Markets cheer Raghuram Rajan's arrival; Sensex spurts 403 points

The Indian markets continued their upward momentum at the pre-close session on Thursday on the back of new RBI Governor Raghuram Rajan's speech yesterday.

The BSE Sensex was trading at 18,970.24, up 2.17 per cent or 402.69 points, and the NSE Nifty was trading at 5,593.15, up 2.66 per cent or 145.05 points.

Improved global cues and a strong rally in the banking sector supported the benchmark indices. On the BSE, the banking index gained the most and was trading at 11,007.84, up 9.23 per cent or 930.5 points.

Other major performers were realty index up 5.15 per cent, PSU 4.56 per cent and consumer durables 4.52 per cent.

IT, TECk and healthcare indices were however trading in the red. IT index was down 2.88 per cent, followed by TECk 2.16 per cent and healthcare 0.29 per cent.

SBI, ICICI Bank, BHEL, Coal India and HDFC Bank were the top five Sensex gainers, while the top five losers were TCS, Infosys, Sesa Goa, Wipro and GAIL.

According to analysts, profit-booking and currency gaining strength contributed to the correction in IT and TECk stocks.

The rupee was trading strong by 90 paise at 66.20 against the previous close of 67.10.

Marketmen said that Rajan’s statement on monetary policy, inclusive development, financial markets, rupee, capital inflows, financial infrastructure and households have set the bar of expectations high.

Raghuram Rajan on assuming office on Wednesday said: “Any entrant to the central bank governorship probably starts at the height of their popularity. Some of the actions I take will not be popular. The governorship of the central bank is not meant to win one votes or Facebook “likes”. But I hope to do the right thing, no matter what the criticism, even while looking to learn from the criticism.”

European stocks rose for a second day and the bonds fell ahead of central bank meetings in the region.

Stoxx 50 was up 11.68 points or 0.42 per cent at 2,769.97, FTSE 100 rose 49.61 points or 0.77 per cent to 6,524.35 and DAX climbed 32.77 points or 0.4 per cent to 8,228.69.

Asian stocks were up for a sixth day and emerging market currencies strengthened as central banks from Japan to Europe review the monetary policy.

Japan's Nikkei was up 10.95 points or 0.08 per cent at 14,064.80, Hong Kong's Hang Seng surged 276.03 points or 1.24 per cent to 22,602.20 and Australia's S&P/ASX 200 was down 19.14 points or 0.37 per cent at 5,142.50.

The Bank of Japan left its monetary easing unchanged plan at the end of a two-day gathering today, ahead of policy meetings by central banks in the UK and euro zone.

The US non-farm payroll data scheduled to be released tomorrow may provide signals on whether the Fed will start tapering its asset purchases after its Beige Book survey showed consumers spent more on travel and tourism while manufacturing expanded.

Co-op banks to short-sell govt bonds on intra-day basis: RBI

Earlier, urban co-operative banks were allowed to trade in government securities on the stock exchanges, but were not permitted to undertake short selling

The Reserve Bank of India (RBI) has allowed urban cooperative banks to undertake short selling of government bonds on an intra-day basis.

“It has been decided to permit well-managed urban cooperative banks, who are members of negotiated dealing system-order matching (NDS-OM) and have regular concurrent audit of their treasury operations, to undertake intra-day short selling of government securities,” said RBI in a notification on Wednesday.

Earlier, urban co-operative banks were allowed to trade in government securities on the stock exchanges, but were not permitted to undertake short selling of government securities, even on an intra-day basis.

RBI has laid down three conditions for urban cooperative banks to undertake these transactions.

The urban cooperative bank should have an NDS-OM membership, a net worth of Rs 25 crore, capital-to-risk weighted assets ratio (CRAR) of 9% or more and net non-performing asset (NPA) of not more than 3%.

Besides, banks should have followed sound risk management practices and mandatory concurrent audit of their treasury operations, RBI said.

Markets remain firm, financials rally

The market breadth in BSE remains firm with 1,274 shares advancing and 702 shares declining

Benchmark indices continue to remain firm as the rupee rose today after the new RBI Governor Raghuram Rajan announced plans to bolster the financial industry and stabilize the rupee.

