 2.57%, Reliance Infra up by 2.25%, L&T up by 2.16%, DLF up by 2.03% and Wipro was up by 2.02%, while, Cipla down by 0.29% was the lone loser on the index.
Meanwhile, Deputy Governor of the Reserve Bank of India (RBI) said on Thursday that the sudden reversal in non-food manufacturing inflation in the month of February was a key concern for the Indian central bank which so far has only been worried about the elevated levels of food and primary goods' inflation.
In an interview given to a business news channel, Gokarn said that the RBI has been trying to do a balancing act between growth and inflation and has so far been successful in not disrupting growth prospects while tightening the monetary stance. However, he added that there is a need to be watchful the emerging inflationary trends, particularly the unexpected jump in manufacturing inflation is quite concerning.
In the month of February, WPI inflation in the primary articles declined from 17.28% to 14.79% while the same in the food commodities also came down from nearly 15% to about 10%. However, in case of manufacturing commodities, inflation went up from 3.75% to 4.94%. This indicates that while improved supply of food and other primary commodities in wake of a strong Kharif harvest has eased prices, the strong domestic demand scenario in case of manufactured products is causing supply bottlenecks.
Further, manufacturing inflation sans manufactured food items, generally called as core inflation, showed even sharper increase in February. The core inflation increased from around 4% to 6%, clearly indicating that capacities were coming under pressure. What is worse is that as the central bank continues to tighten its monetary policy to fight inflation, it will have a dampening impact on investment and capital formation. This will in turn slow down the adjustment in capacities to surging demand and thereby growth in the economy.
The S&P CNX Nifty is currently trading at 5,576.15, higher by 53.75 points or 0.97%. The index has touched a high of 5,588.70 and a low of 5,560.95 respectively. There were 42stocks advancing against 8 declines on the index.
The top gainers of the Nifty were HCL Tech up by 3.27%, Infosys up by 2.75%, Wipro up by 2.17%, L&T up by 2.08% and DLF up by 1.99%.
GAIL down by 0.95%, Ranbaxy down 0.87%, BPCL down 0.48%,  Cairn India down 0.37% and Cipla down by 0.33%, were the major losers on the index.
All the Asian equity indices were trading in the green; Shanghai Composite was up by 1.07%, Hang Seng was up by 0.93%, Jakarta Composite up by 0.01%, KLSE Composite up by 0.20%, Nikkei 225 was up by 0.85%, Straits Times was up by 0.75%, Seoul Composite was up by 0.80% and Taiwan Weighted was up by 0.51%.
 

TOP PICKS FOR 25th MARCH

Markets though in a positive frame but still are in consolidation mode till the NIFTY convincingly crosses 5600. Tomorrow the NIFTY is likely to make an attempt to cross 5562 & on the downside may slip to 5466. long positions can be taken in ABAN for a target of 646, ARVIND for a target of 63, BEML for a target of 811, KTKBANK for a target of 125, HDIL for a target of 177.
                                          HAPPY INVESTING.........CHEERS !!!

A STABLE DAY

It turned out to be a stable day for the Indian benchmarks which sustained sanguinity for the third successive session and climbed well over half a percent point and managed to get the better of the crucial support levels. Optimistic cues from across the globe underpinned the investors' conviction locally as they overlooked the worrisome food inflation numbers which increased for the second consecutive week ended March 12. After early weakness, the crude oil prices bounced back due to rising fears over supply disruptions as Gaddafi denied surrendering to Western forces in any circumstances and data showing US gasoline stocks fell more than expected in the week to March 18. While marketmen remained of the belief that spiraling oil prices and towering inflation numbers are going to make it difficult for an emerging market like India to log higher than expected growth regardless of scoring higher on the GDP scale. The decline in index heavyweight Reliance which shaved off around a quarter percent point was off-set by the upsurge in rate-sensitive counters. The NSE's 50-share broadly followed index Nifty, which traded below 5,400 levels three sessions ago, ricocheted above the crucial 5,500 support level while Bombay Stock Exchange's Sensitive Index, Sensex garnered close to one hundred fifty points and regained the psychological 18,350 mark. The broader markets too traded on healthy note and performed in tandem with their larger peers. The BSE's midcap index went home with gains of 0.78% while the smallcap index climbed 0.67% points. On the sectoral front, high beta Realty counter continued to remain at the top of the table for the third straight day after rising 2.83% led by heavyweights like Unitech which surged 9.61% after a brokerage firm upgraded its call on the stock. Also, hefty position build up was witnessed in the rate sensitive Auto index which soared 1.40% after Ashok Leyland zoomed 5.24% while Mahindra & Mahindra spurted 2.88% as  it proposed to set up a Rs 300-crore tractor plant at Zaheerabad in Andhra Pradesh. On the other hand Oil and Gas index languished at the bottom of the table with 0.25% losses dragged by stocks like RIL and Gail India which plunged 0.25% and 2.24% respectively. Debutant, Lovable Lingerie settled at Rs 249.20, versus its issue price of Rs 205 a share.

