No respite...

Continuing from where they had closed yesterday, the markets have opened today in a similar fashion, on a weak note. Indices remain volatile as market participants continue to distance themselves from equities. Except selective buying in FMCG, telecom, engineering and software sectors, most other sectors seem to be out of favour.

The BSE Sensex is trading at 6,258 (down 20 points) and the Nifty is trading at 1,935 (no movement). The rupee is trading at Rs 43.72 per US Dollar.

RBI in its report on 'Macroeconomic and Monetary Development in FY05', released yesterday, has attributed the housing loans segment for being the major driver of credit growth for banks during FY05. Fresh housing loans advanced by banks have grown by 80% YoY despite the fact that the risk weightage on home loans was increased by RBI. The growth trigger was the fact that home loans up to Rs 1.5 m was categorized as 'priority sector lending'. Along with housing, infrastructure sector continued to lead credit absorption, accounting for 42% of fresh loans to industry during FY05. Inflation however continues to be one of the major concerns for credit growth in the coming quarters. The apex bank will be releasing the http://www.equitymaster.com/detail.asp?date=4/27/2005&story=2 monetary policy for 2005-06 today, which is expected to give a direction to the interest rate movement and the banking sector's credit disbursement policies. Banking stocks are currently trading in the red with SBI (1%), OBC (1%) and ICICI Bank (ICBK.BO, news) (1%) being the top losers.

The US markets regained optimism on Wednesday on the back of declining oil prices, with the blue chips leading the rally. However, sentiment remained cautious due to apprehensions about the GDP report and Microsoft's results, both of which are expected today. While the Dow and the NASDAQ added 0.5% and 0.2% respectively, the broader S&P 500 gained 0.4%. However, with the Fed chief indicating caution about inflationary pressures, the anxiety with regard to earnings growth continues to hover.

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