Uptrend to continue with pauses
The range-bound market saw a sharp rise in the noon session on positive news from the government. The development ensured a green close for the third straight day. We had mentioned that uptrend on the Nifty will continue to the level of 5,450, subject to dips. We maintain the stance. Today the benchmark made a higher high and a higher low and closed in the positive. The National Stock Exchange (NSE) saw a higher volume of 78.92 crore shares.
The Indian market opened flat with a mixed bias in the absence of cues from the US markets, which were closed on Wednesday for the Independence Day holiday. Investors also awaited policy decisions from the European Central Bank, which are expected later today. The Nifty opened six points down at 5,297 and the Sensex resumed trade at 17,478, up 15 points over its previous close.
The indices fell to their intraday lows in initial trade itself on profit booking tracking a mixed trend across Asia. At the lows the Nifty went back to 5,289 and the Sensex fell to 17,423. The market was range-bound amid volatile trade in subsequent trade.
Meanwhile, the rupee recovered marginally in mid-morning trade and was seen at 54.90 to a dollar, after breaching the 55 level earlier. The Indian currency had closed at 54.49 on Wednesday.
Select buying lifted the indices into the positive in late morning trade. The market witnessed a sharp rise in the in the noon session following reports quoting Mauritius foreign ministry officials that the Indian government will not take any steps which would hinder Mauritius economic interests. This apart, the finance ministry is working on a proposal to reduce the incidence of withholding tax on external commercial borrowings (ECB) to encourage Indian companies to raise funds from overseas markets.
These developments helped the market hit its intraday high in the post-noon session. At this point, the Nifty climbed to 5,331 and the Sensex surged to 17,563. The market came off the highs as investors booked profits at higher levels.
The benchmarks settled off the highs with the Nifty gaining 25 points at 5,327 and the Sensex at 17,539, up 76 points over its Friday’s close.
The Asian pack closed mixed as investors awaited the outcome of the ECB policy meeting. Analysts opine that the central bank is likely to cut rates in a bid to spur growth in the crisis-ridden continent.
The Hang Seng gained 0.50%; the KLSE Composite added 0.04%; the Straits Times climbed 0.77% and the KOSPI Composite rose 0.06%. On the other hand, the Shanghai Composite declined 0.50%; the Jakarta Composite fell by 0.15%; the Nikkei 225 slipped 0.27% and the Taiwan Weighted declined 0.47%.
At the time of writing, two of the three key European indices were in the green while the US stock futures were mixed with a negative bias.
Back home, foreign institutional investors were net buyers of shares totalling Rs239.19 crore on Wednesday while domestic institutional investors were net sellers of equities amounting to Rs161.77 crore.
There are 969 debtors who defaulted in repaying loans over Rs10 crore each, adding up to around Rs27,000 crore of the Rs1 lakh crore total defaults of nationalised banks
Thane: Over 49 lakh debtors have defaulted in repaying loans totalling more than Rs1 lakh crore from various nationalised banks in the country, an RTI query has revealed, reports PTI.
The information was provided by individual banks to Om Prakash Sharma, an RTI activist and a former National Council member of BJP.
The State Bank of India tops the list accounting for 32% of the total defaulted amount and 36.3% of the defaulters.
A compilation of the information received indicated that the debtors numbered 49.2 lakh and the defaulted amount was to the tune of Rs1.0 lakh crore.
The State Bank of India has a total of 17.9 lakh defaulters and the amount involved is Rs32,534 crores.
Punjab National Bank stands second with Rs9,632 crores in default, accounting for 0.1% of the total defaulted amount, followed by Union Bank of India where the debtors have not repaid Rs7,615 crore.
As regards the number of defaulters, Union Bank of India comes second with a total of 5.50 lakh defaulters followed by Bank of India which has 3.43 lakh defaulters.
There are six banks where the defaulted amount is between Rs3,000 and Rs4,000 crore, four banks where it is between Rs2,000 and Rs3,000 crore, seven where default is between Rs1,000 and Rs2,000 crore and three with less than Rs1,000 crore.
It was revealed that there were 969 debtors who defaulted in repaying loans over Rs10 crore each, adding up to around Rs27,000 crore.
The State Bank of India has 370 Non-Performing Assets, while Bank of India has 139 and Union Bank of India 93.
No significant reform has been passed during the current government's second term observed the report from Capital Economics
Singapore: India's economic troubles are mostly self-inflicted, resulting from policy paralysis and opposition to reforms -- a situation that is unlikely to change before the general elections in 2014, says PTI quoting a report.
"That (situation) is unlikely to change until the 2014 general elections at the earliest," said the report -- Emerging Asia Economics Update - What's Gone Wrong in India? -- by Capital Economics, a global macro-economic research consultancy.
The report expressed doubts over reforms even post-2014.
It noted that India's economic performance deteriorated sharply as GDP growth slowed to 9-year low of 5.3% in the first quarter of this year.
"We believe that growth dropped to well below 5% in Q1 on an annualised basis," it said.
A major contributor to the slowdown was the big drop in investment, which slumped to (-)1.9%, year-on-year during the latest three quarters from double-digit levels in late 2010.
Expectations of growth have also been scaled back.
The latest consensus forecasts were for 6.3% growth this year, down from 7.8% at the beginning of the year, said the consultancy monitoring global economies from its offices in Singapore, London and Toronto.
"As growth has slowed, India's twin deficits have increased. The central government budget deficit increased to 5.9% of GDP last fiscal year and the current account deficit widened to 3.7% of GDP," it noted.
Foreign reserves remain quite high, at $292 billion, but have fallen by $30 billion since August 2011.
Although wholesale price inflation has declined, it too was high, at 7.5% year-on-year.
The report said India's problems can't be blamed on the weak external environment.
While export growth has declined to 4% year-on- year in the first four months of this year, from 38% in 2011, India's economy remained far less open than most emerging Asian economies, which have not slowed as much as India.
"Given that these explanations are unconvincing, it appears that weak governance, although not new, is the most plausible explanation for the slowdown," the report said.
No significant reform has been passed during the current government's second term, which began in 2009, observed Capital Economics.
"Repeated promises to liberalise FDI in the retail, insurance and airline sectors have come to nothing. Nor has the government honoured pledges to pass legislation facilitating land acquisition and investment in mining," it said.