Global Stocks Push Higher After Fed, Dutch Election Results-The Total Investment & Insurance Solutions

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16 March 2017 

Korea Composite Stock Price Index (KOSPI)  (The Total Investment & Insurance Solutions)

Global stocks pushed higher Thursday in the wake of relatively dovish comments from the U.S. Federal Reserve that accompanied another rate hike and amid relief over the Dutch election result.

KEEPING SCORE: In Europe, Germany's DAX was up 0.6 percent at 12,082 while France's CAC-40 rose 0.5 percent to 5,009. London's FTSE 100 gained 0.6 percent to 7,410. Wall Street was poised for modest gains at the open with Dow futures and the broader S&P 500 futures up 0.1 percent.

U.S. RATE HIKE: The Fed raised short-term interest rates by a quarter of a percentage point, its third such move since late 2015. The move was widely expected. The central bank stressed that it plans to move gradually and stuck to its projection that it will raise rates a total of three times this year. That cooled speculation among some investors that the Fed could move more aggressively.

DUTCH ELECTIONS: Dutch Prime Minister Mark Rutte's party won a parliamentary election victory over anti-Islam lawmaker Geert Wilders in the year's first test for populism in Europe. Following Britain's vote to leave the European Union and Donald Trump's election as U.S. president, "the Netherlands said, 'Whoa!' to the wrong kind of populism," said Rutte. Wilders campaigned on pledges to close borders to migrants from Muslim nations, close mosques, ban the Quran and take the Netherlands out of the EU.

ANALYST TAKE: "Global equities are handsomely positive, risk appetite revived by a Fed update that was less hawkish than it could have been, further policy tightening likely gradual," said Mike van Dulken, head of research at Accendo Markets. "Relief from the Dutch election result is also supporting sentiment."

ASIA'S DAY: Tokyo's Nikkei 225 index advanced 0.1 percent to 19,590.14 and the Shanghai Composite Index gained 0.8 percent to 3,268.94. Hong Kong's Hang Seng added 2.1 percent to 24,288.28 and Seoul's Kospi rose 0.8 percent to 2,150.08. India's Sensex climbed 0.5 percent to 29,541.64 and benchmarks in New Zealand, Taiwan and Singapore also rose. Sydney's S&P-ASX 200 gained 0.2 percent to 5,785.80. The Total Investment & Insurance Solutions

ANALYST'S TAKE: "The Fed took off as expected but left the market with a more 'gradual' view with regards to future rate hikes," said Jingyi Pan of IG in a report. "Comments by Federal Reserve chair Janet Yellen in her press conference had been perceived as dovish. The Fed chair had reiterated that the committee expects a 'gradual increase' in rates on the back of evolving economic conditions and monetary policy 'remains accommodative' at present."

CHINA FOLLOWS THE FED: China's central bank raised a short-term interest rate on lending to banks but left its benchmark rate unchanged following the U.S. increase. The People's Bank of China hiked the rate for its six-month and one-year medium-term lending facility and open-market repurchase operations by 0.1 percent. The benchmark one-year commercial lending rate was unchanged. The bank cited the U.S. Federal Reserve's Wednesday rate hike and improved Chinese economic conditions.

HONG KONG FOLLOWS THE FED TOO: Hong Kong's central bank copied the Fed by raising its benchmark lending rate by one-quarter point to 1.25 percent. The Hong Kong currency is pegged to the dollar, which means the Hong Kong Monetary Authority copies U.S. monetary policy.

JAPAN STANDS PAT: Japan's central bank held monetary policy steady as the Fed and Europe's central bank move toward tightening. The Bank of left its benchmark lending rate unchanged at minus 0.1 percent and said it would work toward a 2 percent inflation rate target. The central bank is buying about 80 trillion yen ($700 billion) a year of Japanese government bonds to inject cash into the economy. The BOJ said the world's third-largest economy was on a "moderate recovery trend."

