Key indices came off the days high but continued to trade with decent gains in morning trade. The Nifty ascended towards 12,200 mark. PSU banks stocks advanced after RBIs operation twist. At 10:25 IST, the barometer index, the S&P BSE Sensex, was up 176.49 points or 0.43% at 41,340.25. The Nifty 50 index was up 49.7 points or 0.41% at 12,176.25.
The broader market traded higher than benchmark indices. The S&P BSE Mid-Cap index was up 0.58%. The S&P BSE Small-Cap index was up 0.44%.
The market breadth was titled in the favour of buyers. On the BSE, 1145 shares rose and 649 shares fell. A total of 105 shares were unchanged.
The Nifty PSU Bank index surged 2.66% at 2,562.10. Punjab & Sind Bank (up 6.81%), Punjab National Bank (up 4.3%), Syndicate Bank (up 3.88%), Bank of Baroda (up 3.59%), Oriental Bank of Commerce (up 2.91%), Canara Bank (up 2.7%), Union Bank of India (up 2.48%), UCO Bank (up 2.08%), Corporation Bank (up 2.02%), Bank of Maharashtra (up 1.88%) and Bank of India (up 1.76%) were top gainers in PSU segment.
PSU Banks advanced after the Reserve Bank of India (RBI) on Thursday said it will buy Rs 10,000 crore worth of the current benchmark 10-year bond on 30 December 2019 while selling four bonds maturing in 2020 for an equivalent amount. Simultaneously buying long-end bonds and selling short-end bonds should lead to a flattening of the yield curve.
The yield on 10-year benchmark federal paper fell to 6.509% at 9:45 IST compared with 6.576% in the previous trading session.
Earlier this week, RBI had conducted a similar open market operation (OMO) and purchased securities worth Rs 10,000 crore and sold securities worth Rs 6,825 crore.
The falling yields and rising bond prices are credit positive for state-run banks as mark-to-market (MTM) profit from the government bonds increases in their investment portfolios.
Stocks in Spotlight:
State-run ONGC has reportedly received environment clearance (EC) for carrying out onshore exploration, development and production of oil and gas in 100 locations in non-forest area of Assam, that would entail an investment of Rs 3,500 crore.
ONGC was trading 0.23% lower at Rs 127.75.
Sebi imposed a fine of Rs 25 lakh each on credit ratings agencies pertaining to ratings of various debentures of IL&FS. After examining the role of credit rating agencies Sebi noted that credit rating agency failed in assigning rating to various NCDs of IL&FS. Sebi also noted that the default in IL&FS has occurred due to lethargic indifference, needless procrastination and laxity on the part of credit rating agencies. Sebi further said that credit rating agencies should have anticipated the mounting credit risks, the stressed balance sheet position of the issuer and placed the ratings accordingly to alert the market in advance regarding the deteriorating financial profile of the issuer.
CARE Ratings was up 1.41% at Rs 516.25. ICRA traded 0.05% higher at Rs 2822.9.
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