Hero MotoCorp: says open to acquiring companies

After stringing up a series of technology partnerships, Hero MotoCorp says it is open to acquiring companies, including full-fledged two-wheeler makers, as part of global expansion strategy.

“We have not stopped efforts to find technology partners, it is an ongoing process. We are open to acquiring companies,” Hero MotoCorp Managing Director and CEO, Pawan Munjal, told PTI.

In July, the company had picked up 49.2 per cent stake in US-based Erik Buell Racing (EBR) for $25 million, after entering into a technology sourcing pact last year.

It had entered into an alliance with Austria-based engine developer AVL to enhance capability in various segments last year, apart from roping in Italian two—wheeler design firm Engines Engineering as a partner to help develop next-generation product line-up.

Asked if HMC was open to acquiring a full-fledged two-wheeler company, Munjal said: “We are not aggressively scouting for one at the moment but if some target comes on the way, we will surely look at it.”

While he did not specify what kind of company would interest HMC, Munjal said it was about adding value to the company’s pursuit of technological prowess.

“Money is not an issue, it is about putting it to good use,” he said.

Currently, HMC has cash reserves of about Rs 3,500 crore.

The company has also been strengthening its R&D set-up after the Indian promoter of the two-wheeler maker, the B.M. Munjal family, agreed to buy out the entire 26 per cent stake of Honda in their erstwhile joint venture Hero Honda for Rs 3,841.83 crore in December 2010.

Having embarked on a solo journey, HMC has set ambitious targets, looking to expand in global markets. In August, it had announced plans to enter 50 new markets by 2020 with a target of 20 manufacturing facilities across the globe and an overall annual turnover of Rs 60,000 crore.

It had set a target of selling 100 million bikes cumulatively by 2020, after it had rolled out its 50 millionth bike. It has set a target of selling 1 million units annually by 2017 from its overseas markets that will be 10 per cent of its total sales.

The company in July announced its foray into the African continent with the launch of its brand and products in Kenya where it has also set up an assembly unit. A month later, it entered Peru with the launch of the ‘Hero’ brand and its range of two-wheelers in the Latin American nation.

Sensex nosedives 400 points on US budget impasse woes

With the threat of US Government shutdown looming large, global markets nosedived and this had a negative impact on the Indian bourses.

Global markets worldwide were circumspect ahead of the September 30 deadline for the US to increase its debt limit to fund government expenditure.

With the Democrats and the Republicans unrelenting on the Obamacare issue, the possibility of shutdown of the US Government has had a negative impact on the global markets.

What has added further to the uncertainty is the political turmoil in Italy where the survival of the Government is at stake.

The US Government appeared headed for a partial shutdown on Monday after the Republican-controlled Lower House approved a Budget Bill that Democrats in the Senate and the White House vowed to reject.

A Government shutdown would be the first since 1996 and would begin on Tuesday, the first day of the new fiscal year, unless lawmakers find a last-minute solution in Monday's session.

The Sensex plunged 400.36 points or 2.03 per cent at 19,326.91 and the Nifty shed 111.55 points or 1.91 per cent at 5,721.65.

Barring IT, all other BSE sectoral indices were trading in the red. Capital Goods, Banking, Metal and Realty indices succumbed to heavy selling pressure and were down 2.92 per cent, 2.84 per cent, 2.44 per cent and 2.09 per cent, respectively.On the other hand, IT index was up 0.06 per cent

Among major gainers, HUL was up 1.06 per cent at Rs 627.40, Sun Pharma 0.47 per cent at Rs 592.55, Infosys up 0.3 per cent at Rs 3,015.45, NTPC 0.27 per cent at Rs 148.20 and GAIL up 0.09 per cent at Rs 326.70.

Among the major losers were Tata Steel, BHEL, ICICI Bank, Coal India and L&T. Tata Steel was trading down by 7.03 per cent at Rs 267.70, BHEL lost 4.72 per cent to trade at Rs 137.15, ICICI Bank down 4.12 per cent at Rs 885.25, Coal India lost 3.71 per cent at Rs 295.65 and L&T 3.44 per cent at Rs 789.30.

US Treasury Secretary Jacob J. Lew in a follow-up letter to the Speaker, US House of Representatives, urged the Congress to allow an increase US borrowing capacity to fund its social security and healthcare expenditure.

“If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history,” Lew said.

Referring to the US credit rating downgrade in 2011, he said: “If Congress were to repeat that brinksmanship in 2013, it could inflict even greater harm on the economy.”

Rajesh Agarwal of Eastern Financiers said that the HSBC manufacturing and services PMI and auto sales numbers would set the tone for this week’s market movement.

MCX shares hit lower circuit limit

Shares of Multi Commodity Exchange of India Ltd (MCX) today fell 5 per cent to hit its lowest trading permissible limit for the day, after index provider Morgan Stanley Capital International excluded the company from its small cap indices.

After making a weak opening, the scrip further lost 5 per cent to Rs 382.05 — its lower circuit limit on the BSE. On the NSE, the scrip fell 5 per cent to touch its lower circuit limit of Rs 381.10.

“MCX shares will be deleted from the MSCI global small cap indices with effect from Wednesday,” Morgan Stanley Capital International (MSCI) had said on Friday.

MSCI is a leading provider of benchmark indices globally.

Geometric trades higher on the bourses

Geometric is currently trading at Rs. 76.15, up by 0.60 points or 0.79% from its previous closing of Rs. 75.55 on the BSE.

The scrip opened at Rs. 75.20 and has touched a high and low of Rs. 76.85 and Rs. 75.20 respectively. So far 4221 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 2 has touched a 52 week high of Rs. 125.50 on 08-Oct-2012 and a 52 week low of Rs. 61.40 on 02-Aug-2013.

Last one week high and low of the scrip stood at Rs. 79.55 and Rs. 74.20 respectively. The current market cap of the company is Rs. 482.27 crore.

The promoters holding in the company stood at 37.17% while Institutions and Non-Institutions held 2.90% and 59.94% respectively.

Geometric, a leader in Product Lifecycle Management (PLM), Global Engineering Services and Intellectual property led solutions, and Anark Corporation, a leading provider of automated 3D CAD visualization solutions, has announced the expansion of their strategic partnership with an equity investment by Geometric’s wholly owned subsidiary, Geometric Americas, Inc.

The agreement will further extend the companies’ capabilities to deliver a world class Model Based Enterprise (MBE) authoring and publishing solution, Anark Core MBEWeb, which is powered by Geometric’s Glovius, an easy to use and customizable viewer application that enables downstream users to view high fidelity 3D data from anywhere, anytime.

The companies plan to expand their global sales and marketing collaboration and jointly target enterprise manufacturers within the aerospace, defense, automotive and industrial sectors. This will be achieved through development of a joint product roadmap that will focus on market needs and deliver a highly effective and cost efficient solution for publishing and consumption of 3D documents by users in manufacturing, inspection, and purchasing.

Glenmark gets USFDA nod for skin infections cream

Glenmark Pharmaceuticals today said it has received approval from the US health regulator for its generic Hydrocortisone Butyrate cream used for treating a variety of skin infections.

Glenmark Generics Inc USA, the subsidiary of Glenmark Generics Ltd, has received the nod for its Hydrocortisone Butyrate Cream USP (0.1 per cent), abbreviated new drug approval (ANDA) from the United States Food and Drug Administration (USFDA), Glenmark Pharmaceuticals said in a statement.

The company is entitled to 180 days of exclusivity with respect to the product as it is the first generic company to file an ANDA for the product, it added.

“In April 2011, Glenmark had entered into a royalty-bearing licence agreement with Triax Pharmaceuticals, Astellas Pharma Europe BV and Astellas Pharma International BV to settle a patent infringement suit against commercialisation of generic version of Locoid Lipocream and agreed to launch it near the end of CY 2013,” Glenmark Pharmaceuticals said.

According to IMS Health sales data for the 12-month period ending June 2013, Hydrocortisone Butyrate Cream garnered annual sales of nearly $34 million, it added.

The company’s product is a generic version of Triax’s Locoid Lipocream.

“Hydrocortisone Butyrate cream is indicated for the relief of the inflammatory and pruritic manifestations of orticosteroid-responsive dermatoses in adults and the treatment of mild to moderate atopic dermatitis in patients three months to 18 years of age,” Glenmark Pharmaceuticals said.

The company’s current portfolio consists of 90 products authorised for distribution in the US market and 53 ANDAs pending approval with the USFDA, it added.

Shares of Glenmark Pharmaceuticals were today trading at Rs 533.05 per scrip in afternoon trade on the BSE, up 1.95 per cent from its previous close.

Oct 31 deadline for e-filing audit reports of tax returns

The government today extended the last date for uploading audit reports of income tax returns by a month to October 31.

The due date, which was earlier September 30, has been extended in the wake of difficulty in uploading the report of audit electronically as prescribed under the sub—rule (2) of Rule 12 of the IT rules for the assessment year 2013—14.

“It has come to the notice of the CBDT (Central Board of Direct Taxes) that many assessees who are required to file their income tax returns by September 30, 2013 are finding it difficult to upload the report of audit electronically.

“Therefore, the CBDT has decided to extend the time for furnishing the report of audit electronically till October 31, 2013,” the finance ministry said in a statement.

The statement, however added that, the assessees are required to file the report of audit manually with the jurisdictional Assessing Officer by September 30, 2013.

As per the Central Board of Direct Taxes (CBDT), there has been an unprecedented surge in number of returns being e—filed.

Sensex plummets 257 points on US budget impasse woes

Global markets worldwide were circumspect ahead of the September 30 deadline for the US to increase its debt limit to fund government expenditure.

With the threat of US Government shutdown looming large, global markets plunged and this had a negative impact on the Indian bourses with the Sensex trading down 257.31 points or 1.3 per cent at 19,469.96 and the Nifty trading down 73.85 points or 1.27 per cent at 5,759.35.

