Renewed Bid for GST Nod Triggers Buying in Logistics Stocks

Shares of Logistics companies like Gati, Snowman Logistics, TCI Industries, Aegis Logistics, Allcargo Logistics and VRL Logistics gained between 3-10 per cent on Wednesday as a glimmer of hope has emerged on the Goods and Services Tax (GST) Bill.
  Minister of state for finance Jayant Sinha told NDTV that convening a special session of Parliament remains an option for passing the GST Bill.

The GST - which creates a single national sales tax to replace a matrix of unwieldy and complicated levies by the states and central government - was stalled in the Rajya Sabha last month.

"The tax reform is crucial for the economy and we are making every effort to build consensus," Parliamentary Affairs Minister Venkaiah Naidu said on Tuesday after meeting Mallikarjun Kharge, the leader of the opposition Congress in the Lok Sabha.

Unless the GST Bill is cleared urgently by Parliament, there are fears that it could not be rolled out by the April 2016 deadline set by the government.

According to analysts, logistics companies will be among the biggest beneficiary of the GST implementation as it will hasten the movement of goods.

As of 11.05 a.m., shares of Gati traded 6.4 per cent higher at Rs 133.60, Snowman Logistics was up 4.24 per cent at Rs 93.50 and Aegis Logistics advanced 4.63 per cent to Rs 760.90 compared to a 0.3 per cent gain in the broader Nifty.

LIC Buys 86% of Indian Oil Shares Sold by Government

Mumbai: State-owned Life Insurance Corporation of India, the country's largest investor, bought just under 86 per cent of shares sold by the government earlier this week in state-run refiner and fuel retailer Indian Oil Corp, a regulatory filing showed.

New Delhi is seeking to raise as much as Rs 71,500 crore or $11 billion by selling stakes in state-run firms this year. While LIC is a frequent back up for government sales, the sum it bought on Monday, amid a stock market rout, is likely to raise questions over the future of the sell-off programme.

The Indian government sold 10 per cent of Indian Oil, raising around Rs 9,100 crore or $1.4 billion.

Officials at LIC, whose stake has risen to 11.11 per cent in Indian Oil from 2.52 per cent according to Tuesday's filing after market hours to the Bombay Stock Exchange, did not immediately respond to requests for comment

Currency Volatility Upsets Asian Growth Plans

Singapore: Faced with falling exports and deflation risks, it suited much of Asia to let their currencies drift lower, until China's abrupt devaluation triggered a tide of volatility that is upsetting not just their currency management but also their growth strategies.

China's 2 percent devaluation on Aug. 11 added to evidence that its economy was struggling, and overseas it caused a ripple of panic that a currency war was in the offing.

Currencies and stock markets in the region have since tumbled to multi-year lows, pulling global markets in their wake, as worries about China played into broader concerns about global growth, a collapse in commodity prices and the timing of a rise in U.S. interest rates.

Suddenly, in a region still haunted by memories of destabilising currency devaluations during the 1997/98 Asian crisis, the option of a gently sliding currency has been taken off the table by a freefall that threatens a destabilising flight of capital, sharp market swings and a spike in the cost of funds.

Central banks from South Korea to Thailand have deferred rate cuts, which would put further downward pressure on vulnerable currencies, with the result that growth and stimulus plans are likely to take a back seat.

Bank Indonesia kept its main interest rate unchanged at a policy review last week, making clear currency stability is foremost among its priorities, even though the economy has slowed to its weakest pace in six years and inflation is falling.

"We will not follow competitive devaluation," Indonesia's central bank Governor Agus Martowardojo said this week.

The central bank said it was aggressively intervening in the rupiah markets and even mopping up short-term cash to stop investors speculating against the currency.

Indonesia is particularly vulnerable after a sharp loss of 14 percent in the rupiah against the dollar so far this year, low forex reserves and a heavy dose of foreign money in its debt markets.

But even central banks such as India's and Singapore's are unlikely to be able to cut rates while markets remain volatile.

"Asian authorities have got to be willing to stomach high interest rates for a while," said Cliff Tan, head of east Asian markets research at Mitsubishi UFJ in Hong Kong.