ENERGY: Benchmark U.S. crude rose 35 cents to $49.21 per barrel in electronic trading on the New York Mercantile Exchange. Brent crude, used to price international oils, added 34 cents to $52.15.The Total Investment & Insurance Solutions

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

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15 March 2017

I had written in Tuesday’s closing report that Nifty, Sensex were likely to head higher. The major indices of the Indian stock markets were range-bound on Wednesday and closed with marginal losses over Tuesday’s close. 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)

Selling pressure in IT (information technology) and Teck (technology, media and entertainment) stocks, coupled with disappointing macro-economic data pulled the Indian equity markets lower on Wednesday. Besides, investors were cautious ahead of the US Federal Open Market Committee's meet later in the evening on whether or not to raise interest rates. However, the rupee was strong. On the NSE, there were 790 advances, 661 declines and 63 unchanged. On the BSE, there were 1,426 advances, 1,384 declines and 187 unchanged.

Asia's oldest bourse BSE on Tuesday launched futures on S&P BSE Sensex 50 index which will help investors to achieve portfolio diversification. "The market participants would be able to take a long-term view on the underlying. Introduction of additional indices will also lead to increased participation in the index futures market," it said in a statement. The index is designed to measure the performance of the top 50 largest and liquid stocks in the exchange's Large and Mid Cap by float-adjusted market capitalisation. Further, index futures contracts will lead to better price discovery and will be useful in hedging and risk management tools. According to the exchange, it will also take market towards a multi-product environment. "The index is diversified index as it represents each key economic sector identified by bourse's sector model covering approximately 53.9% of total market capitalisation of the exchange listed companies as of October 30, 2016," it added. The Total Investment & Insurance Solutions

Reliance Communications (RCOM) has got the approval of the SEBI, BSE and NSE for the proposed de-merger of its wireless division into Aircel, the company said on Wednesday. Post-closing, RCOM and the present shareholders of Aircel will hold 50% each in Aircel. Industrialist Anil Ambani-led RCOM and Aircel announced plans to merge their wireless operations on September 14, 2016 to give birth to an entity with assets worth Rs65,000 crore. Reliance Communications shares closed at Rs36.80, up 1.52% on the BSE.

Anchor investors of Reliance Mutual Fund Central Public Sector Enterprises-Exchange Traded Fund (CPSE ETF) have bid for Rs5,700 crore, that is, over 7.5 times of Rs750 crore of reserved quota, said industry sources. Some of the anchor investors who participated in the bid on day one on Tuesday are BNP Paribas, Morgan Stanley, SocGen, CitiGroup while the domestic investors include LIC, Exide Insurance, SBI Bank, Axis Bank and Canara Bank. Reliance Mutual Fund, a part of Reliance Capital, plans to raise Rs2,500 crore through its second further fund offer (FFO) of its CPSE ETF. The issue opens for all other investors from March 15-17, 2017 with allocation priority to retail and PFs. The bids received by the anchor investors also surpass the aggregate issue size on the first day by over two times. 

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)

State election results to facilitate reforms: Moody's -The Total Investment & Insurance Solutions

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15 March 2017

Global credit rating agency Moody's Investor's Service on Wednesday said the recent state election results will facilitate reforms by the BJP led Indian government.

In a statement Moody's said the 2017 state election results demonstrate broad-based popular support for the Indian government's policy agenda and will facilitate the implementation of further reforms, a credit positive for the sovereign. The Total Investment & Insurance Solutions

Moody's said the Bharatiya Janata Party (BJP) has made substantial gains in the state elections.

As a result, the party will increase its share of seats in the upper house of India's parliament.

"The ruling party will not feel the benefit of its electoral gains immediately, because the changes in the upper house will only occur next year, when some members retire," said William Foster, a Moody's Vice President and Senior Credit Officer. The Total Investment & Insurance Solutions

"Nevertheless, electoral support at the state level should translate into broader support for government policy in the upper house, facilitating the passage and implementation of additional reforms," added Foster. The Total Investment & Insurance Solutions

The BJP's solid gains were despite the negative economic hit from demonetisation in late 2016, Moody's said. The Total Investment & Insurance Solutions

According to Moody's in 2018, 69 seats in the upper house, including 10 from Uttar Pradesh and one from Uttarkhand, will come up for reelection. The Total Investment & Insurance Solutions

If the BJP-led coalition increases its seat tally to or close to an outright majority, passage of policies will become easier, helping to accelerate reform.

