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Thursday, February 20, 2014

Stress likely at start

Reality is the leading cause of stress amongst those in touch with it. - Jane Wagner

After staging some smart gains in recent days, the market could take a breather. The sentiment at the IIFL conference remains cautiously optimistic.

The political developments are being closely watched but don’t seem to be having an immediate bearing on the market. The Lok Sabha approved the interim budget for 2014-15 through a voice vote. Andhra Pradesh Chief Minister N Kiran Kumar Reddy has resigned, after the controversial Telangana bill was passed in the Lok Sabha.

The outlook is a cautious start. Global cues are not displaying any positive trend for now. Asian markets have fallen ahead of a report which may indicate a second month of contraction for Chinese manufacturing. The IMF has also warned of risks to world growth earlier. US markets closed in the red as investors got a hold of the minutes of the Federal Reserve's last meeting. The Fed minutes indicated that there were some Fed officials who debated the possibility of raising interest rates sooner than anticipated as the economy improves. The Dow and S&P 500 fell over half a percent while the Nasdaq lost almost a percent.

Lieutenant Governor of Delhi Najeeb Jung on Wednesday received two visitors separately – Anil Ambani, whose company supplies electricity in Delhi, and PMS Prasad of Mukesh Ambani’s Reliance Industries.

At IIFL’s global investors conference, Enterprising India – V, Dr. K. C. Chakrabarty, Deputy Governor, Reserve Bank of India, gave his take on the Macro-economic outlook 2014.

Earlier in the session, Dr. Jim Walker, Renowned Economist, Founder & Managing Director, Asianomics Macro Ltd in his presentation titled ‘The Storm after the Calm’, said, "Complacency has overwhelmed fundamentals in the QE-addicted investment world. In India, there is more weakness to come in economic growth data as the private sector deleverages and balance sheets are repaired."

Prof. Yogendra Yadav, Senior Leader – Aam Aadmi Party (AAP), discussed the party’s philosophies and principles under the topic "The Phenomenon of AAP."

Rajan Anandan, Managing Director, Google India said, "Google's basic objective in India is to get a billion people on the Internet. With smartphone base in India increasing rapidly, this is achievable quickly, as India is a unique country in the sense that within two years, the majority of Internet users would be accessing the net only through their mobile."

Besides a host of corporate who interacted with institutional clients, the first day of the conference also witnessed specialist speakers like Nipun Mehta, Founder,, Arvinder Singh Bakshi, Advisor to Ministry of Power and Ex-Chairman CEA and Rajeeva Karandikar, Eminent Mathematician, Statistician and Psephologist.

Meanwhile, Moody’s said the subsidy provisions made in the interim budget will not meet the amount that the government will have to pay to oil marketers and full-year budget will have to set aside a whopping Rs422bn more in the March quarter.

In order to address the anticipated tightening in liquidity conditions on account of advance tax payments by corporates commencing mid-March 2014 and with a view to providing flexibility to the banking system in its liquidity management towards March-end 2014, the Reserve Bank of India will conduct term repo auctions of appropriate amount and tenor during March 2014.

Mumbai builder Lodha Group has acquired second building in London for over 90 million pounds, or around Rs 1,000 crore, according to reports.

Standard & Poor's Ratings Services said in a report released that it believes financial institutions in the Asia-Pacific region may face more hurdles in 2014 after relatively resilient years because softer economic growth and wary financial markets will likely weigh on their asset quality.

Moody's Investors Service says Bharti Airtel Limited's announced acquisition of Loop is credit positive. "The proposed acquisition of Loop is credit positive, not only will it add 3 million subscribers to Bharti's existing subscriber base of 4 million in Mumbai, catapulting it to the #1 position by customers in this key market ahead of Vodafone India, it is also immediately EBITDA accretive for Bharti" says Laura Acres, a Moody's Senior Vice President.

Volkswagen has reduced prices of all its cars in the Indian market. Prices for the Volkswagen Polo have been reduced by Rs 18,000-Rs 31,000.For the Vento, prices have been reduced by Rs 14,500-Rs 27,000. Jetta prices have been reduced by Rs 38,000-Rs 51,000.

Results watch: Birla Pacific Medspa, Birla Power, PREMIER ENER

Trends in FII flows: The FIIs were net buyers of Rs4.68bn in the cash segment on Wednesday, while the domestic institutional investors (DIIs) were net sellers of Rs3.38bn, as per the provisional figures released by the NSE.

In other news in the media:

Ashok Leyland Limited has launched new Light Commercial Vehicle "Partner" truck in Andhra Pradesh market packing with comfort features including air-conditioner and expects to go pan-India with it by March. (BL)

NTPC laid the foundation stone for a 1,600-MW power plant in Madhya Pradesh, plans to set up two more projects in the state. (BL)

Havells India Ltd has begun production at its new unit at Haridwar in Uttarakhand. (BL)

Elder Pharmaceuticals has appointed consulting firm Deloitte for restructuring the company and its brands, including ‘Eldervit’, following the sale of its formulation business to Torrent Pharmaceuticals for Rs20bn. (BL)

Blaming wrong classification for showing assets as bad debt, United Bank of India said the software system sourced from Infosys has "inherent deficiencies" in identifying quality of assets in certain categories. (ET)

Reliance Industries is in talks with 4 to 5 export credit agencies to raise over US$1bn in the next about 4 months. (BS)

The Delhi High Court approved a settlement among IDFC, the National Highways Authority of India and DSC Limited, paving way for IDFC to take over the Delhi-Gurgaon Expressway project. (BS)

Apollo Hospitals Ltd has lined up an investment of Rs20bn in the next 2-3 years for adding 2000 new beds. (BS)

Jindal Steel and Power Ltd has said it sees "no reason" behind deallocation of the coal block allocated to it in Chhattisgarh, saying environment clearance was granted to it on February 10. (ET)

The New York Attorney General and the US units of Ranbaxy Laboratories Ltd and Teva Pharmaceutical Industries Ltd have settled claims that an agreement between the two drug makers unlawfully restricted competition. (ET)

India received US$1.1bn of foreign direct investment in December 2013, unchanged from the level in the same month a year earlier, according to data from the Department of Industrial Policy and Promotion. (BS)

The government is planning to set up an independent office to manage the Centre's debt through an executive order till the time a proposed bill is tabled and passed by Parliament. (BS)