Buying among financial sector and firm global cues has also buoyed the sentiments among local investors.

At noon, the rupee was trading at Rs 66.02 compared with previous close of Rs 67.09 per dollar. The rupee had opened at Rs 66.10 today.

At 1315 hrs, the Sensex was up 405 points at 18,973 and the Nifty gained 140 points to trade at 5,588.

According to Chetan Jain, Deputy Manager (Derivatives Desk) - Equity Research, Anand Rathi Financial Services, “Nifty future has been witnessing huge volatility in last couple of weeks with zigzag movements continuing in the market, INDIAVIX has broken 21 month long consolidation range and now entered into higher territory of 22-36 levels indicating this volatility is likely to continue for next coming months till next elections.”

On the global front, Asian stocks rose to three-week highs on Thursday as Indian shares and the rupee rallied a day after the country's new central bank chief unveiled measures to support the currency and the banking sector.

Tokyo's Nikkei closed a touch firmer, having lost a bit of steam after hitting a one-month high.

Back home, BSE Bankex index has zoomed by over 8% followed by counters like Consumer Durables, Realty, PSU, FMCG, Capital Goods, Power and Oil & Gas, all gaining between 2-4%. However, BSE IT index has slumped by nearly 3%.  

Banking shares on a roll on the bourses after the Reserve Bank of India (RBI) announced a slew of measures to benefit retail investors and revive the Indian economy.

YES Bank, Axis Bank, IndusInd Bank, Kotak Mahindra Bank and ICICI Bank have rallied more than 8% each, while HDFC Bank, Bank of Baroda, Federal Bank, Bank of India, Punjab National Bank and Union Bank of India are up 5-7% on the BSE.

Oil and Natural Gas Corporation (ONGC) has surged 5% to Rs 269, extending its previous day’s 2.4% rally, on price hike buzz.

Other notable gainers are BHEL, ITC, L&T, Coal India, Tata Motors and Maruti Suzuki.

Shares of information technology (IT) are trading lower in otherwise firm market after the Indian rupee strengthens against the US dollar.

Among the individual stocks, Tata Consultancy Services (TCS) has dipped 3% at Rs 2,011 on BSE. The stock opened at Rs 2,075 and hit a low of Rs 1,990 so far.

Infosys and HCL Technologies are down by 2% each, while Wipro, Tech Mahindra and MphasiS down around 1% each at 1015 hours.

The market breadth in BSE remains firm with 1,274 shares advancing and 702 shares declining.

Bank of Maharashtra opens five rural branches in UP

Bank of Maharashtra has opened five new rural Branches in Ghaziabad Districts (U.P.) on September 02, 2013. The bank has opened these new rural Branches at Teela Shahabazpur, Ganoli, Sikhrani, Nurpur and Roshanpur (Khurrampur) in Ghaziabad Districts in Uttar Pradesh.

The bank has reported a rise of 89.61% in its net profit at Rs 266.33 crore for the quarter, as compared to Rs 140.46 crore for the same quarter in the previous year. Total income from operation of the bank has increased by 34.14% to Rs 2974.31 crore for the quarter under review as compared to Rs 2217.30 crore for the quarter ended June 30, 2012.

Hero Group to create three-four large business units

The Hero Group would soon create three-four large business units, which will be on the lines of Hero MotoCorp, which contributes the largest chunk of revenue to the group. To this development, the group has launched Hero Future Energies, a company focused on renewable energy. The company, which would initially have wind and solar projects, is being lead by Rahul Munjal, who also heads the group’s company, Easy Bill.

Hero Future Energies, registered in October 2012, has already commissioned a 37.5-Mw pilot wind project in Rajasthan. This fiscal, the company plans to develop 100 Mw of wind and solar power and 1 Mw of roof-top solar power.

Hero MotoCorp is the world's single largest two-wheeler motorcycle company. Honda Motor Company of Japan and the Hero Group entered a joint venture to setup Hero Honda Motors in 1984. Hero Honda Motors changed its name to Hero MotoCorp following the exit of its erstwhile Japanese promoter, Honda, from the company.