Capital Economics analysts Gareth Leather and Daniel Martin said in a note to clients that Malaysia and Indonesia might even be forced to raise rates "if the currency sell-off became a rout".

Citibank has already cut its Asian growth forecast for 2015 to 6 percent from 6.1 percent, citing the volatility associated with China's weakening of the yuan, its slowing growth and the possible adverse policy reaction among other countries.

It cut its forecast for Thailand's growth to 2.7 percent from 3.5 percent.

Unwelcome Volatility

Though Thailand has admitted its economy wil be weaker than forecast and had welcomed depreciation in the baht as a remedy, its central bank voted to keep rates steady in August and alluded to financial market volatility as a factor. The baht hit its weakest levels since 2009 this week and most of the baht's 8 percent losses this year against the dollar have been in the past couple of months.

"It's clearly a bit uncomfortable. I would expect them to start to think this is unwelcome volatility rather than welcome depreciation," said Richard Yetsenga, global head of financial markets research at ANZ in Sydney.

South Korea's central bank turned swiftly defensive of the won this week as it hit its lowest in nearly four years, selling dollars to slow the won's decline.

That's a turnabout from its tactics earlier this year to weaken a currency that had become less competitive against Japan's sharply weaker yen. It also kept rates unchanged this month, two days after China's devaluation.

MUFJ's Tan reckons Asian central banks could coordinate policies better and be more proactive in using their trillions of dollars in currency reserves to defend their currencies.

"Asian central banks are already on the defensive, but the question is a strong versus a weak defence.

"They have a chance to prove that, by driving rates up and making it very expensive to hold these short-term positions."

Carnegie Mellon receives $35 mn Gift from TCS

The gift also will endow Presidential Fellowships and Scholarships, increasing the availability of a CMU education to outstanding students.

Carnegie Mellon University and Tata Consultancy Services (TCS) announced a $35 mn gift from TCS to the university, marking a new era of partnerships between leaders in industry and academia.

Representing the largest corporate gift to CMU, and from outside the U.S., this donation will fund a new facility, the Tata Consultancy Services Building, which will support education and cutting-edge research by CMU faculty and students. At approximately 40,000 square-feet, the stand-alone structure will house state-of-the-art facilities, providing collaborative spaces for CMU faculty and staff. The building will provide space for TCS staff to interact with CMU faculty, staff and students.

The gift also will endow Presidential Fellowships and Scholarships, increasing the availability of a CMU education to outstanding students. In doing so, TCS, which has been at the forefront of national and grassroots campaigns to encourage science, technology, engineering, and math education, will help equip Carnegie Mellon undergraduate and graduate students with the knowledge they need for future careers.

“With our shared commitment to education and research in areas that help address many challenges of our time, the partnership with TCS is both natural and extraordinarily promising,” said Subra Suresh, President of Carnegie Mellon. “Together, our two organizations have the capabilities and capacity to make breakthrough discoveries, and the scale to make societal impact on a global scale.”

“TCS is proud to invest in this landmark partnership with CMU to promote market-driven innovation and accelerate advancements in technology,” said Natarajan Chandrasekaran, Chief Executive Officer and Managing Director of TCS. “As global leaders, Carnegie Mellon and TCS have the intellectual power, creativity, institutional nimbleness, and global reach to capitalize on new opportunities and have a lasting impact on society and industry through cutting-edge digital research and a long-term commitment to education.”

TCS joins a growing group of major technology companies moving to the Pittsburgh region in recent years. More than 250 companies now have partnerships with CMU. This groundbreaking collaboration with a multinational company headquartered outside the U.S., marks a new chapter in the region, joining a rich ecosystem of entrepreneurship supported and catalyzed by the university.

“I’m very pleased to welcome TCS to Pennsylvania,” said Pennsylvania Governor Tom Wolf. “This is an exciting time as we see more and more companies establish and expand their presence in the state. Carnegie Mellon has been especially adept in attracting cutting-edge businesses to and near its campus, which helps to drive economic growth."