Barring IT, all other BSE sectoral indices were trading in the red.

Capital goods, metal, PSU and banking sector stocks succumbed to heavy selling pressure and were down 2.86 per cent, 2.8 per cent, 2.75 per cent and 2.48 per cent, respectively. Only IT sector stocks were up 0.58 per cent.

Among major gainers, HUL was trading at Rs 628.25, up 1.19 per cent, Wipro gained 0.96 per cent at Rs 479.70, Infosys gained 0.72 per cent to trade at Rs 3,028, Bajaj Auto up by 0.31 per cent at Rs 1,998.40 and Sun Pharma gained 0.18 per cent to trade at Rs 590.80.

Among the major losers were Tata Steel, BHEL, Bharti Airtel, ICICI Bank and ONGC. Tata Steel was trading down by 5.52 per cent at Rs 271.95, BHEL lost 5.35 per cent to trade at Rs 136.25, Coal India lost 4.07 per cent to trade at Rs 294.55, ICICI Bank down by 3.65 per cent at Rs 889.60 and ONGC shed 3.62 per cent to trade at Rs 264.55.

US Treasury Secretary Jacob J. Lew in a follow-up letter to the Speaker, US House of Representatives, urged the Congress to allow an increase US borrowing capacity to fund its social security and healthcare expenditure.

“If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history,” Lew said.

Referring to the US credit rating downgrade in 2011, he said: “If Congress were to repeat that brinksmanship in 2013, it could inflict even greater harm on the economy.”

Rajesh Agarwal of Eastern Financiers said that the HSBC manufacturing and services PMI and auto sales numbers would set the tone for this week’s market movement.

With the Democrats and the Republicans unrelenting on the Obamacare issue, the possibility of shutdown of the US Government has had a negative impact on the global markets.

What has added further to the uncertainty is the political turmoil in Italy where the survival of the Government is at stake.

Japan's Nikkei shed 262.99 points or 1.78 per cent to 14,497.10, Hong Kong's Hang Seng plunged 282.81 points or 1.22 per cent to 22,924.20 and Australia's S&P/ASX 200 lost 88.16 points or 1.66 per cent to 5,218.90.

Life insurance products to become more transparent from Tuesday

While product returns would be easier to understand, pending approvals may mean lesser insurance plans to choose from in initial few days

Beginning Tuesday, life insurance policies will not just be more transparent, but the returns from each plan will also be more easier to understand. From October 1, the new product guidelines for linked and non-linked insurance products will be implemented, which will disclose all benefits and fund value calculations upfront, to ensure that customer are buying products that they need.

Anup Rau, CEO, Reliance Life Insurance said that the new guidelines have categorised life insurance products into three broad categories- traditional insurance plans, variable insurance plans (VIPs) and unit-linked insurance plans. "New traditional products will have a higher death cover. For regular premium policies, the cover will be ten times the annualised premium paid for those below 45 and seven times for others. The minimum death benefit in case of traditional plan is at least the amount of sum assured and the additional benefits, if any," he added.

Insurance Regulatory and Development Authority (Irda) had brought out new set of guidelines for life insurance products in February. While the minimum death benefit and surrender value have been altered for traditional product customers who stay invested in a policy for a longer period, in the case of Unit-Linked Products (Ulips), insurers will have to intimate customers about changes in the yield of the Ulip every month. Further, Rau explained that as per the new norms, variable insurance plans will guarantee a certain minimum rate of return at the beginning of the policy, though they are linked to an index.

These variable insurance products will be treated at par with Ulips, those products will follow the same commission package for Ulips. Agents who tend to sell shorter tenure products will now have to shift their sales strategy to longer tenure products, since commissions have now been linked to tenure of a policy. Higher the duration, higher is the commission.

However, industry officials said that the product mix, which is in heavily tilted towards traditional products will continue. Reliance Life, which has about 80% traditional plans and 20% Ulips, expects this trend to continue for some time. "The new regulations make the traditional products, like endowment and money-back plans, more transparent and customer-friendly due to larger life cover and higher flexibility. It will definitely make traditional plans a more compelling proposition," added Rau.

Customers, say industry experts will now be motivated to take a higher insurance cover. Niraj Shah, senior vice president and head-products, ICICI Prudential Life Insurance added that the new product regulations which will be applicable from October 1 include a higher level of insurance cover, more transparency and improvement in minimum surrender value for traditional products.

Shah also informed that Ulips continue to remain attractive due to the inherent advantages of transparency and flexibility to choose level of insurance cover, premium payment term, asset allocation.

Ulips are presently sold mandatorily with a personalised Benefit Illustration. V Viswanand, Director and Head Product  Solutions Management, Max Life Insurance said that this requirement is now being extended to other product forms. "The new guidelines have also provided for setting up a 'With Profit Committee', at the board level.  While personalized benefit illustration will provide for greater transparency, the With Profit Committee is likely to lead to better and more transparent governance in the administration of Participating policies," he said.

While customers will have a clearer idea of their policy with the new guidelines in place, there could be lesser number of products to choose from, for a new customer. With the approval process still on at the regulator's office, estimates suggest that each insurance company would only start off with 6-8 products. There is also a fear that some smaller life insurers may not have any product to sell on the first day, that is tomorrow, and would only be able to have products approved in next few weeks.

Effective today, corporate bonds can be used as collateral on exchange

To be considered part of non-cash component of liquid assets

Entities trading on the stock market can now use corporate bonds as collateral, expanding the pool of securities which included government securities and open-ended mutual funds

The National Stock Exchange implemented the move effective from Monday, according to an exchange circular.

“Corporate bonds shall be treated as part of the non-cash component of the liquid assets of the clearing member and shall not exceed 10% of the total liquid assets of the clearing member,” said the note dated September 20.

The collateral will be to the tune of up to 90% of the value of the bond or with the application of a 10% haircut to its value. The bonds are to be valued everyday on the basis of its closing price of in the cash or debt segment of the exchange, added the note.

The Securities and Exchange Board of India(Sebi) had come out with a circular in March expanding the pool of securities which can be used by foreign institutional investors(FIIs) to meet collateral requirements.

“FIIs are permitted to offer the following collaterals - government securities, corporate bonds, cash and foreign sovereign securities with AAA ratings, for their transactions in both cash and F&O(Futures and Options) segments. In this regard, the stipulations specified by Sebi and RBI(Reserve Bank of India) with regard to the acceptance of various collaterals shall be adhered to,” said the Sebi circular.

MRF plans to invest about Rs10bn

Report said that the expansion would provide employment to over 1,000 people.

India's leading tyre maker MRF reportedly said that it will invest about Rs 1,000 crore to double its capacity at a facility located near Hyderabad.

Last week, MRF approached Andhra Pradesh industries ministry  to double capacities.
Report said that the expansion would provide employment to over 1,000 people.
MRF has about 32% market share in the Rs 41,000-crore domestic tyre industry.
MRF has Rs 2,853 crore of reserves and surp
lus in its books by the end of 2011-12,

Indian IT to benefit from uptick in outsourcing demand

Accenture's FY14 revenue growth guidance of 2-6% suggests IT behemoth is facing competitive pressure in outsourcing, where Indian players are strong

Analysts in India believe that key factors that impact the profitability of Indian software services exporters, namely uptick in demand, a weak rupee and cost controls at home, have come together favourably for the sector. While a large part of this is true, the key growth markets for India’s IT exports, US and Europe, are not back to normal. In the first quarter, most players have reported healthy volume growth, but for any earnings upgrade analysts will look for more clarity.

To this extent, quarterly performance of Accenture shows a mixed picture. The company’s fourth quarter revenues for the fiscal year 2012-13 declined by 1.5% sequentially to $7.1 billion, but grew 3.7% year-on-year.

Interestingly, new order bookings for the quarter grew at an anemic 1.2% to $8.4 billion. This growth was largely driven by increase in outsourcing orders, which at 4.2% QoQ, while consulting declined by 2.6% QoQ.

What this implies is that the discretionary spending is not seeing any major revival but outsourcing is continuing to grow.  In contrast, outsourcing continues to grow, due to the cost efficiencies of most players (including Indian companies) and demand for business process outsourcing.  Edelweiss Securities believes that Accenture is facing stiff competition from Indian players, which is why it is struggling.  Infosys’ pronounced aggression in the market is making things even tougher. The brokerage says: “We continue to believe that Accenture has reaped the benefits of low hanging fruits and increasingly cost is becoming relevant which should benefit Indian IT companies.”

Analysts say that Accenture’s revenue growth guidance of 2-6% for the FY14 is the lowest in four years. The benefits of low-hanging fruits may be over for Accenture as Indian companies like Infosys getting into the race with aggressive pricing models and cost efficiencies.

India's forex reserves jump by $2 bn

 India's foreign exchange (forex) reserves jumped by $2.03 billion to $277.38 billion for the week ended Sep 20, the biggest weekly gain in nearly two years, on the back of concessional swap facilities offered to banks by the Reserve Bank of India (RBI).

The forex reserve has increased sharply for the second consecutive week. It had jumped by $544.7 million in the previous week.

According to RBI's Weekly Statistical Supplement, the country's foreign currency assets, the biggest component of the forex reserves, increased by $1.97 billion to $249.22 billion for the week ended Sep 20.
The foreign currency assets, expressed in the US dollar term, include the effect of appreciation or depreciation of non-US currencies held in reserve, such as the pound sterling, euro and yen.
Analysts say the concessional swap facilities offered by the RBI to banks was the main reason for such a sharp increase in the forex reserve. The RBI had announced the concessional swap facilities Sep 4, with a view to support the battered rupee.

Under the new facilities, commercial banks can swap dollars raised through foreign currency non-resident deposits and overseas forex loans with RBI at a discount to the market swap rate.
The special drawing rights (SDRs) increased by $38.3 million to $4.42 billion, while reserves with the International Monetary Fund (IMF) rose by $17.4 million to $2.01 billion.
The value of India's gold reserves remained unchanged at $21.72 billion during the week under review.

