No Respite for Indian Indices

Fri, 13 Nov Closing

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Indian equity markets languished in the red throughout the trading session today on heavy selling by funds and retail investors in capital goods, auto and FMCG stocks amid weak global cues. While the BSE-Sensex closed lower by 257 points, the NSE-Nifty closed lower by 63 points. Both the BSE Mid Cap and the BSE Small Cap closed on a negative note as well losing 1.4% and 0.8% respectively. However, metal and consumer durable sectors managed to finish with moderate gains.

Asian markets finished broadly lower today with shares in Hong Kong leading the region. The Hang Seng is down 2.15%, while China's Shanghai Composite is off 1.43% and Japan's Nikkei 225 is lower by 0.51%. European markets are lower today with shares in London down the most. The FTSE 100 is down 0.48%, while France's CAC 40 is off 0.25% and Germany's DAX is lower by 0.20%. The rupee was trading at 66.14 against the US$ in the afternoon session.

According to a leading financial daily, Yes Bank and London Stock Exchange Group (LSEG) have signed a memorandum of understanding (MoU) to foster the development around bond and equity issuance, with a strong focus on Green Infrastructure Finance. The MoU was signed on November 12 in London.

Reportedly, Yes Bank is planning to list a Green Bond of up to £330 million through MTNs on the London Stock Exchange by December 2016. The bank also intends to raise further capital in London potentially through the listing of Global Depository Receipt (GDR) as part of its overall £650 million of equity capital raising plans.

Public sector banks have been facing a lot of traction in recent times. The non-performing asset (NPA) to loan ratio has increased, which is an indication that their asset quality has deteriorated and many banks do not have enough assets to support growth. The average tier I capital of public sector banks is less than 8%. While this is more than 6% tier I capital that banks are required to maintain under current norms, it is very close to the 7% tier I capital that banks will have to maintain under the Basel III norms, which need to be fully implemented by March 31, 2018. In one of our recent editions of '5 Minute Wrap Up', we have talked about the banks which have outperformed the Indian benchmark and what is expected of the public sector banks going forward.

HCL Technologies (HCL) and IBM Corp have reportedly entered into a strategic partnership to jointly build hybrid cloud solutions to help enterprises drive their digital transformations. HCL will use Bluemix, IBM's Cloud platform to build applications and solutions in the areas of Unified Service Management and Internet of Things (IoT). The IoT solutions will enable clients to collect and exchange data from a network of physical objects embedded with electronics, software, sensors, and connectivity.

HCL will also use IBM Cloud's Infrastructure as a Service (IaaS), SoftLayer, to offer cloud-based solutions to its clients. The scrip of HCL Technologies finished the trading day on a negative note (down 1.9%) on the BSE.