Global Crude oil price of Indian Basket at US$ 33.22 per bbl on Tuesday

The international crude oil price of Indian Basket as computed/published by PPAC under the Ministry of Petroleum and Natural Gas was US$ 33.22 per barrel (bbl) on Tuesday.

The international crude oil price of Indian Basket as computed/published by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 33.22 per barrel (bbl) on Tuesday. This was higher than the price of US$ 31.86 per bbl on previous publishing day of Monday.

In rupee terms, the price of Indian Basket increased to Rs 2264.23 per bbl on Tuesday as compared to Rs 2185.97 per bbl on Monday. Rupee closed stronger at Rs 68.16 per US$ on 01.03.2016 as against Rs 68.62 per US$ on Monday. The table below gives details in this regard:

Particulars	Unit	Price on March 01, 2016 (Previous trading day i.e. 29.02.2016)	Pricing Fortnight for 01.03.2016 (12 Feb to 25 Feb, 2016)
Crude Oil (Indian Basket)	($/bbl)	33.22             (31.86)	30.61
	(Rs/bbl	2264.23         (2185.97)	2096.17
Exchange Rate	(Rs/$)	68.16             (68.62)	68.48

 

Asian stocks in green; Hang Seng up 1.5%

Surging oil prices helped Asian stocks to rise on the first day of the trading week. Monetary easing steps by European Central Bank (ECB) last week lifted sentiment across Asian stocks.

Surging oil prices helped Asian stocks to rise on the first day of the trading week. Monetary easing steps by European Central Bank (ECB) last week lifted sentiment across Asian stocks. It is expected that the Bank of Japan will also follow ECB in their monetary policy review. Buoyed by the rally, Hong Kong’s Heng Seng Index is currently trading 1.50% higher at 19,730.40 points.

Climbing crude oil prices helped the Chinese stocks to take the gains forward with the Shanghai Composite Index currently trading 0.54% higher at 2,932.25 points; while the CSI 300 Index is currently trading    0.31% up at 3,123.12 points.

Among other gainers, Japan’s Nikkei 225 Index is currently trading 0.89% higher at 17,110.91 points, Singapore’s Straits Times at 2,603.60 points (1.02%), Taiwan’s Weighted Index at 7,894.15 points (1.75%), South Korea’s Kospi Index at 1,893.43 points (0.74%), Thailand’s SET Composite Index at 1,282.09 points (1.10%), Indonesia’s Jakarta Composite Index at 4,518.84 points (1.37%) and Singapore Nifty, better known as SGX Nifty, is currently trading 0.44% higher at 7,459 points.

Meanwhile, in India, the S&P BSE Sensex and Nifty 50 index are currently trading 0.48% and 0.50% higher at 24,553.88 points and 7,459.70 points respectively.

Global markets crack! Sensex plunges 500 points

The India VIX (Volatility) index is up 15.36% to 20.5000. A total of five stocks registered a fresh 52-week high in trades today, while 131 stocks touched a new 52-week low on the NSE.

The market continues sag in the negative zone. The Indian rupee tumbled 33 paise to trade over 28-month low at 67.98 against the dollar.The rupee hits 68 against US Dollar for first time since Sep 2013.  Sensex cracks below 24,000-level for the first time since May 16, 2014, by plunging 482 points to 23,998.65.

At 2:09  PM, the S&P BSE Sensex is trading at 23,914 down 566 points, while NSE Nifty is trading at 7,263 down 171 points.

The BSE Mid-cap Index is trading down 2.90% at 9,941, whereas BSE Small-cap Index is trading down 2.67% at 10,245.

All sectors are showing weakness on BSE. Among sectors - the CNX Metal index has shed 3.7 percent at 160.95. The Media and Realty indices are down 2 percent each, while the Bank Nifty has declined 2.5 percent to 14,894.

Sun Pharma, Infosys, SJVN,Balkrishna Industries, Rajesh Exports and Vakrangee are among the gainers, whereas Tata Steel, RIL, SBI, L&T, Adani Ports, ONGC, ICICI Bank and Axis Bank are losing sheen on BSE.

The India VIX (Volatility) index is up 15.36% to 20.5000. A total of five stocks registered a fresh 52-week high in trades today, while 131 stocks touched a new 52-week low on the NSE.