SKS Microfinance completes Rs 321 crore securitization transaction

The transaction is possibly the first substantial securitization deal in FY14 in the microfinance sector.

SKS Microfinance Limited  announced the conclusion of a securitization transaction for Rs. 321 crore, rated A1+ (SO) by a leading rating agency, with a major public sector bank.

The transaction is possibly the first substantial securitization deal in FY14 in the microfinance sector.
“This fiscal we could complete the first securitization transaction in Q2 itself as against Q3 in FY13,” said S. Dilli Raj, Chief Financial Officer, SKS Microfinance Limited. “The present transaction generates liquidity of Rs. 321 crore for SKS Microfinance Limited, and enables the Company to extend micro loans to 4,75,000 rural women entrepreneurs. Notably, 29% of the pool is from loans extended to women entrepreneurs from Scheduled Castes and Scheduled Tribes, 17% from minorities, 37% from Backward Castes and the remaining 17% from women belonging to the other castes. The entire pool thus qualifies for weaker section treatment for the bank."

Another significant aspect to be noted is that the transaction further corroborates the fact that securitization is emerging as a meaningful financial inclusion tool

RBI guv for conversion of co-op bank

RBI governor Raghuram Rajan has kind of a bee in his bonnet about financial inclusion and that is why he is more than ready to allow urban cooperative banks to acquire the status of scheduled commercial banks if they meet the criteria of minimum capital and deposit size.

The new governor seems bent on allowing a proliferation of small banks so the whole country gets banked. India has 88 scheduled commercial banks: 26 state-run banks, 20 private banks and 42 foreign banks.
Financial inclusion has of late become a major goal of the apex bank as a high 40% of India’s population does not take part in formal financial services.

RBI had introduced a three-year financial inclusion program in 2010 that saw 200,000 villages covered by banks.
RBI is working on a new financial inclusion plan to broaden access in the next years.
Sources say the RBI idea of allowing cooperative banks to transform themselves into scheduled commercial banks has thrilled the cooperative world.

Nifty opens below 5,800, Asian markets weigh

The Sensex has opened lower by 141 points at 19,594 mark and the Nifty slipped by 44 points at 5,789 levels

Markets have started the trading session on a lower note tracking weak Asian cues. The Sensex has opened lower by 141 points at 19,594 mark and the Nifty slipped by 44 points at 5,789 levels.

Asian stocks fell on Monday on concern the US government is headed for a shutdown amid a budget stalemate. Key benchmark indices in Japan, Hong Kong, Taiwan, Indonesia, Singapore and South Korea fell 1-2%. China's Shanghai Composite rose 0.45%.

Nikkei falls 2% on global political concerns

U.S. stock futures and the dollar came under pressure on Monday as a shutdown of the U.S. government seemed increasingly likely, though the euro had political troubles of its own as the Italian government teetered on the edge of collapse.

The end result was a shift out of equities and toward safe havens including the yen, Swiss franc and some sovereign debt. U.S. Treasuries also benefited from a view that the economic damage done by a government closure would be yet another reason for the Federal Reserve to keep interest rates low for longer.

"Weekend political dynamics in the U.S. and Italy are likely to keep markets on the defensive at the start of a busy week for data and policy events," Barclays analysts wrote in a note.

The damage was clear in U.S. stock futures where the S&P 500 contract shed 0.7 per cent, as did the E-MINI S&P.

Asian stocks followed, though markets in the region are often reluctant to be first to react to U.S. and European events that happen over the weekend.

MSCI's broadest index of Asia-Pacific shares outside Japan eased 0.5 per cent. Japan's Nikkei fell 2 per cent and South Korean shares lost 0.8 per cent.

The air of risk aversion lifted the yen across the board. The dollar fell to 97.84 yen from 98.20 late in New York on Friday, while the euro sank to 132.01 yen from 132.78.

The euro also lost ground to the Swiss franc, hitting its lowest since early May at one point. Against the U.S. dollar, it was off a quarter of a cent at $1.3494.

The losses came as Italian Prime Minister Enrico Letta said he would go before parliament on Wednesday for a confidence vote after ministers in Silvio Berlusconi's centre-right party pulled out of his government at the weekend.

Letta said he wanted to avoid elections under the current widely criticised voting system which he said would produce more stalemate, but it was not clear if an alternative majority could be found.

Meanwhile in Washington, it seemed increasingly unlikely that Republicans and Democrats could reach a deal on funding the government before the fiscal year ends at midnight on Monday.

If so, many government employees will be furloughed and the Labor Department will not issue its monthly employment report scheduled for Friday.

It would also set the stage for a far-more consequential fight to raise the federal government's borrowing authority. Failure to raise the $16.7 trillion debt ceiling by mid-October might force the United States to default on some payment obligations - an event that could cripple the economy and send shockwaves around the globe.

Markets have always assumed it would never actually come to default, given the grave repercussions. Indeed, U.S. government debt still seemed to be considered a safe haven with Treasury futures trading 9 ticks higher on Monday.

Investors also bid up Eurodollar futures on expectations that a drawn-out government shutdown and brinkmanship over the debt ceiling would keep the Fed from tapering its asset buying anytime soon.

The political bickering overshadowed data from Japan showing manufacturing activity expanded in September at the fastest pace since the earthquake and nuclear disaster of early 2011.

Also due later is the final September HSBC manufacturing purchasing managers' index (PMI) for China, while the official PMI is out on Tuesday and HSBC services PMI on Friday.

"China data will provide confidence to investors who are consumed by the U.S. cues, but probably not enough to convince investors about risk-taking behaviour," said Samsung Securities analyst Kim Yong-goo.

In commodity markets, gold was a shade firmer at $1,339.91 an ounce, while copper futures fell 0.4 percent.

Brent oil for November dropped 73 cents to $107.90 a barrel and NYMEX crude lost $1.08 to $101.75 a barrel.

Japan’s industrial output down 0.7% in August

Japan’s industrial production edged down a seasonally adjusted 0.7 per cent in August from the previous month for the first drop in two months, the Government said on Monday.

The figure, which was slightly below the 0.4 per cent fall predicted by analysts surveyed by the Nikkei business daily, followed a 3.4 per cent rise in July.

The Ministry of Economy, Trade and Industry maintained its basic assessment, saying “industrial production shows signs of picking up at a moderate pace.” The index of production at factories and mines stood at 97.2 against a baseline of 100 for 2005, the ministry said.

General machinery, transport equipment and information electronic equipment industries contributed to the bulk of the fall in August, the ministry said.

Manufacturers surveyed by the ministry expected industrial output to jump 5.2 per cent in September and rise 2.5 per cent in October.

The index of industrial shipments edged up 0.4 per cent in August from the previous month to 96.0, and that of industrial inventories inched down 0.1 per cent to 108.6, the ministry said.

Sensex sheds 160 points on weak global cues; Bank, realty stocks slide

The Nifty and the Sensex were trading down by about 0.8 in the pre-close session due to lack of positive cues.

At 3.00 p.m., the Nifty was trading at 5,833.55, down 48.7 points or 0.83 per cent, while the Sensex was trading at 19,733.36, down 160.49 points or 0.81 per cent.

The downtrend was led by banking, realty, metal and capital goods stocks which were down 1.72 per cent, 1.31 per cent, 1.23 per cent and 1.2 per cent, respectively.

On the other hand, oil & gas, healthcare, IT and FMCG stocks capped the Sensex losses and were up 0.54 per cent, 0.08 per cent, 0.02 per cent and 0.01 per cent, respectively.

Hero MotoCorp, Sun Pharma, Coal India, RIL and TCS were the top five Sensex gainers, while the top five losers were BHEL, Tata Steel, Hindalco, Bharti Airtel and HDFC Bank.

European indices, FTSE 100, CAC-40 and DAX were trading marginally in the red after a report said that Bank of England Governor Mark Carney sees no need for further monetary stimulus.

Asian stocks were mixed after US jobless claims data pointed to a improving labour market, reviving hopes of a reduction in US monetary stimulus.

But a stalemate in US congressional negotiations over the budget and increasing the federal borrowing limit is likely to cap the gains in global shares.

Bajaj Auto likely to raise prices of vehicles

It will be launching new variants of Pulsar and Discover in 3 months

Two wheeler major Bajaj Auto today said it was planning to increase prices of its vehicles across segments due to rise in input costs.

"It seems likely that we have to raise prices because commodity prices have gone up significantly, partly owing to the way forex has moved. So, I think, yes, we are looking at a price increase," Bajaj Auto Managing Director Rajiv Bajaj told reporters here.

He was speaking on the sidelines of an AIMA event here.

"We have not decided how much and when but it is inevitable that in the near term there will be a price increase," he added.

When asked about the previous price hike, Rajiv Bajaj said the company had last increased prices of its vehicles five to six months ago, and the rupee at that time was close to 53-54 against the dollar.

"That (rupee value) has changed significantly, and as a result domestic players have increased prices of their products. So, there is a lot of cost pressure," he added.

On being asked if the price rise would cover the entire range of products, Bajaj said: "It would be across most products because when the commodities (prices) go up, they affect all the segments."

On new launches, Bajaj said the company would be launching new variants of Pulsar and Discover in next three months.

When asked if the company is upbeat on the effect of monsoon on sales figure, he said, "It is hard to say. So far, we do not see any tangible signs of change, although we see lot of hope. Next two months will be good for obvious reasons. But, I am concerned about how the demand would shape up from December."

On launch of its next generation vehicle 'Quadricycle', Bajaj said: "I would like to keep it very factual. What I have heard is that Minister Oscar Fernandes called the representatives of the industry and called for their comments. Today is the last day for the 30 days draft notification, and it is expected that in a couple of weeks, the (Road Transport) Ministry would announce a decision."

