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Bank stocks gain as Modi promises bank accounts for poor

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Last Updated : Aug 18 2014 | 6:32 PM IST

Key benchmark indices remained firmly in positive zone in afternoon trade. The S&P BSE Sensex, was currently up 113.79 points or 0.44% at 26,217.02. The market breadth indicating the overall health of the market was strong. The BSE Mid-Cap index was up 1.28%. The BSE Small-Cap index was up 1.65%. Both these indices outperformed the Sensex. Decline in crude oil prices boosted investor sentiment. In his Independence Day address to the nation, Prime Minister Narendra Modi on Friday, 15 August 2014, stressed on the need to promote the manufacturing sector. A day later, Modi stressed on the government's thrust on infrastructure development.

Index heavyweight and cigarette maker ITC dropped on reports the Centre is planning to introduce tougher provisions under anti-tobacco law to curb tobacco consumption in the country. Bank stocks rose after Prime Minister Narendra Modi announced a new financial scheme to help the poor open bank accounts.

The market sentiment was boosted by data showing that foreign portfolio investors (FPIs) were net buyers of Indian stocks on Thursday, 14 August 2014.

Key benchmark indices have retained positive zone after a relatively steady start.

At 12:16 IST, the S&P BSE Sensex was up 113.79 points or 0.44% to 26,217.02. The index jumped 133.61 points at the day's high of 26,236.84 in mid-morning trade, its highest level since 25 July 2014. The index fell 27.95 points at the day's low of 26,075.28 in early trade.

The CNX Nifty was up 33.10 points or 0.42% to 7,824.80. The index hit a high of 7,832.95 in intraday trade, its highest level since 25 July 2014. The index hit a low of 7,779.20 in intraday trade.

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The market breadth indicating the overall health of the market was strong. On BSE, 1,654 shares gained and 853 shares fell. A total of 82 shares were unchanged.

The BSE Mid-Cap index was up 115.52 points or 1.28% at 9,123.37. The BSE Small-Cap index was up 161.91 points or 1.65% at 9,985.97. Both these indices outperformed the Sensex.

Bank stocks rose after Prime Minister Narendra Modi announced a new financial scheme to help the poor open bank accounts. Among PSU bank stocks, State Bank of India (SBI) (up 1.1%), Canara Bank (up 1.49%), Union Bank of India (up 1.69%), Bank of India (up 1.17%), Punjab National Bank (up 0.71%) Syndicate Bank (up 1.87%), Andhra Bank (up 1.37%), Oriental Bank of Commerce (up 2.83%), Dena Bank (up 2.22%), and Indian Bank (up 2.36%), gained.

Among private sector banks, ICICI Bank (up 1.85%), HDFC Bank (up 0.32%), IndusInd Bank (up 0.77%), Yes Bank (up 2.3%), Federal Bank (up 2.27%), Kotak Mahindra Bank (up 1.75%) and Axis Bank (up 2.17%), gained.

Prime Minister Narendra Modi on the ocassion of Independence Day on Friday, 15 August 2014, launched 'Pradhan Mantri Jan Dhan Yojana' to help the poor open bank accounts, which will come with the facility of a debit card and an insurance cover of Rs 1 lakh. Observing that people have mobile phones but not bank accounts, Modi said, the scheme will help in bringing the benefits of formal banking system to them.

Under the Jan Dhan Yojana, Modi said that the person who will open bank account will get a debit card and the family will get Rs 1 lakh insurance cover. This will help the family to tide over the unforeseen eventuality.

Index heavyweight and cigarette maker ITC dropped 2.55% on reports the Centre is planning to introduce tougher provisions under anti-tobacco law to curb tobacco consumption in the country. After raising taxes on cigarettes and calling for a countrywide ban on sale of tobacco products, the Centre is now planning to introduce tougher provisions under law to curb tobacco consumption in the country, report said. From banning branding on cigarette packets to raising the age limit on tobacco consumption to 25 years from 18, to substantively increasing penalties for smoking in public, the Union Health Ministry is considering a host of amendments to the anti-tobacco law, report added.

