Wednesday, September 18, 2013
…Future ages will certainly look back upon us as a people so immersed in the pursuit of wealth as to be blind to higher considerations. - Alfred Russel Wallace
There’s caution and anticipation on the street as investors remains immersed in thought on what the outcome of the Federal Reserve’s policy committee meet would be. So there is very little chance of positive bets immediately today. Outside the market, Lord Ganesha brought into homes and communities will be immersed in the sea.
The outlook is a flat start with very little stock specific movements. The Fed is expected to announce that it will slow the pace of its $85 billion in monthly purchases of Treasury bonds and mortgage-backed securities. Earlier, the Fed had indicated that it would taper its quantitative easing program sometime this year.
The RBI has tightened rules governing non-banking financial companies (NBFCs) lending against gold jewellery.
Nandan Nilekani is said to enter politics and is likely to contest the next Lok Sabha elections from South Bangalore on a Congress ticket, according to a media report.
The Fed’s record stimulus has helped fuel a $33 trillion jump in the value of global equities from a 2009 low, according to data compiled by Bloomberg.
The Dow, S&P 500 and Nasdaq closed with gains. The Dow Jones rose 34.95 points or 0.23%, to 15,529.73, while S&P 500 gained 7.16 points or 0.42 percent, to 1,704.76. Nasdaq Composite added 27.853 points or 0.75%, to 3,745.699. The US Consumer Price Index rose just 0.1% in August, indicating that inflation remains tame.
India pushed import duty on gold jewellery up by half to 15 percent, the finance ministry said on Tuesday.
According to Forbes's annual list of the top 400 richest Americans released on Monday, Microsoft founder Bill Gates is the richest American for the 20th year in a row with a networth of $72 billion.Warren Buffett, the head of Berkshire Hathaway, retained his second position with networth of $58.5 billion, while Oracle co-founder Larry Ellison stayed third with networth of $41 billion.
Trends in FII flows: The FIIs were net buyers of Rs3.18bn in the cash segment on Tuesday, while the domestic institutional investors (DIIs) were net sellers of Rs5.01bn, as per the provisional figures released by the NSE.
The foreign funds were net sellers of Rs10.20bn in the cash segment on Monday, according to the SEBI figures.
Global Data Watch: CB Leading Indicator (Jul) AUD, Westpac Leading Index (MoM) (Jul) AUD, House Price Index (Aug) CNY, Current Account (YoY) (Jul) EUR, Bank of England Minutes GBP, BOE MPC Vote Cut GBP, BOE MPC Vote Hike GBP, BOE MPC Vote Unchanged GBP, Construction Output w.d.a (YoY) (Jul) EUR, Construction Output s.a (MoM) (Jul) EUR, ZEW Survey - Expectations (Sep) CHF, 2-year Notes auction EUR, MBA Mortgage Applications (Sep 13) USD, M3 Money Supply INR, Building Permits (MoM) (Aug) USD, Housing Starts (MoM) (Aug) USD, EIA Crude Oil Stocks change (Sep 13) USD, BoC Governor Poloz Speech CAD, Fed Interest Rate Decision USD, Fed Pace of MBS Purchase Program (Sep) USD, Fed Pace of Treasury Purchase Program (Sep) USD, FOMC Economic Projections USD, Fed's Monetary Policy Statement and press conference USD, Gross Domestic Product (YoY) (Q2) NZD, Gross Domestic Product (QoQ) (Q2) NZD, Merchandise Trade Balance Total (Aug) JPY, Adjusted Merchandise Trade Balance (Aug) JPY, Exports (YoY) (Aug) JPY, Imports (YoY) (Aug) JPY
In other news in the media:
GMR Infrastructure Ltd has divested 74% stake in GMR Ulundurpet Expressways Ltd to India Infrastructure Fund for Rs2.22bn. (BL)
The Karnataka High Court has granted a week’s time to United Breweries to submit audited statement of accounts pertaining to utilisation of money received from sale of its shares to Diageo Plc. (BL)
Dr Reddy’s Laboratories Ltd has received approval from the USFDA for Azacitidine injection. (BL)
The Supreme Court said a dispute between GAIL and Gujarat State Petroleum Corporation on the price of gas imported from Qatar be decided by arbitration. (BS)
In yet another senior-level exit from Infosys, Kartik Jayaraman, global sales head (business process outsourcing, energy, utilities and services), has quit the company. (BS)
Polaris Financial Technologies has begun exclusive talks with Japanese NEC Corp to sell its services division. (ET)
US court has ordered fresh proceedings into charges that the Satyam Computer had fraudulently induced a company, Venture Global Engineering, into a partnership. (ET)
SEBI has said that the deal between Ambuja Cements and Holcim is an “interdependent” and “not independent” transaction. SEBI has asked the bourses to ensure that its comments are brought to the notice of the high court, whose approval is a must for the merger transaction to take place. (ET)
ONGC Videsh, the overseas arm of ONGC, plans to raise its stake in oil and gas acreages in Brazil and Venezuela to counter China’s growing influence in the region. (ET)
YES Bank has raised US$257mn through a two-tranche, dual currency (US dollar and euro) multi-tenor syndicated loan facility. (BL)