The breadth too has turned negative - Out of 1,782 stocks traded on the NSE, 1,377 have declined and 165 advanced so far.
Indian Rupee opened at 66.77/$,down 12 paise in early trade on Wednesday as against the previous close of 66.65/$.The Indian Rupee slipped to lowest level since September 2015. On macroeconomic front, IMF has downwardly revised its growth forecasts for the third consecutive time in last 12 months and now projects the world economy to grow at 3.4% in 2016 and 3.6% in 2017, about 2% lower than previous estimates. China's growth is expected at 6.3% in 2016 and 6% next year. Growth outlook for the US has been lowered as well, weighed down by strong US dollar, ensuing weak exports and lower investments in energy sector. US economy is forecasted to grow at 2.6% for 2016 and 2017, down 0.2% from its October forecast. Europe is forecasted to expand by 1.7% this year.
Rallis India hit 52-week low at Rs.142.50 on BSE. The company posted a net profit after taxes and minority interest of Rs. 204.10 mn for the quarter ended December 31, 2015 as compared to Rs. 254.90 mn for the quarter ended December 31, 2014. Total Income has decreased from Rs. 3881.80 mn for the quarter ended December 31, 2014 to Rs. 3111.10 mn for the quarter ended December 31, 2015.Currently, the stock is trading down 3.2% at Rs.144.70.

Axis Bank slipped 2.7% to Rs.382.55 on BSE. The bank is scheduled to announce its December quarter earnings today. According to IIFL estimates, the bank will report net profit around Rs. 2243.9 crore at growth rate of 18.1 % on Y-o-Y basis and 17.1 % on Q-o-Q basis.

BASF India tumbled 4.8% to Rs.799.95 on BSE. The company reported net loss of Rs. 106.38 crore for the quarter ended December 31, 2015. The company’s revenue stood at Rs. 1131.7 crore registering growth of 15.77% yoy.

Titan Company has collaborated with HP, to launch JUXT, the India's most stylish smartwatch.

Chinese woes! MSCI Asia Pacific index tumbles to 4 year low

Market experts are of the view that a weaker yuan since last 8 days might escalate fears of a global currency war.

Mounting concern over the financial stability in China has dragged the Asian stock markets once again. The MSCI Asia Pacific excluding Japan Index nosedived over 2% to 374 points today in Hong Kong, going southward to its lowest level since October 2011.

Most of the leading Asian stock markets, began the second week of 2016 on a negative note as selling pressure prevailed Monday after signs of recovery in Chinese economy blurred with yuan devaluation.

Market experts are of the view that a weaker yuan since last 8 days might escalate fears of a global currency war.

Succumbing to heavy sell-off across sectors Asian stocks markets remained subdued on Monday as China’s Shanghai Composite Index opened lower. The Index currently is trading 2.40% lower at 3,109.95 points. Meanwhile, the CSI 300 Index is trading 2.16% lower at 3,288.80 points.

Among other notable losers, Singapore’s Straits Times is currently trading at 2,694.17 points (-2.12%), Taiwan’s Taiex at 7,804.08 points (-1.15%), South Korea’s Kospi index at 1,905.12 points (-0.66%), Thailand’s SET Composite at 1,228.28 points (-1.29%) and Singapore Nifty (SGX Nifty) at 7,520 (-1.12%). The Tokyo Stock Exchange is closed due to a holiday.

Trading halted in China once again; Asian markets tumble

The Chinese stocks reacted negatively after the People's Bank of China (PBOC) set the yuan’s reference rate at 6.5646, the lowest levels since April 2011.

This perhaps is the worst start of the year for Chinese stock markets in last two decades with the authorities had to halt the trading twice in a week - after two major falls of over 7%. The Chinese stocks reacted negatively after the People's Bank of China (PBOC) set the yuan’s reference rate at 6.5646, the lowest levels since April 2011.

The Shanghai Composite Index(CSI 300) was last quoted at 3,115.89 points, down by 7.89% after the trades were suspended. The index opened lower at 3,309.66 points as against its previous close of 3,361.84 points.