In addition, collaboration between the central government and the new BJP-led states could improve, partially circumventing impediments to reform at the federal level on politically sensitive issues like land and labour reform. The Total Investment & Insurance Solutions

This situation would support state-led reform momentum. For example, BJP-led states like Gujarat and Rajasthan have already amended some land and labour laws, Moody's said.The Total Investment & Insurance Solutions

'Trump wrote off $ 100 million in business losses' -The Total Investment & Insurance Solutions

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15 March 2017

 

President Trump (The Total Investment & Insurance Solutions)

US President Donald Trump's tax affairs were back in the spotlight after leaked 2005 returns showed he wrote off more than $100 million in "business losses" to reduce his federal taxes burden.

The President paid $38 million in federal income tax on reported income of $150 million, an effective tax rate of 25 per cent, according to documents from Trump's 2005 tax returns disclosed on Rachel Maddow's MSNBC show late Tuesday. The Total Investment & Insurance Solutions

By claiming losses, Trump apparently saved millions of dollars in taxes that he would otherwise have owed, reports said. The Total Investment & Insurance Solutions

The White House responded without even waiting for the show to air, issuing a statement that seemed to confirm the authenticity of the forms as it defended Trump and assailed MSNBC for publicising them. 

"You know you are desperate for ratings when you are willing to violate the law to push a story about two pages of tax returns from over a decade ago," a White House official said in a statement.

"The dishonest media can continue to make this part of their agenda, while the President will focus on his, which includes tax reform that will benefit all Americans," the official said.

The White House described Trump's business losses as a "large-scale depreciation for construction", but did not elaborate, reported the New York Times.

In addition to the federal income taxes in 2005, the statement said, he paid "tens of millions of dollars in other taxes, such as sales and excise taxes and employment taxes, and this illegally published return proves just that". The Total Investment & Insurance Solutions

Democrats pounced on the report, arguing that the White House's decision to release details of Trump's 2005 taxes before Maddow's show undercut his past refusal to release any such information.

"If they can release some of the information, they can release all of the information," said Zac Petkanas, a senior adviser to the Democratic National Committee. 

"The only reason not to release his returns is to hide what's in them, such as financial connections with Russian oligarchs and the Kremlin." The Total Investment & Insurance Solutions

The tax forms were sent to journalist David Cay Johnston, who has written a book on Trump. 

Appearing with Maddow on the MSNBC show, Johnston said he had received the forms "over the transom" at his home and did not know who had sent them. 

He suggested that they might even have been sent by Trump himself. Because he did not solicit the forms. Johnston said it was not illegal to receive them, reported the newspaper.

The forms showed that Trump made $67 million in real estate royalties, $42 million in business income, $32 million in capital gains, $9 million in taxable interest and $998,599 in salary in 2005, for a total of nearly $153 million. The Total Investment & Insurance Solutions

After writing off $103 million, he reported adjusted gross income of nearly $49 million. In the end, he had to write a check for $2,450,597, including penalties and interest for late payment, said the report.The Total Investment & Insurance Solutions

Delhi HC vacates ITAT stay on Rs525 crore penalty on NDTV -The Total Investment & Insurance Solutions

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15 March 2017

 

NDTV (The Total Investment & Insurance Solutions)

The Delhi High Court has vacated a stay granted by the Income Tax Appellate Tribunal (ITAT) on the Rs525 crore penalty on New Delhi Television Ltd (NDTV), saying that the Tribunal does not have any powers in this matter. This is a big setback to the Prannoy Roy-controlled NDTV within this month.