My own expectation is that there would be no roll back on the Quadricycle, but what exact notification and time-frame would be announced is what we have to wait and watch, he added.

When asked if the company would launch the Quadricycle in Europe if delayed in India, Bajaj said: "I do not want to speculate like that. It is just a matter of two to three weeks. Then we would know what the reality is, and accordingly we would make plans," he said.

Gold futures down 0.26 % on rising rupee

Gold futures prices on Friday fell by 0.26 % to Rs. 29,787 per 10 grams as speculators offloaded their positions, taking weak cues from the global market amid rising rupee.

Besides, subdued demand at spot markets also put pressure on the prices

At the Multi Commodity Exchange, gold prices for delivery in October fell by Rs. 78, or 0.26%, to Rs. 29,787 per 10 grams in business turnover of 490 lots.

Similarly, metal prices for delivery in far-month December declined by Rs. 23, or 0.08%, to Rs. 29,396 per 10 grams in 155 lots.

Analysts said the fall in gold futures was mostly attributed to a weak trend overseas and a rising rupee, which made dollar-quoted precious metal cheaper.

Slackened demand at domestic spot markets, too put pressure on the prices, they said.

Globally, gold prices fell 0.70% to trade at $1,323.80 an ounce in New York on Thursday.

UB Group stocks in demand

United Breweries, United Spirits, UB Holdings, Kingfisher Airlines and McDowell Holdings are up 5-10% on the BSE.

Shares of Vijay Mallya led United Breweries (UB) Group companies are in limelight trading higher by up to 10% in late noon deals on the Bombay Stock Exchange (BSE).

United Breweries, United Spirits, United Breweries Holdings, Kingfisher Airlines and McDowell Holdings are up 5-10% on back of heavy volumes.

Kingfisher Airlines is locked upper circuit for fourth day in a row, up 5% at Rs 6.52 on reports that the UB Group is in talks with a foreign investor for potential stake sale in the company. The stock has surged 44% in past one week from Rs 4.56 on the BSE.

On Tuesday, 24 September 2013, the company's Chairman Vijay Mallya that the company is in talks with a foreign investor for a potential stake sale. Kingfisher Airlines has been grounded since October 2012 for want of cash.

Among the other UB Group stocks, United Breweries Holdings and McDowell Holdings have rallied 10% each at Rs 29.25 and Rs 25.45 respectively, while United Breweries and United Spirits are up 9% each at Rs 900 and Rs 2,675 respectively on the BSE.

Videocon, BPCL JV with Petrobras strikes oil in Brazil

Oil field estimated to hold more than a billion barrels of oil; will be a game changer for Videocon, BPCL JV

A joint venture between Videocon Industries and BPCL has found more than a billion barrels of oil in a field off the Brazilian coast.

Government-owned Brazil Petroleo Brasileiro SA and IBV Brasil, a 50-50 joint venture between Bharat Petroleum Corporation (BPCL) and Videocon Industries Ltd, have found that "SEAL-11" exploration block contains very large amounts of high-quality light crude oil and natural gas.

The field, with $12 billion of oil reserves, is good news for the investors of BPCL and Videocon even as share price of both companies shot up on the Bombay Stock Exchange on Friday. During the afternoon trades, Videocon was up 8.5% to Rs 184 a share while BPCL was up to Rs 336 a share.

“This is the biggest overseas find by any Indian company and it will propel Videocon and BPCL to become one of world’s biggest oil producing companies,” said an oil analyst. IBV owns 40% stake in the block – which is one of the biggest global discoveries of the year.

When contacted, Videocon Chairman VN Dhoot declined to comment on the issue. But sector analysts say the SEAL-11 may hold more than 3 billion barrels of oil in place. The exact numbers will only be known once appraisal plans are completed in the next two years.

For Videocon, the oil find in Brazil is a game changer as it transforms the group from a consumer durables company to an oil giant. Just few months ago, it announced sale of its Mozambique gas field to Indian government-owned OVL and Oil India for close to $2.5 billion. Post its exit from Mozambique field, the company is now focusing on Brazil which holds huge oil reserves.

In an earlier interview, Dhoot had said the company will now endeavor to emerge as a major player in the global oil and gas industry.

“We have created huge and unprecedented value in our entire exploration portfolio built tirelessly over the last seven years globally, ranging from Brazil to Indonesia to Timor and Australia. Mozambique is a small portion of the total pie of reserves and potential reserves our 12-14 prolific blocks show. We are explorers at heart and hence we will continuously look at opportunistic portfolio reshuffle of our assets and buy new assets in exploration and also venture into producing blocks across the globe in new frontiers like we have in the past and further build on the success we have already achieved,” he had said.

Today, Videocon is globally recognized in this field and shares a seat with amongst the world’s largest oil companies in oil exploration and hence opportunities come to us more easily than they did five years back, he said.

“We will continue to focus aggressively on our existing oil assets globally, which have a proven recoverable potential of over 2 billion barrels of oil as of today and a lot more to look forward to with new exploration targets there, especially in Brazil,” Dhoot had said.

Sensex slips 100 points, Nifty slips below 5,850

The Nifty was witnessing selling pressure and was near day's low as profit booking picked up in banks, realty, metals and capital goods sectors. Analysts expect the market to correct further in the near term in absence of positive triggers to drive the market higher.

"The Indian markets snapped the September F&O series on a very quiet note, though the series witnessed gains of over 8 percent for the benchmarks. The start of the new series is likely to be cautious and markets may remain in consolidation mood. Traders will be eyeing the movement of rupee, which is on an appreciation move, outperforming all its regional peers after RBI took additional measures for liquidity," said LKP report.

"There will be some concern in the rate sensitives as the RBI governor Raghuram Rajan has questioned central banks across the globe, whether current ultra-low interest rates are the right way to return to growth after the financial crisis, sending jitters back home," the report added.

At 01:00 p.m.; the 50-share index was at 5,851.20, down 31.05 points or 0.53 per cent. The index touched intraday high of 5,909.20 and a low of 5,846.40.

The S&P BSE Sensex was at 19,784.42, down 109.43 points or 0.55 per cent. It touched a high of 19,981.57 and a low of 19,757.20 in trade today.

The S&P BSE Midcap Index was up 0.18 per cent and the S&P BSE Smallcap Index gained 0.48 per cent.

Among the sectoral indices, the S&P BSE Oil & Gas Index was up 0.66 per cent, the S&P BSE IT Index was 0.20 per cent higher and the S&P BSE Healthcare Index gained 0.17 per cent.

The S&P BSE Bankex was down 1.57 per cent, the S&P BSE Realty Index declined 1.02 per cent and the S&P BSE Metal Index was 0.95 per cent lower.

ICICI BankBSE -1.92 % (2.81 per cent), Tata SteelBSE -2.62 % (2.65 per cent), BHELBSE -3.26 % (2.16 per cent), Hindalco (2.1 per cent) and Jaiprakash Associates (2.08 per cent) were among the top Nifty losers.

BPCLBSE 6.15 % (6.34 per cent), Hero MotoCorpBSE 2.51 % (2.42 per cent), HCL Tech (2.11 per cent), Sun Pharma (1.53 per cent) and Grasim (0.98 per cent) were among the index gainers.

The market breadth was positive on the NSE with 577 gainers against 560 losers.

Foreign institutional investors(FIIs) bought shares worth Rs 172.15 crore while domestic institutional investors were net sellers worth Rs 362.11 crore on Thursday as per the provisional data from the National Stock Exchange.

ICICI Bank opens 12 new branches in Jammu & Kashmir

ICICI Bank, India's largest private sector bank, has opened 12 new branches in Jammu & Kashmir. These new branches will offer the entire gamut of ICICI Bank products including a comprehensive range of deposits, loans and NRI services. Most of the branches will also have Privilege banking as well as locker facilities to cater to different customer profiles and needs. The branches will remain open for customer transactions from 9:00 am to 6:00 pm on Monday to Friday and 9.00 am to 2.00 pm on Saturday.

ICICI Bank has 3,384 branches and extension counters, and over 11,000 ATMs spread across the country. The Bank services its large customer base through a multi-channel delivery network of branches, ATMs, call center and internet banking.

BPCL, Videocon Ind gain on new oil find in Brazil block

BPCL has surged 8% to Rs 333, while Videocon Industries up 3% at Rs 175 on NSE.

Bharat Petroleum Corporation Limited (BPCL) has surged nearly 8% to Rs 333 on NSE reports that a drilling campaign off Brazil's northeastern coast showed that an area control by the consortium of IBV Brazil likely hold more than a billion barrels of oil.

The stock opened at Rs 315 and has seen a combined around 1.4 million shares change hands on the counter till 0950 hours on NSE and BSE.

Petroleo Brasileiro SA, as Brazil's state-run oil company is formally known, and IBV Brazil, a 50-50 joint venture between BPCL and Videocon Industries, have determined the SEAL-11 exploration block contains very large amounts of high-quality light crude oil and natural gas, the Reuters report suggests.

The SEAL-11 block and adjacent areas, 100 kilometers (62 miles) off the coast of the Brazilian state of Sergipe, may hold more than 3 billion barrels of oil in place. If confirmed, that would make the block - owned 60% by Petrobras and 40% by IBV - one of the biggest global discoveries of the year, added report.

Meanwhile, Videocon Industries is trading higher by 3% at Rs 175 on BSE.

Shipping stocks extend gain, ABG Shipyard surges over 35% in 2-days

ABG Shipyard, Bharati Shipyard, SCI, Mercator, G E Shipping and Varun Shipping are up 3-14% on the BSE.

Shares of shipping companies are continue their upward march and rallied up to 14% second day in a row  after the Baltic Dry Index touched its highest level since December 23, 2011 on Wednesday.

