Financials

RBI Governor Raghuram Rajan has said there would be some volatility in emerging markets once the US Federal Reserve decided to raise interest rates, but India is well prepared deal with market volatility.

“My hope is that after the initial volatility there will be differentiation, and the financial investors would try to see where there is some macro-stability,” Rajan said here.

He was here for International Monetary Fund (IMF) and World Bank fall meetings.

It is expected that the Fed Reserve may raise interest rates from next year as the US economy is showing signs of improvement.

The market valuation of top-five Indian companies fell by Rs 42,519.88 crore last week, with IT major TCS taking the biggest hit.

While TCS, ITC, CIL, HDFC Bank and Sun Pharma saw losses in their valuation, ONGC, RIL, Infosys, SBI and ICICI Bank made gains.

The market capitalisation (m-cap) of TCS plunged by Rs 18,911.52 crore to Rs 5,24,772.61 crore.
ITC’s m-cap tanked by Rs 8,691.94 crore to Rs 2,81,610.82 crore, while Sun Pharma lost Rs 8,626.15 crore to Rs 1,69,582 crore.

India Inc’s overseas direct investment in September 2014 more than doubled from a year ago period to USD 3.02 billion, the Reserve Bank data showed.

Total investment abroad by Indian firms were at USD 1.43 billion in September 2013.

In the previous month August, the Indian companies had undertaken investments of USD 1.25 billion in overseas markets.

The investments were a mix of issuance of guarantees (USD 2.53 billion), loan (USD 257.60 million) and of equity (USD 232.59 million).

National Human Rights Commission on Friday directed Chhattisgarh government to pay Rs five lakh as monetary relief to the kin of a suspected Naxalite, who died due to alleged torture in police custody in Dantewada.

According to an NHRC statement, the Commission has recommended that Chhattisgarh government pay Rs five lakh as monetary relief to the family of Pudiyami Mada, who died due to alleged police torture while being in illegal custody from January 9 to January 13, 2012.

After two days of losses, the rupee today recovered by 9 paise to 60.11 against the US dollar in early trade at the Interbank Foreign Exchange market on increased selling of the American currency by exporters amidst fall in global crude oil prices.

Besides, strengthening of the euro and yen against the dollar in overseas market and a higher opening in the domestic equity market also supported the rupee, forex dealers said. The rupee had shed 2 paise to close lower at 60.20 against the dollar in yesterday’s trade on weak local equities and import-driven demand for the American currency.

The benchmark BSE Sensex on Tuesday recovered nearly 155 points in early trade on emergence of buying by funds and retail investors amidst fall in global crude oil prices.

Snapping its four-day losing streak, the 30-share index gained 154.82 points, or 0.62%, to 25,186.14, with all the sectoral indices led by infrastructure and oil and gas, are trading in positive zone with gains up to 0.94%. The index had lost nearly 490 points in the last four sessions.

As Indian markets attain a larger global character, the Securities and Exchange Board of India is strengthening cooperation with its global peers for exchange of information in key cases and to implement global standards in its regulatory functions.

A full-fledged ‘International Affairs’ team has been put in place at the capital markets regulatory body, while SEBI is also working on a ‘comprehensive study’ to understand the surveillance mechanism of regulators in developed markets like the US, UK, Australia and Hong Kong, a senior official said.

Surveillance mechanism

A benchmark index of the Indian stock markets closed Monday’s trade 74 points or 0.30 percent down on selling pressure in fast moving consumer goods (FMCG) and information technology (IT) scrips.

This is the fourth straight session of fall for the markets which closed 96.29 points or 0.38 percent down at 25,105.51 points Friday.

The 30-scrip S&P Sensex (sensitive index) of the Bombay Stock Exchange (BSE), which opened at 25,108.09 points, closed the trade at 25,031.32 points, down 74.19 points or 0.30 percent from its previous day’s close at 25,105.51 points.

As benchmark BSE index Sensex shed over 122 points last week, seven of 10 most valued companies saw erosion of Rs 31,966 crore in their total market capitalisation during the period.

Reliance Industries, ONGC and Larsen and Toubro witnessed significant fall in their market valuations (m-cap) in the week ended on last Friday (June 20). Among top 10 bluechips, only three companies — ITC, TCS and Infosys — posted gains in their valuations.

A benchmark index of the Indian stock markets closed Monday’s trade down 74 points or 0.30 percent on selling pressure in fast moving consumer goods (FMCG) and information technology (IT) scrips.

The 30-scrip S&P Sensex (sensitive index) of the Bombay Stock Exchange (BSE), which opened at 25,108.09 points, closed the trade at 25,031.32 points (provisional), down 74.19 points or 0.30 percent from its previous day’s close at 25,105.51 points.

The Sensex touched a high of 25,197.50 points and a low of 24,878.66 points intra-day.

The benchmark BSE Sensex dipped below the 25,000 mark for the first time since June 5 by losing nearly 210 points during midsession on sellng by funds by retail investors on weak global cues amid concerns over rising crude prices on continued violence in Iraq.

After rising to 25,197.50 in morning trade in line with positive Asian cues, the Sensex fell back to trade lower by 209.92 points, or 0.83 percent, to quote at 24,895.59 during midsession.

Stocks of FMCG, IT, tech, consumer durables, oil and gas, power and capital goods led the fall on profit-booking.

