Indian stock market indices continued to trade firm over the last two hours of trade on the back of sustained buying activity across index heavyweights. Stocks across sectors are trading in the green except for Auto. IT stocks are witnessing maximum buying interest.
Banking stocks are trading strong. Indian Overseas Bank and Central Bank are the biggest gainers. According to a leading financial daily, Government of India is planning to infuse Rs 30 to 45 bn in State Bank of India (SBI) by March end. This will enable the bank to achieve 8% capital adequacy norm. Currently SBI needs Rs 120 bn to achieve 8% capital adequacy. Internal accruals will be around Rs 75 to 90 bn, so the rest will need to be funded by the government. The government has also said that SBI may not go for rights issue or public issue as the market conditions are not good for raising money. It must be noted that SBI had raised Rs 160 bn through rights issue in 2008. The government's contribution at that time was in the form of bonds instead of cash.
Power stocks are trading in the green. Jaiprakash Power and Reliance Infra are the biggest gainers while Power Grid Corporation and Reliance Power are biggest losers. According to a leading financial daily, state run Power Grid Corporation of India is planning to enter the power transmission business in Sri Lanka and Bangladesh by setting up joint ventures with local partners. The company is planning to set up an interlink between India and Sri Lanka similar on the lines of the interlink between India and Bangladesh. The company wants to enter these markets through the public - private partnership route and set up joint ventures. Power Grid will take a stake in joint ventures and put in equity which will make it easy for the joint venture to raise loans. The company is also setting up a 250 mega watt (MW) grid interconnection for power transmission between India and Bangladesh. It is also in talks to set up a link for 1,000 MW grid interconnection between India and Sri Lanka of which 30 km will be under the sea.