Indian share markets pare gains

Tue, 31 Dec 01:30 pm

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Indian share markets pared gains but continued to trade above the dotted line in the post-noon trading session. Majority of the sectoral indices are trading in the green with power, oil and gas and consumer durables stocks being the biggest gainers. Banking, FMCG and metal are among the few stocks trading in the red.

BSE-Sensex is up 27 points and NSE-Nifty is trading 10 points up. BSE Mid Cap is trading up 0.4% and BSE Small Cap index is trading up 0.3%. The rupee is trading at 61.8 to the US dollar.

Majority of the public sector banking stocks are trading in the green with Oriental Bank and Canara bank being among the major gainers whereas Dena Bank and State Bank of India (SBI) are among the few stocks trading in the red. As per a leading financial daily, Reserve bank of India has permitted banks to lend upto Rs 1 lakh against collateral of gold jewellery. In such loans, the lending period should not be more than a year and interest chargeable monthly will become due for payment along with principal at the time of maturity. As per RBI guidelines, banks should prescribe a minimum margin to be maintained on these loans and accordingly fix the loan limit by factoring the market value, price volatility and the interest income to be earned during the tenure of the loan. Such an account would be classified as non-performing if the prescribed margin is not maintained. RBI had in May 2013 imposed restrictions on banks and non-banking financial companies in extending loans against gold coins,gold ETF's and mutual funds.

Most of the energy stocks are trading firm with Chennai Petroleum and Mangalore Refinery and Petrochemicals (MRPL) leading among gainers. As per a leading financial daily, Gas Authority Of India Ltd. (GAIL) India has received environmental approval for setting up a 220 MW gas based power plant. The State Level Environment Impact Assessment Authority of Maharashtra has given clearance to GAIL's gas based power project at Raigad in Maharashtra. The project is expected to cost about Rs 10.3 bn and electricity generated will be sold to Maharashtra's state electricity board. The project would be located at the GAIL's existing LPG recovery plant at Raigad and would use natural gas or imported LNG as its fuel. It may be noted that, GAIL has earlier appointed consultant for detailed feasibility report for the project. And as per the study, the proposed project would require about 1 million standard cubic meters per day of natural gas to generate 220 MW of electricity. Currently, the stock of GAIL is trading weak.