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Indian Stock Market News, Equity Market and Sensex Today in India | Equitymaster
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Heavyweights drag Indian indices lower 
(Mon, 13 Jun 09:30 am) 
 
All major Asian stock markets have opened the day in the red. Stock markets in China (down 1.1%), Hong Kong (down 0.8%) and Japan (down 0.8%) are leading the losses. The Indian stock markets have also opened the day with marginal gains. Stocks in the oil & gas and realty space are leading the pack of losers.

The BSE-Sensex is trading lower by around 75 points (0.4%), while the NSE-Nifty is trading down by about 27 points (0.5%). While midcap stocks are trading in the negative as well with the BSE Midcap index down by 0.2%, the BSE Small cap index is trading flat. The rupee is trading at 44.88 to the US dollar.

Bank stocks have opened the day on a weak note with IndusInd Bank, Axis Bank and Yes Bank leading the losses. According to RBI's prudential credit norms, a bank cannot grant loans more than 15% of its capital funds to a single borrower. Nevertheless, in certain exceptional cases the banks can exceed the limits by 5% with prior approval of their boards. Leading banks such as ICICI Bank and SBI had both breached the lending limit during the financial year 2010-11. However, the banks brought down their loan exposures within the prudential limits as on 31st March, 2011. It is important to note that the lender in the both the cases was Mukesh Ambani-led Reliance Industries (RIL). Of RIL's total outstanding debt of about Rs 674 bn as on year ended March 2011, 10% of the borrowings are estimated to from SBI and ICICI Bank.

Oil & Gas stocks have opened the day on a weak note with Reliance Industries and ONGC trading in the red. Indian Oil Corporation (IOC) and Oil India Ltd will most likely shut its Mauritius-based special purpose entity floated with a motive of acquiring oil and gas acreages outside India. The reason for the same is that there remains no utility from the same. The entity, Ind-Oil Overseas Ltd, was supposed to look for assets in the African and the CIS region. This is a 50-50 JV and was set up in 2008. This company is set out in Mauritius to use the tax advantage that the country enjoys. But from the time of registration, the company has not acquired any asset. While the stock IOC is trading in the green, Oil India is facing selling pressure.

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