Is RBI ready to take the onus for soaring prices?

The new agreements say that the central bank "shall be seen to have failed to meet the target if inflation is more than 6% or less than 2% for three consecutive quarters" 

The new government has ushered in an environment of change and this has led to birthing of a new rule for the Reserve Bank of India. As per a new agreement on the “monetary policy framework” which has been signed between the government and RBI a week before Union Budget was declared, the central bank governor will now have to justify the reasons for not being able to meet the inflation target for the country, according to media reports.

The new agreements say that the central bank "shall be seen to have failed to meet the target if inflation is more than 6% or less than 2% for three consecutive quarters". Inflation must be below 6% by January 2016, and a band of 6-2% for 2016-17 and subsequent years.

The Governor will have to write a letter to the government, if inflation is not harnessed as per the set target, in which it would be mandatory to state the reasons of price hike as well as the solution and time frame to get inflation back in check.

The government could also make this protocol public like other countries in order to root out the main causes of soaring prices.

Going back to the event of Budget 2015, Finance Minister Arun Jaitley had candidly mentioned that the RBI Act would be amended in order to formulate a monetary policy committee. However, the committee composition is still pending and will be processed when the RBI Act gets amended, as per reports.

Low inflation is a requisite for India’s growth and reigning the same is the chief role of RBI believe RBI Governor Raghuram Rajan and his deputy Urjit Patel, as per a report 

Sensex, Nifty in red...Auto, Bankex slips

Some buying activity is seen in Healthcare, IT, realty, capital goods,metal and consumer durable sectors, while auto, banking and fmcg are showing weakness on BSE. 

Fiscal deficit has risen to Rs5.68trn in April-January period, way beyond the budget estimates. The government seems to be relying on ‘off-balance sheet’ debt for funding a large part of its capex push. Almost 80% of incremental resources outside the budget is expected to come from higher borrowings. This raises legitimate questions about ‘true’ fiscal deficit but also highlights the fuzzy nature of the concept of fiscal deficit itself. Meanwhile, the Finance Minister says India's economy needs to reach an annual growth rate of 9 per cent to 10 per cent and then sustain that activity "many, many more years than 10 years" in order to improve infrastructure and bring down rampant poverty.

At 9:31 AM, the S&P BSE Sensex is trading at 29,400 down 59 points, while NSE Nifty is trading at 8,933 down 24 points.

The BSE Mid-cap Index is trading up 0.43% at 11,000, whereas BSE Small-cap Index is trading up 0.39% at 11,416.

Some buying activity is seen in Healthcare, IT, realty, capital goods,metal and consumer durable sectors, while auto, banking and fmcg are showing weakness on BSE.

Sun Pharma, TCS, Wipro, Bajaj auto, Reliance Industries Tata steel and  are among the gainers, whereas Coal India, M&M, Tata Motors, Axis Bank and ITC are losing sheen on BSE.

US indices gained despite economic numbers indicating a slowdown. Perhaps investors are reconciled to the fact that there is some growth nevertheless at a moderate pace. The Nasdaq closed at 50009, up 0.9%; these are levels last seen in the year 2000 when dotcom mania had gripped Wall Street. Dow rose 0.8% while S&P added 0.6%. Asian markets are mixed with Nikkei and Hang Seng in the green while China’s Shanghai is in the red.  

Adlabs Entertainment, which runs an amusement park, is opening its initial public offer (IPO) on March 10.The issue will close on March 12. The company has fixed the price band at Rs. 221 to Rs. 230 per Equity Share.
        
Ortel Communications Limited public issue opens today. The Price Band is fixed from Rs. 181 to Rs. 200 per Equity Share.

Cardamom To Continue Gain On Lower Level Buying

Cardamom To Continue Gain On Lower Level Buying

Cardamom futures rebounded from prior loss on strong demand amid weak crop estimations. The MCX cardamom for the April delivery settled the day at Rs 1049.90, up 2.36%. Cardamom futures are likely to gain further on bargain buying at lower side. 

Strong arrivals in the auction weighed the sentiment in the recent trading sessions. Heavy inflow of commodity reported in the auction centers from the fourth pickings. India's cardamom output for the year 2014-2015 is expected to be lower due to the bad weather. Azhukal is the most severe fungal disease of cardamom is affecting the crop. The auction arrivals from August to so far estimated at 13,962 tonnes with average rate Rs 790 per kg as on 02nd March 2015, against 14,810 with Rs 600 a kg same period a year ago. 

The MCX March Cardamom recovered from the recent low of Rs 1016 as on 28th February 2015, and ended the day at 1,049.90, up 2.36%. The open interest added 109 tonnes to 810 lots, indicating fresh buying. Technically, the counter is likely to find resistance at Rs 1060, Rs 1070 and supports at Rs 1031, Rs 1015 level. 

April-Jan fiscal deficit exceeds full-year target

The government seems to be relying on ‘off-balance sheet’ debt for funding a large part of its capex push. Almost 80% of incremental resources outside the budget is expected to come from higher borrowings. 