ABG Shipyard, Bharati Shipyard, Shipping Corporation of India (SCI), Mercator, Great Eastern Shipping Company and Varun Shipping Company are up 3-18% on the Bombay Stock Exchange (BSE).

The Baltic Dry Index, benchmark for measure of shipping or sea freight rates across the world, has surged over 30% in past two weeks.

Higher shipping rates are generally positive for shipping companies’ revenues, which will positively affect earnings, cash flows, and share prices.

ABG Shipyard has zoomed 14% to Rs 343, extending its previous day’s 20% rally on the BSE. On Thursday, ICICI Prudential Life Insurance Company had sold 582,000 shares of private shipbuilder at an average market price of Rs 271 per share, through open market transactions. However, the name of the buyer was not disclosed by the company.

Among the other individual stocks, Bharati Shipyard has soared 11% to Rs 34, followed by G E Shipping (up 4% at Rs 309) and SCI (up 3% at Rs 41.80) at 1010 hours.

LIC sells stake in Infosys

Sells close to 1.16 crore shares amounting to Rs 3,738 crore

LIC, the country’s largest insurer, has reduced its stake in IT bellwether company Infosys by about 2%. LIC’s stake in Infosys now stands at 5% down from 7% earlier.

In a filing on Friday, the insurer informed the exchanges that it had sold close to 1.16 crore shares amounting to Rs 3,738 crore. The sale was done through the open market on both the NSE and the BSE.

As of June 2013, LIC’s stake in Infosys was about 6.72%. The insurer had been consistently raising its stake in the company for the past two quarters.

On Thursday, the Infosys scrip closed up 0.2% at Rs 3013.35 per share.

The BSE Sensex ended the day on Thursday up 0.2% to 19,893, while the NSE Nifty was up 0.1% to 5,882.

Scindia to seek affordable gas price for power

Power minister Jyotiraditya Scindia said on Thursday that he will soon approach the cabinet for putting in place a suitable mechanism under which gas to power projects can be supplied at a viable price.


Scindia said while the government has raised gas prices - that are expected to almost double to $8.4 a unit (per million British thermal unit) from April, 1, 2014, the same cannot be made applicable for the power sector because the cost of power (being a regulated commodity) at this price is not viable.

"Anything beyond $5 a unit is unviable for the power sector and a mechanism to address this issue will have to be worked out by the government ...for which I will be taking this issue shortly to the cabinet," Scindia said while addressing a conference on completing 300 days as the power minister.

The power sector has been struggling to source gas at an affordable price for the 7,800 MW stranded gas-based power plants. At present, the power sector sources domestic gas at $4.2 a unit, but the new price is expected to be almost double from April 1, 2014.

Scindia said while there has already been an agreement that power projects would get any surplus gas produced in India until March 2016, after requirement of the fertiliser plants is met, the cost at which gas is supplied to this sector is of utmost importance.

Scindia also announced that in order to maintain grid discipline and have greater private sector investment in building transmission systems, he would be taking another proposal to the cabinet for having an independent transmission (or grid) regulator.

This, he said, will be done by providing greater autonomy to POSCO, currently an arm of India's largest transmission company - Power Grid.

"We are looking for private sector participation in the transmission sector for which there is a need for a regulator and POSOCO cannot perform as a regulator if it works as a subsidiary of Power Grid," he said.

After POSOCO achieves autonomous status, it will act as a regulator for the transmission grid that is primarily engaged in maintaining grid discipline and discouraging overdrawal of electricity by the states.

Scindia also exuded confidence over getting a better response from companies for the upcoming ultra mega power projects (UMPPs) in Odisha and Tamil Nadu.

Japan consumer prices up 0.8% in August

Consumer prices in Japan rose 0.8 per cent in August from a year earlier for the third straight month of increase on higher electricity and other energy prices amid the yen’s fall, the government said on Friday.

The core consumer price index, which excludes fresh food, stood at 100.4 against a base of 100 for 2010, the Ministry of Internal Affairs and Communications said.

Bank of Japan Governor Haruhiko Kuroda, who took office in March, vowed to pull the nation’s economy out of 15 years of deflation. The bank decided to take aggressive monetary easing measures to achieve an inflation target of 2 per cent within about 2 years.

In June, the index climbed 0.4 per cent in the first increase in 14 months.

A weaker yen is a factor contributing to the higher energy prices as the depreciation of the currency drove up import costs.

Sun Pharma soars on buzz of higher Doxil sales in US

Sun Pharmaceutical Industries touched an all-time intraday high of Rs 587 a share on Thursday on hopes of higher sales of its key cancer drug, Doxil, after innovator Janssen Pharmaceuticals Inc, a unit of Johnson & Johnson (J&J), said on Wednesday that the drug will likely be in short supply in the coming weeks.

The expected shortage in supply is due to an interruption from the company’s own supplier, Ben Venue Laboratories Inc, J&J said. The company said it is unable to provide an estimate of when the cancer drug would be available again and advised healthcare providers to contact Sun Pharma.

Analysts tracking the sector pointed out that Sun Pharma already has 50% market share in this drug, and the development means it will be the only supplier in the US until J&J resumes supply.

Credit Suisse initiated coverage on the company’s unit Taro Pharmaceutical Industries with an “outperform” rating and a target of $85, saying improving growth visibility, was seen helping the shares.

Barclays reiterated its overweight rating on the stock saying “we see renewed opportunity to drive Doxorubicin growth”.

“Given the current Doxorubicin landscape, we reiterate our OW on Sun Pharma with a 12-month price target of Rs 600. We believe that Sun could likely repeat last year’s success (CY2012 revenues of $120 million vs CY13 revenues of $63 million year to date) as a result of the current situation,” the report added.

The stock closed the day at Rs 581.30, down from the day’s high, but still up 2.16%.

Sensex opens on a flat note

Indian equities opened the session marginally in the green on buying by funds and retail investors in select stocks amid firm Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was up 30.09 points (0.15 per cent) at 19,923.94 and the 50-share NSE index Nifty was up 23.3 points (0.4 per cent) at 5,905.55.

Asian stocks, except Nikkei, are headed for the best monthly gain since September 2010 after US jobless claims data pointed to a improving labour market, reviving hopes of a reduction in US monetary stimulus.

But a stalemate in US congressional negotiations over the budget and increasing the federal borrowing limit is likely to cap the gains in global shares.

In the Asian trade, Japan's Nikkei fell 16.52 points or 0.11 per cent to 14,782.60, Hong Kong's Hang Seng was up 20.91 points or 0.09 per cent at 23,145.90 and Australia's S&P/ASX 200 was up 12.65 points or 0.24 per cent at 5,307.10.

On Thursday, the Dow Jones industrial average ended down 60.59 points or 0.4 per cent at 15,274.00. The Standard & Poor's 500 Index was down 4.53 points or 0.27 percent, at 1,692.89. The Nasdaq Composite Index was down 7.05 points, or 0.19 percent, at 3,761.21.

Finance Ministry approves Rs 5,500 crore fertiliser subsidy under SBA

Indian fertilizer sector suffering with acute liquidity crunch is not likely to get much respite, as the Finance ministry has agreed to pay only Rs 5,500 crore subsidy under a special banking arrangement (SBA) as against Rs 12,000 crore sought by the Department of Fertilisers (DoF). 

Though, the total requirement of funds for the sector is estimated to be around Rs 30,000 crore, which the department was going to seek under supplementary grant, but as the domestic urea subsidy funds got exhausted, DoF sought Rs 12,000 crore under SBA as immediate requirement. DoF hopes that finance ministry will pay the remaining amount soon as industry plays an important role in making the country self-reliant in food grain production.

Meanwhile, the government has marginally reduced the fertiliser subsidy to Rs 65,971.50 crore for the current fiscal as compared to the revised estimate of Rs 65,974 crore in the previous fiscal. For current fiscal, the government will provide Rs 21,000 crore for indigenous (urea) fertilisers, Rs 15,544.44 crore for imported urea, and Rs 29,426.86 crore for decontrolled fertilisers (DAP, MOP and complexes) for supplying the inputs to farmers at a subsidised rate.

ICICI Prudential Life Insurance sells 5.82 lakh shares of ABG Shipyard

ICICI Prudential Life Insurance Company has sold total 582,608 shares of ABG Shipyard through an open market transaction on September 26, 2013. The life insurer has sold 291,304 shares at Rs 271.01 on National Stock Exchange (NSE) and another 291,304 shares at Rs 271 on Bombay Stock Exchange (BSE).

ABG Shipyard is engaged in the business of carrying shipbuilding and ship repair business. The company has emerged as the largest private sector shipbuilding yard in India with satisfied customer base all around the world.

Balrampur Chini Mills gets nod for merger of KSMPL with itself

Balrampur Chini Mills (BCML) has received an approval whereby Board for Industrial and Financial Reconstruction (BIFR) has sanctioned merger of Khalilabad Sugar Mills (KSMPL) with BCML under the modified draft rehabilitation scheme.

The certified copy of the order of BIFR has been filed with Registrar of Companies (RoC) both West Bengal and UP on September 26, 2013. The said scheme comes into operation from the appointed date i.e. April 01, 2012.

Balrampur Chini is one of the largest integrated sugar manufacturers in India. Its business portfolio consists of manufacturing and marketing of sugar, ethyl alcohol, ethanol, generation and selling of power and also manufacturing and marketing of organic manure.

World shares mixed after US data

US jobless claims point to improving labour market, revive expectations of reduction in US monetary stimulus

The dollar held firm in early Asian trade after US jobless claims figures pointed to a improving labour market, reviving expectations of a reduction in US monetary stimulus.

Lack of progress in budget and debt negotiations in Washington could also undermine investor risk appetite, capping gains in global shares.

Both Japanese shares and MSCI's broadest index of Asia-Pacific shares outside Japan were little changed in early trade.

"Though US jobless claims data is positive enough to marginally lift the market, investors need further evidence of a US economic recovery as well as a settlement in Washington," said Hanyang Securities analyst Lim Dong-rak.