Sub-brokers down shutters as cash volumes dwindle

The listless equity markets, with hardly any direct retail participation, have hit the broking community hard. Thousands of registered sub-brokers have gone out of business in the last few months as high market volatility and rising share of derivatives in overall turnover have forced many of them to give up their cash segment registrations.

Indeed, as per the latest Securities and Exchange Board of India (Sebi) bulletin released earlier this week, the number of sub-brokers in the cash segment fell from 69,060 as at end-June to 66,042 as at end-July this year – a drop of nearly 4.5%.

Between August 2012 and July 2013, the number has fallen by nearly 9,760.

Smaller broking firms have been at the receiving end due to lower retail participation and the range-bound nature of the markets, Sudip Bandopadhyay, MD & CEO, Destimoney Securities, pointed out. “The downtrend has been on for several quarters now,” he said, adding that the reduction in numbers showed up in July as the process of informing the public and getting regulator approval takes a lot of time.

Also, many of the sub-brokers are also migrating and reapplying as ‘authorised person’ which would also have contributed to the decrease, said Vinay Agrawal, executive director - equity broking at Angel Broking.

With the equity markets unable to break past their highs and remaining range-bound in the last five years, the trading volumes in the cash segment have almost halved from their peak of around Rs 27,000-28,000 crore in December 2007 to around Rs 12,000-13,000 crore in recent months. Worse, there has been a structural shift in volumes towards the derivatives segment, which has impacted the blended broking yields.

As a result, July saw average daily cash trading volumes as a percentage of total daily volumes dwindle to 5.8% – the lowest ever.

Domestic brokerage firms have seen blended yields falling to 2.7-3.4 basis points in the last quarter due to lower trading in cash segment and have also reduced their own branch offices to cut down on cost.

Ranbaxy Laboratories concludes 20 successful years in Russia

Ranbaxy Laboratories, India’s largest pharmaceutical company, has completed 20 successful years in Russia. The company established its operations in the Russian market in 1993 with the launch of its key brand, Cifran. Since then, Ranbaxy has grown to become a No 1 player with a market share of 15.4% in the represented market segment in Russia, as per IMS, May 2013.

With a well-established distribution network and skilled field force, Ranbaxy presently has operations in 56 regions in Russia and has built strong equity with its customers. The company has a portfolio of products covering anti-infective, cold, pain management, cardiovascular, diabetology, central nervous system, urology and dermatology segments. The company has so far registered 51 drugs in the Russian Federation and commercialized 72 SKU’s.

Ranbaxy’s leading brands in Russia includes Ketanov, Coldact, Faringosept, Cifran, Pylobact and Fenules. Last year, the company’s popular brand, Faringosept was selected as the People’s brand of choice. Another well know brand, Cifran OD was ranked by IMS as the best antibiotic launch in 2004.

Coal India inks FSAs with sixteen private power projects worth Rs 84,500 crore

In a major relief to the power sector, state-run monopoly supplier Coal India has inked fuel supply agreements (FSAs) with sixteen private power projects worth Rs 84,500 crore, which have a generation capacity of over 14,000 mega watts (MW). Further, the ministry is now chasing for similar fuel supply pacts for nine more power projects worth Rs 41,200 crore.

In view of the Centre's efforts to revive investor sentiment by jumpstarting large stalled investments, the coal mammoth expedited the signing of these pacts. With this development, seven of these projects can be commissioned as early as the next quarter (between October and December), while the rest are expected to generate power between January and September next year.

Coal India is the world’s largest coal mining company. It also produces non-coking coal and coking coal of various grades for diverse applications.

Emami opens first ayurvedic clinic in Kolkata

Emami, Kolkata-based FMCG firm has opened its first ayurvedic clinic ‘Zandu Ayurvedic Clinic’ in Kolkata. The clinic was opened at the Nature Cure and Yoga Centre at Konchouki on the southern fringes of the city.

The Zandu Ayurvedic Clinic prescribes Ayurveda, an ancient system of healing and cure to offer some much required relaxation and rejuvenation from stressful daily living.

