Indian share markets remain in red

Wed, 19 Jun 11:30 am

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Indian share markets have remained in red during the previous two hours of trade with metals and consumer durables trading in green. BSE PSU and Auto are facing the maximum selling pressures.

The BSE-Sensex is down by 45 points and NSE-Nifty is down by 11 points. That said, BSE Mid Cap is up by 0.6% and BSE Small Cap is up by 0.5%. The rupee is trading at 58.75 to the US dollar.

Almost all Finance sector shares are trading in green barring few with Mahindra Finance and JM Financial leading the gains and Edelweiss Financial and ICRA Ltd are facing the maximum selling pressures. According to a leading news medium, IDFC Limited, infrastructure financing company has its board approved for obtaining a banking license from the Reserve Bank of India (RBI). Guidelines for licenses of new banks in the private sector issued on February 22nd and thereafter associated clarifications issued on June 3rd this calendar year would form the basis for decision. In this backdrop, RBI recently mentioned that the entities getting licenses to open new banks will be given 18 months to open branches against 12 months prescribed earlier. Also, the promoters would have to transfer their holdings to the non-operative financial holding company (NOFHC) in a stipulated period. IDFC, in particular, stands as one of the best poised institutions in the financial sector, with highest capital adequacy and high operating efficiency. Moreover, the management has indicated their willingness on compliance with regulatory requirements to form a banking entity. Overall it is best placed in the entire gamut of financial services and hence proves as a strong contender for a banking license. IDFC Limited's share is up by 1.8%.

All of the Telecom shares are trading in green with ADC India Comm and Tata Teleservcies leading the gains. According to leading financial news daily, Bharti Airtel, the telecom service provider has allotted around 200 mn shares to Doha-based Qatar Foundation Endowment (QFE) for an aggregate consideration of around Rs 68 bn on preferential basis. The stake sale to QFE comes in the light of plans of Bharti AIrtel to strengthen its capital structure and fund future growth. This will have a positive impact in the coming months. The company has had a net debt of Rs 638 bn as on March 31st, 2013. In a filing to BSE, the company has stated that the Bharti Telecom's stake in the company has increased to 45.81% post the purchase from 45.77%. While the sectoral headwinds are expected to gradually clear up in the long term, Bharti Airtel is best poised to reap returns in the event of consolidation in the Indian telecom markets. Bharti Airtel's share is up by 1.4%.