The major Asian stock markets have opened the day in the red on the global tensions surrounding Syria. The stock markets in Singapore (down 1.7%) and Indonesia (down 1.1%) leading the losses. However, the Indian equity markets indices have opened the day on a firm note. The sectoral indices have opened mixed with stocks in the software and healthcare leading the gains. However, stocks in the FMCG and realty are witnessing losses.
The Sensex today is up by around 75 points (0.4%), while the NSE-Nifty is up by around 24 points (0.5%). Midcap and small cap stocks have opened in the green as well with the BSE Mid Cap and BSE Small Cap indices up by around 0.3% and 0.1% respectively. The rupee is trading at Rs 68.43 to the US dollar.
Realty stocks have opened the day mainly in the red mixed note with DLF Ltd and Simplex Infra Ltd leading the losses. In a move to shield banks and home loan borrowers from risk, the Reserve Bank of India (RBI) has raised a red flag on 20:80 home loan schemes. RBI has asked banks to disburse home loans as per the stages of construction instead of lump sum disbursals to limit the risk of fallout of such housing finance schemes. The innovative schemes popularly known as 80:20 or 75:25 schemes, the interest or equal monthly installments are taken care of by the builder on housing loans availed by the borrowers.The risks could be on account of disputes between borrowers and builders, delayed or non-payment by the builder or delay in project completion. Even in cases when the default is done by builders, the credit rating or scoring of the borrower may take a hit by credit information companies. Also, such schemes expose banks to very high risks including the risk of fund diversion. Hence, RBI has come up with a notification that there should be no upfront disbursal in case of incomplete and green field housing projects.
Cement stocks have opened the day on a mixed note with JK Lakshmi Cement and Heidelberg Cement leading the losses. However, Prism Cement and Madras Cement were trading firm. As per a leading financial daily, the cement major ACC Ltd is planning to invest Rs 30 bn to expand its capacity from 6 million tonnes per annum (mtpa) to 10 mtpa in the three eastern region States in the next three years. As per the management, the plans are ready to expand capacities at existing plans - Jamul in Chhattisgarh and Sindri in Jharkhand. Further, ACC expects to start construction of a 1.5-MT grinding unit at Kharagpur by next January 2014. The latter is likely to entail an investment of Rs 6 bn. The management has approached state Government for acquisition of around 150 acres for the proposed project. The expansion projects are likely to be financed through internal accruals.