Market May Extend Gains On Real Recent Asian Stocks; RBI Policy Review Development

The market may extend the two-day rally of 2.48% on firm Asian equities. Some of the key policy decisions taken by the Government of India, Thursday, September 15, 2011, will facilitate the concerns of political paralysis and to garner support on the domestic exchanges. Futures S & P CNX Nifty on the Singapore stock market indicates a gain of 21.50 points at the opening bell.

Interest rate sensitive banking, automotive and real estate shares is focused primarily on RBI’s mid-quarter review of the policy. Eleven of the twelve economists who responded to the capital market to expect 25 points (BPS), increased the repo rate, the key short-term interest policy, the Reserve Bank of India with its mid-quarter review of the policy Today, September 16, 2011. The RBI said that a change in the anti-inflation monetary policy is motivated by evidence of a sustainable reduction in inflation. Reserve Bank of India increased its key rate 11 times over the past 18 months to tame high inflation.

PSU OMC stocks and the car will attract attention from traders, oil companies after the government raised prices of petrol by Rs 3.14 per liter, or about 5% from midnight Thursday. Rising gas prices could help reduce the share of subsidy borne by the state run oil exploration major ONGC are required to attend the under-recoveries of public enterprises Petroleum Marketing (PSU OMC) to sell diesel fuels and cooking at prices fixed by the government.

Tata Motors, Indian car manufacturer more revenue, said Thursday that its worldwide turnover of vehicles in August were up 3% year on year to 87,459 units. The company said sales in the United Kingdom of its luxury car unit, Jaguar and Land Rover, rose 31% to 21,242 vehicles during the month. Sales of sport utility vehicles Land Rover jumped 43% to 17,833 units, but sales fell 10% to 3409 Jaguar cars. Global sales of all trucks and buses increased by 17% to 48,023 units, the company said.

The withholding tax for the quarter September is paid by the top 100 companies based in Mumbai have registered a moderate growth of 5% to about Rs 17,224 crore (Rs 16,366 crore), as most banks and oil companies have recorded growth flat in their tax payment NRI Demat account.

Relaxation of the rules of foreign borrowing by the Government to help Indian companies tap cash abroad cheaper and less of the euro zone debt worries helped Indian shares climbed a fence a week high on Thursday 15 September 2011. BSE Sensex surged 166.94 points, or 1% to 16,876.54, its highest closing level since Sept. 8, 2011. From a recent low of 16,467.44 Tuesday, September 13, 2011, the Sensex surged 409.10 points or 2.48% in two days of bargaining sessions. Foreign institutional investors (IIE) bought shares worth Rs 136.55 crore Thursday, September 15, 2011, according to provisional figures.

Economic Affairs Secretary R. Gopalan Thursday, September 15, 2011, said the government raised the limit on external debt for businesses of $ 750 million to 500 million. Companies in India can now get loans up to $ 1 billion Chinese yuan, Mr. Gopalan said. The relaxation of foreign loans to help Indian companies tap foreign species in the cheapest way to increase the cost of credit in the local market. American and European countries have interest rates close to zero in an attempt to support weak economic growth.

The government Thursday, September 15, 2011, opened the ambitious $ 90 billion Delhi Mumbai Industrial Corridor. The government has also approved projects worth over 18,000 crore RS.

In recent investor in India, the study prepared by JP Morgan Asset Management, note values ​​refer to expect the Sensex to trade between 20,000 and 22,000 this year. According to the report, the investment climate in interest concerns such as depression, often increases in interest rates and fluctuations in domestic investment. In spite of witnessing a decline of 4.2 points in the last quarter, “Small investor confidence index,” ranks highest 137.5 points. Funds activity of small investors has improved by 11% over the previous quarter, the study said. The study was conducted from July 22 to August 4, 2011.

The study also shows that investors are still cautious to preserve capital, increase investment strategy popular among small investors (40%). However, 40% for investors, compared to 57% in March 2011, is expected to become a little ‘aggressive in their investment strategy over the next six months.

Finance Minister, Pranab Mukherjee, Tuesday, September 13, 2011, these same central banks of emerging economies have been forced to raise interest rates repeatedly that his combat high inflation, exposing them to the volatility of capital. A question of immediate interest to emerging economies is to manage large capital inflows, he said. Big business and the volatility of emerging markets may be destabilizing, because they generate high volatility in the exchange rate and in some cases, it is to maintain a high level of foreign exchange reserves as insurance against sudden flight large international capital.

Since the first IFI lackluster response to the government, and a strong upper limit of FII investment in corporate bonds issued by long-term infrastructure company in March 2011, the Board of Directors on Monday, September 12 In 2011, still a standard FII relaxed investment in such bonds. The Ministry of Finance said in a statement that FIIs can now invest in long-term infrastructure bonds, subject, limiting the maximum of $ 5,000 million, which has an initial term of five years or more, and the remaining time duration of a year for the first time to buy IFI. These investments are subject to a lock-in period of one year. IFI can sell their bonds with each other but can not sell to domestic investors during the lock-in period of one year.

IFI can now invest in, subject to no more than $ 17 billion long-term infrastructure bonds, which have an initial term of five years or more with this and the remaining maturity is three years for the first time to buy IFI. These investments are subject to a lock-in period of three years. The three-year lock-in during the IFI can sell to each other, but can not sell to domestic investors. Securities & Exchange Board of India (SEBI) is expected to include announcements of these changes in the system no later than October 15, 2011.