The dollar's currency basket index held firm after gaining 0.2% on Thursday, extending its recovery from seven-month low hit last week when the Fed decided not to trim its bond buying.

The dollar was also helped by the euro's fall amid renewed concerns Italy's fractious coalition government could fall apart.

Italian centre-right deputies supporting former Prime Minister Silvio Berlusconi renewed threats to resign if their leader is expelled from Parliament following a tax fraud conviction.

The euro traded at $1.3487, off seven-month high of $1.3569 hit last week while the dollar fetched 98.87 yen, maintaining its 0.6% gain on Thursday.

The yen showed no reaction to data that showed Japan's core inflation rose to five-year high.

US weekly initial claims for unemployment benefits dropped 5,000 last week despite economists' expectations of a rise, helping US shares to end a five-day losing streak.

The claims data's four-week moving average, a key gauge that smoothes out weekly volatility, dropped to 308,000, the lowest level since June 2007.

That fall could add to the case that the Fed is safe to go ahead with winding down its bond buying programme later this year.

Indeed, Fed Board Governor Jeremy Stein, who voted for keeping stimulus in place at the September 17-18 meeting, said on Thursday he would have been comfortable with tapering at that meeting, adding the decision was, for him, a "close call".

An end to US monetary stimulus could, however, hurt emerging markets that rely on foreign capital, such as India and Indonesia. Overnight, most Latin American shares eased.

An impasse in US congressional negotiations over the budget and increasing the federal borrowing limit is likely to cap global shares.

"The market thinks default will be averted in the end, as usual. Yet this is not something that makes the markets go risk-on," said Tohru Yamamoto, chief fixed income strategist at Daiwa Securities.

The cost of protection against US sovereign debt default in the credit default swap market has risen to its highest level in four months.

Republican lawmakers in the US House of Representatives refused to give in to President Barack Obama's demands for straightforward bills to keep the government running beyond September 30.

The move makes does not bode well for prompt resolution of these fiscal battles that could lead to a government shutdown on October 1 and at the very extreme, a default in mid-October, when the Treasury will have run out of money.

‘Banks should exert influence to help SMEs get their dues’

“Banks should exert their influence over big companies to settle their dues to small and medium enterprises (SMEs) on time,” said Uma Shankar, Regional Director, Reserve Bank of India (RBI).

Addressing the ‘SME CEO Knowledge Forum’ sponsored by UTI Mutual Fund, in association with  SIDBI and KPMG as knowledge partners, Uma Shankar pointed out that SMEs have no muscle power to tell big companies to pay on time or a voice to tell them to pay their dues on time. “It is here the banks should step in to help them for their survival.”

She pointed out that most SMEs are a ‘one-man-show’ units and they face hindrances such as lack of manpower, lack of ability to market products, prepare financial statements, adhere to norms or get technical support or know-how. Also, these SMEs lack resources to advertise their products or have constraints in getting funds.

Uma Shankar said several institutions such as SIDBI (Small Industries Development Bank of India) have been set up in the country to help SME units/entrepreneurs, while commercial banks have been specifically instructed to set aside some portion of lending to the SMEs.

She also advised SMEs that after getting financial assistance, they should adhere to fiscal discipline in their daily business functioning so that the repayment schedule is not violated.

They should also prepare financial statements according to ICAI norms, and internally they should seek the co-operation of their employees to adhere to production timelines and quality.

Bharath L. Ghia, Country Head, SME & Distribution Channel of UTI Mutual Fund, said SMEs should explore the option of investing in mutual funds which provide better returns. B.P. Shashidar, President of Kassia (Karnataka Small Scale Industries Association), said from his experience, operating a small unit was not an easy task. “It is a mix of risk, tension, pressure, anxiety, progress, thrill and satisfaction too as they contribute to the society at large.”

Ram Nath, Chief General Manager, SIDBI, said SMEs should stop asking for subsidies and instead seek competitive rates.

Market expects OMOs to resume from Oct

So far in FY14, RBI has infused Rs 30,000 cr via open market operations

With the Reserve Bank of India (RBI) assuring market participants that it will ensure adequate liquidity to support flow of credit to the productive sectors, the bond market expects RBI to conduct open market operations (OMO) for infusing liquidity in October.

“The next OMO may happen in the second week of October. From then, banks will be busy for the lending season. At that time, some liquidity support can come. After yesterday’s (Wednesday) assurance by RBI, sentiments in the bond market improved,” said N S Venkatesh, chief general manager and head of treasury, IDBI Bank and chairman of the Fixed Income Money Market and Derivatives Association of India.

So far in the current financial year, RBI has infused liquidity by about Rs 30,000 crore through OMOs.

OMO is the buying and selling of government securities in the open market by the central bank, in order to expand or contract the amount of money in the banking system

“OMOs will be based on RBI's assessment of liquidity. One has to be patient. Traditionally, RBI did more OMOs in the second half of a fiscal. The busy season and the festive season will drain cash out of the system, that is when we can perhaps expect (OMOs). The second half of October may be the time for initiation of OMOs, based on RBI”s assessment of systemic liquidity,” said Dhawal Dalal, executive vice-president and head of fixed income at DSP BlackRock Mutual Fund.

Liquidity will remain tight owing to sluggish deposit growth, while credit growth has picked up thanks to festival-related demand. The gap between deposit and credit growth has widened with credit expanding at 18.2 per cent, while deposits are growing at 13.4 per cent, on a year-on-year basis. Bond yields had hardened following RBI’s liquidity tightening steps announced on July 15. Of late, banks have been borrowing heavily from the central bank. Apart from capping borrowing from liquidity adjustment facility at 0.5 per cent of banks’ net demand and time liabilities, the marginal standing facility (MSF) rate was also raised by 200 basis points (bps) to 10.25 per cent.

In the mid-quarter review of monetary policy last week, the MSF rate was reduced by 75 bps and RBI is expected to withdraw the steps in an calibrated manner.

Currently, RBI is injecting about Rs 1.5 lakh crore into the banking system on a daily basis through the LAF, the export credit refinance facility (ECR) and the MSF taken together. The government has announced a gross borrowing programme of Rs 5.79 lakh crore for the current financial year. Out of which, the market borrowing will be Rs 2.35 lakh crore in the second half.

According to the central bank, despite the liquidity infusion, liquidity conditions have been tightening due to uncertainties around the government borrowing programme for the second half of FY14, as well as the prospective effects of banks’ half-yearly account closure, the seasonal pick-up in credit demand, festival-related demand for currency and sluggish deposit growth.

On Thursday, the yield on the 10 year government bond closed at 8.72 per cent, which has risen by about 150 bps in the current quarter. In August, yield had touched 9.23 per cent.

WHY IS LIQUIDITY TIGHT?

* Growth gap between credit and deposit growth

* Two bond auctions this week. On Monday, close one-third of Rs 15,000 crore auction devolved and another Rs 14,000 crore auction scheduled tomorrow

* Banks borrowing capped at 0.5% of NDTL

* Advance tax outflow for second quarter of about Rs 50,000 crore

* Festive season credit demand

* Only 4 OMOs conducted in H1, the last one on Aug 30

BSE Sensex,Nifty flat; Indian hotels up 11%, BHEL gains 5%

3:30 pm Rupee stings: Stung by the rupee's recent collapse, the Reserve Bank of India (RBI) is taking a carrot-and-stick approach to curb trade in the offshore forwards market that is seen as a key source of wrenching currency volatility, reports Reuters. However, with no viable alternative to trading in non-deliverable forwards (NDF) involving the rupee, the strategy is likely to have only a limited impact. "They are saying that if you are a big pension fund or a large hedge fund, come to India and we will provide you with all the dollar liquidity that you need rather than going to the NDF markets," said the head of trading at a US bank in Hong Kong, who did not want to be named.

The market showed no sign of recovery in the last hour of trading before the September series expiry. Continuing its flattish trend, the Sensex is up 22.04 points or 0.11 percent at 19878.28, and the Nifty gains 4.25 points or 0.07 percent at 5878.10. About 1103 shares have advanced, 1073 shares declined, and 155 shares are unchanged. BHEL remains to be the gainer of the day, gaining around 5.5 percent. Coal India , Sun Pharma , Tata Steel and HDFC are other major gainers in the Sensex. Indian Hotels surged 11 percent on the BSE. On the losing side are Jindal Steel , GAIL , Reliance , HUL and Hero MotoCorp. Shares of Godrej Properties touched a record low of Rs 349.70 on Thursday. Morgan Stanley has equalweight rating on the stock and cut its target price to Rs 407 from Rs 535. The brokerage house also cut its earnings per share estimates for FY14 and FY15 by 45 percent each, driven by slower-than-expected sales at the Ahmedabad and Commercial projects, delay in planned new launches and new revenue recognition guidelines.

Just Dial hits new high since listing

The stock has rallied 72% against its issue price of Rs 483 per share offered to the retail investors.

Just Dial has moved higher by nearly 6% to Rs 830, also its record high since listing in June this year, on the National Stock Exchange (NSE).

The stock has opened at Rs 795 and hit a low of Rs 781 in early morning deals. A combined 114,803 shares change hands on the counter so far on NSE and BSE.

Shares of the Mumbai-based company providing local search services over the Phone, Web, Mobile[4] and SMS has surged 72% against its issue price of Rs 483 per share offered to the retail investors. The company had issued shares at price of Rs 530 per share to institutional investors.

Meanwhile, foreign institutional investors (FIIs) are bullish on the stock, raising their holding in the company by nearly four percentage points post listings.

FIIs total holding in the company had increased to 18.77% as on June 30, 2013 against 14.85% on date of listing, the BSE data shows.