As per reports, Health Minister Harsh Vardhan has constituted a committee of experts last month headed by Delhi government's former principal secretary, Health, Ramesh Chandra, to review and suggest changes to the Cigarettes and Other Tobacco Products Act 2003 (COTPA), and it is expected to submit its report by the end of this month.

India's macroeconomic worries have eased on falling crude oil prices. India imports about 80% of its crude oil requirement. Brent crude oil futures fell below $103 a barrel on Monday as Libya increased its oil output and as worries over supply from key producer Iraq eased. The October Brent crude contract was off 81 cents at $102.72 a barrel. The contract rose $1.52 a barrel to settle at at $103.53 on Friday, 15 August 2014.

The market sentiment was boosted by data showing that foreign portfolio investors (FPIs) were net buyers of Indian stocks on Thursday, 14 August 2014. FPIs bought shares worth a net Rs 625.18 crore on Thursday, 14 August 2014, as per provisional data from the stock exchanges.

In his Independence Day address to the nation from the ramparts of the Red Fort, Prime Minister Narendra Modi on Friday, 15 August 2014, stressed on the need to promote the manufacturing sector. He invited manufacturers from across the world to start manufacturing in India, and help boost India's industrial growth. He also called upon the youth of India to unleash their entrepreneurial spirit and work towards manufacturing in India, the various items that add to the country's import bill. Let "Made in India" become a synonym of excellence, he added. Modi also announced that a new institution would be created to replace the Planning Commission. This new institution would respect the federal structure of the country, he asserted.

In a major new scheme to universalize banking access and financial inclusion, the Prime Minister announced the Pradhanmantri Jan-Dhan Yojana which will provide for a bank account, a debit card and an insurance amount of Rs 1 lakh to poor families.

The Prime Minister said development and good governance are the only two tracks which could take the nation forward.

At a function at Solapur in Maharashtra, the Prime Minister on 16 August 2014 outlined a comprehensive vision for new modes of infrastructure development in the country, which would include nationwide connectivity networks of roads, power transmission lines, gas grids and water grids. He asserted that roads and highways development will be given priority by the new Government, drawing inspiration from the Golden Quadrilateral and Pradhan Mantri Gram Sadak Yojana launched by former Prime Minister Atal Bihari Vajpayee. The Prime Minister said the Government is concerned at the large number of stalled SEZ projects across the country, and a high-level team has been constituted to review the problems and resolve them at the earliest. He added that his Government wishes to create an environment for ease of business, and encouragement for youth. Elaborating his theme of Come, make in India, which he mentioned during his Independence Day address, the Prime Minister said his Government will encourage foreign investment in shipbuilding.

Asian stocks declined on Monday, 18 August 2014, as another bout of tensions in the Ukrainian conflict sapped investor confidence. Key benchmark indices in South Korea, Taiwan, Singapore and Hong Kong were off 0.27% to 0.71%. Key benchmark indices in China, Japan, and Indonesia were up 0.03% to 0.27%.

China's foreign-direct investment slumped 17% in July from a year earlier, the Ministry of Commerce said today, 18 August 2014. Another data showed that China's new-home prices fell in July in almost all cities that the government tracks.

Trading in US index futures indicated that the Dow could gain 64 points at the opening bell on Monday, 18 August 2014. Most US stocks ended lower on Friday, 15 August 2014, as increasing violence in Ukraine sent oil prices to the biggest increase in a month.

Ukrainian forces have reportedly raised their national flag over a police station in the city of Luhansk which was for months under rebel control, Kiev said on Sunday, 17 August 2014, in what could be a breakthrough in Ukraine's efforts to crush pro-Moscow separatists. Russia denies helping the rebels and accuses Kiev, backed by the West, of triggering a humanitarian crisis through indiscriminate use of force against Russian speakers in eastern Ukraine who reject the Ukrainian government's rule.

Meanwhile, the US widened its airstrikes on Iraq over the weekend and used bombers for the first time since the offensive began on 8 August to help secure the country's largest dam near Mosul that had been seized by insurgents.

Global markets will be focused on the Aug. 21-23 annual meeting of top central bankers at Jackson Hole, Wyoming, for possible clues about the path for monetary policy in the months ahead.

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First Published: Aug 18 2014 | 12:14 PM IST

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