Among the nation’s major research universities, Carnegie Mellon ranks first in startups per research dollar, according to the Association of University Technology Managers. Since 2008, CMU faculty, students and alumni have created 215 new companies.

These startup activities also will benefit from CMU’s largest campus expansion since Andrew Carnegie founded the university in 1900. Work has begun on the David A. Tepper Quadrangle, the university’s major new academic hub, which will be located just east of the new TCS facility.

Market slips in morning deals

Despite surging yesterday, the market has started the day on a negative note, following weak global cues.

The NSE Nifty opened with a loss of 15 points at 7,865, while the BSE Sensex was up 31 points at 26,063.

Soon, the key benchmark indices drifted sharply into red on the back of fresh selling in select shares.

The benchmark indices have touched a low of 7,785 and 25,687, respectively.

Now, the NSE Nifty is down 19 points at 7,785 and the BSE Sensex is also down almost 115 points at 25,917.

The broader market, too, started in red, the CNX Midcap and Smallcap indices have shed 1.6-2 percent each at 12,582 and 4,908, respectively.

There are no gainers in sectoral indices, the CNX PSU Bank index has slipped 2 percent at 3,169. The Realty, Auto, Pharma and IT indices have dropped 1.5 per cent each.

The Bank Nifty, Metal, Finance and Infra indices are also down over a percent each.

Vedanta is the top loser in Nifty-50, down over 3 percent to Rs. 84. Hero MotoCorp and Dr. Reddy's have plunged almost 3 percent each at Rs. 2,393 and Rs. 3,989, respectively.

BHEL, ICICI Bank, Tata Motors, Bank of Baroda, Infosys, Yes Bank and Tech Mahindra are the other significant losers.

On the other hand, Cairn India has spurted over a percent at Rs. 127. HDFC and Wipro advanced nearly a percent each at Rs. 1,154 and Rs. 545, respectively.

18 Stocks in focus today

ITC Ltd: The company  could see weakness even though the company has not received any communication from the Uttar Pradesh government regarding presence of higher lead in its Yippee instant noodles and pasta, the company has told the Bombay Stock Exchange.

Jain Irrigation said its board has approved sale of its food business on 'slump sale' basis to its wholly owned subsidiary Jain Farm Fresh Foods Ltd.

Yes Bank: The bank has received approval from the Reserve Bank of India for re-appointment of Rana Kapoor as MD & CEO for a period of three (3) years, with effect from September 1, 2015.

SBI, IOB, UBI:  SBI said it will issue equity shares on preferential basis to the government for capital infusion of Rs. 5,393 crore. Indian Overseas Bank and Union Bank of India also informed about capital infusion from the government in lieu of preferential allotment of equity shares.

Gujarat NRE Coke Ltd: The company will seek shareholders nod to sell its wind mill business as part of the firm's corporate debt restructuring (CDR) efforts. The company in a regulatory filing said it will hold a postal ballot for seeking approvals of the shareholders.

IOC:  LIC has purchased nearly 90% of Indian Oil shares sold by the government in its Rs. 9,379-crore disinvestment.

Dabur India Ltd: The company said the USFDA has sought "additional information" for its Alwar unit and the company is "in process of submitting the same".

Austral Coke & Projects and Dunlop India: Leading stock exchange BSE today ordered suspension of trading in shares of as many as 20 companies, including Austral Coke & Projects and Dunlop India, from August 28 until further notice.

JSPL: The companywill seek shareholders' nod for raising up to Rs. 15,000 crore via securities for loan refinancing and capital expenditure.

Power Mech Projects Ltd: Power Mech Projects will remain in focus on its listing day. The pubic issue was subscribed nearly 38 times. Listing price is at Rs 640/share.

IL&FS Engineering and Construction Company: The company has bagged Rs 190.88 crore project from Madhyanchal Vidyut Vitran Nigam Ltd (MVVNL) for rural electrificationBSE 5.44 % works in Uttar Pradesh.

GVK Power & Infrastructure Ltd has announced that it has begun commercial operations of GVK Deoli-Kota Expressways, a wholly-owned subsidiary of the company. The diversified Hyderabad-based infrastructure company said it has received provisional completion certificate as per the provisions of the Concession Agreement.