Analysts are of the view that mounting concerns over tepid economic growth is prompting the Chinese authorities to lower yuan. In early trades, yuan was quoted 0.6% lower at 6.592 against the US dollar.

The bearish trend in Chinese stock markets proved contagious which affected other leading Asian stock indices, which fell between 1-2.5%. The weak sentiment in Chinese stock markets triggered heavy sell-off at other Asian stocks markets. Japan’s Nikkei 225 index is currently trading 1.53% down at 17,917.71 points, Singapore’s Straits Times at 2,748.48 points (-2.03%), Hong Kong’s Heng Seng at 20,479.39 points (-2.45%), Taiwan’s Taiex at 7,815.40 points (-2.24%), South Korea’s Kospi index at 1,905.51 points (-1.05%), Singapore Nifty (SGX Nifty) at 7,653 (-1.06%).

Meanwhile, India’s S&P BSE Sensex and Nifty 50 are currently trading 0.71% and 0.76% lower at 2,5224.70 points and 7,682.25 points respectively.

European markets closed lower yesterday. UK’s FTSE 100 closed 1.05% lower at 6,073.38 points, France’s CAC 40 index at 4,480.47 (-1.28%) and Germany’s DAX at 10,214.02 points (-0.94%).

Dow Jones Futures and S&P 500 Futures closed 1.34% and 1.10% at 16,750 points and 1,972.50 points respectively. 

Falling global gas prices bonanza for India!

Almost 18 months after it shut down due to a lack of liquefied natural gas (LNG), the Dabhol power plant in Maharashtra started generating electricity again for the Indian Railways on November 26, 2015.

Falling global gas prices have brought achche din (good days) for India’s beleaguered power-from-gas sector, ridden with unused power plants and struggling banks that have loaned billions to these projects.
 
Almost 18 months after it shut down due to a lack of liquefied natural gas (LNG), the Dabhol power plant in Maharashtra started generating electricity again for the Indian Railways on November 26, 2015.
 
The Railway Ministry, in this release, said it has started buying 300 mega watt (MW) of electricity from the project, which will later increase to 500 MW. This electricity will be Rs 4/unit cheaper than the rate the Railways pays to power utilities and will result in an annual saving of Rs 1,000 crore, according to the ministry.
 
Ratnagiri Gas and Power, which owns the 1,980 MW Dabhol power plant and the associated natural gas import terminal, owes Rs 8,500 crore to banks–money which now has a chance of being repaid.
 
The revival of the Dabhol project has been made possible by the sharp fall in international gas prices, IndiaSpend reported previously.
 
Low fuel price cheers
 
The drop in price of liquefied natural gas (LNG) by almost 60% over the last 18 months is evident elsewhere across India.
 
Private-sector power companies, such as Torrent Power, GMR, GVK and Lanco, own 9,773 MW of gas-fuelled power plants. All of these plants have either been idle or operating at low capacity for the past several years. Cheap domestically produced gas was not available, while imported gas at international prices was too expensive to use.
 
This is now changing. During October 2015, these plants generated 2.5 times (or 150% more) the electricity they produced in October 2014. Between April and October, the total electricity generation of these power plants increased 76%.
 
The extra electricity generation has come without adding a mega watt of generation capacity; the improvement has come from better capacity utilisation.

The improvement in the operating health of gas power plants will also bring cheer to Indian banks that have lent large sums to corporate groups, such as GMR, GVK and Lanco. These three business houses have a gross debt of Rs 1.29 lakh crore ($19.4 billion), according to a recent report by brokerage Credit Suisse. Only a part of this debt is because of gas-fired power plants, which are just one of the many businesses these groups run.
 
During financial year 2015 (FY15), the interest rate cover – the ratio of pre-tax earnings to the interest payments owed by these groups – was less than one. This means the three groups did not make sufficient pre-tax profits to pay the interest they owed to the banks, let alone the principal.
 
Government companies need reform?
 
However, not everyone has been able to cash in on the drop in fuel prices. Public-sector   companies owned by the central and state governments, which own a total of 14,465 MW of gas-based power capacity, have actually seen operating performance deteriorate in 2015.
 
Over a period where private sector plants generated 76% extra electricity, the government-owned plants actually generated less electricity compared to the previous year.
 