Government to allow private energy firms to explore shale oil and gas from their blocks: Veerappa Moily

 Oil Minister Veerappa Moily said on Thursday that the government would soon allow private energy firms such as Reliance IndustriesBSE -1.14 %, Cairn IndiaBSE -0.30 % and BP and BG to explore shale oil and gas from their existing fields.

"The cabinet has approved shale gas exploration policy for national oil companies, Oil India and ONGC. Soon, the same will be extended to other companies including private energy players," Moily told reporters after the inaugural session of the Global HSE Conference.

The cabinet on Tuesday approved a shale gas and oil exploration policy, which paved way for state-run ONGCBSE -0.98 % and Oil India to hunt for non-conventional resources in blocks awarded to them without auction.

"Initially, I was in favour of an integrated shale gas policy for all players, but there were some issues to be resolved. We decided to move ahead with ONGC and OIL. At least one step forward is better than waiting," Moily said.

He said, the government would also launch the tenth bidding round of oil and gas blocks after certain policy issues are resolved. "We have nine rounds so far. Several issues came up in the Nelp (New exploration licensing policy) rounds. We have learnt lessons. We are working on the next round. The tenth will be the perfect round," he said.

The government has auctioned more than 250 blocks under nine Nelp rounds since 1999, but only two of them are so far producing, that too with several disputes, oil ministry and industry officials said. Reliance Industries, which is producing oil and gas from its KG-D6 block auctioned in the first Nelp round, is facing several contractual issues. It evoked the arbitration clause of the contract in last year after the oil ministry disallowed it to recover its expenditure in developing the D6 gas fields because output from the block fell sharply.

Moily said, the government would resolve differences over interpretations of various contractual provisions soon. "I had a three and a half hour meeting with Reliance and BP last week . That shows we want to resolve the issues," he said.

RIL is protesting the government's move to deny rights over eight gas discoveries worth more than $8 billion because timeline expired and challenged the oil ministry's proposal to deny it the benefit of increased gas price from April 1.

Moily said gas price hike proposed by the Rangarajan committee would be uniformly applicable. "There are no gray areas. There will be uniform gas price for all," he said. He, however, declined to comment on any particular case.

AirAsia announces it has received NOC from Aviation Ministry

AirAsia India today announced it has received the crucial 'No Objection Certificate' from the Civil Aviation Ministry, with the Malaysian parent company's chief Tony Fernandes terming the development as "very exciting".

Though NOC was issued by the Ministry last week, this was the first formal statement by the AirAsia CEO on microblogging site Twitter.

"I am thrilled to announce that Airasia India has received NOC approval from the government of India. Very exciting and hugely profitable," Fernandes said in a tweet.

With the NOC in hand, AirAsia India would now have to apply to the Directorate General of Civil Aviation (DGCA) for its Scheduled Operator's Permit (SOP or the flying permit), which is the final step before it can start its flight operations.

The DGCA grants the SOP after vetting the preparations of a start-up airline to launch flights by examining issues like availability of aircraft, manpower to operate flights as well as on the ground, aircraft parking space at airports and engineering facilities.

The NOC would also enable AirAsia India to import the first of the three aircraft to Chennai, which would be its headquarters.

AirAsia India, a joint venture between the Malaysian airline AirAsia (which would own 49 per cent stake), the Tatas (30 per cent) and the Telstra Tradeplace owned by Arun Bhatia (21 per cent), plans to start operations within this financial year itself.

The start-up airline had been granted security clearances by the Union Home Ministry last month.

Currently, AirAsia operates in Thailand and Malaysia and connects Chennai, Bangalore, Tiruchirappalli, Kochi and Kolkata in India.

Tata Sons have recently announced that they plan to launch another airline in India with Singapore Airlines and have sent their own application to the FIPB for approval. Tatas would own a 51 per cent stake in this venture.
AirAsia India, which was granted formal approval by the Foreign Investment Promotion Board in April, currently has a fleet of three Airbus A-320 aircraft and over 200 employees, including pilots, engineers and ground staff.

The parent company, AirAsia, had submitted a request to start the joint venture to launch AirAsia India in February this year.

In a statement, AirAsia India CEO Mittu Chandilya said "This is the fastest an NOC has been granted and with this, we will focus on obtaining the Air Operating Permit. We will continue with our preparations and get ourselves ready for take-off once the Air Operating Permit is acquired."

He said the new airline would "look forward towards being one of the dynamic contributors to the development of the Indian aviation industry."

The statement said AirAsia India was "confident that it will be able to replicate the success of its counterparts in Malaysia, Thailand and Indonesia, enabling people to fly affordably through superior operational performance by emphasizing a focused and disciplined cost structure which will tremendously benefit the Indian consumer."

Sun Pharma shares at record high

Sun Pharmaceutical Industries Ltd was at an all-time high of 587 rupees on Thursday on hopes of higher sales of its key cancer drug, Doxil, after innovator Janssen Pharmaceuticals Inc, a unit of Johnson & Johnson (J&J) said on Wednesday the drug will likely be in short supply in the coming weeks.

The expected shortage in supply is due to an interruption from the company's own supplier, Ben Venue Laboratories Inc, J&J said.

J&J cannot provide an estimate of when the cancer drug would be available again and has advised healthcare providers to contact Sun Pharma.

Sensex up 62 points; Metal, capital goods stocks shine

Indian equities were trading up by about 0.3 per cent on buying by funds and retail investors in select stocks owing to global cues. Investors also remained cautious ahead of expiry of September month F&O contracts today.

US scrips fell last night on fears that the funding for the Federal Government would run out.

At 12.12 p.m., the 30-share BSE index Sensex was up 62.48 points (0.31 per cent) at 19,918.72 and the 50-share NSE index Nifty was up 19.95 points (0.34 per cent) at 5,893.80.

All the broader and sectoral indices were trading flat.

Metal, capital goods and healthcare stocks remained in the limelight and were up 1.19 per cent, 0.9 per cent and 0.82 per cent, respectively.

On the other hand, oil & gas, consumer durables and realty stocks succumbed to selling pressure and were down 0.79 per cent, 0.69 per cent, 0.61 per cent, respectively.

Sun Pharma, Wipro, Coal India, Tata Steel and Wipro were the top five Sensex gainers, while the top five losers were Jindal Steel, GAIL, HUL, RIL and Cipla.

A report from Dalmia Securities said “On the economic data front, current A/C and GDP data in UK and in the US, GDP data, pending home sales, personal consumption expenditure and jobless claims are some of the important ones lined up for today.”

Most Asian shares were down tracking overnight cues from the Wall Street. US stocks ended lower on Wednesday as Wal-Mart Stores Inc. fell and concerns grew that a political showdown over government spending poses a threat to growth.

US Congressmen is currently struggling to pass a spending bill to keep the government funded beyond October 1. According to US Treasury Secretary Jack Lew, the US will exhaust its borrowing limit on October 17. One of the solutions being contemplated is tampering with the healthcare programme introduced in 2010.

Japan's Nikkei rose 102.66 points or 0.7 per cent to 14,723.20, Hong Kong's Hang Seng fell 68.71 points or 0.3 per cent to 23,140.90 and Australia's S&P/ASX 200 was up 15.96 points or 0.3 per cent at 5,291.90.

The Dow Jones industrial average ended down 0.4 per cent on Thursday, while the S&P 500 Index faded 0.27 per cent. It was the fifth consecutive session of losses for the benchmark S&P 500, the first such period for 2013.

HCL Tech inches up as its arm secures multi-year deal from WyCAN Consortium

HCL Tech is currently trading at Rs. 1057.50, up by 0.65 points or 0.06% from its previous closing of Rs. 1056.85 on the BSE.

The scrip opened at Rs. 1070.00 and has touched a high and low of Rs. 1072.00 and Rs. 1041.00 respectively. So far 16,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 1104.30 on 24-Sep-2013 and a 52 week low of Rs. 556.70 on 09-Oct-2012.

Last one week high and low of the scrip stood at Rs. 1104.30 and Rs. 996.05 respectively. The current market cap of the company is Rs. 73,714 crore.

The promoters holding in the company stood at 61.92% while Institutions and Non-Institutions held 30.94% and 7.14% respectively.

HCL America Inc (HCLA), a fully owned subsidiary of leading global IT services company HCL Technologies, has won a multi-year, multi-million dollar deal with the WyCAN Consortium, a group of states including Wyoming, Colorado, Arizona and North Dakota. HCLA will enable WyCAN to significantly improve services for its Unemployment Insurance (UI) modernization program, which is one of the largest programs in the US providing critical income to millions of unemployed Americans.

HCLA was selected through a highly competitive process where it demonstrated its unique and effective managed cloud-as-a-service solution called iGOVERN. HCL's solution expertise will be used to deliver and support WYCAN's unemployment insurance (UI) tax and benefit systems and transform it into an integrated claimant and employer focused, self assisted service channel.

The deal will give the consortium states a configurable, intuitive Government-to-Citizen (G2C) system aimed at consolidating and replacing existing legacy systems to allow easier adaptation to changing legislation. This means superior services for the claimant, employers and UI staff by improving collaboration with other Department of Labor (DOL) agencies.

M&M gains as arm enters into strategic partnership with Carzonrent

Mahindra and Mahindra (M&M), country’s major automobile maker’s business conglomerate Mahindra Reva has entered into a strategic partnership with the leaders in Cab Rental Industry, Carzonrent to launch first-of-its kind electric vehicle in the self-drive category in India.

Carzonrent will offer Mahindra e2o for self-drive in New Delhi, Bengaluru and Mumbai at most economical price ever. Each city will have a fleet size of five e2o’s to begin with and the service will be expanded to all metropolitan cities.

Carzonrent has been a pioneer in offering Self Drive services across major Indian cities along with inter-city, intra-city, outstation and international car rental services. Carzonrent has deployed a comprehensive range of cars under these services and offers transparent pricing through its online booking engine and national reservation center.

