Financials

The rupee recovered modestly by eight paise to close the week at 62.04 against the greenback following strong rebound in local equities amid increased capital inflows, despite US Fed’s decision to taper its stimulus.

The dollar selling by exporters and some banks exceeds dollar demand from importers, which also supported the rupee rise.

The local currency closed strong on the first day of the week and later showed weak trend for three straight day on hopes of US Federal Reserve will start tapering of its bond buying programme, which was later proved to be right.

Amidst a slowdown in the economy, the net direct tax collection has risen by 13.7 percent to Rs 4.12 lakh crore till December 20 of current fiscal.

The government has fixed direct tax collection target of over Rs 6.68 lakh crore for 2013-14, envisaging a growth of 19 percent, as against Rs 5.65 lakh crore in 2012-13.

The collections had totalled Rs 3.63 lakh crore during the same period of 2012-13, the Finance Ministry said in a statement Saturday.

The benchmark S&P BSE Sensex spurted by 364 points this week on almost across-the-board buying triggered by frantic foreign fund inflows amid status quo stance taken by RBI on key interest rates.

On Friday, the 30-share index spurted by 371 points on sharp rise in heavyweight Reliance Industries, whose stock flared up after the government allowed the company, with some riders, to increase price of its natural gas from April.

A benchmark index of Indian equities markets ended Friday’s trade 371.10 points, or 1.79 percent up.

The bullish sentiment in the market was seen a day after the government allowed Reliance Industries to charge higher prices for gas from April.

The gains came a day after the benchmark index lost 151 points after the US Federal Reserve announced a $10 billion tapering of its bond buying programme.

Shrugging off fears linked to a trimmed US stimulus, the Sensex on Friday shot up by 371.10 points — its best gain in nearly a month — on account of smart jump in RIL on government nod for higher gas prices and good buying in bluechips from banking, IT and auto sectors.

Overall on the BSE, 1,522 stocks — or about six out of every ten traded — closed in the green, helping investor wealth surge by Rs 1 lakh crore in the session. Oil & gas and realty led 12 out of the 13 sectoral indices higher.

The rupee recovered after three days of declines to close 10 paise higher at 62.04 against the dollar today amid gains in local stocks and capital inflows.

Dollar sales by exporters and some weakness in the US currency overseas also supported the rupee.

The rupee opened lower at 62.40 a dollar from the previous close of 62.14 at the interbank foreign exchange market and dropped to 62.45 on sustained dollar demand from importers, mainly oil refiners.

Facebook CEO Mark Zuckerberg is reportedly selling the social networking company’s shares to help pay taxes.

Zuckerberg, along with Facebook board member Marc Andreessen are going to offer about 3.9 billion dollars, which includes 27 million Facebook shares and additional 41.35 million shares by the CEO.

According to stuff.co.nz, the follow-on sale, first since the company’s public debut in May last year, is expected to raise about 3.9 billion dollars.

After strictures passed by Forward Markets Commission (FMC) against Jignesh Shah as well as FTIL, capital market watchdog Sebi and power sector watchdog CERC are likely to soon take a call on the two entities’ association with MCX-SX and IEX, respectively.

FMC, the regulator for commodities market, has ruled that Shah and his flagship firm FTIL are not “fit and proper” to run any exchange amid the continuing NSEL payment crisis.

The National Spot Exchange Ltd (NSEL), promoted by FTIL, is embroiled in a Rs 5,500 crore payment turmoil and is under the scanner of multiple agencies.

The benchmark Sensex fell 151 points Thursday after the US Federal Reserve decided to taper its monthly bond-buying programme, raising concerns that funds available for investing in emerging markets would be reduced.

Banking, capital goods and oil & gas stocks declined the most while IT, teck, pharma and metal shares advanced. IT shares were in the limelight on expectations of the economy recovering in the US, their biggest market.

ICICI Bank, HDFC and HDFC Bank were the biggest drag on the index, while Infosys and TCS lifted it.

Finance Minister P. Chidambaram on Thursday said pingthe bilateral currency swap arrangement between India and Japan will further strengthen financial cooperation between the two countries. “On 18.12.2013, RBI Governor Dr. Raghuram Rajan signed on behalf of the Reserve Bank of India the Agreement on bilateral currency swap arrangement between RBI and Bank of Japan,” Chidambaram said in a statement issued here regarding bilateral currency swap arrangement between the Reserve Bank of India and Bank of Japan to enhance facility of currency swap from USD15 billion to USD 50 billion.

The rupee dropped further by 37 paise to 62.46 against the American currency in the late morning trade on persistent dollar demand from banks and importers on the back of higher dollar in the overseas market.

Fears of slow down in the foreign capital inflows into Indian equity market following decision of Federal Open Market Committee on tapering also affected the rupee sentiment, a forex dealer said.

Finance Minister P. Chidambaram on Thursday said India is better prepared now to deal with the consequences of a mild tapering by the US Federal Reserve than it was earlier this year.

The benchmark BSE Sensex gained nearly 158 points in early trade today on sustained buying by funds and retailers amid a firming trend on other Asian bourses.

The 30-share barometer, which had gained 247.72 points in the previous session, surged by 157.59 points, or 0.75 per cent, to 21,017.45.