Two factors may account for this. First, government-owned power companies haven’t been as quick as their private-sector counterparts in buying cheap gas internationally and bringing it to India. For instance, the Dabhol project was finally restarted only by end-November – months after private-sector plants ramped up operations.
 
The second problem may have to do with failing state power utilities, as IndiaSpend has reported.
 
Most of these utilities incur heavy losses from power theft, transmission losses and subsidies. Poor financial health means many of them can afford electricity only from the cheapest sources – in this case, coal.
 
State power utilities are so badly off that they cannot cash in on these falling gas prices. It may be better to sell their plants to profitable public-sector companies, such as NTPC, which can run them better.
 
India is and will remain short of natural gas, and only imports can meet this shortfall. But the price of gas is likely to remain low for some time, as new gas supplies from Australia and the US will be available over the next few years.
 
India, a large energy consumer, is in a strong bargaining position, well poised to sign long-term gas supply agreements at today’s low rates.

Entering 2016! 4 key risks to global banking sector

According to a report published by Standard & Poor's Ratings Services titled "The 2016 Global Credit Outlook For Banks: Challenges Still Numerous Leading Into The Chinese Year Of The Monkey," there are four key risks and two emerging risks that could be most likely to influence bank ratings in 2016.

Risks to global banking sector credit quality leading into 2016 remain numerous, according to a report published today by Standard & Poor's Ratings Services.

The report, titled "The 2016 Global Credit Outlook For Banks: Challenges Still Numerous Leading Into The Chinese Year Of The Monkey," identifies four key risks and two emerging risks that we believe could be most likely to influence bank ratings in 2016. The key risk factors we identify are

(i) China
(ii) higher U.S. interest rates and potentially volatile currencies and other market prices including oil, other commodities, and property
(iii) regulatory developments, and (iv) geopolitical risks.

Meanwhile, emerging risks that could influence bank credit quality are (i) lower market liquidity, and (ii) cyber-security. The relative importance of these key and emerging risks tends to vary by region.

The report also notes there is more certainty looking toward 2016 compared with this time last year mainly because rating adjustments we flagged leading into 2015 for banks in jurisdictions where government support was expected to diminish--principally in Western Europe and the U.S.--has now largely occurred.

While the recovery of the global banking sector from the aftermath of the global financial crisis beginning in 2007 has been has been a long and slow grind, the sector is now in much better shape to contend with challenges ahead--and they remain numerous. Across six major regions globally, issuers on negative outlook or CreditWatch with negative implications still outnumber positive ones, resulting in a net negative bias of about 30% of banking group issuers (at Dec. 4, 2015). While there are variations between regions, our outlook overall is that ratings momentum in 2016 is more likely to be negative.

We currently identify nine of 20 of the world's largest economies and banking sectors as showing a negative trend for economic risk: China and Japan (being the world's second- and third-largest economies); each of the four "BRIC" countries (Brazil, Russia, and India, in addition to China); and Germany, Canada, Sweden, and Hong Kong. By contrast, the U.K., Italy, Spain, and Singapore show positive trends for economic risk, and our view of the economic risk trend in the U.S. is stable.

Global drug spending to reach US$ 1.4 trillion in 2020: IMS

Medicines in 2020 will include a vast array of treatments ranging from those that provide symptom relief available without a prescription to lifesaving genetically personalized therapies unique to a single patient.

An increase in access to healthcare services in emerging markets and rising price of certain medicines for diseases like cancer and diabetes, the global spending on drugs is expected to reach US$ 1.4 trillion in 2020, accounting to IMS Institute for Healthcare Informatics.

The global use of medicines will reach 4.5 trillion doses by 2020 costing $1.4 trillion. The largest pharmaceutical-using countries will be the pharma emerging markets, accounting for two-thirds of the global medicine volumes, mostly comprised of generic medicines and reflecting dramatic increases in utilization of medicines due to broad-based health system expansions.

Medicines in 2020 will include a vast array of treatments ranging from those that provide symptom relief available without a prescription to lifesaving genetically personalized therapies unique to a single patient. 

“Disease treatments in 2020 will be transformed by the increased number and quality of new medicines in clusters of innovation around cancer, Hepatitis C, autoimmune disorders, heart disease and an array of rare diseases,” notes IMS.