SEBI was the beginning of August 2011 allowed qualified foreign investors (QFIs) plans to subscribe to Mutual Fund debt, investing in infrastructure in the overall height of up to $ 3 billion of the total funding up to $ 25 billion.

On the macro front, the recent steep slide, the rupee against the dollar has led to concern that high inflation as India imports most of its needs of crude oil. Lower the rupee pushes up costs for imports, which could worsen the current account deficit.

Food inflation dipped slightly to 9.47% for the week ending 3 September 2011 year on year, down from the 9.55% recorded in the previous week, according to official data released Thursday. The primary articles index, which has a 20.12% weight in the index of wholesale prices increased by 13.04% during the week under review compared to 13.34% increase the previous week, according to data published by Trade and Industry. The index for fuel and electricity increased by 13.01% against 12.55% the previous week.

Inflation measured by wholesale price index (WPI) rose 9.78% in August 2011 from the previous month’s preliminary reading of 9.22%, data released by the government Wednesday, September 14 2011 showed. The reading of inflation exceeded market expectations. The government also revised upwards the inflation rate for June 2011 to 9.51% of the initial increase of 9.44% mentioned above.

Planning Commission Deputy Chairman Montek Singh Ahluwalia, Monday, September 12, 2011, said at a conference that private funding must be half of the infrastructure investment target of $ 1000 billion in five years in 2012 2017. Indian Prime Minister Manmohan Singh told the conference that to overcome the crisis of the Infrastructure Fund, the government proposed to establish a funding of $ 11 billion to support infrastructure projects. We have also established a High Level Committee to propose the necessary measures to finance our ambitious program of infrastructure development, Singh said.

Prolonged rain in the last part of the season helped ease concerns that the monsoon this year could fall below its long-term average after a brief pause in July, when the country usually receives one third of the monsoon rains. The monsoon was 3% higher than the average for September 7, 2011, the latest data from the India Meteorological Department (IMD). Most parts of the country received an average of above average rainfall this year, but the season was marked by two lulls and periods of heavy rain in western and eastern parts.

Although it rained a key element in determining the status output, the timing and distribution of rainfall is also important to ensure a good harvest. Unusually this year, rains can delay the harvest, affect the Enter key to the summer-sown crops such as rice, oilseeds, sugarcane and cotton. Area of ​​rice that the September 2, 2011, up 12% from last year to 35.75 million hectares.

A good monsoon season in general, can improve farm incomes in rural areas and have an impact on the global economy through increased spending on consumer goods and lower prices for foodstuffs. But food prices are not necessarily fall if the rains and the long delay in some areas affecting crops.

Moody’s Investors Services confirmed its rating of Baa3 foreign currency debt rating of India and the Ba1 local currency debt annual credit analysis published last week. Votes for the company given the positive outlook for bonds denominated in Indian rupees, saying it is considering a rating of Baa3 uniform for all bonds if India is to improve the fiscal position and its commitment to strengthen the market inside. Currency debt outlook is stable.

Report optimistic about India’s ability to overcome the global economic crisis. Although not immune to the slowdown in international, domestic demand and prepare for the diversity of economic slowdown in the world are exposed to the fields, the report said. He noted that India’s foreign currency reserves than four times the foreign debt.

A debt to GDP ratio of 71% is a concern that the interest on this debt eats 25% of revenues from India every year. But Moody expects continued growth of GDP and further fiscal consolidation efforts will continue to reduce the public debt / GDP, the report said.

India, exports of goods grew by 44.2% in August 2011 over the previous year, for a total of $ 24.3 billion, a sharp slowdown from the previous rate, Rahul Khullar Commerce, said last week. Imports account for just over a month increased by 41.8% year on year and 38.4 billion U.S. dollars, which increased the trade deficit of $ 14.1 billion from $ 11.1 billion in July.

Asian stocks rose Friday, September 16, 2011, with the new comprehensive plan for central banks to increase dollar liquidity in Europe, helping to alleviate concerns about the possibility that another financial crisis. The key benchmark indices in China, Hong Kong, Indonesia, Singapore, Japan, South Korea and Taiwan increased from 0.39% to 2.49%.

Emerging Issues in Europe seemed to retire Friday after news of central banks move “followed by a promise made earlier this week by Germany and France to support Greece as it struggles to reduce its debt pile . The European Central Bank, Bank of England, Bank of Japan and the Swiss National Bank and the Federal Reserve, Thursday, September 15, 2011, said they provide additional dollar liquidity to commercial banks. The movement seemed to allay some fears of another credit crisis, as Europe is struggling to contain the crisis of sovereign debt.

A two-day meeting of finance ministers of the EU “, also attended by US Treasury Secretary, Tim Geithner, begins today, September 16, 2011.

U.S. stocks rose for a fourth day on Thursday, a coordinated central bank soothed fears that the financial sector was aimed to freeze the debt due to the area of ​​sovereign debt crisis. On the macro front, weekly jobless supported by the United States has reached its highest since the end of June and the indicator of activity in New York Factory was contracted in September. Another report showed manufacturing operations in the Mid-Atlantic region contract for the second consecutive month.

The Federal Open Market Committee (FOMC) is scheduled to conduct a policy review in two days on U.S. interest rates, 20 to September 21, 2011. It remains to be seen whether the Federal Reserve announces new measures to boost the economy of the USA. Among the options that the Fed might consider including another round of quantitative easing and EQ3, the operation of rotation is the long-term purchase verses sell short-term bonds to reduce long-term returns, and reducing the rate of excess reserves of the Federal Reserve Banks to increase the monetary aggregates.


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