Brokers said sentiments buoyed after the RBI unexpectedly decided to keep key policy rates unchanged amid a firming trend in the Asian region after the US Fed decided to trim stimulus from next month.

Stocks of IT, realty and metal sectors led the rally.

In an unexpected move, the Reserve Bank of India (RBI) on Wednesday surprised markets by leaving all key policy rates unchanged.

The benchmark BSE Sensex today recovered by over 58 points in early trade on emergence of buying by funds and retail investors ahead of the RBI’s policy review.

The 30-share index, which had lost over 714 points in the previous six sessions, recovered by 58.20, or 0.28 per cent, to Rs 20,670.34, with stocks of power, capital goods and healthcare sectors leading the recovery.

Similarly, the wide-based National Stock Exchange index Nifty moved up by 18.65 points, or 0.30 per cent, to 6,157.70.

RBI Governor Raghuram Rajan surprised the markets today by leaving all key policy rates unchanged, notwithstanding persistent high inflationary pressure.

The short-term lending rate was kept unchanged at 7.75 per cent, while the cash reserve ratio (CRR) remained at 4 per cent, the Reserve Bank of India said in its Mid-Quarter Monetary Policy Review.

The decision to keep rates unchanged will be a big breather for the industry and retail borrowers in particular as the markets had expected another 25 bps hike in the short-term lending rate.

Chinese initial public offerings will set new record figures in 2014. The move comes due to the resumption of IPOs on the Chinese mainland and strong Hong Kong momentum, according to an Ernst & Young report. According to China Daily, Terence Ho, Ernst & Young”s Greater China strategic growth markets leader, said 2014 will be a record year in China and globally, with economic fundamentals and strong global liquidity fueling new listings. Ho said that small-and medium-sized enterprises would be the main driving force of Chinese mainland IPOs next year.

With food prices showing no signs of abatement, the Reserve Bank is likely to hike its key policy rate by 0.25 per cent tomorrow, the third straight increase under Governor Raghuram Rajan as part of the war against inflation.

Wholesale Price Index inflation in November climbed to a 14-month high of 7.52 per cent as prices of food items such as onions and potatoes surged. Consumer price inflation touched a nine-month high of 11.24 per cent last month.

Factory output shrank 1.8 per cent in October, the first contraction in the Index of Industrial Production (IIP) in four months.

The benchmark BSE Sensex recovered over 93 points in early trade today on emergence of buying by funds at existing levels amid a firming Asian trend.

Snapping its five-day long losing streak, the 30-share barometer gained by 93.51 points, or 0.45 per cent, to 20,753.03 with auto, capital goods, realty, consumer durables and metal sector stocks leading the recovery. The index had lost over 667 points in the last five sessions.

Similarly, the wide-based National Stock Exchange index Nifty moved up by 27.00 points, or 0.44 per cent, to 6,181.70.

The S&P BSE Sensex recovered by 16 points in late morning trade today on mild buying, mainly in consumer durable, IT, tech, healthcare, capital goods and banking counters, despite weakness in the global market.

IT stocks gained ahead of the two-day policy meeting in the United States beginning tomorrow.

Metal and mining stocks extended their recent losses as latest economic data showed that growth in China’s manufacturing-sector activity slowed to a three-month low.

A benchmark index of Indian equities markets was trading flat at 1.10 points or 0.01 percent down in the early morning trade Monday.

Selling pressure was observed in oil and gas and auto sectors while good buying was observed in healthcare sector.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 20,714.26 points, was trading at 20,714.48 points in the early session, down 1.10 points or 0.01 percent from previous day’s close at 20,715.58 points.

India’s foreign exchange (forex) reserves jumped by $4.40 billion to $295.70 billion for the week ended Dec 6, helped by a sharp increase in foreign currency assets, Reserve Bank of India (RBI) data showed.

This is the fifth consecutive week of gain in the country’s foreign exchange reserves.

Forex reserves had soared by $5.03 billion to $291.30 billion during the week ended Nov 29, 2013.

The BSE benchmark Sensex extended losses for the third straight day, declining over 120 points in early trade today, on sustained selling by funds amid weak trend in other Asian markets.

The 30-share barometer fell by 120.35 points, or 0.56 per cent, to 21,051.06. The index had lost 155.01 points in previous two sessions.

In a similar fashion, the National Stock Exchange index Nifty declined by 37.30 points, or 0.59 per cent, to 6,271.60.

All the sectoral indices, led by capital goods, auto and banking were trading in the negative zone with losses up to 1.03 per cent.

Twitter’s stocks have reportedly hit a new high with shares priced 51 dollars apiece after the microblogging company announced its plans for mobile advertising based on users’ web browsing history.

The social networking site went public in November, and this week its shares shot up by more than 9 percent, its biggest single-day gain since its debut.

Finance Minister P. Chidambaram, on Wednesday said financial sector reforms could be game changers for the ailing Indian economy.

The gross domestic product (GDP) expanded 4.6 percent year-on-year, only two basis points above the previous quarter, which was the lowest in four years. The minister listed major reforms bill, which needed parliament approval. “I believe that financial sector reforms can be game changers.