By 2020, technology will be enabling more rapid changes to treatment protocols, increasing patient engagement and accountability, shifting patient-provider interaction, and accelerating the adoption of behavior changes that will improve patient adherence to treatments. 

Stronger than expected China GDP Growth: India Ratings

Foreign portfolio investors may take note of weak corporate earnings, as disinflation worries plague India Inc.’s revenue and profit.

Rupee to Trade between 65.5-65.1/USD: India Ratings and Research (Ind-Ra) expects the Indian rupee (INR) to trade sideways this week, in the 64.50-65.1/USD range. Foreign portfolio investors may take note of weak corporate earnings, as disinflation worries plague India Inc.’s revenue and profit. There are nascent signs of recovery in overall domestic growth as well, despite weakness in exports and investment demand.

The risks will be balanced by robust foreign portfolio investments (FPIs) in bond markets (USD2.1bn in the month till 15 October 2015) on high Indian real yields. Further, Asian currencies should trade firm on the lack of negative triggers, while the US dollar (USD) may strengthen against the majors such as the euro and Japanese yen on relative growth and inflation dynamics.

Global Calmness to Keep Indian Markets Range Bound: Ind-Ra opines stronger than expected China GDP growth and expectations of Fed rates on hold for a while will lead to benign global sentiments. We are entering into a phase of consolidation in global currency markets ahead of European Central Bank’s monetary policy decision this week and the US Federal Reserve Meeting later during the month.

China’s growth downturn has been arrested for now (GDP for 3Q15 at 6.9% vs expected 6.8%) as the increase in fast paced services, infrastructure spends and consumption countered the decline in manufacturing and exports.

Separately, US data remains mixed. Although consumer confidence and core inflation (particularly services inflation) indicate that the US economy is chugging along, the expectations of Fed normalising rates have been pushed to 2016 on a poor jobs report as well as on the lack of trade, industrial and retail sales data along with the complete absence of inflation pressures elsewhere within the US economy.

Bullish Steepening of Bond Curve to Continue: Amid ongoing benign global developments and heavy FPI interest in India, the bond market is likely to consolidate hereon, with yields likely to soften.

Interest on the front end of yield curve has been strong, resulting in the bullish steepening of the curve (5x10 spread down 11bp vs 14bp fortnight ago). Over the week, the interest of foreign portfolio investors in G-sec was particularly noted in short-end high-yielding securities (Figure 1). We expect this momentum to continue and yields may soften in range of 2bp-5bp through the week.

FPI to Benefit G-sec Market: With the state development loan (SDL) limit fully utilised, FPIs may pour into the G-sec market. We expect the market to remain well bid with limit worth INR30.42bn still available in G-secs.

On the states’ front, Ind-Ra observes that foreign portfolio investors have been differentiating between credits, and selectively investing in SDLs. The biggest beneficiaries of the fresh flows have been Maharashtra, Tamil Nadu and Gujarat. These SDLs have broadly traded at spread of 35bp-40bp over the benchmark 10-year G-sec.

China’s Q3 GDP grows by 6.9%

China's economy grew 6.9% yoy in the third quarter, compared with 7% in the previous three months.

China's economy grew 6.9% yoy in the third quarter, compared with 7% in the previous three months. Expectations were it would grow by 6.8% in July-September period.

Asian Shares Rise on Fading Fed Tightening View

Tokyo: The prospect of a delay in the U.S. Federal Reserve's plan to raise interest rates and signs of some stability in oil and commodity markets boosted Asian stocks on Tuesday.

MSCI's broadest index of Asia-Pacific shares outside Japan rose 0.7 per cent to two-week high.

Japan's Nikkei extended the rebound from eight-month low hit a week ago, helped by speculation that the Bank of Japan might adopt stimulus to support the flagging economy.

Also mildly supporting the market, twelve Pacific Rim countries including the United States, Japan and Canada reached the most ambitious trade pact in a generation, though some analysts say the benefits are far from clear.

"The market seem to be driven by speculation on policy steps, including uncertain benefits from the Trans-Pacific Partnership (TPP)," said Hitoshi Ishiyama, chief strategist at Sumitomo Mitsui Asset Management.

