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After a robust start, the Indian Markets have continued to trade positively. Sectoral indices are trading on a mixed note with pharma and metal stocks leading the gains. However banking stocks are witnessing selling pressure.
The BSE-Sensex is trading up 200 points (up 0.8%) and the NSE-Nifty is trading up 51 points (up 0.7%). The S&P BSE Midcap index and the S&P BSE Smallcap index are also trading firm, both up by about 0.9%. The rupee is trading at 65.75 to the US$.
Stocks in the steel sector are trading on an encouraging note with Tayo Rolls and Tata Steel leading the gainers. As per an article in Economic Times, domestic steel producers are expected to increase prices by up to Rs 1,500 per tonne in order to take advantage of the hike in the safeguard duty. The government had, earlier this month, imposed a provisional safeguard duty of 20% on imports of certain hot rolled fat steel products with a view to protect domestic producers. As reported, government spending on public projects coupled with the industrial activity is expected to pick up in the second half of this fiscal. These factors along with a depreciating rupee against the US$ could provide a good opportunity to the steel producers to raise prices. This would help them by improve their realizations. In all, a stabilizing impact on domestic prices and demand-supply equation could be on the cards.
As per a leading financial daily, the Reserve Bank of India (RBI) has allowed companies to raise up to Rs US$ 750 million from overseas markets under the automatic route, through rupee-denominated bonds. With this announcement on Tuesday, the banking regulator has also allowed Real Estate Investment Trusts (REITs) and Infrastructure Investment Trusts (IITs) to raise funds under this route. The proceeds from these, as stated by the RBI, can be used for all purposes except for equity investments domestically, real estate activities other than for development of integrated township or affordable housing projects. These bonds will come with a minimum maturity period of five years. This could help some realty players ease their liquidity position.
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