Barring Indonesia (down 1.0%), the major Asian stock markets have opened the day on a positive note with the stock markets in Hong Kong (up 0.5%) and Japan (up 1.3%) leading the gains. The Indian share markets have opened the day on a firm note as well. All sectoral indices have opened in the green with the stocks in the banking and metal sector leading the gains.
The Sensex today is up by around 136 points (0.6%), while the NSE-Nifty is up by about 40 points (0.6%). The mid and small cap stocks have also opened in the green with the BSE Mid Cap and BSE Small Cap indices up by around 0.6% each. The rupee is currently trading at Rs 60.98 to the US dollar.
PSU Banking stocks have opened on a positive note with United bank of India and Corporation Bank leading the gains. As per a leading financial daily, the country's largest lender State Bank of India (SBI) will be offloading around Rs 50 bn of its Rs 678 bn bad assets to asset reconstruction companies (ARCs) before the end of the month. Such a step has never been taken by the bank in its history of over two centuries. It is to be noted that SBI had reported 5.73% of its assets as bad loans in the December quarter. The move comes ahead of the stricter provisioning norms that will kick in from next April, that the central bank had announced in May last year when the provisioning for restructured loans was doubled to 5% from 2%. Generally, ARCs pay 5-10% of the total bad loans being bought in cash and the rest could be security receipts (SRs).
Mining stocks have opened the day on a positive note with Sesa Sterlite Ltd and Coal India Ltd leading the gains. As per a leading financial daily, Coal India Ltd (CIL), the country's largest mining company is likely to miss its production target for the current fiscal year (FY14) by about 12 million tonnes (MT). The company is struggling to achieve at least 470 MT of output against a fixed target of 482 MT for financial year 2013-14. The management has suggested that it may achieve an output of only 470 MT for FY14 as a number of factors including delays in securing clearances to projects, infrastructure problems, strike, cyclone Phailin and problems in evacuation etc have resulted in lower output. The management has stated that given the circumstances, CIL can increase annual growth to only 30 MT for the next few years.