Stock markets in Asia are higher today following key earnings on Wall Street and as oil prices came off two-week lows set earlier in the session. The Shanghai Composite is up 0.13%, while the Hang Seng is up 0.35%. The Nikkei 225 is trading higher by 0.31%. The US equities closed mostly lower on Wednesday, with IBM and oil prices pushing down the Dow Jones industrial average.
Meanwhile, share markets in India have opened the day on a flat note with a positive bias. The BSE Sensex is trading up by 60 points while the NSE Nifty is trading up by 5 points. The BSE Mid Cap index and BSE Small Cap index have opened the day up by 0.4% & 0.5% respectively.
Barring bank stocks, all sectoral indices have opened the day in green with stocks from metal sector and information technology sector leading the gains. The rupee is trading at 64.54 to the US$.
Bank stocks opened the day on a mixed note with DCB Bank and Karnataka Bank witnessing maximum buying interest. In the latest development, Yes Bank Ltd and IndusInd Bank Ltd have reported a sharp rise in their quarterly bad loan provisioning, eroding profits, after the Reserve Bank of India (RBI) advised lenders to follow stricter standard asset provisioning and disclosure rules.
The additional provisioning pertains to their exposure to the Jaiprakash Associates Ltd cement assets that are being purchased by UltraTech Cement Ltd. Exposure to a single cement company made a Rs 3.5 billion dent in the net profits of both the banks, private lenders otherwise known to have better control on asset quality.
IndusInd Bank and YES Bank had to make provisions of Rs 1.22 billion and Rs 2.28 billion, respectively, for their exposure to this account, in compliance with a Reserve Bank notification.
One must note that, the Indian banking system reported the worst NPA levels among Asian economies in 2015. Vivek Kaul has written extensively about the mess in public sector banks in his Diaries.