Emami manufactures products under various categories namely Hair Care, Skin Creams and Lotions, Talcum Powder and ayurvedic health care products.

Kirloskar Electrics gains as its power transformers successfully connected to Angola grid

Kirloskar Electric is currently trading at Rs. 14.02, up by 0.29 points or 2.11% from its previous closing of Rs. 13.73 on the BSE.

The scrip opened at Rs. 14.85 and has touched a high and low of Rs. 14.85 and Rs. 14.01 respectively. So far 867 shares were traded on the counter.

The BSE group 'B' stock of face value Rs. 10 has touched a 52 week high of Rs. 31.50 on 01-Oct-2012 and a 52 week low of Rs. 13.30 on 29-Aug-2013.

Last one week high and low of the scrip stood at Rs. 14.90 and Rs. 13.30 respectively. The current market cap of the company is Rs. 70 crore.

The promoters holding in the company stood at 49.34% while Institutions and Non-Institutions held 8.19% and 42.47% respectively.

Kirloskar Electric Company’s 182 MW power transformers have successfully connected to Angola 150kV grid. The Company supplied 10 No Power Transformers up to 150kV Class, 45 MVA Generator Transformers to Angola National Electricity Company.

These Transformers were placed in service connecting to the Angola National grid, further these Transformers contribute in stabilising Angola's electric system. People from Angola have appreciated Kirloskar Electric having partnered with them in meeting their objective and working in team right from inception.

Kirloskar Electric Company is the manufacture, sales and services of diverse range of electrical and electronic equipment such as AC Induction Motors, AC Generators, DG Sets, DC Machines & Traction Equipment, Transformers, Switchgears, Control Equipments and Systems etc., The projects and system division of the Company has specialized in executing system packages for large industries like steel, fertilizers, cement, sugar and other core sectors.

Swiss Finance buys 55.30 lakh shares of Apollo Tyres for Rs 36 crore

Swiss Finance Corporation (Mauritius) has acquired 55.30 lakh shares of Apollo Tyres for nearly Rs 36 crore through open market transactions. The Foreign investor has purchased around 25.57 lakh shares of Apollo Tyres on the BSE and another 29.73 lakh shares of the company on the National Stock Exchange (NSE) for an average price of Rs 64.88 apiece, valuing the transaction at Rs 35.89 crore.

Apollo Tyres, headquartered in Gurgaon, has a manufacturing presence in Asia, Europe and Africa. With revenues of over $2.34 billion, the company exports to over 100 countries.

Indian services PMI fell further to 47.6 in August

Pointing to a further slowdown in Indian economy, the growth in services sector, which make up nearly 60% of country’ economics output, eased further during August on account of decline in new businesses amid tough economic conditions. The HSBC services Purchasing Managers’ Index (PMI), based on a survey of around 400 companies fell to 47.6 in August from 47.9 in the previous month, the weakest since April 2009. The survey indicated that four out of the six monitored sub-categories, recorded a reduction in business activity with fastest contraction being witnessed in Transport & Storage sub-sector.

Slowdown in service sector activity because of the decline in new business orders suggested that an uncertain economic outlook had dampened client confidence and also made services firms less optimistic about the year ahead. A sub-index for the Indian PMI that measures new businesses fell to 46.6 in August from 47.8 in July, the lowest in over four years. Further, decline in new business also slowed down the employment growth in Indian service sector. Similarly, the HSBC India Composite Output Index, which measures activity in both the manufacturing and services sector, came down to 47.6 from 48.4 in June, indicating moderate contraction overall.

Further, August data signaled broadly a steady inflation reading as input prices continued the trend that started in April 2009. Service providers indicated that a range of raw materials, fuel, transport and labour costs increased over the month. However, overall rate of charge inflation eased to the weakest in three months as firms raised their selling prices only marginally in August, amid reports of increased competitive pressures. The overall unfinished work fell for the first time since July 2012, as lower new business levels forced the service firms to work on their backlogs in August.

