As regards global markets, Asian indices closed on a mixed note today, with the Hong Kong and Japanese markets posting gains. The rupee was trading at Rs 60.42 to the dollar at the time of writing.
Banking stocks have ended the day on a weak note. Dhanlaxmi Bank and Karnataka Bank closed the day with the biggest declines . As per a leading business daily, deposit growth at Indian banks has picked up pace. This comes on the back of two consecutive months of subdued deposit growth. Bank deposits rose almost 14% YoY in the fortnight to 8th August. One of the reasons for this is that investments in debt mutual fund products flowed to deposits as the government changed the taxation structure on the former in the Union Budget gone by. A strong deposit growth may help banks lower their deposit rates. This may further lead to lower lending rates too. A lowering of deposit rates also lead to lower cost of funds for banks.
Energy stocks too ended the day on a weak note. Hindustan Petroleum Corporation Limited (HPCL) and Indian Oil Corporation Limited (IOC) were among the losers today, while ONGC ended the day on a positive note. As per a leading business daily, IOC's Paradip refinery could take almost a decade to breakeven due to a substantial escalation in project costs. This project has been long delayed and is finally slated to be commissioned by the end of 2014. It is expected to produce 110 m barrels per annum when operating at its peak capacity. Note that a refinery usually takes 4 to 5 years to break even, and IOC could take almost twice the amount of time to break even on this project due to the delay.