Maruti to hike prices of all models by up to Rs 10,000 from Oct

 Maruti Suzuki India, country's largest car maker, on Wednesday said it will increase the prices of its entire range of models by up to Rs 10,000 from October first week, mainly due to depreciation of rupee.

"We have been wanting to raise the price for some time as our input costs went up severely, mainly on account of weakening of rupee. However, the market was not conducive. Now it has become inevitable," Maruti Suzuki India (MSI) Chief Operating Officer (Marketing and Sales) Mayank Pareek told .

The quantum of price increase will vary according to different models and fuel specifications, and will be effective from the first week of October, he added.

"The amount of price hike will vary between Rs 3,000 and Rs 10,000. It will be applicable to all our models," Pareek said.

The prices of MSI's vehicles that are manufactured in India start from Rs 2.35 lakh and goes up to Rs 10.21 lakh. These prices are as per the company's official website and are for ex-showroom, Guwahati.

MSI had last hiked the prices in January for all its vehicles by up to Rs 20,000 to offset the pressure of adverse currency fluctuation.

In the last few months, rupee devalued drastically and hit a life-time low of below 68.85 against the US dollar. However, it started gaining after Raghuram Rajan joined as the new governor of RBI and announced a slew of measures.

Earlier, this month, Hyundai and General Motors decided to increase vehicle prices by up to Rs 20,000 to offset the impact of rupee depreciation and rising input costs, resulting in more spending from new car buyers in the festive season.

Tata Motors said it plans to increase the prices of its passenger and commercial vehicles by around 1-1.5 per cent, depending on the model, either petrol or diesel.

Toyota Kirloskar Motor had announced a hike in prices of its key models by up to Rs 24,000 with effect from September 21 to partly offset higher cost of raw materials and rupee depreciation.

Kingfisher still grounded but shares take-off

Counter gains nearly 80% so far this month

Vijay Mallya promoted Kingfisher Airlines (KFA) may still be grounded but its shares have taken a strong take off so far this month.

At a time when key benchmark indices slipped, counter of KFA has gained a whopping 80% in September.

Ever since Mallya said he was still working on a deal to finance the debt-laden airline with a foreign player, shares of KFA are continuously hitting upper circuit on the stock exchanges.

Currently, the stock is trading at Rs 6.21 or 9.91% up on the BSE.

Though market participants are wary about the company, speculators seem to rushing in to buy the rising counter.

BGR Energy forms new management team

 Power company BGR Energy has named A Swaminathan the joint managing director and CEO of the company and V R Mahadevan as the joint managing director of the company. Sasikala Raghupathy, wife of the late founder B G Raghupathy will be the Chairman of the board. The changes in the management team come close to two months after the passing away of the founder-chairman of the company, B G Raghupathy.

Mahadevan, who is currently director - technology and HR, will be in-charge of projects, and Swaminathan, now director-marketing, will be in-charge of technology and new growth areas and joint ventures of BGR.

While the team's immediate focus will be on commissioning power projects on hand and reworking billing cycles to get back receivables, the company is also looking at working overseas. "We will look outside India. We now have a mature management team and will look at projects in Southeast Asia, Middle East, and Africa," Swaminathan said. With these, the company expects faster topline growth at 20% against the 12% growth it currently sees. The company provides EPC (engineering, procurement and construction) services for power projects in India.

BGR has an order backlog of Rs 11,900 crore, part of which is an order it won through its joint venture with Japanese company Hitachi to supply boilers and turbines for a Rs 1600 crore order from NTPC for supplying equipment for its super-critical thermal plants. The projects will be commissioned during 2015-16, Swaminathan said. 

BGR and Hitachi had also jointly invested about Rs 4,000 crore to set up a manufacturing unit for boilers and turbines in Tamil Nadu, but the investment has now been downsized to Rs 2,700 crore as a result of the sluggish demand in the power sector and also because the timelines for delivery of the products to NTPC were not in sync with the progress of the manufacturing unit, Swaminathan said. Land acquisition for the plant, however, is complete and products from the unit will be rolled out from late 2015, he added. 

Gillette stock surges as SEBI allows Poddar group to be ordinary shareholder

The stock of Gillette India surged 10.4 per cent to Rs 2,253 in early trade on Thursday as SEBI allowed the Poddar group - its domestic promoters - to be reclassified as public shareholders.

In a stock exchange filing, Gillette India today said that SEBI has accepted its proposals, which include reclassification of the Poddar group shareholding from promoter to non-promoter.

SEBI nod, however, is subject to several conditions.

SEBI said the Poddar group will have no special rights in Gillete India through any formal or informal arrangements other than that of normal public shareholder.

Entities belonging to the Poddar group cannot hold any key management personnel position in Gillette India and the other group companies of Procter & Gamble (P&G) through any formal or informal arrangements, SEBI added.

"If entities belonging to the Poddar group promoters want to be classified as promoters of GIL again in future, they shall be required to make an open offer and no exemption shall be given in this regard," SEBI said.

Poddar group has also been directed not to acquire any Gillette India shares for a period of one year from the date of reclassification.

To fulfill SEBI conditions, Soraj Poddar will have to step down from chairmanship and also give up his other powers.

Currently, Soraj Poddar is the founder director and chairman the company and he also has ability to nominate one more director on the board.

The promoter holding in Gillette India stands at 88.76 per cent with Procter & Gamble controlling 75.9 per cent and the Poddar group owning the remaining 12.86 per cent.

To meet minimum public shareholding norm of 75 per cent, P&G will sell 0.99 per cent stake through the offer for sale route and the Poddar group 6 per cent of its holding. The remaining 6.86 per cent stake of Poddar’s will be classified as public holding.

After the reclassification, P&G will be the sole promoter in Gillette India. SEBI has exempted P&G from making an open offer as the intent behind this was to comply with the shareholding norm.

Earlier in July, the Securities Appellate Tribunal had dismissed Gillette’s appeal to reclassify the shares of one of its promoters as public shareholding, as SEBI had frozen the voting rights and the right to corporate benefits (dividend, rights, bonus, share splits, and the like) of the Gillette promoters and promoter group, till they comply with minimum public shareholding norm.

Gillette India will also pay a severance compensation' to Poddars for giving away their rights but such compensation will have to be paid by P&G “without any recourse to Gillete India and interest of the existing minority shareholders”, SEBI ordered.

King of India's car makers gives in to a weak rupee

Maruti Suzuki announces price increases for all models by up to Rs 10,000

Maruti Suzuki,India, the country’s largest car maker, on Wednesday said it would increase the prices of its entire range of models by up to Rs 10,000 from October first week, mainly due to the depreciation of the rupee against the dollar. “We have been wanting to raise the price for some time, as our input costs went up severely, mainly on account of the weakening of the rupee. However, the market was not conducive (to an increase). Now, it has become inevitable,” Chief Operating Officer (Marketing and Sales) Mayank Pareek said.

The quantum of increase will vary according to the models and fuel specifications and will be effective from the first week of October, he added. “The amount of price hike will vary between Rs 3,000 and Rs 10,000. It will be applicable to all our models,” Pareek said.    

The prices of Maruti’s vehicles manufactured in India start from Rs 2.35 lakh and go up to Rs 10.21 lakh. These are by the company’s website and for ex-showroom, Guwahati. Maruti had last hiked prices in January for all its vehicles by up to Rs 20,000 to offset the pressure due to the weakening rupee. In the last few months, the rupee has devalued drastically and hit a life-time low of below 68.85 against the dollar. However, it started gaining after Raghuram Rajan joined as the Governor of the Reserve Bank of India and announced a slew of measures.

Earlier, this month, Hyundai and General Motors decided to increase vehicle prices by up to Rs 20,000 to offset the impact of the rupee depreciation and rising input costs. Tata Motors said it planned to increase prices of its passenger and commercial vehicles by 1-1.5 per cent, depending on the model (that is, petrol or diesel). Toyota Kirloskar Motor had announced an increase in prices of its key models by up to Rs 24,000 with effect from September 21 to partly offset higher cost of raw materials and the rupee depreciation.

Bonds gain after RBI assures it will ensure cash

RBI comments come as yields had risen by 60bps after repo rate hike

Government bonds rose on Thursday after the Reserve Bank of India (RBI) assured markets it would ensure adequate cash and also buy debt via open market operations if needed.

The RBI's comments, announced after trading hours on Wednesday, come as yields had risen by 60 basis points (bps) after a surprise hike in the repo rate on Friday and on worries about the fiscal second borrowing programme of the government.

Cash continues to be tight, though the overnight borrowing rate has come off after the RBI lowered its marginal standing facility rate by 75 bps to 9.5%.

The RBI has been injecting about Rs 1.5 trillion on a daily basis via the repo auction, the export credit refinance facility and the marginal standing facility taken together.

Bond dealers have been hoping that the central bank would provide some intervention through open market bond purchases to help tight cash conditions. It last bought bonds from the secondary market in late August.

"Yesterday's statement keeps hopes of OMOs alive but they will do it probably only if yields again go higher. The fact that the statement came yesterday shows that they want the next auction to go through and want PDs to bid decently in terms of underwriting commission," said Bekxy Kuriakose, head of fixed income at Principal PNB Asset Management, referring to primary dealers.

Nearly one-third of a federal bond auction on Monday had to be underwritten by primary dealers after poor demand from investors.

The government will sell another Rs 14,000 crore of bonds on Friday, in the last sale of the fiscal first half that ends in September.

It will also borrow Rs 2.35 trillion between October and March.

The benchmark 10-year bond yield fell as much as 12 bps on the day to 8.67%. It was last at 8.72%.

The rupee rose after the RBI relaxed the minimum maturity tenure for banks' foreign currency borrowings' to one year from three years, in order to use the central bank's swap facility which was set up to support the ailing rupee.

The partially convertible currency, the worst performer in Asia this year, was trading stronger on the day at 62.23/24 per dollar versus its close of 62.44/45 on Wednesday.