Indian stock market
indices have been trading strong on back of buying interest in index heavyweights during the previous two hours of trade. All sectoral indices are trading in the green led by FMCG
The BSE-Sensex is up by 173 points while NSE-Nifty is trading 55 points above yesterday's closing. BSE Midcap and BSE Small cap
indices are up by 0.9% and 1% respectively. The rupee is trading at 44.41 to the US dollar.
IT stocks are trading firm led by Crane Software and Mastek. As per a leading daily, India's largest lender SBI is taking a tough stance on defaulters who can pay, but won't. The leading bank has taken this stand because of rising bad loans and defaulters. SBI had Rs 253 bn of bad loans at the end of last year which is the highest in the industry. Its NPAs (non performing assets) constituted 3.28% of its total assets which post provisioning stands at 1.63%. SBI has decided to mark willful defaulters out of its list of borrowers.
As per RBI, a willful defaulter is a person or entity that has defaulted in meeting its payment/ repayment obligations to the lender even when it has the capacity to honour the said obligations. Also, an entity that does not use the borrowed money for the specific purpose but for others is a willful defaulter. An entity that has siphoned off funds or has removed the fixed assets or property given by it for the purpose of securing a term loan without informing the lender is also termed as a willful defaulter. After being declared a willful defaulter, an entity and all its affiliates are prevented from borrowing money from any financial institution.
Auto stocks are trading firm led by Escorts and M&M. As per a leading financial daily, Tata Nano is set to make inroads into the rural and semi-urban parts of the country. Tata Motors to achieve this aims to launch 300 new dedicated sales outlets this fiscal year in the rural and semi urban markets. This increase in distribution reach combined with new export markets of Sri Lanka and Nepal is expected to help pick up sales for the car. It may be noted that sales of Nano fell to 5,451 units per month in June from 10,012 units sold in April. As per a company spokesperson, sales of Nano are expected to normalize soon. The dip has been due to slowdown generally seen during the monsoon months and increasing fuel prices and interest rates.