The Delhi High Court was hearing the case (W.P.(C)­1327/2017) related with a stay granted by the ITAT on 15 September 2016. In its order, the ITAT had directed Income Tax (I-T) Department not to pass any order for the proposed penalty of Rs525 crore against NDTV till final disposal of the main appeal pending before the Tribunal. The Total Investment & Insurance Solutions

However, the HC Bench of Justice S Ravindra Bhat and Justice Najmi Waziri felt that, in such matters, the ITAT does not have any powers in the penalty matter and hence the stay given by the Tribunal was vacated. The Total Investment & Insurance Solutions

A senior official from NDTV said the company will appeal against the ruling of Delhi High Court. “This entire case relates to a baseless and outrageous charge by the Income Tax department that in effect accuses (Jeff Immelt, CEO) GE (US) as well as (Jeff Zucker, then CEO) NBC (US) of money laundering -- which is an offence that is punishable with jail in the US. In 2008, NBC (a 100% subsidiary of GE) invested $150 million in an entertainment wing of NDTV. Subsequently, without any evidence whatsoever, the I-T Department in Delhi called this legitimate investment a 'sham transaction' and in effect accused NDTV of round tripping money and using NBC and GE to act as a 'front' in a case of money laundering by GE and NBC,” says KVL Narayana Rao, Group Chief Executive & Executive Vice Chairperson of NDTV, in an email reply. The Total Investment & Insurance Solutions

He says, “The ITAT has been unable to hear the case as the Delhi I-T Department has asked for 20 consecutive adjournments - with a succession of flimsy excuses. With the basic case not even being heard, the Delhi I-T department suddenly tried to levy a further penalty on NDTV for a delay in the case. Please note the delay is entirely the fault of the Delhi IT dept. asking for adjournments. The ITAT stayed the penalty. Now the Delhi High Court has ruled that the ITAT does not have the authority to stay the penalty. The Delhi I-T department's accusations against GE, NBC and NDTV are very damaging for the global image of India.  With all due respect to the High Court, NDTV will appeal against this ruling.”

Earlier this month, the Reserve Bank of India (RBI) rejected NDTV's application to compound from the Rs2,030 crore notice issued by the Enforcement Directorate (ED) under the Foreign Exchange Management Act (FEMA). "Filing compounding application to RBI by those who served notice under FEMA means that they have admitted their contravention in routing money from abroad and plead guilty by paying a fine. So NDTV admitted its guilt and offered its readiness to pay a fine. Many FEMA defaulters were using this compounding method to escape from being prosecuted under the FEMA. Continuing prosecution under FEMA also has a danger of converting the case to PMLA, when money laundering is established," says an article in PGurus.com. 

However, according to Mr Narayan Rao, the RBI has not rejected NDTV's application for settlement under FEMA provisions. “The RBI has asked NDTV to approach a particular division of the RBI called the Foreign Investment Division of RBI's Central Office,” he said.

Earlier in November 2015, the ED had slapped a Rs2,030 crore notice on NDTV for allegedly violating FEMA provisions for routing huge funds through the channel’s foreign units. The notice served to promoters Prannoy Roy, his wife Radhika Roy and senior executive KVL Narayan Rao stated that NDTV had violated RBI provisions on fund transfers. The Total Investment & Insurance Solutions

Cyber attacks on e-wallets aim to steal data: Report -The Total Investment & Insurance Solutions

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15 March 2017

As traffic to e-wallet platforms grows, there has been a significant increase in cyber attacks on online payment gateways to steal data than to disrupt operations, a new report said on Wednesday.

According to the data provided by global leader in content delivery network (CDN) services Akamai Technologies, hits to web pages on e-wallet companies grew from 512,115,015 per day in September to 1,264,470,283 per day in February in the country. The Total Investment & Insurance Solutions

Akamai in India analysed the growth in traffic volume to India's e-wallet sites on the Akamai Intelligent Platform, three months before and three months after the demonetisation announcement.

"Nearly 94 per cent of attack attempts on mobile wallet companies were on the application layer (XSS and RFI attacks) with intent to steal business critical data," the report added.

Distributed Denial of Service or DDoS attacks were insignificant in comparison to the overall number of attacks observed, the report noted. The Total Investment & Insurance Solutions

DDoS attempts on these wallets constituted less than 1 per cent of the total number of attempts in this time period, emphasising the fact that attacks were intended to steal data and not necessarily disrupt operations of mobile wallet firms. The Total Investment & Insurance Solutions

According to Akamai's recent "State of The Internet Security" report for Q4 2016, India is second in the list of countries in Asia Pacific that sourced the most web application attack traffic with nearly 86,38,666 attacks attributed as originating from the country, after China.

