Sensex Trades Marginally Higher, Dow Futures Down By 30 Points

Share markets in India are presently trading marginally higher.

The BSE Sensex is trading up by 131 points, up 0.3% at 48,849 levels.

Meanwhile, the NSE Nifty is trading up by 37 points.

Bajaj Finance and SBI are among the top gainers today. Tata Consumer Products and Cipla are among the top losers today.

The BSE Mid Cap index is trading up by 1%.

The BSE Small Cap index is trading up by 1.1%.

On the sectoral front, stocks from the banking sector, are witnessing most of the buying interest.

On the other hand, stocks from the telecom sector, are witnessing most of the selling pressure.

US stock futures are trading lower today, indicating a negative opening for Wall Street.

Nasdaq Futures are trading down by 26 points (down 0.2%) while Dow Futures are trading down by 30 points (down 0.1%)

The rupee is trading at 73.77 against the US$.

Gold prices are trading down 0.4% at Rs 47,140 per 10 grams.

Gold prices corrected in the Indian market today as a stronger dollar and Federal Reserve Chair Jerome Powell's comments on the US economy weighed on the yellow metal. On MCX, June gold futures were trading at Rs 47,220 for 10 grams, down Rs 99, or 0.2%.

Speaking of the stock markets, Brijesh Bhatia, Research Analyst at Fast Profits Report, talks about why he thinks capital goods stocks are looking good in the month of May 2021, in one of his latest videos for Fast Profits Daily.

Moving on to stock-specific news...

Among the buzzing stocks, today is JSW Energy.

JSW Energy on May 3, 2021, said its arm JSW Renew Energy has inked a power purchase agreement for the supply of 540 megawatts (MW) from a total blended wind capacity of 810 MW.

The company bagged the order through a competitive bidding process.

JSW Renew Energy, a wholly-owned subsidiary of JSW Future Energy, has signed a Power Purchase Agreement (PPA) with Solar Energy Corporation of India (SECI) for the contracted capacity of 540 MW out of the total awarded capacity of 810 MW, as per a BSE filing said.

This is the single largest PPA for the wind/ blended wind category in the industry, and marks the foray of the company into the wind/ blended wind energy generation segment, it added.

In September 2020, JSW Energy said that JSW Future Energy had received a Letter of Award for total blended wind capacity of 810 MW in respect to the tariff-based competitive bids invited by SECI for setting up of 2,500 MW ISTS (Inter-State Transmission System)-connected blended wind power projects (Tranche - IX).

How this pans out remains to be seen. Meanwhile, stay tuned for more updates from this space.

At the time of writing, shares of JSW Energy were trading up by 1% on the BSE.

Speaking of the power sector, it is interesting to note that the power exchanged in India is about 4.5% of the overall power production, as can be seen in the chart below:

As per Tanushree Banerjee, India's power sector is currently in transition. It is driven by increasing reliance on short-term contracts and electricity spot markets. This transition to the short-term market is happening due to quickly evolving industry dynamics.

Tanushree believes the Indian power sector will see a surge in spot power volumes due to certain factors.

In August 2020, Tanushree recommended a high-quality stock from this space. Subscribers can read the report here (requires subscription).

In news from the banking sector...

RBI Imposes Rs 30 Million Penalty on ICICI Bank Over Rule Violations

The Reserve Bank of India (RBI) on May 3, 2021, imposed a monetary penalty of Rs 30 million on ICICI Bank for certain rule violations.

The penalty has been imposed for contravention of certain directions issued by the RBI on 'Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks', the central bank said in a release.

"This penalty has been imposed in exercise of powers vested in RBI under the provisions of section 47 A (1) (c) read with section 46 (4) (i) of the Banking Regulation Act, 1949 (the Act)," the RBI said.

Explaining the action, the RBI said an examination revealed violations of the above directions issued by the bank.

With respect to the same, a notice was issued to ICICI Bank advising it to show cause as to why a penalty should not be imposed on it for failure to comply with the directions issued by the RBI.

Oral submissions were made in a personal hearing and additional submissions were made by ICICI Bank. However, after considering the bank's reply to the notice, the RBI came to the conclusion that the charge of non-compliance with RBI directions was substantiated and warranted the imposition of monetary penalty.

In an update to stock exchanges, ICICI Bank said the penalty has been imposed for shifting certain investments from HTM (held to maturity) category to the AFS (available for sale) category in May 2017.

The bank had transferred two separate categories of securities on two different dates from HTM to AFS in April and May of 2017, which it believed was permissible as per Master Circular on Prudential Norms for Classification, Valuation and Operation of Investment Portfolio by Banks' dated July 1, 2015, the bank said in the exchange note.

"The RBI has held that the shifting of securities the second time in May 2017 without explicit permission was in contravention of RBI directions," ICICI Bank said.

We will keep you posted on updates from this space. Stay tuned.

Disclosure: Equitymaster Agora Research Private Limited (Research Analyst) bearing Registration No. INH000000537 (hereinafter referred as 'Equitymaster') is an independent equity research ...

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