A strong end to the week

Fri, 28 Nov Closing

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While Indian stocks did pare some of the gains towards the end of today's trading session, they still ended comfortably above yesterday's closing levels. The BSE-Sensex closed higher by about 255 points or 0.9%, while the NSE-Nifty closed higher by 94 points or 1.1%. Barring stocks from the information technology space, buying activity was seen across the board with banking and automobile stocks being the top gainers. Midcaps and smallcaps ended the day on a firm note as well with the BSE Mid Cap and BSE Small Cap indices closing higher by about 1% and 0.3 respectively.

Stock markets in other parts of Asia ended in the green, while European stocks were trading weak at the time of writing. The rupee was trading at Rs 61.97 to the dollar at the time of writing.

Stocks of public sector banks ended the day on a firm note led by PNB, Canara Bank and Bank of Baroda. As per the junior Finance Minster, public sector banks are likely to be impacted by US$ 15.6 bn or nearly Rs 960 bn, due to the scrapping of coal permits given to companies. As per him, the overall bad loans of the state level banks stood at bad about 5.32% of the total loans as of September 2014. On the other hand, the same figure for private sector banks stood at about 2.04%. However, when it comes to exposure to the coal sector, the scenario seems relatively better. Bad loans of state banks in coal industry stood at 0.23% as of September 2014, while that for private banks it was 0.22%. It may be noted that the lenders' overall exposure to the power and steel sector - sectors which have also been impacted by this verdict - stands at around Rs 7.7 trillion. These sectors, facing tough times due to poor fuel and raw material supply, are already a major cause of stressed assets on the lending books of the banks.

As reported by the Business Standard, India's fiscal deficit stood at about Rs 4.8 trillion at the end of October 2014. This stands at about 90% of the full year's target of 5.3 trillion. During the same seven months period last year, the figure stood at about 85% of the full year target. Net tax revenues for the period stood at Rs 3.7 trillion which is about 38% of the full year's target, while non-tax revenues stood at Rs 1.1 trillion which has a little over half of the full year target. The non debt capital receipts stood at Rs 62 bn, which is about 9% of the full year target. This is however the case due to no disinvestment occurring in the year so far. It may be noted that the Modi government has committed to bring down the fiscal deficit of 4.5% of GDP in FY14, to 3.6% and 3% of GDP in FY16 and FY17 respectively. The FM stated that the reduction in deficit over the last couple of years was largely a product of reduction in expenditure rather than increase in revenues.