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Friday, September 06, 2013

Market may open higher

The market may start higher, with the indices extending last two-day gains. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 85 points at the opening bell. The new central bank Governor Raghuram Rajan announcing plans late on Wednesday, 4 September 2013 to bolster the financial industry and stabilize the rupee helped calmed investors' nerves battered by the recent sharp slide in rupee.

Fertilizer Corporation of India (FCIL) has signed an memorandum of understanding (MoU) with Coal India (CIL), GAIL India and Rashtriya Chemicals & Fertilizers (RCF) for revival of Talcher Urea Plant in Odisha on Thursday. The MoU was signed in presence of Union Minister of Petroleum & Natural Gas, Shri Veerapa Moily, Minister of Coal, Shri Sriprakash Jaiswal and Minister of State (I/C) for Chemicals and Fertilizers, Statistics & PI, Shri Srikant Kumar Jena. On the occasion, Shri Srikant Kumar Jena said that today is a historic day for the country, in particular for the people of Odisha, as the Talcher Unit of FCIL is being revived by a consortium of RCF, CIL, GAIL & FCIL at an estimated cost of about Rs 8000 crore. He said that it is a unique project being setup on Coal Gasification for production of 1.2 million tonnes per annum (MTPA) Urea and Ammonium Nitrate. CIL shall supply about 5 million tons per annum of coal for this project.

Shri Jena informed that it has been decided to form two separate Joint Venture (JV) Companies for the proposed revival. JV-1 would take up upstream coal gasification and gas purification with GAIL having major stake. JV-2 would take up down-stream Urea-cum-Ammonium Nitrate Complex & Off-sites, including Power Plant & Coal Washery and will have major stakes of RCF & CIL with minor stake by FCIL & GAIL, the Minister added.

The pre-project activities for revival of Talcher project have already started. GAIL has already floated tender for pre-qualification of Coal-Gas Technology Supplier. RCF has also floated tender calling for LSTK bids for Ammonia - Urea plant. The project will not only reduce the dependence on imported urea but shall also utilize indigenously available feedstock. The project is expected to be commissioned by 2017.

Bharat Heavy Electricals (Bhel) turns ex-dividend today, 6 September 2013, for final dividend of Rs 3.29 per share for the year ended 31 March 2013.

BPCL turns ex-dividend today, 6 September 2013, for dividend of Rs 11 per share for the year ended 31 March 2013.

Coal India turns ex-dividend today, 6 September 2013, for final dividend of Rs 4.30 per share for the year ended 31 March 2013.

Key benchmark indices surged and the rupee rose against the dollar on Thursday, 5 September 2014 after the new central bank Governor Raghuram Rajan announced plans late on Wednesday, 4 September 2013 to bolster the financial industry and stabilize the rupee. The S&P BSE Sensex jumped 412.21 points or 2.22% to settle at 18,979.76 on that day, its highest closing level since 14 August 2013.

Foreign institutional investors (FIIs) bought shares worth a net Rs 1101.41 crore on Thursday, 5 September 2013, as per provisional data from the stock exchanges.

The Reserve Bank of India said on Thursday that it will release the next Mid-Quarter Review of Monetary Policy 2013-14 at 11.00 IST on 20 September 2013 instead of 18 September 2013 as indicated in the First Quarter Review of Monetary Policy 2013-14. This will be followed by Governor Dr. Raghuram Rajan addressing the media in the afternoon.

Most Asian stocks gained on Friday, extending a six-day advance as investors await the monthly American jobs report later in the global day today, 6 September 2013. Key benchmark indices in China, Hong Kong, South Korea, and Singapore rose by 0.08% to 0.24%. Key benchmark indices in Indonesia, Japan and Taiwan shed by 0.08% to 1.18%.

Leaders of the world's biggest economies at a Group of 20 summit in Russia grappled with threats to the global economy as the effects of the Syrian conflict added to the fallout from a potential stimulus exit. The BRICS countries pledged yesterday in St. Petersburg to create a $100 billion pool of currency reserves to guard against shocks even as Russia said US President Barack Obama sought to ease concern about an abrupt pullback. Chinese and Italian officials warned that military intervention in Syria would risk harming the global economy. China will contribute $41 billion to a pool of BRICS reserves, with Russia, India and Brazil each adding $18 billion and South Africa providing $5 billion, according to a statement issued yesterday. The BRICS countries, which also agreed to seed a new development bank with $50 billion of capital, are seeking a shield against unintended negative spillovers from unconventional monetary policies in developed economies, according to the statement.

US stocks on Thursday climbed for a third consecutive session, with the Dow Jones Industrial Average posting its longest winning run since the middle of July, as investors looked to the government's monthly jobs report. Claims for US unemployment benefits declined by 9,000 to 323,000 in the week ended August 31, less than the estimates. Another report showed companies boosted employment by 176,000 workers in August, according to the ADP Research Institute.

The influential US nonfarm payroll report for August 2013 is due for release today, 6 September 2013. The employment numbers will be keenly watched given the implications for the timing of the Federal Reserve's plan to begin slowing the pace of its monetary stimulus.

Investors across the globe are eyeing the next policy meeting of the Federal Open Market Committee (FOMC) scheduled this 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.

In Europe, European Central Bank indicated recent improvements in the euro zone's economy haven't been strong enough for a pullback from the bank's easy monetary policies. While the ECB's Governing Council left its benchmark lending rate unchanged at 0.5% at its meeting Thursday, ECB President Mario Draghi said policy makers had discussed lowering the rate. He also said inflation expectations are contained, which will give the central bank room to hold off on raising rates for some time.

The Bank of England also on Thursday offered no surprises, leaving the size of its bond-buying program unchanged and holding its key lending rate at a record low of 0.5%, where it has stood since March 2009. The central bank's Monetary Policy Committee left its asset purchases, the centerpiece of its quantitative-easing strategy, at 375 billion pounds ($585 billion). The minutes from the September 4 meeting will be published on September 18. The central bank has said it aims to keep rates low at least until the UK unemployment rate drops below 7%, which it doesn't expect will happen until 2016.