Punjab National Bank unveils prepaid ATM Debit card

Punjab National Bank (PNB) has launched ‘PNB Prepaid ATM Debit Card, Suvidha’ for withdrawing money, making purchases at various shops, commercial establishments, air and rail tickets, payment of utility bills and for online Internet transactions. It is the first of its type to be launched by a nationalized bank, can be recharged at any branch of PNB in the country and is similar to like recharging a prepaid mobile connection at any place.

The card is valid for 6 months to 36 months and can be issued to PNB customers already having any account and also to Non Customers subject to their KYC compliance as per RBI directions. Instead of carrying cash people can procure the prepaid ATM Debit Card with a minimum of Rs 500 and maximum of Rs 50,000 recharge.

Beside, the Prepaid Debit Card can be used at ATMs for 24x7 cash withdrawal, at POS outlets for making purchases and over the internet for e-commerce transactions and payment of utility bills etc.

Corporation Bank opens new branch in Mumbai

Corporation Bank has inaugurated its new branch located at Gokhale Road, Dadar in Mumbai in state of Maharashtra on August 31, 2013. The Executive Director of the bank inaugurated the branch. The bank has also launched ‘Agriculture Lending Chaturmas’ campaign for a period of four months from September 2 to December 31.

The bank has reported a rise of 2.09% in its net profit at Rs 377.98 crore for the first quarter ended June 30, 2013, as compared to Rs 370.26 crore for the same quarter in the previous year. Total income from operation of the bank has increased by 21.98% to Rs 4852.69 crore for the quarter under review as compared to Rs 3978.24 crore for the quarter ended June 30, 2012.

Rupee strengthens at 65.81/$

The rupee has recovered from all time low of 68.85 per dollar in early trades.

Rupee has strengthened on Thursday at 65.81/$ after new RBI governor, Dr. Raghuram Rajan has announced slew of measures to liberalise financial markets.

The rupee has  recovered from all time low of 68.85 per dollar in early trades.
Global cues also appear health with possible US military intervention in Syria seen as limited.
The International Monetary Fund says the dynamics of global growth are shifting with the major economies strengthening while developing countries slow. The IMF predicts the U.S. will be the main driver of global growth in the near term.

RBI to offer swap rate at concessional rates for NRI deposits: Raghuram Rajan

The Reserve Bank of India (RBI) will offer a swap window to banks for fresh dollar deposits mobilised from non-resident Indians, which will be available to lenders till November 30, 2013, new governor Raghuram Rajan said on Wednesday in his first media briefing after taking charge.

The central bank will offer the swap for dollar funds mobilised for three years and above at a fixed rate of 3.5 per cent per annum at a concessional rate of 100 basis points below the market rate, he said.

Reuters earlier on Wednesday reported that the central bank has sounded out lenders on offering forex swap lines at below-market rates for banks raising deposits from non-resident Indians as it considers ways to attract funds to support the battered rupee.

Lok Sabha passes pension overhaul, foreign investors wary

 The Lok Sabha approved changes aimed at luring foreign asset managers to run retirement funds, a small victory in government efforts to rescue the economy before elections next year.

Wednesday's vote will slightly loosen rules governing foreign investment in pensions, and is a step towards creating a viable private pension industry to cater to the growing middle class in the world's second most populous nation.

"When the bill is passed, I expect that some more FDI will come in," Finance Minister P Chidambaram said after the debate, referring to foreign direct investment.

The bill must now go to the upper house, where it is expected to get final approval.

But foreign firms say the new law is unlikely to immediately trigger the flood of investment the government is looking for to kickstart Asia's third largest economy and help stem a sharp depreciation in the rupee.

The bill links the ceiling on foreign investment in pensions to a related law governing the insurance industry. A revised insurance law in the works would raise the cap to 49 per cent from 26 per cent in insurance, and therefore pensions, but it is opposed by opposition parties and unlikely to be approved soon.

Even at 49 per cent, some fund managers say the current economic crisis means new investors will be slow to step up.

"This is a welcome push for the industry as the bill has a progressive approach, but increasing the FDI cap in the pension sector might not immediately result in a large inflow of foreign capital," said Anil Ghelani, chief investment officer at India's DSP BlackRock Pension Fund Managers Pvt. Ltd, in which US-based BlackRock Inc is a minority partner.

