Friday, 22 September 2017

Nifty, Sensex headed lower – Weekly closing report-The Total Investment & Insurance Solutions

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22 September  2017

I had mentioned in last Friday’s closing report that Nifty, Sensex were at their best weekly performance in the last two months.  The major indices of the Indian stock markets suffered a sharp correction over the last one week and closed on Friday with losses over last Friday’s close. The trends of the major indices in the course of the week’s trading are given in the table below:

Weekly Indices (The Total Investment & Insurance Solutions)

Positive global cues, along with buying in automobile, capital goods and banking stocks, lifted the Indian equity markets, with the NSE Nifty50 touching record high levels during the mid-afternoon trade session on Monday. According to market observers, the rally was aided by persistent pumping in of funds by domestic investors. On the NSE, there were 1,011 advances, 658 declines and 309 unchanged.

Bankers on Saturday said they are betting on the Insolvency and Bankruptcy Code and the process of National Company Law Tribunal for getting quick resolutions in order to solve the problems of bad loans. "The Insolvency and Bankruptcy Code, 2016 is a game-changer," State Bank of India's Managing Director (National Banking Group),Rajnish Kumar said, adding that it will greatly increase the pace of resolution of stressed assets. NCLT process is the new one and not matured but it provides a quick mechanism for getting resolutions for the stressed assets, bankers said, adding that the restructuring of bad loans, under the previously floated models, were tried to get rid of the problems but earlier models did not solve many problems. 

Key Indian equity indices traded on a flat-to-negative note during the mid-afternoon session on Tuesday on the back of broadly negative global cues and profit booking in metals, consumer durables and banking stocks. According to market observers, investors were cautious ahead of the two-day US Federal Reserve meeting slated for later in the evening (India time). However, buying in automobile and oil and gas stocks pared some losses. On the NSE, there were 833 advances, 821 declines and 305 unchanged.

On Tuesday, SBI Life Insurance was eyeing to achieve 35%-40% growth in the new business premium collection in the current fiscal, said a company official. The company expects 32% growth in agency channel. The life insurer will remain focused on banking and agency channel to achieve the growth, he added. SBI Life Insurance proposed to open an initial public offering (IPO) of up to 120 million equity shares of face value of Rs10 each on September 20. It comprised of an offer for sale of up to 80 million equity shares by State Bank of India and up to 40 million equity shares by BNP Paribas Cardif S.A. SBI Life expected to mop up Rs8,400 crore from the IPO proceeds. 

Key Indian equity indices traded on a flat note during the mid-afternoon session on Wednesday as investors remained cautious ahead of the US Federal Open Market Committee policy meet outcome. The outcome of the two-day US Federal Reserve meeting is slated for later in the evening (India time). Besides, escalating geo-political tensions related to the Korean peninsula, along with a weak rupee and profit booking in auto, banking and IT (information technology) stocks, capped gains. Buying was witnessed in capital goods and healthcare stocks. On the NSE, there were 761 advances, 899 declines and 297 unchanged.

State-owned Oil and Natural Gas Corp (ONGC) has made a significant oil discovery to the west of its prime Mumbai High fields in the Arabian Sea, a senior official said on Wednesday. The discovery in the well WO-24-3 is estimated to hold an in-place reserve of about 20 million tonnes, he said. 

Tata Steel Ltd and German major thyssenkrupp AG have signed a memorandum of understanding (MoU) to create a 50:50 joint venture by combining the flat steel businesses of the two companies in Europe and steel mill services of the German company, a top company official said here on Wednesday. The proposed 50:50 joint venture -- "thyssenkrupp Tata Steel" -- would be focused on quality and technology leadership, and the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products, the steel maker said in a statement. The proposed transaction in Europe also paves the way for significant de-leveraging of the Tata Steel group's consolidated balance sheet and provides a platform for it to pursue future growth, Tata Steel claimed. 

Low cost carrier IndiGo said it would operate 16 additional flights across its network with effect from October 1. "Effective October 1, 2017, IndiGo will operate new flights between Hyderabad-Visakhapatnam, Delhi-Visakhapatnam, Amritsar-Delhi and Bhubaneswar-Delhi amongst other routes," the airline said in a statement. According to Indigo, the new services would further consolidate the airline's position as the fastest growing airline in the country, with its 940 flights connecting 46 destinations across its network. 