India also ranks fourth in the list of target countries for web application attacks globally, the report said.The Total Investment & Insurance Solutions

Nifty, Sensex to head higher - Tuesday closing report-The Total Investment & Insurance Solutions

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14 March 2017

Major Indices (The Total Investment & Insurance Solutions)

I had mentioned in Friday’s closing report that the stock market was inching up on global cues. The major indices of the Indian stock markets put up a strong rally on Tuesday and advanced by around 1.71% over Friday’s close. NSE trading volumes were on the higher side, thus justifying the rally. The trends of the major indices in the course of Tuesday’s trading are given in the table below: The Total Investment & Insurance Solutions

Indian equity markets surged during the mid-afternoon trade session on Tuesday following crucial state election results declared on March 11. Besides, investors' sentiments were lifted by a strong rupee, broadly positive global cues and buying witnessed in banking, capital goods and automobile stocks. On the NSE, there were 944 advances, 523 declines and 75 unchanged. On the BSE, there were 1,703 advances, 1,124 declines and 218 unchanged.

Indian equity markets witnessed firm opening, tracking positive state election results for ruling party at the Centre. The benchmark indices witnessed gap up opening on strong buying sentiments, according to market analysts. Bearish USD/INR futures prices also supported the firm sentiments of the markets. Almost all sector stocks traded with firm sentiments tracking over all buying activities in Indian equity markets.

India's annual rate of inflation based on wholesale prices rose to 6.55% in February 2017 from 5.25% in the previous month, official data showed on Tuesday. According to the Wholesale Price Index (WPI) data released by the Commerce and Industry Ministry, the annual inflation rate was (-)0.85%  in February 2016. A rise in inflation could divert some fixed income investments into the stock markets and show higher trading volumes over a period of time.

US stocks wavered and ended mixed, as Wall Street mainly awaited a possible interest rate hike from the US Federal Reserve on Wednesday. On Monday, The Dow Jones Industrial Average was down 21.50 points, or 0.10%, to 20,881.48. The S&P 500 rose 0.87 points, or 0.04%, to 2,373.47. The Nasdaq Composite Index gained 14.06 points, or 0.24%, to 5,875.78. Traders generally anticipated the Federal Open Market Committee to raise interest rates at the conclusion of its two-day monetary policy meeting later this week. Market expectations for a March rate hike were around 95.2%, according to the CME Group's FedWatch tool. A rise in interest rates could divert some funds of foreign institutional investors from India to developed countries.

US total nonfarm payroll employment increased by 235,000 in February, well above market consensus of 188,000, the Labour Department announced Friday. The unemployment rate was little changed at 4.7%. After Friday's jobs report, market expectations for a March rate hike sharply increased. The Total Investment & Insurance Solutions

Coal India on Saturday said its wholly-owned subsidiary Central Coalfields Limited (CCL), which had approved a Rs1,001.88 crore buyback proposal, has decided "not to proceed" with the plan. "..the Board of Directors of CCL at its meeting held on March 10, 2017 has, after reviewing the limited reviewed unaudited financials of the company ended December 31, 2016 based on the Revised valuation Report submitted by the merchant banker, decided not to proceed with the proposed buyback," the miner said in a regulatory filing. Last week, the miner's arm had approved buyback of 5,21,000 fully paid equity shares for an aggregate amount not exceeding Rs1,001.88 crore. It had also said the equity shares proposed to be bought back by the miner's subsidiary would represent 5.54% of the existing paid up capital of CCL. In another regulatory filing, CIL which produces 84% of the country's coal, said its board on Saturday approved to tender the shares held by the company in its subsidiaries -- Mahanadi Coalfields Ltd (MCL), Northern Coalfields Ltd (NCL), South Eastern Coalfields Ltd (SECL) -- in their respective buyback offer. Coal India shares closed at Rs295.55, down 0.76% on the BSE.

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)