The Fed has said it is likely to raise rates this year as the economic recovery progresses, but surprisingly soft U.S. jobs data published on Friday led many market players to abandon expectations of a rate hike by the year-end.

That boosted sentiment on risk assets, which have been long hit by threats of higher dollar borrowing costs as well as concerns that growth in China may be falling to its slowest in many years.

The MSCI's broadest gauge of world stocks rose 1.9 per cent on Monday to its highest level in more than two weeks.

Oil prices rose more than two percent on Monday, bolstered by a rally in U.S. gasoline and Russia's willingness to meet other major oil producers to discuss the market.

Global crude benchmark Brent rose 2.3 percent to $49.22 per barrel, edging closer to the top end of its rough $46-$50 trading band in the past month.

Commodity-linked currencies also fared better, with the New Zealand dollar hitting a six-week high of $0.6430 on Monday.

The Canadian dollar rose to its highest levels in more than two weeks to C$1.3065 to the greenback on Monday.

Precious metals were also supported, with silver hitting a three-month high of $15.71 per ounce on Monday.

Gold went to a one-week high of $1,142 per ounce on Monday and last stood at $1,136.10.

The dollar had a mixed performance against major currencies as the headwind from fading expectations on the Fed's rate hike was countered by positive risk sentiment.

The dollar traded at 120.48 yen and the euro traded at $1.1188, with both yen and euro sitting comfortably in their respective narrow trading ranges of the past few weeks.

The Australian dollar stood little changed at $.07083 after scaling a two-week high of $0.7112 on Monday, ahead of monthly policy meeting by the Reserve Bank of Australia (RBA) on Tuesday.

While the RBA is widely expected to keep rates at a record low of 2 percent, but the market will be scrutinising the policy statement for clues on the central bank's next move.

The BOJ also starts its two-day policy meeting on Tuesday.

Asian Shares Stabilise, Japan's Nikkei Leads Gains

Tokyo: Most Asian stock markets steadied on Wednesday after sliding to 3-year lows but a weak outlook for commodities and persistent concerns about China's economy discouraged most buyers.

MSCI's broadest index of Asia-Pacific shares outside Japan was little changed in early trade after plumbing its lowest since June 2012 on Tuesday on fears that China's slowdown would curb its huge appetite for commodities and resources.

The index was on track for a 19 per cent loss for the quarter, its worst loss in four years.

"Global equities are closing in on their worst quarter since 2011, with a number of factors fuelling fears in an already jittery market, including weak global growth, driven by deceleration in emerging markets, particularly China," strategists at Barclays wrote.

"We recommend overweight positions in Japanese and European equities."

South Korea's Kospi dropped 1 per cent while Australian shares gained 0.3 per cent.

Japan's Nikkei brushed aside an unexpected drop in the country's industrial output and gained 1.6 per cent. It was still poised for a 14 percent drop over the quarter, its deepest since 2010.

Asian stocks took an early positive lead from Wall Street, which ended slightly higher overnight as the U.S. bourses took a breather, with the latest round of China fears that gripped global markets petering out for the moment.

Investors also felt relief as shares of mining and trading giant Glencore gained more than 10 per cent overnight.

Hitting risk sentiment, Glencore shares fell to a record low at the start of the week on concerns over the company's ability to withstand a prolonged decline in prices of metals.

Benchmark three-month copper on the London Metal Exchange rose 0.1 per cent to $4,970 a tonne, though the rise did not do much to move the metal away from a six-year low of $4,855 hit in August.

Prices of other industrial metals like aluminium and zinc also halted their recent routs overnight.

Commodities and the global financial markets still face a major test of nerves on Thursday, when the closely-watched Chinese Purchasing Managers' Index (PMI) is likely to show the country's factory sector shrank for the second month in a row in September.

Commodity currencies languished while the U.S. dollar stood tall. The Canadian dollar stood near an 11-year low of C$1.3463 per dollar struck overnight.

South Africa's rand managed to bounce modestly but was still in reach of a record low of 14.16 per dollar touched on Tuesday.

The greenback, meanwhile, stood little changed at 119.86 yen. The euro was steady at $1.1253.