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Wednesday, February 12, 2014

Yellen on track; Markets chug ahead

You think your life is going one way and then suddenly, you're on another track. - Liam Neeson

The market finally has reason to cheer. Global indices got a boost after new Fed chairperson Janet Yellen indicated that monetary policy is unlikely to change much under her leadership. Yellen said the central bank plans to continue easing its stimulus program, adding it would take a notable change in economic data for the Fed to change its plans.

The start is set to be positive. Later, the market will have a number of domestic data to content with. The Railway Minister Mallikarjun Kharge will today present the interim budget or vote on account. Investors will watch whether the government looks at populist policies in terms of passenger fares. The other data to be watched is the Index of Industrial Production for December, by CSO. The CPI for Combined, Rural, and Urban for January, by CSO is also expected today.

Global markets are doing well. Nikkei is up 0.7% and Hong Kong's Hang Seng index has gained half a percent. South Korea's Kospi is marginally up while China's Shanghai index is lower. The Dow added 190 points and flirted with the 16,000 mark. The S&P 500 and Nasdaq advanced more than 1%.

The RBI Governor Raghuram Rajan will speak at the NASSCOM, India leadership forum today. Nasscom has forecast that Indian IT-BPM exports will grow 13%-15 % in 2014-15 to touch $97- $99 billion indicating an improved economic outlook and rise in global technology spending.

India’s trade deficit fell by half to US$9.92 bn in January from US$18.87 bn in the corresponding month last year, with the Government succeeding in cutting down gold and silver imports through higher import duties and other curbs.(BL)

Meanwhile, RIL has said that the direction of the Delhi Government to order the registration of an FIR in relation to the decision of Union Cabinet to revise the price of gas is indeed shocking. The complaint and each of the allegations on the basis of which the Delhi Government has taken such action are completely baseless and devoid of any merit or substance whatsoever. The allegations appear to have been made by persons who are also Petitioners in the Supreme Court of India in a petition in which similar allegations have been made. The issue of gas pricing is also a contentious issue between the contracting parties being the Government of India and the Contractors, according to a statement issued by RIL.

Results watch: Abacus Comp, Adinath Tex, Aditya Spin, Agarwal Indl, Alpa Lab, Ansal Housing, Bartronics, Bata India, Bhushan Steel, Bihar Sponge, DCM, Deccan Chron, Deccan Gold, Ennore Coke, Eureka Inds, Excel Crop, Gammon Infra, Hindustan Copp, HT Media, IL&FS Engg and Const, IL&FS Trans, India Polyspin, Indian Terrain, Iris Mediaworks, Insecticides India, Jyothi Infraventures, NCC, Nimbus Inds, Oil India, Welspun Projects and Western India Ship.

Trends in FII flows: The FIIs were net sellers of Rs1.65bn in the cash segment on Tuesday, while the domestic institutional investors (DIIs) were net buyers of Rs2.42bn, as per the provisional figures released by the NSE.

The foreign funds were net buyers of Rs6.33bn in the cash segment on Monday, according to SEBI data.

In other news in the media:

Vodafone has declined to accept the Finance Ministry’s proposal to initiate arbitration proceedings under Indian law. Instead, it wanted the conciliation to take place under the United Nations Commission on International Trade Law. However, this was rejected by the Cabinet. (BL)

DLF Ltd will get a refund of about Rs6.8bn from the Delhi Development Authority (DDA) for returning a plot of land it had acquired in the Dwarka area to build a convention centre. (BL)

Ranbaxy has denied sabotage at its Toansa (Punjab) factory, which makes active pharmaceutical ingredients (APIs), by workers offered voluntary retirement had led to a ban by the US Food and Drug Administration (FDA). (BS)

Maruti Suzuki India Limited (MSIL), has pinned hopes on its latest hatchback 'Celerio' to reverse sagging sales. (BS)

Tata Global Beverages has unveiled the second phase of the " Power of 49%" campaign which was launched last August. (ET)

Hindustan Petroleum Corp Ltd aims to raise crude imports from Iraq's national oil company by 8 % to about 65,000 barrels per day (bpd) in 2014/15 as it takes up better terms offered by Baghdad. (ET)

Australian construction and contracting firm Leighton Holdings said it has bought Welspun Group's entire 39.9 % stake in its Indian joint venture firm Leighton Welspun for US$99 mn. (ET)

AstraZeneca's decision to close its research and development centre in Bangalore is causing angst amongst biotechnology entrepreneurs in the country who have gained from the ideas and learning that it provided. (ET)

In a first case against a company with foreign stake, a chief judicial magistrate on issued notices against Hershey India Private Ltd (formerly known as Godrej Hershey Foods and Beverages Ltd.) in violation of Biological Diversity Act 2002. (BS)

With on the ongoing debate on tough regulations in the pharmaceutical industry creating concern in the sector, Chairman of Cipla Ltd Yusuf Hamied called for a new pragmatic drug licensing policy in the country to cater to the needs of the Indian population. (BS)

The Reserve Bank of India (RBI) prescribed caps on banks’ transactions with and exposure to its group entities to restrict concentration and contagion risks.(BS)