Mixed global cues, coupled with selling pressure in banking, consumer durables and metal stocks, dragged the key Indian equity indices lower during the mid-afternoon trade session on Thursday. According to market observers, investors remained cautious as the US Federal Reserve on Wednesday night signalled another rate-hike in December, while keeping its interest rates steady for now. A rate-hike could potentially lead foreign portfolio investors (FPI) away from emerging markets such as India. The US Fed also announced that it would start unwinding its $4.5 trillion balance sheet from October, a further step to end the loose monetary policy. On the NSE, there were 576 advances, 1,083 declines and 301 unchanged.

Income Tax Department sleuths on Thursday searched the business and residential premises of Cafe Coffee Day retail chain founder-owner V.G. Siddhartha, son-in-law of former Karnataka Chief Minister SM Krishna, in Bengaluru and other places in the state for alleged tax evasion, said a senior official. 

Nasscom Foundation of the Indian IT (information technology) industry apex body announced a Rs10-lakh grant each for mentoring technology-based social innovations in five thematic areas. 

Key Indian equity indices -- the BSE Sensex and the NSE Nifty50 -- descended by more than 1% each on Friday as weak Asian markets, on the back of geo-political risks and depreciation of the rupee subdued investors' sentiments. Selling pressure in banking, capital goods and consumer durables stocks aided in the downslide of the indices. On the NSE, there were 206 advances, 1,463 declines and 292 unchanged.


Housing finance company Reliance Home Finance Ltd (RHFL) -- part of Anil D Ambani-led Reliance Group -- on Friday debuted on the NSE at Rs107.20. The Total Investment & Insurance Solutions

Reviving private investment, strengthening banks a challenge: FM Jaitley-The Total Investment & Insurance Solutions

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22 September  2017
Finance Minister Arun Jaitley (The Total Investment & Insurance Solutions)

As the government mulls ways to shore up sagging growth, Finance Minister Arun Jaitley on Friday said reviving private investments and strengthening the banking sector are the biggest challenges in this process.
"The reality is that there are two major challenges. One with regard to encouraging private sector investment and second with regard to improving the capacity of our banking system to support growth," Jaitley said, addressing IBA's Annual General Meeting here.
The Indian economy has the resilience and entrepreneurial vision, he said while exuding confidence that there is a will in the government to carry out reforms.
It has initiated sector-specific measures in the face of global slowdown in the past, he added.
Jaitley said however that global prospects are reviving and pointed out to these two issues as the potential impediments in the process.
For the last six quarters, India's GDP growth has been falling and it came down to 5.7 percent in the June quarter.
Private investments are low and bankers often complain about there being no fresh demand for greenfield projects. The system credit growth is struggling to revive and continues to be in mid single digits.
Deteriorating asset quality and the pressure on capital stemming from the high NPAs, coupled with migration to newer capital guidelines, is the biggest stumbling block for banking system.
The government is mulling a stimulus package, which some reports peg at over Rs 40,000 crore, to revive the economy.
"As a dynamic and progressive society, we have to look for the best solutions and make sure that we are able to resolve these issues," Jaitley said.

According to some experts, continuing slowdown is likely to increase pressure for additional stimulus through a higher fiscal deficit, accommodative policy stance and a competitive rupee, which unfortunately has limited scope.The Total Investment & Insurance Solutions

India's oil output fell 1.56 percent to 3.02 mln T in Aug - govt-The Total Investment & Insurance Solutions

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22 September  2017
 
India's crude oil  (The Total Investment & Insurance Solutions) 
India's crude oil production in August declined 1.56 percent to 3.02 million tonnes from a year ago, while natural gas output rose about 3.7 percent to 2.77 billion cubic metres, provisional government data released on Friday showed. The Total Investment & Insurance Solutions

Refinery output rose 0.79 percent to 20.45 million tonnes.The Total Investment & Insurance Solutions

Benami property secret informers to get reward of 1 crore-The Total Investment & Insurance Solutions

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22 September  2017
INR (The Total Investment & Insurance Solutions)

