The major Asian equity markets have opened the session on a positive note with markets in Singapore (up 1%) and Japan (up 0.4%) leading the gains. However, US and European stock markets closed their session on a negative note. The rupee is trading at 63.97 per US dollar.
After trading on a negative note for couple of days, Indian markets today have picked up their pace and rushed forward into the green. BSE Sensex is trading up by 241 points (up 1%) and NSE-Nifty is trading up by 66 points (up 0.8%). BSE Mid Cap and BSE Small Cap index indices are also trading in the green, up by 1% and 0.8% respectively. Most of the sectoral indices are trading on a positive note with engineering and banking leading the gains.
The Reserve Bank has recently proposed that Indian corporates eligible for raising external commercial borrowings (ECBs) could also raise funds overseas by issuing Rupee linked bonds. The move is likely to open another window for cheaper resources. The corporate that are currently allowed to access ECB under the approval route, will require prior permission of the RBI to issue such bonds. The corporate that come under the automatic route however can do so without prior permission of the RBI. The bonds may be floated in any jurisdiction that is Financial Action Task Force (FATF) compliant. The subscription, coupon payments and redemption may be settled in foreign currency. End use restrictions will be as applicable under the extant ECB guidelines. For US dollar to Indian rupee conversion, RBI's reference rate on date of issue will be applicable. The RBI has invited comments on the draft guidelines by June 15, 2015.
Stocks in the Rating agencies sector are trading mixed. As per a leading financial daily, domestic rating agency ICRA (Investment Information and Credit Rating Agency of India Ltd) has said that non-performing assets (NPAs) in the system might surge to 5.9% this fiscal year as compared to 4.4% in FY15. This rising NPA estimate is primarily driven by a greater proportion of assets restructured in the past, slipping into NPAs again. ICRA is also estimating profitability in the banking sector, especially for state-run lenders, which will be under pressure if they are forced to pass the rate cuts by RBI to their lending rates. Stock of ICRA is currently trading in the green.