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Friday, August 30, 2013

Market may open flat to slightly higher

The market may open flat to slightly higher as most Asian stocks rose. Trading of CNX Nifty futures on the Singapore stock exchange indicates a flat opening on the domestic bourses today, 30 August 2013. On the macro front, the Central Statistics Office (CSO) will unveil data on gross domestic product (GDP) for Q1 June 2013 today, 30 August 2013. India's GDP grew a dismal 4.78% in Q4 March 2013. The GDP grew 5% in the year ended 31 March 2013, the weakest in a decade, as falling domestic and overseas demand, crumbling domestic infrastructure facilities, bureaucratic delays in approvals for industrial projects and high borrowing costs choked investments in the economy.

Infrastructure and realty stocks will be in focus as the path-breaking Land Acquisition Bill, which seeks to provide just and fair compensation to farmers while ensuring that no land can be acquired forcibly, was passed by the Lok Sabha with overwhelming majority on Thursday. The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Bill, 2012 stipulates mandatory consent of at least 70% for acquiring land for Public Private Partnership (PPP) projects and 80% for acquiring land for private companies. The bill, which will replace over a century-old law, proposes compensation that is up to four times the market value in rural areas and two times the market value in urban areas. The bill was passed with 216 votes in favour and 19 against.

State Bank of India (SBI) said after market hours on Thursday, 29 August 2013 that the interest rate for bulk deposits for the tenors 7 days to 60 days will be 9% per annum and for the tenor 61 days to less than one year will be 8.25% per annum with effect from 31 August 2013.

Sesa Goa said after market hours on Thursday, 29 August 2013 that the board of directors of the company at its meeting held on 29 August 2013 approved allotment of equity shares to the shareholders of Sterlite Industries (India) (Sterlite), The Madras Aluminium Company (MALCO) and Ekaterina (Ekaterina) pursuant to the Schemes of Amalgamation and Arrangement.

To the shareholders of Sterlite a total of 194.45 crore shares were issued, 3 Sesa Goa shares being issued for every 5 existing Sterlite shares. To the Shareholders of MALCO, 7.87 crore shares, 7 Sesa Goa shares being issued for every 10 existing MALCO shares. To the Shareholders of Ekaterina 7.23 crore shares, 1 Sesa Goa share being issued for every 25 existing Ekaterina shares.

Consequent to the aforesaid allotments, the paid up equity share capital of the company stands increased from Rs. 86.91 crore to Rs. 296.46 crore. Sesa Goa will apply to the Bombay Stock Exchange and the National Stock Exchange in India (together, the Indian Stock Exchanges) for listing approval for the new Sesa Goa shares and expects to receive the final listing approval within three to four business days. Thereafter, Sesa Goa will apply to the Indian Stock Exchanges for trading approval for the new Sesa Goa shares and expects to receive the trading approval within a further two to three business days. The new Sesa Goa shares are expected to begin trading on the Indian Stock Exchanges on the next business day in India after trading approval is received.

Hindalco Industries turns ex-dividend today, 30 August 2013, for dividend of Rs 1.40 per share for the year ended March 2013.

NHPC turns ex-dividend today, 30 August 2013, for a final dividend of Rs 0.60 per share for the year ended March 2013.

A recovery in the battered rupee, a slide in oil prices triggered by US President Barack Obama's comments on Wednesday, 28 August 2013, that he hasn't yet decided whether to launch an attack on Syria and weaker-than-expected report on US durable-goods orders which raised expectations that the Federal Reserve may delay plans to reduce its monetary stimulus to the US economy, aided a rally in Indian stocks on Thursday, 29 August 2013. The S&P BSE Sensex jumped 404.89 points or 2.25% to 18,401.04 on that day, its highest closing level since 26 August 2013.

Foreign institutional investors (FIIs) sold shares worth a net Rs 248.18 crore on Thursday, 29 August 2013, as per provisional data from the stock exchanges.

Most Asian stocks rose after the UK parliament voted against military strikes on Syria. Key benchmark indices in South Korea, Indonesia, Taiwan and China rose by 0.31% to 0.89%. Key benchmark indices in Singapore, Hong Kong, and Japan fell by 0.09% to 0.8%.

Japan's consumer prices increased at the fastest pace since 2008 in July, adding to signs that Prime Minister Shinzo Abe is making progress in pulling the economy out of 15 years of deflation. Consumer prices excluding fresh food climbed 0.7% from a year earlier, the statistics bureau said today in Tokyo.

US stocks rose as data showed the economy expanded at a faster pace in the second quarter and concerns over Syria eased. Gross domestic product rose at a 2.5% annualized rate, up from an initial estimate of 1.7%, Commerce Department figures showed Thursday in Washington. Jobless claims in the week ended August 24 dropped 6,000 to 331,000 from a revised 337,000 the week before that was higher than initially reported, the Labor Department said

The prospect of imminent military strikes on Syria receded as the UK and France said they favor waiting for the results of a United Nations investigation into alleged use of chemical weapons. The US which says it has evidence that Syria's government was responsible, won't act without allies, Defense Secretary Chuck Hagel said.

Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled next month, with their focus squarely on the timing of tapering of Federal Reserve's bond purchases. The FOMC holds a two-day policy meeting on 17-18 September 2013 to decide on interest rates in the United States. The US central bank currently buys $85 billion a month in US debt and mortgage-backed securities in a bid to hold interest rates low and encourage economic growth. Federal Reserve Chairman Ben Bernanke has on several occasions stressed that the tapering process is dependent on an improvement in data. Fed's bond-buying program has kept global markets flush with liquidity in recent years.