The Centre is planning to give out cash rewards to the tune of Rs one crore to secret informers who provide tip offs to investigative agencies in connection with Benami Properties.The Total Investment & Insurance Solutions
The initiative is likely to be announced by next month. A senior Central Board of Direct Taxes (CBDT) official who is part of the policy making said on condition of anonymity, "An informer will get minimum Rs 15 lakh and maximum Rs 1 crore.
According to the official, the information will have to be acute and identity of the informer will be kept secret. The department will never disclose the identity as this could endanger the informer.The Total Investment & Insurance Solutions
The Benami Property Law introduced last year lacked this provision. It is a common practice by the Enforcement Directorate, the Income Tax department and Directorate of Revenue Intelligence to reward informers.
The reward, however, is not so lucrative."Finding Benamidars is a herculean task for Income tax officials as well as the administration. A senior CBDT official told ANI, "It would be a lot easier, faster and effective method of operation if we take the help of informers.The Total Investment & Insurance Solutions
If we have an attractive award prize for informers then our task will become easy and we will start cracking Benami property holders nationwide, he further added. This policy is now with Finance Ministry. 
Once it gets approval from Finance Ministry and Final nod by Finance Minister, it will be announced by CBDT. An announcement is expected to be made by October end or first week of November.The Total Investment & Insurance Solutions

The Benami Transactions (Prohibition) Amendment Act, 2016 came into effect from 1st November, 2016. Several benami transactions have been identified since the coming into effect of the amended law. The benami properties attached include deposits in bank accounts and immovable properties.The Total Investment & Insurance Solutions

Stocks Subdued Amid North Korea Concerns, European Data-The Total Investment & Insurance Solutions

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22 September  2017
Hong Kong financial markets (The Total Investment & Insurance Solutions)

World stocks were subdued on Friday after North Korea said it could test a hydrogen bomb in the Pacific Ocean, though European markets were supported by upbeat economic data.
KEEPING SCORE: Britain's FTSE 100 rose 0.2 percent to 7,275 and Germany's DAX rose by the same rate to 12,624. France's CAC 40 gained 0.3 percent to 5,284. Wall Street was poised to open lower. Dow futures shed 0.1 percent and the broader S&P 500 futures lost 0.2 percent.
SANCTIONS: Geopolitical tensions ratcheted up after U.S. President Donald Trump authorized stiffer new sanctions in response to North Korea's nuclear weapons advances, drawing a furious response from Pyongyang. Trump's administration said it would punish foreign companies dealing with the North, including by expanding the Treasury Department's ability to ban anyone from interacting with the U.S. financial system. North Korean leader Kim Jong Un retaliated by calling Trump "deranged" and saying he'll "pay dearly" for his threats, while Kim's foreign minister reportedly said the country might plan to test a hydrogen bomb in the Pacific Ocean.
EUROBOOM: European stocks were supported by a survey that showed the eurozone economy accelerated at the end of the third quarter. Financial information company IHS Markit said its main gauge of the eurozone's business activity, the so-called purchasing managers' index, jumped to a four-month high of 56.7 points in September, a whole point above the previous months' rate. The firm's chief business economist Chris Williamson says that points to a high quarterly economic growth rate of 0.7 percent.
CHINA RATING: In Asia, investors were digesting Standard & Poor's downgrade of China's credit rating after markets closed Thursday. Citing rising debt levels, S&P lowered its sovereign rating by one notch, to A+ from AA-, saying credit growth increased China's economic and financial risks. Then it cut Hong Kong's rating Friday, citing risks posed by close ties between mainland China and the Asian financial center. The downgrade underscores challenges faced by China's Communist leaders as they cope with slowing growth in the world's No. 2 economy.
ASIA'S DAY: Japan's benchmark Nikkei 225 slipped 0.3 percent to close at 20,296.45 and South Korea's Kospi lost 0.7 percent to 2,388.71. Hong Kong's Hang Seng shed 0.8 percent to 27,880.53 and the Shanghai Composite fell 0.2 percent to 3,352.53. Australia's S&P/ASX 200 added 0.5 percent to 5,675.70. Taiwan's benchmark fell and Southeast Asian indexes were mostly lower.
ENERGY: Oil futures were down. Benchmark U.S. crude shed 12 cents to $50.43 a barrel in electronic trading on the New York Mercantile Exchange. The contract fell 14 cents, or 0.3 percent, to settle at $50.55 a barrel on Thursday. Brent crude, used to price international oils, fell 2 cents to $56.41 a barrel in London.