L&T: The Power Transmission & Distribution Business of has won orders worth Rs. 1,563 crores in both the international and domestic markets in July & August 2015.
 
Suzlon: National Stock Exchange of India Ltd (NSE) completed 6.25 MW wind power project. Suzlon Group, one of the leading wind turbine manufacturer was the technical partner for supply & commissioning of the project. 

Edelweiss Financial Services: The FIPB has cleared Tokio Marine Holdings Inc.’s proposal to increase its stake to 49% from 26% in Edelweiss Tokio Life Insurance Co. Ltd., a joint venture life insurance company between Edelweiss Financial Services and Tokio Marine Holdings Inc.

Oil Near 6-1/2 Year Lows as China Economy Fears Linger

Seoul: Crude oil futures held in a narrow band on Wednesday not far off 6-1/2 year lows after China's central bank moved to support the country's stumbling economy, while concerns about a supply glut capped gains.

U.S. stock futures resumed their descent in early Asian trade and Asian shares were seen on the defensive on Wednesday as monetary easing by China's central bank had limited success in cheering up nervous investors.

Brent was trading up 1 cent at $43.22 a barrel as of 0222 GMT after it settled up 52 cents at $43.21 a barrel in the previous session.

U.S. October crude was down 6 cents at $39.25 a barrel, after finishing the previous session $1.07 higher at $39.31.

ANZ said that China's rate cuts had calmed commodity markets, but they remained cautious and gains would be limited.

"The displacement of high cost supply from the United States is taking much longer than expected, and it's likely to keep the market substantially oversupplied in the short term," it said.

Beyond China, other emerging markets such as Russia, Indonesia, Brazil and Thailand were also seeing a slowdown in demand, Macquarie noted.

"Industrial demand has struggled in many key emerging markets - this is perhaps best evidenced by auto sales, where the trend has continued to slide into mid-2015," the bank said.

U.S. crude stocks fell by 7.3 million barrels last week to 449.3 million, compared with analysts' expectations for a rise of 1 million barrels as refinery runs rose, data from the American Petroleum Institute showed on Tuesday. Energy Information Administration data is due on Wednesday.

"While the rate of global oil stock build is still set to decline, stocks will build for longer than initially anticipated," BNP Paribas said late on Tuesday.

"As such, any price improvement will most likely take place from a lower starting point and the pace of any price improvement is likely to be slower than previously assumed."

Iran will ramp up crude oil production and reclaim its lost share of exports shortly after international sanctions on the OPEC member are lifted, Iran's oil minister Bijan Zanganeh said on Tuesday, while Nigeria is also boosting exports.

With oil falling further, support is growing among non-Gulf members for action and even some Gulf officials are concerned about the latest drop in prices. Policymakers in top OPEC producer Saudi Arabia have remained publicly silent.

Stocks Slip as China Rate Cuts Fail to Calm Nerves

Asian stocks fell on Wednesday as investors feared fresh rate cuts in China would not be enough stabilise its cooling economy or halt a collapse in its stock markets.

China's key share indexes attempted to move higher several times in early trade only to be slapped back by waves of selling, reflecting investors' views that much more support was needed from the government and the central bank.

Following a near 20 per cent plunge in stock prices in three days, the People's Bank of China cut interest rates late on Tuesday and lowered the amount of reserves that banks must hold in a much-anticipated move that some economists said was long overdue.

While the double-barrelled policy moves were initially cheered by markets around the world, the impact didn't last long as investors quickly resumed their focus on the deteriorating outlook for China and the global economy.

By midmorning, China's CSI300 index was down 0.5 per cent at 3,028.48 points, while the Shanghai Composite Index was down 1.3 per cent at 2,925.97.

MSCI's broadest index of Asia-Pacific shares outside Japan fell 0.2 per cent in early trade and was just shy of a three-year low hit in the previous session.

Japan's Nikkei was the lone bright spot, rising 1.3 per cent, while Australia fell 0.4 per cent.

Companies such as mining giant BHP Billiton have softened expectations of demand growth from China while countries most exposed to China's economy, such as Indonesia, have dialled down their growth forecasts for 2015 in recent days.

