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After opening the day on a positive note, the Indian indices registered losses and went on to trade near the dotted line. Sectoral indices are trading on a negative note with stocks from the telecom and consumer durables sector witnessing maximum selling pressure.
The BSE Sensex is trading down 30 points (down 0.1%) and the NSE Nifty is trading down 8 points (down 0.1%). The BSE Mid Cap index is trading flat and the BSE Small Cap index is trading up 0.2%. The rupee is trading at 66.93 to the US$.
As per a leading financial daily, Finance Minister Arun Jaitley is going to hold a quarterly performance review of public sector banks (PSBs) today. The review will be held with heads of PSBs and Financial Institutions and is undertaken against the backdrop of mounting bad loans and record losses of public sector banks.
The Finance Ministry said in a statement that there will be review of the overall performance of PSBs during the financial year 2015-16 as well as with regard to the flow of credit to agriculture, insurance and MSE sectors among others.
The meeting will also take stock of the performance of PSBs with regard to the new projects and proposals, stalled projects and possible remedial measures among others.
All of this bears importance as many PSBs have posted record losses in the fourth quarter of FY16 on the back of rising bad loans. The issue of rising bad loans has made Prime Minister Narendra Modi repairing bank balance sheets his administration's top-most priority. Also earlier, in April, the Supreme Court had asked the government to overhaul the banking system to prevent bad loans and hasten recovery from defaulting borrowers to reduce the NPA levels. Tanushree Banerjee, co-head of research at Equitymaster, has stated how banks have accumulated NPAs worth billions of rupees in one of the editions of The Equitymaster Research Digest (subscription required).
In our recent edition of The 5 Minute WrapUp we have discussed how debt is the common thread between most of India's economic problems.
Moving on to the news from commodity space. Crude oil is witnessing buying interest today. At the time of writing crude oil was trading at Rs 3,286 per barrel, up by around 1%. This is seen as marketmen increased their positions in the commodity after tracking positive cues from the Asian markets.
These gains are followed by losses witnessed during last week after the much-awaited OPEC meet went off with no decision on the freeze of crude supplies.
The Organization of the Petroleum Exporting Countries (OPEC) members failed to change the oil output policy at the meeting scheduled in Vienna last week. This came as Iran insisted on steeply raising its production. This was seen as yet another failure by oil producers after they failed to agree on a production cap during the summit in Doha earlier in April. However, some respite was found as Saudi Arabia promised not to flood the market and sought to mend fences within OPEC. Also, Saudi Arabia's oil minister stated that oil prices have recovered and will continue to.The failure of the meet could lead to an increase in crude oil supplies and weigh on prices, which only recently touched their 2016 highs.
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