CURRENCIES: The dollar weakened to 112.03 yen from 112.49 yen in late trading Thursday. The euro climbed to $1.1965 from $1.1940.The Total Investment & Insurance Solutions

Wednesday, 20 September 2017

Nifty, Sensex Directionless – Wednesday closing report-The Total Investment & Insurance Solutions

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20 September  2017

I had mentioned in Tuesday’s closing report that Nifty, Sensex were still on an uptrend. The major indices of the Indian stock markets were range-bound on Wednesday. The trends of the major indices in the course of Wednesday’s trading are given in the table below: The Total Investment & Insurance Solutions
 
Major Indices (The Total Investment & Insurance Solutions)
Key Indian equity indices traded on a flat note during the mid-afternoon session on Wednesday as investors remained cautious ahead of the US Federal Open Market Committee policy meet outcome. The outcome of the two-day US Federal Reserve meeting is slated for later in the evening (India time). Besides, escalating geo-political tensions related to the Korean peninsula, along with a weak rupee and profit booking in auto, banking and IT (information technology) stocks, capped gains. Buying was witnessed in capital goods and healthcare stocks. On the NSE, there were 761 advances, 899 declines and 297 unchanged.

A weakness in the rupee and concerns over the war of words between the United States and North Korea may also dampen the sentiment, observed market analysts. Divi’s Laboratories’ unit-2 received six observations from USFDA (United States Food and Drug Administration) but all its previous observations were resolved. The USFDA has inspected the company's unit-2 during September 11-19, 2017. On completion of this inspection, Divi's has received a Form 483 citing six observations which are procedural, but all previous observations have been confirmed as completed and resolved. This inspection was for full current good manufacturing practice and verification of all corrective actions proposed against the previous Inspection observations. Divi's Laboratories said it would be responding to these within the stipulated time. The company’s shares closed at Rs946.00, up 9.51% on the BSE. The Total Investment & Insurance Solutions

State-owned Oil and Natural Gas Corp (ONGC) has made a significant oil discovery to the west of its prime Mumbai High fields in the Arabian Sea, a senior official said on Wednesday. The discovery in the well WO-24-3 is estimated to hold an in-place reserve of about 20 million tonnes, he said. The company’s shares closed at Rs167.55, up 0.96% on the BSE.

Tata Steel Ltd and German major thyssenkrupp AG have signed a memorandum of understanding (MoU) to create a 50:50 joint venture by combining the flat steel businesses of the two companies in Europe and steel mill services of the German company, a top company official said here on Wednesday. The proposed 50:50 joint venture -- "thyssenkrupp Tata Steel" -- would be focused on quality and technology leadership, and the supply of premium and differentiated products to customers, with annual shipments of about 21 million tonnes of flat steel products, the steel maker said in a statement. The proposed transaction in Europe also paves the way for significant de-leveraging of the Tata Steel group's consolidated balance sheet and provides a platform for it to pursue future growth, Tata Steel claimed. Tata Steel shares closed at Rs687.65, up 1.64% on the BSE. The Total Investment & Insurance Solutions

Low cost carrier (LCC) IndiGo said it will operate 16 additional flights across its network with effect from October 1. "Effective October 1, 2017, IndiGo will operate new flights between Hyderabad-Visakhapatnam, Delhi-Visakhapatnam, Amritsar-Delhi and Bhubaneswar-Delhi amongst other routes," the airline said in a statement. According to the LCC, the new services will further consolidate the airline's position as the fastest growing airline in the country, with its 940 flights connecting 46 destinations across its network. InterGlobe Aviation shares closed at Rs1,137.00, down 0.94% on the BSE.