The rupee strengthened by 13 paise to 60.05 against the dollar in early trade today at the Interbank Foreign Exchange market on increased selling of the American currency by exporters and banks.

Besides, the dollar’s weakness against other currencies overseas and a higher opening in the domestic equity market also supported the rupee, forex dealers said. The rupee had lost 10 paise to close at 60.18 against the dollar on Friday due to higher demand for the American currency.

The foreign direct investment (FDI) into India has declined 26 percent to USD 1.70 billion in April – the lowest in last five months, according to the data of Department of Industrial Policy and Promotion.

In April 2013, the country had received FDI worth USD 2.32 billion.

Amongst the top 10 sectors, pharmaceuticals received the lowest FDI in April at USD one million as against USD 987 million in April 2013.

India`s foreign exchange (forex) reserves rose by USD950.9 million to USD313.53 billion for the week ended June 13, led by a sharp jump in overseas currency assets, the Reserve Bank of India (RBI) data showed.

According to the RBI`s weekly statistical supplement, foreign currency assets, the biggest component of the forex reserves, jumped by USD958.5 million to USD286.58 billion.

Foreign currency assets, expressed in US dollar terms, include the effect of appreciation or depreciation of non-US currencies held in reserve such as the pound sterling, euro and yen.

To provide new investment avenues to public and institutional players, market regulator SEBI is working on fresh guidelines for municipal bonds — a popular financial product in developed countries like the US.

The market for municipal bonds, also known as ‘muni bonds’, is yet to take off in India even though few municipalities here have offered such products in the past, while Ahmedabad Municipal Corporation in Gujarat was the first to launch such a bond way back in 1998.

Over half-a-dozen private equity funds are set to start the process to raise a combined $2 billion (about Rs. 12,000 crore) from local and foreign investors, riding on the bullish sentiment that the change in government has brought to the market.

At least four established PE funds have started discussions with investors by now whereas three have revived previously shelved plans, said people with knowledge of the matter and fund managers.

Rice basmati prices shot up by Rs 100 per quintal at the wholesale grains market today on increased offtake by stockists.

However, wheat and other grains held steady in restricted deals.

Traders said increased buying by stockists against limited arrivals from producing regions mainly led to the rise in rice basmati prices.

In the national capital, rice basmati common and Pusa-1121 variety rose by Rs 100 each to Rs 8,600-9,100 and Rs 7,500-9,200 per quintal, respectively.

Following are today’s quotations per quintal:

To give a boost to capital markets, regulator Sebi has asked the government to provide clarity on tax benefits for new products like REITs (Real Estate Investment Trusts), as also for Infrastructure Investment Trusts and for debt securities.

“Sebi will soon finalise norms for REITs, but is awaiting clarity on taxation issues,” the Securities and Exchange Board of India (Sebi) Chairman U K Sinha said here today, while adding that the regulator wants such trusts to get tax pass- through status.

The benchmark Sensex fell for the third day and ended about 96 points lower today triggered by selling in the last hour of trade after wary investors appeared reluctant to hold onto positions as violence continued unabated in Iraq.

The rupee lost 18 paise to 60.26 against the dollar in early trade on Friday at the Interbank Foreign Exchange market due to increased demand for the US currency from importers.

Forex dealers attributed the rupee’s fall to increased dollar demand from importers amidst rising global crude prices but said that a higher opening in the domestic equity market and euro’s strength against the US currency capped the fall to some extent.

The benchmark BSE Sensex today rose over 45 points in early trade after two sessions of losses on emergence of buying by funds in oil and gas, consumer durables, realty and healthcare sector stocks amidst a firming Asian cues.

The Indian stock markets’ key indices closed in the red for the second straight day Thursday as oil and gas stocks slumped on escalating tensions in Iraq.

The 30-scrip S&P Sensex (sensitive index) of the Bombay Stock Exchange (BSE), which opened in the positive at 25,327.09 points, ended the day at 25,201.80 points, down 0.18 percent or 44.45 points from its previous day’s close at 25,246.25 points.

The index witnessed volatile session touching a high of 25,425.85 points and low of 25,069.66 points in the intra-day.

Indian economy is exposed to “shocks” on account of high fiscal deficit and the country’s credit outlook will depend on government’s initiatives in the next month’s budget to contain expenditure and reduce exposure to global commodity prices, rating agency Moody’s said on Thursday.

“More relevant to (determine) the sovereign credit outlook will be whether the budget includes measures that address the government’s low revenue base, high current expenditures and exposure to commodity prices,” Moody’s said in a report.

The rupee regained strength to trade 46 paise higher at 59.93 against the dollar at the Interbank Foreign Exchange market on Thursday on increased selling of the US currency by exporters and banks.

Forex dealers said a higher opening in the domestic equity market and dollar’s weakness against other currencies overseas after the US Federal Reserve kept its easing policy unchanged also supported the rupee.

The Fed on Wednesday said it would leave its benchmark interest rate unchanged but cut its monthly stimulus programme to US $35 billion from US $45 billion.

The benchmark BSE Sensex recovered over 125 points in early trade today on emergence of buying by funds and retail investors amidst a firming trend in global markets after Federal Reserve’s upbeat outlook on the US economy.

The 30-share index rose by 125.27 points, or 0.50%, to 25,371.521 points with capital goods, power, consumer durables, realty and auto sector stocks leading the recovery. The index had tanked 274.94 points in yesterday’s trade after unrest intensified in Iraq, threatening rise in crude import costs.