Most of the Asian equity markets are trading on a negative note on today. The Shanghai Composite is off 0.16% while the Hang Seng is down 0.49%. The US and European markets ended mixed after the Federal Reserve held interest rates unchanged.
Meanwhile, share markets in India have opened the day on a firm note. The BSE Sensex is trading up by 147 points while the NSE Nifty is trading up by 30 points. The BSE Mid Cap index opened up by 0.4% while BSE Small Cap index has opened the day up by 0.5%.
Barring metal stocks and energy stocks, all sectoral indices have opened the day in green with bank stocks and PSU stocks leading the gains. The rupee is trading at 64.14 to the US$.
ICICI Bank (IBN) share price surged 6.1% after the bank’s fourth quarter standalone profit jumped 188.4% (nearly 3-fold) to Rs 20.25 billion but bad loans increased sharply due to one account in cement sector.
The profit was largely driven by net interest income and lower provisions but sharp fall in other income and operating income capped growth.
BSE Bankex opened up by 1.3% with Dena Bank and Central Bank being the most active stocks in this space. In a major move by the government to tackle the rising issue of bad loans and non-performing assets (NPAs) with banks the cabinet has cleared the ordinance to resolve the issue.
As per the reports, there are different interpretations about how the ordinance could go about tackling the NPAs issue. One is that it seeks to amend the RBI Act while another is that it could amend the Banking Regulations. A proposal to amend Section 35 A of the Banking Regulation Act through the ordinance route was approved by the Cabinet on Wednesday.
The Union Cabinet approved a new framework for dealing with Rs 6 trillion worth of NPAs in the banking system. Their resolution will enable the liquidation of bad loans and ensure that credit starts flowing through the Indian economyagain.
