The Indian equity markets continued to trade below the dotted line during the post noon trading session. Stocks from the healthcare, FMCG and Capital goods spaces are amongst the top under performers, while those from the realty and consumer durables spaces are amongst the top gainers.
The Sensex today is trading lower by about 15 points (down 0.1%), while NSE- Nifty is trading lower by about 5 points (down 0.1%). Stocks from the midcap and small spaces are however trading higher with the BSE Mid Cap and the BSE Small Cap indices up by 0.2% and 0.4% respectively. The rupee is trading at 54.65 to the US dollar.
Banking stocks are currently trading firm led by Punjab National Bank, Bank of India and IDBI Bank. As per a leading financial daily, the Reserve Bank of India (RBI) has deferred the date of implementation of the Basel III norms by three months from the earlier date of January 1, 2013 to April 1, 2013. This development is likely to provide banks with additional time in shoring up their capital bases in line with global capital norms for banks. The Basel III norms were to be implemented in a phased manner from January 1, 2013 with full implementation by March 2018. The RBI has said that it will closely monitor the progress of Basel III capital regulations in the major countries like Australia , Canada, China , Japan, European Union and the US that are members of the Basel Committee. According to the new global capital norms, banks will have to hold core capital of at least 7% of their risk-weighted assets by 2018. RBI has said that the Indian banking system will require additional capital of Rs 5,000 bn to meet the Basel III norms out of which Rs 1,750 bn will be financed through equity capital. Reportedly, the government with a 70% ownership in the Indian banking system will have to infuse Rs 900 bn to retain its shareholding in the public sector banks.
India's fiscal deficit for the April to November 2012 period stood at Rs 4.1 trillion. This figure is a little over 80% of what was anticipated at the start of the year. The budgeted fiscal deficit was budgeted to be Rs 5.14 trillion or 5.1% of the country's GDP for the year ended March 2013. The latter has been however been revised to 5.3%. The net tax receipts stood at Rs 3.7 trillion, while the total expenditure stood at Rs 8.7 trillion. Finance Minister P Chidambaram recently stated that tough decisions need to be taken in order to bring the fiscal deficit to more comfortable levels. These include controlling expenditure and augmenting resources. As per the FM, the three year target is to bring down the deficit level to about 3% (of GDP).