On the global front, majority of Asian equity indices finished in the positive terrain on the back of increase in commodity prices and some Japanese manufacturers said that they would restart work at factories shut by the March 11 earthquake and tsunami. The European markets after opening on a weak note, pared losses as France's CAC, Germany's DAX and Britain's FTSE traded in the green zone with strong gains. On the other hand, the screen trading for US index futures also indicated that the Dow could open on a positive note.

Earlier on Dalal Street, the benchmark got off to a gap up start as leads from the global front underpinned regional sentiments. Optimistic close on Wall Street, in-line growth in New Zealand's Q4 GDP numbers, and the marginal wilt in crude oil prices filliped investors' mood as they overlooked the weakness in Japanese markets which fell on worries over parts shortage and production halt. The frontline indices traded in a narrow band through the day's trade led by gains in realty and auto stocks. The fifty stock nifty slipped below the crucial 5,500 level in the early moments of second half but recovered immediately to eventually settle around the high point of the day because of sustained buying interests across the board. The markets registered volumes of over Rs 1.13 lakh crore while the turnover for NSE F&O segment too remained on the lower side compared to Wednesday at over Rs 0.99 lakh crore. Market breadth remained positive as there were 1599 shares on the gaining side against 1259 shares on the losing side while 140 shares remained unchanged.

Finally, the BSE Sensex surged by 144.58 points or 0.79% to settle at 18,350.74 while the S&P CNX Nifty climbed 42.15 points or 0.77% to end at 5,522.40.

The BSE Sensex touched a high and a low of 18,373.97 and 18,269.32 respectively. The BSE Mid-cap and Small-cap indices increased by 0.78% and 0.67%, respectively.

Hindalco Inds up 4.25%, Mahindra & Mahindra up 2.88%, BHEL up 2.82%, TCS up 2.76% and Jaiprakash Associates up 2.00% were the major gainers on the Sensex.

On the flip side, Maruti Suzuki down 0.60%, Bajaj Auto down 0.42%, Hindustan Unilever down 0.30%, RIL down 0.25% and DLF down 0.13% were the major losers on the index.

Based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on March 11, 2011, Government of India has approved 14 Proposals of Foreign Direct Investment (FDI) amounting to Rs. 1289.85 crore approximately.

Among those that got the green signal, the biggest one is by the Dhunseri Investments, Kolkata which has been allowed to issue equity shares to the non-resident shareholders consequent upon demerger to the tune of Rs 715 crore. Another major project is by Ghir Investments which got the approval of the FIPB for induction of foreign equity in an investing company. The Mauritius based company proposes to bring in FDI worth Rs 530 crore.

Among others, Gremach Infrastructure Equipments and Projects got the ex-post facto approval for issue of warrants.  The company is engaged in the business of providing equipments on rental for infrastructure projects. Similarly, PCRD Services, Singapore has got approval from the finance ministry to increase the foreign equity percentage in an investing company.