In a sign of how fearful investors have become of risky assets, U.S. stock index futures resumed their descent in early Asian trade with the U.S. S&P 500 mini futures down 0.4 percent, nearing closer to Monday's 10-month low of 1,831.

Overnight, major U.S. stock indexes shot up after China's policy easing but later gave up all their gains, with the S&P 500 ending down 1.4 percent.

U.S. stock futures were down 0.2 per cent in Asian trade, suggesting further weakness on Wall Street later in the day.

Fixed income markets were active with investors rushing for cover to government debt and cash. The 10-year note traded to a low yield of 1.90 per cent earlier this week before recovering to trade at 2.06 per cent currently as prices rose. It was close to 2.50 per cent barely a month ago.

"Some parts of the Asian bond markets have become quite illiquid and investors are only buying high-quality paper amid this selloff," said Hayden Briscoe, fixed-income director at AllianceBernstein in Hong Kong and part of a team that manages $250 in assets globally.

The CBOE Market Volatility Index was still elevated at 36, indicating significant uncertainty, even though it was below the previous day's peak of 53.3, which was the highest level since January 2009.

In currencies, the dollar has also broadly lost steam as traders unwound massive carry trade bets in recent years based on higher yielding assets and instead flocked to safe-haven currencies such as euro and yen.

The euro was $1.1529, little changed from late U.S. trade, but more than a full cent above Tuesday's low of $1.1396.

The dollar also slipped back to 118.90, failing to maintain its brief foray above the 120 mark.

Commodity prices hovered just above multi-year lows hit earlier in the week, but concerns that softer demand from China would worsen global supply gluts kept a lid on them.

A 19-commodity Thomson Reuters/Core Commodity CRB Index was just holding above lows not seen since 2003.

Brent crude futures last traded at $43.36 per barrel, about a dollar above 6 1/2-year low of $42.23 on Monday.

The price of copper, often considered a proxy for global economic activity because of the metal's extensive use, bounced 2.3 per cent to $5,065 per tonne.

BSE Sensex, Nifty Set to Open Lower: 10 Developments

BSE Sensex and Nifty are set to open lower amid weak Asian markets and China stocks coming under strong selling pressure. Despite policy moves by the China central bank to support the economy, market participants continue to fret over the slowdown in the country's economy. The SGX CNX Nifty was down nearly 1.4 per cent at 7,778, indicating a lower opening for Indian markets.

1) Most of the Asian stocks fell on Wednesday as investors feared fresh rate cuts in China would not be enough stabilise its cooling economy or halt a collapse in its stock markets.

2) China's stock markets were under pressure with Shanghai Composite trading 2.2 per cent lower.

3) Analysts say that besides global markets, the value of the rupee holds key to the fortunes of Indian markets. The rupee slipped to 66.28/dollar in early trade today. Yesterday, the rupee posted its biggest gain of the year to close at 66.10/dollar.

4) The rebound in rupee and renewed hopes on the GST Bill had helped Sensex rise nearly 300 points on Tuesday.

5) Foreign institutional investors sold Indian stocks worth Rs 2,080 crore on Tuesday. They have been heavy sellers of Indian stocks in the past four days, putting pressure on Sensex. In the past four days, they sold Indian stocks worth over Rs 11,000 crore.

6) Foreign institutional investors hold nearly 25 per cent of BSE 200 stocks.

7) In contrast, domestic investors bought stocks worth Rs 1,963 crore on Tuesday. They have been big buyers of Indian stocks for the last four days, offering some support to Sensex and Nifty.

8) Following a near 20 per cent plunge in stock prices in past three days, the People's Bank of China cut interest rates and lowered the amount of reserves banks late on Tuesday in a much-anticipated move that some economists said was long overdue.

9) China's policy moves to prop up the economy were initially cheered by markets around the world but the impact didn't last long as investors quickly resumed their focus on the deteriorating outlook for China and the global economy.

10) Overnight, major US stock indexes shot up over 3 per cent after China's policy easing but later gave up all their gains, with the S&P 500 ending down 1.4 per cent.