Mumbai: Prime Minister Narendra Modi’s meeting scheduled with banking and financial institution chiefs and the RBI governor Raghuram Rajan in Pune on Saturday lent sparkle to the markets as they entered the second day of the new year. He is expected to discuss ways of improving the asset quality and efficiency of lenders and to revive the economy. Over 100 bankers and experts held extensive discussions in Pune on Friday at the bankers‘ retreat called ‘Gyan Sangam’ to draw a reform blueprint to be presented to Mr Modi on Saturday.
The bankers have deliberated on rising NPAs and low credit offtake among other issues, which if solved would give a major impetus to the economy. This hope boosted sentiments among investors. After a flat opening the Sensex zoomed 380 points to close at 27,887.90, a three-week high, whilst the Nifty closed at 8,395.45 up 11.45 points aided also by the positive sentiment created by HSBC’s manufacturing PMI that came at a 2 year high.
It was big day for the Bombay Stock Exchange too as it recorded the highest turnover in currency derivatives trading Rs10,530.53 crore (48.47 per cent), overtaking India’s premier National Stock Exchange (Rs 9,861.26 crore) within 13 months of its launch. “The success in the currency derivatives segment can be attributed to the new trading technology at BSE which offers a response time of 200 microseconds. Additionally, the exchange has the lowest transaction fees allowing investors to trade frequently,” the exchange said in a press statement on Friday.
The markets were undeterred by the excise duty on cars and petrol. SMC Research said “finance minister Arun Jaitley saw this as an opportunity to balance wealth flow and to allocate consumption from present to future. An increase in excise duty on cars and petroleum signalled a strong confidence by the government and made clear that the government is not focusing on achieving growth in numbers but strategising to achieve development by redistributing wealth and adopting technically sound and well researched measures”.
Kiran Kumar Kavikondala, director and CEO, WealthRays Securities said banking stocks delivered a stellar performance and the IT sector also led the rally on elevated currency levels whilst Rakesh Goyal, senior vice-president Bonanza Portfolio Ltd expects the markets to remain sideways and within the range of 8,100-8,550 levels in the medium term and remain sideways for the coming week.
