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Indian markets trade higher
Tue, 3 Jun 11:30 am

After opening positive; the Indian Indices have remained in the green after struggling to find a clear direction upon the announcement of the RBI's bi-monthly monetary policy. IT and FMCG stocks are leading the losers while engineering and metal stocks are leading the gainers.

The BSE Sensex is trading up 50 points and the NSE-Nifty is trading up 24 points. The BSE Mid Cap index is trading up 0.4%, while the BSE Small Cap index is trading up 0.6% today. The rupee is trading at 59.18 to the US dollar.

In its second bi-monthly policy review, the Reserve Bank of India (RBI) has kept the benchmark repo rate unchanged. This was along expected lines. However the central bank has cut the Statutory Liquidity Ratio (SLR) by 0.5%. The SLR has been cut from 23% to 22.5%. Thus the repo, reverse repo and the CRR continue to remain on hold at 8%, 7% and 4% respectively. The marginal standing facility (MSF) and the bank rate have also been maintained at 9% each. The RBI governor also reiterated his tough stand on inflation by stating that the easing of monetary policy would be possible only if inflation was to fall faster than currently expected after adjusting for the base effect.

Power stocks are trading mixed today. KSK Energy and NTPC are leading the gainers; while Indiabulls Power and GVK Power and Infra are leading the losers. In order to lessen the debt burden; various private power developers have planned to sell their assets to NTPC. The list of these players include Jaypee Power Ventures, Lanco Infratech, GMR Infrastructure, and Sesa Sterlite. As per industry sources, NTPC has received more than 30 intimations in response to its offer for acquiring such assets which is known as expression of interest (EoI). It is said that these companies are constantly facing pressure from lenders to divest assets to pay their dues. The policy paralysis that has plagued the power sector since over three to four years has led to delay in execution of several projects. This has resulted in huge amount of debts on the books of private developers. It is believed that NTPC is keen on purchasing Jaypee's three power plants at Bina (500 MW), Nigri (1,320 MW) and Bara (1,980 MW), which are either operational or in the final stages of commissioning with adequate coal supply arrangements. NTPC is trading 2% up today.

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