The finance ministry deferred a decision on 27 proposals which include one by Forbo Holding AG, Lindenstrasse, Switzerland to set up a new WoS to undertake the business of manufacturing, sale, distribution, lease, import and export of power transmission belts. Similarly, a proposal by Punj Lloyd for bringing in FDI to undertake additional activities of manufacture, assembly and repair of defence equipment has been postponed too.    

Realty up 2.83%, Auto up 1.40%, Capital goods (CG) up 1.27%, Consumer durables (CD) up 1.25%, and Metal up 1.03% were the major gainers in the BSE sectoral space.

On the other hand Oil & Gas down 0.25% and Health Care (HC) down 0.09% were the only losers in the BSE sectoral space.

Despite the continued tightening of monetary policy by the Reserve Bank of India (RBI) and some uptic in market rates as well, demand for credit continues to remain robust, a heartening sign for an economy that is anticipated to slowdown because of rising cost of financing.

According to the data compiled by the central bank, credit offtake from the banking industry grew by over 23% for the one-year period ended March 11, which also signals that the India Inc is doing just fine, at least till now, despite the ongoing high inflation and in response the continued monetary tightening by the Indian monetary authority. According to the RBI, total credit offtake during the period under review stood at Rs 39.37 lakh crore as against Rs 32.20 lakh crore a year ago.

However, even as the credit growth remains robust, deposit growth is only gradually improving and as a result the gap between the deposit and credit growth is widening. During the period under discussion, total deposits with the scheduled commercial banks in India went up to about Rs 52.85 lakh crore compared with Rs 45.50 lakh crore as on March 12, 2010, which works out to be a growth of around 16.1% on an annual basis.

Clearly, the gap between the deposit and credit growth rate is substantial. The central bank has been pointing out that the increasing difference between the two was also one of the reasons for the liquidity crunch which has been in the deficit mode for last several months. While government spending will ease the temporary liquidity crunch, a more structural issue is the slower growth in deposits as compared with loans. 

Banks have also been looking to adhere to the advice of the central bank and several of them have raised their deposit rates over last one quarter or so. This has had its impact on deposit growth rate which has improved from around 13% a quarter ago to 16.5% presently. The latest figure is much close to the RBI's fiscal-end target of 17% given in the January policy review. The growth in deposits nonetheless is still much slower compared to growth in loans and banks will have to further push the former to maintain equilibrium in the system.       

The S&P CNX Nifty touched a high and a low of 5,529.00 and 5,496.10 respectively.

The top gainers on the Nifty were Hindalco up 4.46%, IDFC up 3.80%, Kotak Bank up 3.66%, Ambuja Cement up 3.20% and M&M up 3.08%.

The top losers on the index were GAIL down 1.71%, Dr Reddy down 1.05%, Suzlon down 0.98%, Cairn down 0.92% and Maruti down 0.82%.

European markets were trading in green on Thursday. France's CAC 40 gained 0.60%, Germany's DAX increased 0.73% and Britain's FTSE 100 surged by 0.85%.

Asian equity indices finished mostly on the higher note on Thursday on the back of increase in commodity prices and as some Japanese manufacturers said that they would restart work at factories shut by the March 11 earthquake and tsunami. Seoul Composite surged more than one percent supported by firm gains in auto players including Hyundai Motor and as foreign investor buying continued for a seventh consecutive session. The higher close of Wall Street overnight also aided the sentiments in the region. However, Japanese Nikkei remained in the red amid continued uncertainty about the stability of a troubled nuclear power complex.

MARKETS CONTINUE TO TRADE FIRM

Local equity markets are managing hold their early splendid gains for the second straight session on sustained buying by funds in fundamentally strong shares influenced by a firm Asian trend even as Japan Nikkei 225 trimmed all its losses after a soft start. The investors have picked up bargains in a market that has underperformed so far this year on the hopes that the India's economic growth story will stay intact which in turn boosted demand for loans which pushed the financial sector stocks higher. Further, markets also turned optimistic on the news that the foreign funds have turned net buyers of Indian equities in March, after dumping them in the first two months of 2011. As per the last available data from the market regulator, they have injected a net of around $305 million in Indian stocks in March, leading the benchmark index 2.1 percent higher. On the global front, Asian shares were mostly higher on bargain hunting, while Japan Nikkei 225 after declining on the news that the authorities in the capital had found dangerously high levels of radiation in the water but the index soon rebounded as traders picked up cheap stocks. The US future indices are trading in green on the screen trade.

