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Metal, banking stocks lead markets
Fri, 7 Oct 01:30 pm

The Indian stock market continued to trade firm on account of strong buying interest in heavyweights. All sectoral indices are trading in the green. Stocks from the metal, banking, realty, consumer durables and software space are leading the pack of gainers.

The BSE-Sensex is trading up by 443 points while NSE-Nifty is trading 138 points above wednesday's closing. The BSE Mid Cap and BSE Small Cap Cap indices are trading up by 1.3% each. The rupee is trading at 49.19 to the US dollar.

Banking stocks have been trading firm with IDBI Bank, Syndicate Bank, Allahabad Bank and Indian Overseas Bank leading the pack of gainers. As per a leading financial daily, banks would not be able to achieve the revised target of 18% credit growth for the current financial year set by Reserve Bank of India (RBI). RBI had already lowered the target from 19% to 18% in its first quarter review in the month of July. In the light of the downward revisions of country's Gross Domestic Product (GDP) growth rates, industry experts are estimating a credit growth of around 16% with downward bias. According to the data released by RBI, bank credit has witnessed a growth of just 3.92% in the first six months of the current fiscal year. Banking officials are also saying that in the current economic scenario, it is difficult to achieve the earlier set target of credit growth. However, according to some banks such as IDBI, they are keeping lower credit growth target as a part of their strategy. They want to focus more on current account and savings account.

One of the biggest reasons for the slower credit growth is being attributed to shifting of fund raising activities of the corporate from banks to private placement of bonds. Since bank interest rates are high, corporate are looking for cheaper source of funds.

Energy stocks have been trading mixed with Reliance Industries Ltd (RIL), Essar Oil, and Mangalore Refinery and Petrochemicals Ltd (MRPL) leading the pack of gainers. However, Petronet LNG and Gujarat State Petronet are trading weak. As per a leading financial daily, RIL would continue to supply natural gas to four fertilizers plants in Uttar Pradesh. The company had recently served a notice to the plants of Indo Gulf Fertiliser, Indian Farmers Fertiliser Co-operative Limited (IFFCO), Kribhco Shyam Fertilisers and Tata Chemical for the suspension of gas supplies from today. However, now the company is saying that it would work out with these companies to resolve the issues providing financial guarantees in form of letter of credits to cover for liability arising from levy of local sales tax on gas sales. RIL has withdrawn the suspension notice after getting assurances from Director General, Fertiliser Association of India that the matter would be resolves soon. However, RIL has retained the right to suspend the supplies without any further notice.

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Mar 21, 2018 12:37 PM