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I had mentioned in Monday’s closing report that Nifty,
Sensex were still directionless. The major indices of the Indian stock markets
recovered to close in the green on Tuesday. The gains of the major indices at
Tuesday’s close of trading were less than 0.50%. The trends of the major
indices in the course of Tuesday’s trading are given in the table below:
A sharp rise in US futures markets, a rise in European
indices, and a rebounding rupee led key Indian equity indices to trade in the
green on Tuesday, while recovering considerably from last week's Brexit
hangover. Healthy buying was particularly witnessed in stocks of fast moving
consumer goods (FMCG) and healthcare. The BSE market breadth was tilted in
favour of the bulls -- with 1,596 advances and 999 declines.
The United Kingdom is likely to explore direct bilateral
trade agreements with India post the vote to exit from the European Union,
thereby giving a boost to slowing UK-India trade, Development Bank of Singapore
(DBS) said on Tuesday. "Post exit EU, the UK is likely to explore direct
bilateral trade agreements with other trading partners, including India,"
DBS said in a research note.
"This might provide an alternate route to India, in
comparison to the tough and the drawn-out negotiations on the EU Free Trade
Agreement, in turn providing a fillip to a slowing India-UK trade," said
DBS. Noting that the UK accounts for 15% of India's total merchandise trade,
the report said this share has, however, been declining. Trade in services has
also eased. The report highlighted the notable investment links between both
countries. The UK is the third largest inward investor into India, after
Mauritius and Singapore, with cumulative foreign direct investment (FDI) equity
investments of $22.7 billion (from April 2000 to December 2015), or 8% of the
total FDI inflows. In turn, India is the third largest investor, based on the
number of projects, into the UK. Indian businesses that tap the UK domestic
markets are unlikely to face many challenges, DBS said.
State-run United Bank of India on Tuesday said it will
focus its lending on Micro, Small and Medium Enterprises (MSMEs) and retail and
will avoid capital guzzling sectors. The bank is planning to raise up to Rs
1,000 crore ($145 million) in one or more tranches through a public issue or
qualified institutional placement (QIP) or rights issue for which it sought
shareholders' approval at its Annual General Meeting. "In 2016-17, the
bank's focus areas for lending would be in the MSME and retail segments,"
Managing Director and Chief Executive Officer P. Srinivas told the shareholders.
The bank will strive to achieve all its targets under Mudra Scheme, Standup
India scheme and strengthen its retail channels, particularly housing,
education and vehicle loan segments, he said. "While making advances, the
bank will endeavour to avoid sectors which are capital guzzlers and concentrate
on government guarantee schemes. The bank will also augment its resources to
ensure wealth generation for the future," he said. The shares of the bank
closed at Rs22.45, up 0.45% on the BSE.
The multiple downside risks in the proposed consolidation
in the Indian public sector banking (PSB) space far outweighs the potential
benefits, said global credit rating agency Moody's Investors Service. The Bank
Nifty closed at 17,561.55, up 0.27%.
The US dollar continued to climb against most major
currencies after Britain voted to leave the European Union in a historic
referendum. In late New York trading on Monday, the euro fell to $1.1019 from
$1.1144 of the previous session, and the British pound decreased to $1.3192
from $1.3696. The Australian dollar went down to $0.7343 from $0.7508. The
dollar bought 101.99 Japanese yen, lower than 102.24 yen of the previous
session. The dollar rose to 0.9776 Swiss francs from 0.9724 Swiss francs,
and it climbed to 1.3092 Canadian dollars from 1.2936 Canadian dollars.
Currency movements are considered important by stock market analysts in India,
as a substantial portion of the investments come from foreign institutional
investors into emerging markets like India. However, international interest
rates in the banking sector are expected to be stable and not contribute to
volatility.
The top gainers and top losers of the major indices are
given in the table below
The closing values of the major Asian indices are given
in the table below:
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