Despite the volatile session, Indian stock markets continued to trade on a higher note during the previous two hours of trade led by continuous buying among the index heavyweights. Most sectoral indices are trading higher led by stocks from the software and capital goods space. FMCG stocks are the only losers.
The BSE-Sensex is trading up by 150 points and the NSE-Nifty is trading up by 41 points. The BSE Mid Cap index is trading up by 0.9% and the BSE Small Cap index is trading up 0.6% today. The rupee is trading at 60.54 to the US dollar.
As per the Reserve Bank of India (RBI), the capital adequacy ratio (CAR) of Indian banks fell to 13% as of March 2014 compared with 13.88% as of March 2013. Mounting non-performing assets is putting stress on the balance sheet of banks and pulling down their profitability. The CAR for banks has reached levels that were same as after the eruption of the global financial crisis. The CAR of banks was 13.01% as of March 2008. Public sector banks have been among the worst performers with the lowest CAR of 11.2% as compared to private sector banks that saw a CAR of 13.1% as of March 2014.Moreover public sector banks have piled on restructured assets that account for 92% of the banking sector's total restructured advances. Additionally state-run banks would require Rs 2.4 trillion of equity capital by 2018 to comply with Basel-III norms. The woes of public sector banks have been further aggravated by the fact that the government is yet to allocate funds for capital infusion in FY15. These banks are now contemplating to raise funds from qualified institutional placement or follow-on public offers.
Auto stocks are trading on a mixed note today. While Escorts is trading higher, Bajaj Auto and Hero MotoCorporation are trading a weak note. As per a leading business daily, Tata Motors has received order for 2,700 urban buses under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) II scheme. The company will supply Tata Marcopolo buses which are urban built specified as under the JNNURM schemes. The order reinforces Tata Motors position as a leading partner to state transport corporations. The order includes 487 buses to be supplied to Karnataka State Road Transport Corporation and 780 buses to be supplied to Himachal Road Transport Corporation. The company is commited to support the buses with its large service network of 1800 plus authorized centers. Over 60,000 Marcopolo buses are already plying across the country. And it is also marketed in focused global markets. Tata Motors scrip is trading up by 1.4% today.