Back on Dalal Street, on the BSE Sectoral front, stocks from Realty, Capital Goods and Auto counters were trading graciously above 1% each. The benchmark index on Bombay Stock Exchange --Sensex-- was trading well above the physiological level of 18000 mark while Nifty too continued to trade above the secured 5500 mark respectively. The Midcap index fared better than its larger peers while small pocket index too were garnering modest gains. The overall market breadth on BSE was in the favour of advances which thrashed declines in the ratio of 1456:757, while, 96 shares remained unchanged.

The BSE Sensex is currently trading at 18,339.87, up by 133.71 points or 0.73%. The index has touched a high of 18,373.97 and a low of 18,286.42 respectively. There were 27 stocks advancing against 2 decline on the index, while 1 stock remained unchanged.

The broader indices were performing in line with benchmarks; the BSE Mid cap and Small cap indices surged 0.73% and 0.85% respectively. 

All the sectoral indices were trading in green, however, the top gaining sectoral indices on the BSE were, Realty up by 2.24%, Capital goods up by 1.11%, Auto up by 1.07%, Bankex up by 1.05% and Metal up by 1.04 %.

The top gainers on the Sensex were Hindalco Industries up by 2.47%,  BHEL up by 1.94%, TCS up by 1.87%, ICICI Bank up by 1.85% and M&M was up by 1.79%.while, Hindustan Unilever down by 0.24 % was the lone loser on the index.

Meanwhile, based on the recommendations of Foreign Investment Promotion Board (FIPB) in its meeting held on March 11, 2011, Government of India has approved 14 Proposals of Foreign Direct Investment (FDI) amounting to Rs. 1289.85 crore approximately.

Among those that got the green signal, the biggest one is by the Dhunseri Investments, Kolkata which has been allowed to issue equity shares to the non-resident shareholders consequent upon demerger to the tune of Rs 715 crore. Another major project is by Ghir Investments which got the approval of the FIPB for induction of foreign equity in an investing company. The Mauritius based company proposes to bring in FDI worth Rs 530 crore.

Among others, Gremach Infrastructure Equipments and Projects got the ex-post facto approval for issue of warrants.  The company is engaged in the business of providing equipments on rental for infrastructure projects. Similarly, PCRD Services, Singapore has got approval from the finance ministry to increase the foreign equity percentage in an investing company.

The finance ministry deferred a decision on 27 proposals which include one by Forbo Holding AG, Lindenstrasse, Switzerland to set up a new WoS to undertake the business of manufacturing, sale, distribution, lease, import and export of power transmission belts. Similarly, a proposal by Punj Lloyd for bringing in FDI to undertake additional activities of manufacture, assembly and repair of defence equipment has been postponed too.    

The S&P CNX Nifty is currently trading at 5,515.25, higher by 35.00 points or 0.64%. The index has touched a high of 5,528.25 and a low of 5,500.75 respectively. There were 40 stocks advancing against just 10 declines on the index.

The top gainers of the Nifty were Hindalco up by 2.67%, BHEL up by 2.14%, Punjab National Bank up by 1.96%, ICICI Bank up by 1.89% and M&M up by 1.78%.

GAIL down by 1.39%, DR Reddy down by 0.49%, Cairn India down by 0.48%, Hindustan Unilever down 0.33% and  JP Associate down by 0.17% were the major losers on the index.

Asian markets were trading mostly in the green; Shanghai Composite  gained 0.09%, Hang Seng  added 0.76%, Jakarta Composite surged 1.07%, KLSE Composite tad up 0.03%, Straits Times increased 0.83% , Seoul Composite rose by 0.82% and Taiwan Weighted was up by 0.53%.Further Nikkei 225 after slipping 14.18 points in early trade is now trading flat.