NTPC has planned a capital expenditure of Rs200bn in FY14 for expansion. (BS)
Tata Capital seems to have come to some kind of a settlement over dues with two of its borrowers, ABG Shipyard and Arshiya International. (ET)
The Finance Ministry has raised the import duty on gold and silver jewellery to 15% in a move to protect the domestic industry and curb the precious metal’s imports, a main fuel for the soaring trade and current account deficits. (BL)
With fuel supply in place for 78,000 Mw of stressed power generation capacity, the power ministry has asked the coal ministry to commit fresh coal linkages for an additional 33,000 Mw coalbased capacity projected for commissioning in the 13th Five- Year Plan period beginning April 2017. (BS)
The Reserve Bank of India and the finance ministry are evaluating a ‘funding for lending’ scheme that will result in cheaper loans for sectors such as housing and automobiles. (ET)
The GSM subscriber base in the country grew marginally in August to 674.4mn with telecom operators adding 1.78mn new users in the month, as per data released by industry body COAI. (ET)
Foreign Direct Investment into India grew by 12% YoY to US$1.65bn in July, highest since April. (ET)
Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 5 points at the opening bell.
The government said on Tuesday that to protect the interests of small artisans, the customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof is being increased from 10% to 15%. A notification notifying the revised rates of customs duty on articles of jewellery and of goldsmiths' or silversmiths' wares and parts thereof has been issued on Tuesday. As part of measures to contain the current account deficit, the customs duty on gold has been revised upwards periodically in the past two years. The government said jewellery making is a labour intensive industry. Millions of artisans are dependent on this sector for their livelihood. In the absence of any duty differential between articles of jewellery and primary metal, which was 8% in the case of gold jewellery and 4% in the case of silver jewellery in January 2012, there is an apprehension that Indian jewellery makers would not be able to compete with cheaper imports, particularly when majority of the imported jewellery is machine-made as compared to handmade jewellery in India.
Meanwhile, the Reserve Bank of India (RBI) reportedly cracked down on offshore foreign exchange trading by Indians through online trading websites, asking banks to report any such remittances to the regulator. In a circular issued late on Tuesday, the Reserve Bank of India (RBI) asked banks to advise customers not to undertake forex trading on foreign websites that offer currency contracts by accepting margins through credit card and online money transfer mechanisms. The RBI also asked banks to close the credit card or online bank account of a customer that is found to be in violation of the rule.
At its upcoming mid-quarter monetary policy review on Friday, 20 September 2013, the Reserve Bank of India will have to decide whether to give in to industry demands and lower interest rates in order to boost slowing economic growth, or leave interest rates unchanged for the third straight policy review as it guards against risks of a fresh rise in inflationary pressures.
Key benchmark indices eked out small gains on Tuesday, 17 September 2013 as index heavyweight and cigarette major ITC extended intraday gains in late trade and as another index heavyweight Infosys rose. The S&P BSE Sensex rose 61.56 points or 0.31% to settle at 19,804.03 on that day, its highest closing level since 11 September 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 318.05 crore on Tuesday, 17 September 2013, as per provisional data from the stock exchanges.
Asian stocks were mixed on Wednesday amid prospects the Federal Reserve will announce today whether it intends to pare back economic stimulus. Key benchmark indices in China, Japan, and South Korea rose by 0.04% to 1.77%. Key benchmark indices in Taiwan, Hong Kong, and Indonesia shed by 0.19% to 0.94%. South Korea's stock markets were closed for a holiday.
US stocks rose slightly on Tuesday on expectations the Federal Reserve will make a modest cut in its stimulative bond buying and keep interest rates extraordinarily low. A report in the U.S. on Tuesday showed the cost of living rose less than forecast in August, with the consumer-price index increasing 0.1%, the least in three months, Labor Department figures showed.
Investors across the globe are eyeing the two-day policy meeting of the Federal Open Market Committee (FOMC), considered by many to provide an indication on the timing and size of the Fed's cutbacks in its bond-purchase program. The FOMC's two-day policy meeting on interest rates in the United States ends today, 18 September 2013. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years. Investors are also eyeing Fed's forward guidance on policy.