US stocks ended higher on Tuesday, with Dow and Nasdaq closing at record highs, as the Federal Reserve began a two-day monetary policy meeting. The Dow Jones Industrial Average gained 39.45 points, or 0.18%, to 22,370.80. The S&P 500 added 2.78 points, or 0.11%, to 2,506.65. The Nasdaq Composite Index was up 6.68 points, or 0.10%, to 6,461.32. It was widely expected that the US central bank won't raise interest rates following the meeting, but investors believe the Fed will announce the unwinding of its $4.5-trillion balance sheet. Analysts said that the market will also be looking for clues of whether the Fed will raise rates in December. Market expectations for a December rate hike rose to 58.3% on Tuesday. Wall Street also kept an eye on the United Nations, where US President Donald Trump gave a speech on Tuesday, trying to rally members to confront threats like North Korea. The Total Investment & Insurance Solutions

The top gainers and top losers of the major indices are given in the table below:
 
Top Gainer (The Total Investment & Insurance Solutions)

The closing values of the major Asian indices are given in the table below: The Total Investment & Insurance Solutions
Asian Indices (The Total Investment & Insurance Solutions)

Package soon to boost economy; no cuts in fuel rates: Jaitley-The Total Investment & Insurance Solutions

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20 September  2017
 
Finance Minister (The Total Investment & Insurance Solutions)
Finance Minister Arun Jaitley on Wednesday hinted at a package of measures to boost the economy, while virtually ruling out any cut in duties on petroleum products to check the spike in fuel prices.

"We have taken note of all the economic indicators that are available. This has been a pro-active government on the reforms agenda. Over the last two days, I have had a series of discussions with ministerial colleagues and various secretaries. The Total Investment & Insurance Solutions

"The government will take additional measures in the coming days after consulting the Prime Minister. Whenever the measures are taken, you will come to know of it," Jaitley told reporters here following a meeting of the union cabinet. The Total Investment & Insurance Solutions

On Tuesday evening, the Finance Minister chaired a high-level meeting to review the economic situation and discuss measures, including a possible stimulus package, to be taken amidst an economic slowdown.

The meeting was attended by, among others, Railway Minister Piyush Goyal, Commerce Minister Suresh Prabhu, Chief Economic Advisor Arvind Subramanian and Secretaries in the Finance Ministry -- Ashok Lavasa, Subhash Chandra Garg, Hasmukh Adhia, Rajiv Kumar and Neeraj Kumar Gupta.

Originally, the review was to take place with Prime Minister Narendra Modi's participation. The Total Investment & Insurance Solutions

On the current high transport fuel prices, Jaitley said it was a temporary spike in global prices caused by the supply-demand mismatch due to hurricanes that hit the US coast. The Total Investment & Insurance Solutions

Asked about the possibility of a cut in excise duties on petroleum products, he said government needed money for public spending to push growth and for social sector schemes. The Total Investment & Insurance Solutions

"States are taking so much tax... earlier under the fortnightly pricing regime, when two years back we lowered fuel prices, states like Delhi, Haryana would immediately raise VAT to earn more money. States under the Left and Congress should take steps to lower cesses," he said. 

Referring to opposition about price-rise, Jaitley said the parties which kept quiet when inflation was in double-digits, were now crying when it is at 3.3 per cent, which is within the RBI mandate of keeping inflation under 4 per cent.

"During monsoon, there is normally a spike in vegetable prices and inflation is still at 3.36 per cent," he added. The Total Investment & Insurance Solutions

Jaitley's high level meetings follow a sharp fall in latest key macro indicators such as the Gross Domestic Product (GDP) and industrial production, as well as a widening Current Account Deficit. The Total Investment & Insurance Solutions

Pulled down by sluggish manufacturing, growth in the Indian economy in the first quarter of this fiscal fell to 5.7 per cent, clocking the lowest GDP growth rate since Prime Minister Modi assumed office in May 2014.

The August consumer price index (CPI) inflation in India shot up a full one percentage point to 3.36 per cent, from 2.36 per cent in July, led by a spike in food prices. The Total Investment & Insurance Solutions

The Index of Industrial Production (IIP) in July rose by 1.2 per cent as compared to the same month of last year. It had declined by (-)0.1 per cent during June this year. The Total Investment & Insurance Solutions

Regarding the technical glitches that have plagued the digital filing of GST returns by businesses, Jaitley blamed it on last minute rush to meet the deadline.

"A lot of the GST problem is self-invited by assessees. For example, today (Wednesday) is the last date for filing returns (July), but till last night only 25 per cent had paid their taxes," he said.

"So, if 75 per cent of people wait till the last day, the system is bound to crash... its capacity is 1 lakh per hour or 24 lakh through the entire day. Till last night, there was no problem," he added. The Total Investment & Insurance Solutions