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RBI is planning to set up a committee to look into the issue of facilitating the development of fixed rate loan products in the banking system
Mumbai: The Reserve Bank of India (RBI) is planning to set up a committee to look into the issue of facilitating the development of fixed rate loan products in the banking system, RBI deputy governor, Anand Sinha said, reports PTI.
“We will set up a committee soon to facilitate the development of fixed rate loan products in the market, which are presently absent in the system,” Mr Sinha told reporters on the sidelines of an Assocham event.
Explaining the rationale behind the move, he said it is the question of market development as consumer should get a range of products to make a choice.
In its last credit policy review in April, the central bank had announced to set up a committee to look into the issue.
Referring to the issue of hedging, Mr Sinha said the central bank has asked banks to have a board mandated hedging policy to protect corporate clients from currency fluctuations.
“We know that the corporates take a view on the exchange rate movement based on the currency movement and then decide whether to hedge or not to hedge. Point is that if we are looking for a safer system then we will have to gear up on our hedging in a better way...,” Mr Sinha said.
He also said the central bank doesn't have any fixed level for rupee and will only intervene to check excess volatility.
“RBI doesn't look for a fixed level of rupee. We will only intervene if there is excess volatility,” he said adding that it is closely watching the liquidity situation.
Presently, banks are borrowing around Rs1 lakh crore from the liquid adjustment facility (LAF) route, which is above RBI's comfort level of around Rs60,000 crore.
Nifty’s resistance is at around 5,370-5400
The market, which saw a flat opening, traded in the positive for the entire session on hopes of a stimulus from the US Fed on the back of weak growth in the world's largest economy in the first three months of 2012. We had mentioned in our Friday's closing report that Monday's move may decide future short-term direction, which may be up. Today the Nifty closed near to its 20-day moving average of 5,254. A higher high may result in the index hitting its first resistance at 5,400. The National Stock Exchange (NSE) saw a volume of the 53.74 crore shares, which was the lowest in the past 11trading days (including today).
The market witnessed a flat opening as FII outflows from the equities segment in the current month weighed investors. The Nifty opened eight points lower at 5,201 while the Sensex added nine points to its previous close to resume trade at 17,176. The opening figures on both benchmarks were their intraday lows.
The indices soon headed higher on institutional buying support and a firm trend in the Asian markets. Inching its way up, the market hit its intraday high at noon. At this point, the Nifty touched 5,262 and the Sensex rose to 17,359.
Demand for IT and technology stocks enabled the benchmarks retain their momentum in the post-noon session on hopes of a new stimulus by the US Federal Reverse on the back of a sagging economy.
The market settled in the green with the Nifty gaining 39 points at 5,248 and the Sensex closed trade at 17,319, a gain of 131 points.
The Indian market will be closed on Tuesday for the May Day holiday.
The advance-decline ratio on the NSE was 827:610.
Among the broader indices, the BSE Mid-cap index 0.69% and the BSE Small-cap index rose 0.57%.
The top sectoral gainers were BSE IT (up 2.37%); BSE TECk (up 1.93%); BSE Oil & Gas (up 1.05%); BSE Realty (up 1.04%) and BSE Metal (up 0.89%). The losers were BSE Consumer Durables (down 0.66%) and BSE Fast Moving Consumer Goods (down 0.27%).
The Sensex was led by TCS (up 3.49%); Jindal Steel (up 3.41%); Infosys (up 2.75%); DLF (up 2.61%) and Hero MotoCorp (up 2.35%). The main laggards were Maruti Suzuki (down 1.95%); BHEL (down 1.94%); Mahindra & Mahindra (down 0.64%); ITC (down 0.61%) and HDFC (down 0.50%).
The top gainers on the Nifty were TCS (up 4.01%); Jindal Steel (up 3.67%); Power Grid Corporation (up 3.04%); DLF (up 2.83%) and Infosys (up 2.63%). The key losers on the index were BHEL (down 2.31%); Maruti Suzuki (down 1.66%); Axis Bank (down 1.34%); Dr Reddy's (down 1.31%) and Asian Paints (down 1.04%).
Markets in Asia closed mostly in the green as weak US economic data gave rise to speculations that the Federal Reserve might announce some stimulus initiatives in the near future. Meanwhile, South Korea's industrial output fell a seasonally adjusted 3.1% in March from February, hurting prospects for a turnaround in Asia's fourth-largest economy. Volumes across the region were lower as markets in Japan and China remained closed.
The Hang Seng surged 1.70%; the Jakarta Composite gained 0.40%; the KLSE Composite rose 0.18%; the KOSPI Composite climbed 0.34% and the Taiwan Weighted closed 0.28% higher. On the other hand, the Straits Times shed 0.10%. At the time of writing, two of the three key European bourses were trading lower and the US stock futures were in the red.
Back home, foreign institutional investors were net buyers of shares totalling Rs6.17 crore on Saturday while domestic institutional investors were net sellers of equities amounting to Rs10.68 crore.
Future Group today announced the intent to execute a full demerger of Pantaloons retail format from Pantaloon Retail India. The demerger, subject to necessary and statutory approvals, will invite an investment from Aditya Birla Nuvo. The latter will subscribe to debentures amounting to Rs800 crore issued by Pantaloons Retail. Pantaloon Retail jumped 8.36% to close at Rs186 on the NSE.
Alstom T&D India has bagged a contract worth Rs84 crore from Chhattisgarh State Power Transmission Company (CSPTCL) for the erection, testing and commissioning of a 400 kV substation at Jagdalpur in the state of Chhattisgarh. The stock declined 0.91% to close at Rs158.55 on the NSE.
Government-owned trading major MMTC is planning to sign iron ore supply contracts with five Japanese companies and one South Korean company including Posco. The supply contract will be for a period of three years and shipments are expected to start from July this year.
As per the deals, the state-owned unit will supply 3 million tonne (MT) of iron ore per annum to five Japanese companies including Nippon Steel Corporation, JFE Steel Corporation and Nisshin Steel. Besides, MMTC will supply 1 MT of iron ore yearly to South Korean major Posco. The stock climbed 5.68% to close at Rs784 on the NSE.