High-profile exits

Foreign firms thronged to India when they were allowed to invest in the insurance and mutual fund industries last decade, but once in place they generally found it difficult to flourish.

In the last two years there have been high profile exits such as ING and New York Life from insurance and Fidelity Investments from the mutual fund industry.

The move for pension sector reform comes a decade after India established an interim regulator to steer the industry. So far, there has been little interest from private players, with just eight asset managers, including Blackrock, operating schemes managing about 300 billion rupees in private sector assets.

This compares with the combined 5 trillion rupees managed by the state-owned provident fund and pension fund and over 7.60 trillion rupees managed by Indian mutual funds.

The push for a more inclusive pension industry is part of Indian financial planners' broader agenda to expand social support and channel domestic savings into the capital markets.

Most of India's half a billion workers still have little or no access to social security and stick to buying gold and real estate instead.

The new law will regulate private asset managers who run retirement funds under a New Pension Scheme (NPS), open to pension contributions even from workers who do not have a stable monthly income.

At present, almost all pension obligations in the country are managed by the state-owned pension fund, which has been criticised for providing measly inflation-adjusted returns and catering for only a fraction of the workforce.

India’s economy remains fundamentally strong: Raghuram Rajan

Raghuram Rajan, the 23rd governor of the Reserve Bank of India (RBI) in his first remarks after taking the helm at the central bank, said India's economy was 'fundamentally sound' and had a 'bright future. Dismissing the S&P statement of a one in three chance of rating downgrade for India as nothing new, Rajan underscored that both gloom and doom were overdone and that the country’s medium rung future was strong.

Flagging off monetary stability as the prime role of RBI, he unveiled that the central Bank will issue inflationary index saving certificates. Further, the new governor highlighted that that besides preserving the purchasing power of the rupee, inclusive growth and development, as well as financial stability were the two other important RBI’s mandate.

Further, in slew of measures outlined on Day 1, the central bank permitted exporters to re-book cancelled forward exchange contracts to the extent of 50% of the value of cancelled contracts as against 25% earlier. It also extended a similar facility to importers to the extent of 25%. Meanwhile, to develop the money and G-sec markets, the central bank would now to introduce cash settled 10 year interest rate future contracts and also examine the introduction of interest rate futures on overnight interest rates.

In yet another important development, Rajan highlighted that the central bank would offer special concessional window to bank for swapping FCNR dollar funds, mobilized for a minimum tenor of three years and over, at a fixed rate of 3.5% per annum for the tenor of the deposit.

Additionally, obliging the bank, the central bank’s new governor decided to raise the current overseas borrowing limit to 100% of the unimpaired Tier I capital as against 50% earlier and mobilize the borrowings under this provision to be swapped with Reserve Bank of India at the option of the bank at a concessional rate of 100 basis points, below the ongoing swap rate prevailing in the market.

Shares may witness gap-up opening

Markets are likely to open higher tracking firm global cues. Investors will also cheer the appointment of Raghuram Rajan as 23rd RBI Governor who has raised hopes of new action plans to revive the economy.

New Reserve Bank of India (RBI) chief Raghuram Rajan kicked-off his term with a bang yesterday, announcing a spate of measures to support the embattled rupee and unveiling a raft of steps to liberalise financial markets and the banking sector.

The rupee is expected to strengthen today.

US Stocks rose for a second day on Wednesday as a possible military action in Syria was seen as limited and strong auto sales lifted investor confidence in the U.S. economy.

The Dow Jones industrial, Standard & Poor's 500 and Nasdaq Composite Index was up 1%.

Asian stocks edged up on Thursday following a positive lead from Wall Street, while fresh measures to shore up the rupee unveiled by India's new central bank chief could set a positive tone for emerging markets throughout the region.

MSCI's broadest index of Asia-Pacific shares outside Japan advanced 0.2 percent, Tokyo's Nikkei put on 0.3 percent, extending Wednesday's 0.5 percent gain.

At 8:00 am Indian Standard Time the SGX Nifty was up 110 points at 5,551.