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Monday, September 17, 2012
RBI policy day ends well; Sensex up for 9th day
Indian stocks rose after RBI cut the CRR and the government opened its huge market to foreign retailers in a bid to kick-start flagging economic growth. Sensex rose 78 points and the Nifty gained by 32 points in today's trade. Major Headlines of the Day: RBI cuts CRR by 25 bps, leaves key rates unchanged Retail reforms will boost Realtors to kick-start projects Govt can raise LPG cap from 6 to 10 cylinders Govt OKs 51% FDI in Multi Brand Retail Indian indices: It was yet another eventful trading day for the Indian indices. The Indian markets pulled back after a knee-jerk reaction to the Reserve Bank of India's decision to hold policy rates, which left the investors disappointed. The Sensex witnessed a drop of over 200 points from the day's high while the broader Nifty slipped below the 5,600 mark. The rupee, too, pared gains against the dollar. Later, the weak opening of the European markets also weighed on the sentiments. Buying in Realty, CG, Bankex, Power, Oil & Gas, Auto, Metal, CD and PSU were the major supporters. Gains in Index heavyweights like ICICI Bank, RIL, L&T, SBI, HDFC, Tata Motors and Bharti Airtel helped the market to remain higher. Indices extended gains for the 9th day and ended higher in a volatile session. The Sensex hit 14-month high and NSE Nifty closed above the 5600 level for the first time since July 25, 2011, though it was off day's high. The Sensex closed 78 points higher while the Nifty gained 32 points in trade today. Movement of the Indian indices for the day: The Indian markets closed on a positive note in today's trade, with the Sensex and the Nifty rising with modest gains. Today, the Indian indices stayed higher throughout the day owing to gains in index heavyweights which helped the markets to remain in green zone for the entire day. Rate sensitives like banking, realty, capital goods and auto stocks led major support while weakness in technology, FMCG and healthcare stocks erased more than half of the gains in second half of trade. The key benchmark indices closed higher for the ninth session in a row, with rising for more than 1200 points. The rally was aided by consistent inflow of foreign money that lifted the rupee to 54 against the US dollar, a third quantitative easing by the Federal Reserve, favorable German's Constitutional court ruling, diesel price hike and FDIs approval in retail, aviation & broadcast carriage services sectors. The broader markets too traded on a positive note. The BSE Midcap index rose by 1.14%, while the BSE Smallcap index was up by 1.13% in trade today. The overall market breadth stood positive. The Sensex ended at 18542.31, up by 78.04 points, while the Nifty shut shop at 5610, up by 32.35 points. Major Events: The RBI announced a reduction in CRR by 25bps and kept the repo rate unchanged at 8% and reverse repo rate remains unchanged at 7% under the liquidity adjustment facility (LAF). Following are the stocks/ sectors which were in news today: 1. Tata Motors trimmed gains to 2.7% from over 6% in late trade, after posting less-than-expected global sales data in August. 2. Real estate firms rose on hopes of benefit from the government's move to allow foreign direct investment in multi-brand retail chains. 3. Welspun Corp gained after the company said it has successfully concluded the placement of Rs252.8 crore secured redeemable non convertible debentures. The stock rose 0.40% in trade today 4. Deccan Chronicle Holdings locked lower circuit of 5%, ahead of the Bombay High Court (HC) verdict on the Board of Control for Cricket in India (BCCI) decision to terminate the contract with IPL team Deccan Chargers.
Banking, realty stocks rally
Key benchmark indices edged higher in choppy trade and attained their highest closing level in 13-1/2 months as the government after market hours on Friday, 14 September 2012, announced liberalization of foreign investment rules in retail, aviation and broadcasting sectors. While the government has allowed up to 51% foreign direct investment (FDI) in multi-brand retail trading (MBRT), in the aviation sector the government has allowed foreign airlines to acquire up to 49% stake in Indian carriers. Comments by Finance Minister P. Chidambaram that the government will unveil more measures to narrow the fiscal deficit and to boost economic growth, which may encourage the central bank to cut interest rates at its next monetary policy review on 30 October 2012, aided the upmove on the bourses.
FDI in multi-brand
Cabinet approves proposal to permit 51% FDI in multi‐brand retail Individual state govts will have discretion to allow multi-brand Centre says CM of Delhi, Assam, Maharashtra, AP support FDI Rajasthan, Uttarakhand, Haryana, Manipur also support FDI Govt of Bihar,Gujarat, Kerala, MP,UP, West Bengal,Odisha oppose FDI: Rpt Karnataka , Jharkhand, Punjab yet not decided & to study fine print: Rpt
FDI in aviation
Cabinet approves proposal to allow foreign airlines to buy upto 49% in local airline cos Alert: Earlier only foreign investors allowed to invest in local airline cos Would help bringing in strategic investors into aviation sector MAJOR BENEFICIARY: Spicejet is major beneficiary of FDI aviation Spicejet does not need money but a partner Alert: Spicejet's debt stands at Rs 700 cr
FDI Norms for Broadcast
Govt hikes FDI limit in DTH & Digital cable svc providers(MSOs) to 74% Alert:The earlier limit was 49% for DTH segment. FDI limit was 74% for Headend in the Sky (HITS), bringing DTH on par now Alert:HITS- A satellite multiplex svc provides TV channels for cable operations 49% can come through ‘automatic route’
Govt in form with reform; RBI action awaited
FDI in power exchanges, retail, media and aviation are among the steps in the right direction not to mention the tough stand of hiking diesel prices. Only in growth, reform, and change, paradoxically enough, is true security to be found.- Anne Lindbergh A government synonymous with policy paralysis has suddenly shifted gears. FDI in power exchanges, retail, media and aviation are among the steps in the right direction not to mention the tough stand of hiking diesel prices. The Fed’s stimulus announcement of course cheered world markets last week which are adding to the positive mood. ECB president Mario Draghi’s plan for unlimited, but conditional, bond purchases of troubled euro area countries brought in cheer.
Indian stocks signal firm opening on D-street ahead of RBI policy
The Indian markets may open on a positive note led by positive Asian cues. SGX Nifty is trading 65 points higher. Events for the day: Release of RBI mid quarter monetary policy. Headlines for the day: SBI may get Rs 4,000 cr capital support from govt Bhel says coal row won't impact its operations Govt to export 1.75 lakh tonnes fertilisers to Nepal this year' RIL plans low-cost telecom towers costing Rs 1 lakh
Market may extend recent surge on government's bold reforms
The market may extend recent strong gains on bold reforms announced by the government after market hours on Friday, 14 September 2012. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a surge of 78 points at the opening bell. Shares of organised retailers will surge after the government after trading hours on Friday, 14 September 2012, announced that the Union Cabinet has approved the proposal of the Department of Industrial Policy & Promotion for permitting foreign direct investment (FDI) up to 51% in multi-brand retail trading (MBRT). The permission for 51% FDI in MBRT is subject to specified conditions. A statement issued by the government said that retail sales outlets can be set up in those states which have agreed or agree in future to allow FDI in MBRT under this policy. The establishment of the retail sales outlets will be in compliance of applicable state laws/ regulations, such as the Shops and Establishments Act etc. The policy provides that it would be the prerogative of the state governments to decide whether and where a multi-brand retailer, with FDI, is permitted to establish its sales outlets within the state. Therefore, implementation of the policy is not a mandatory requirement for all states, the government said in statement.
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