Sensex holds 400-pt gain, Nifty eyes 7400; Bank Nifty surges 4%

Moneycontrol Bureau 12:58 pm Market holds gain: The Sensex climbed 434.14 points or 1.83 percent to 24213.49 and the Nifty rose 142.30 points or 1.97 percent to 7364.60. About 1888 shares have advanced against 534 declining shares on the BSE. 12:45 pm Global Markets Update: Asian markets rose today, with Japan's Nikkei 225 index leading the way after a strong finish on Wall Street overnight. The Japanese benchmark index was up 4.26 percent, with the yen hovering near the 114 handle against the dollar, after falling overnight. Other markets followed suit, with Australia's S&P/ASX 200 finishing on a one-month high, breaking the 5,000 level, to close up 98.94 points, or 2.01 percent, at 5,021.20. South Korea's Kospi gained 1.60 percent while Hong Kong's Hang Seng index was up 2.9 percent. Chinese markets also rallied, with the Shanghai composite up 4.2 percent. Major US indexes rose on Tuesday, with the Dow Jones industrial average up 2.11 percent, S&P 500 adding 2.39 percent, and the Nasdaq composite gaining 2.89 percent. Many analysts agreed that the better-than-expected data from the US overnight reduced some of the concerns, for now, over a sharp slowdown in US growth. 12:30 pm Interview: Bajaj Auto reported 12 percent gain in total sales for the month of February, year-on-year (YoY) and sold 2.7 lakh units. Motorcycle sales increased 9 percent (YoY) to 2.35 lakh units and three wheeler sales went up 37 percent (YoY) to 37437 units. Exports remained the only eye-sore as sales dipped 12 percent (YoY). In an interview with CNBC-TV18, Kevin D'sa, President of Finance at Bajaj auto said that he expects domestic sales to grow to 2 lakh units in March against 1.73 lakh units in February. At present Bajaj has 20 percent market share as retail level and the company aims to capture 22 percent by March end. 12:15 pm Jaitley supports PSU Banks: Welcoming RBI's easing of rules to allow lenders to bolster capital ratios, Finance Minister Arun Jaitley today said the government will take all steps and provide resources to keep public sector banks in good health. During his post-Budget interaction with the industry, he said banking is a stressed sector and so the government is professionalising PSU banks and recapitalising them. "RBI last evening took a very positive move which helps further in recapitalisation of banks," he said. Easing rules on what banks can count towards their core capital requirement under the upcoming Basel III rules, the Reserve Bank of India allowed reserves associated with property revaluations and foreign-currency translations to be considered as common equity tier I capital. The move is likely to free up as much as Rs 3,50,000 crore in capital of public sector banks, helping them boost buffers while complying with a deadline set to clean up their balance sheets. Also read - Enjoy the rally till it lasts but do not over invest: Srivastava 12:00 pm Market Check The market maintained its uptrend in noon trade, mainly driven by banks after the Reserve Bank of India made changes in determining banks' regulatory capital. Bank Nifty surged 4 percent, led by SBI (up 9 percent), ICICI Bank (up 5 percent), HDFC Bank (2 percent), Axis Bank (up 4.4 percent), Bank of Baroda (up 8 percent) and Punjab National Bank (up 5 percent). The Reserve Bank of India on Tuesday made some amendments to the treatment of certain balance sheet items of banks, in effect boosting their regulatory capital and aligning it with the internationally adopted Basel III capital standards. As per the new rules, banks will be allowed to recognise part of their real estates assets, foreign currency assets and deferred tax assets as capital with suitable hair cuts. PS Jayakumar, MD & CEO of Bank of Baroda says the Reserve Bank’s new amendments on balance sheet items will help in improving CET I by 1.1 percent while Anshula Kant, CFO of State Bank of India (SBI) says that the bank should get upward of 100 basis points (bps) of capital [adequacy ratio]. The 30-share BSE Sensex rose 407.74 points or 1.71 percent to 24187.09 and the 50-share NSE Nifty gained 138.20 points or 1.91 percent at 7360.50. The BSE Midcap and Smallcap indices continued to outperform benchmarks, up 2.5 percent. About five shares advanced for every share declining on the Bombay Stock Exchange.

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