Fiscal deficit has risen to Rs5.68trn in April-January period, way beyond the budget estimates. The government seems to be relying on ‘off-balance sheet’ debt for funding a large part of its capex push. Almost 80% of incremental resources outside the budget is expected to come from higher borrowings.

 This raises legitimate questions about ‘true’ fiscal deficit but also highlights the fuzzy nature of the concept of fiscal deficit itself.

The fiscal deficit during April-January period of 2013-14 stood at 98.2%.

In the Budget speech, Finance Minister Arun Jaitley had said government would achieve the 4.1 per cent fiscal deficit target in 2014-15.

Flat start; Nifty eyes 9,000 mark

The Nasdaq closed at 50009, up 0.9%; these are levels last seen in the year 2000 when dotcom mania had gripped Wall Street. Dow rose 0.8% while S&P added 0.6%. Asian markets are mixed with Nikkei and Hang Seng in the green while China’s Shanghai is in the red.

Fiscal deficit has risen to Rs5.68trn in April-January period, way beyond the budget estimates. The government seems to be relying on ‘off-balance sheet’ debt for funding a large part of its capex push. Almost 80% of incremental resources outside the budget is expected to come from higher borrowings. This raises legitimate questions about ‘true’ fiscal deficit but also highlights the fuzzy nature of the concept of fiscal deficit itself. Meanwhile, the Finance Minister says India's economy needs to reach an annual growth rate of 9 per cent to 10 per cent and then sustain that activity "many, many more years than 10 years" in order to improve infrastructure and bring down rampant poverty.

That’s all well known but what is in store for the market? The outlook is flat start. Indices could swing in and out of positive zone today. With Nasdaq kissing the 5000 mark, the Nifty’s 9000 number is in focus. US indices gained despite economic numbers indicating a slowdown. Perhaps investors are reconciled to the fact that there is some growth nevertheless at a moderate pace. The Nasdaq closed at 50009, up 0.9%; these are levels last seen in the year 2000 when dotcom mania had gripped Wall Street. Dow rose 0.8% while S&P added 0.6%. Asian markets are mixed with Nikkei and Hang Seng in the green while China’s Shanghai is in the red.  

Adlabs Entertainment, which runs an amusement park, is opening its initial public offer (IPO) on March 10.The issue will close on March 12. The company has fixed the price band at Rs. 221 to Rs. 230 per Equity Share.
        
Ortel Communications Limited public issue opens today. The Price Band is fixed from Rs. 181 to Rs. 200 per Equity Share.

The government is set to liberalise foreign direct investment norms for non-resident Indians as part of its efforts to boost capital flows in sectors such as defence and railways, says a report. This could prompt some action in these counters.

Brent futures fell 5% on reports supplies could increase in case a nuclear deal lifts Iran's sanctions and boosts its oil exports.

Auto stocks ended on a mixed note following the monthly sales data. Shares of Maruti and Ashok Leyland rallied while those of Bajaj Auto and Hero MotoCorp slipped. Tata Motors shares too were down.

Firms plan to raise Rs 52,986 crore through qualified institutional placement (QIPs) in 2015, according to an analysis of corporate announcements on stock exchanges and conversations with merchant bankers and companies, says a report in ET.

Shares of oil marketing companies flared after oil firms hiked petrol and diesel prices by around Rs. 3 each. Shares of BPCL gained 4% to Rs. 779. HPCL soared 6% to Rs. 657. Indian Oil (IOC) gained 5.5% at Rs. 350.

Shares of Jet Airways ended 3% lower after Jet fuel price was hiked by a steep 8.2 per cent.

Reliance Industries ended lower at Rs.863 on reports of a fire accident at one of its associate company Reliance Gas Transportation Infrastructure (RGTIL)'s pipeline in Maddikunta, a remote area in Telangana.

GMR Infrastructure plunged ended 6% lower to Rs. 17.70 after the company priced its rights issue at a significant discount, i.e. Rs. 15 per share.

HCC hit 10% upper circuit at Rs. 39, as the Union Budget announced by FM Arun Jaitley had sops for the Infra sector.

The firm plans to issue 2.03 crore shares including 20 lakh shares offered for sale by the promoter, Thrill Park Ltd. The company intends to deploy the funds raised from the fresh issue for payment of loans and general corporate purposes.

Ola (formerly Olacabs) has acquired TaxiForSure, India’s second largest cab aggregator, for $200 mn in a cash and equity deal. With this deal, Ola, which is already the market leader in the personal transportation space with over 1-lakh vehicles on its platform, has further deepened its footprint with TaxiForSure’s operator led model.

Almost 60% of Asian retail investors who have exited mutual funds do so because the funds have achieved their target returns. Slightly less than half exited due to poor fund performance, while two in five retail investors redeemed fund investments in anticipation of poor market conditions.