“The revision of the outlook to Stable reflects the measures taken by the government to contain the budget deficit, including the commitments made in the FY’14 budget,” Fitch said in a statement
Bringing cheer to the government struggling to arrest rupee’s slide, global ratings agency Fitch on Wednesday revised India's sovereign credit outlook to stable from negative. Taking note of the government’s efforts to contain fiscal deficit, Fitch Ratings revised India’s outlook to Stable from Negative and affirmed ‘BBB-’ rating.
“The revision of the outlook to Stable reflects the measures taken by the government to contain the budget deficit, including the commitments made in the FY’14 budget, as well as some, albeit limited, progress in addressing some of the structural impediments to investment and economic growth,” the agency said in a statement. Fitch further said it expects the economy to recover after real GDP grew just 5% in 2012-13 versus 6.2% in the year-ago period.
India’s economic recovery, however, is likely to remain slow until a healthier investment climate is created, which helps lift potential growth again, it said. “As a result, Fitch is forecasting only a modest recovery with real GDP expected to expand 5.7% and 6.5% in FY14 and FY15, respectively,” Fitch said.
Fitch along with Standard and Poor’s had earlier threatened to downgrade India’s rating to junk grade in absence of steps by government to contain deficits and promote investment. The rupee on Tuesday touched historic low of 58.96 against the dollar.
However, it recovered by 19 paise to 58.20 against the dollar in early trade today after the Reserve Bank of India (RBI) announced steps to check the free-fall in rupee, raising the limit for online repatriation of export proceeds by over three-fold to $10,000. A concerned government has given indications to investors that it would take more steps to increase foreign investments in the country to stabilise rupee.
Fitch also affirmed its Long-Term Foreign-and Local-Currency Issuer Default Ratings (IDRs) at ‘BBB-’. “The agency has also affirmed the Country Ceiling at ‘BBB-’ and the Short-Term Foreign-Currency IDR at ‘F3’," it said.
It said the outlook revision and the affirmation of India’s investment-grade ratings reflect that the authorities were successful in containing the upward pressure on the central government’s budget deficit in the face of a weaker-than-expected economy. The fiscal deficit was 4.9% of GDP in 2012-13, compared with 5.7% in the previous year.
“The authorities have also begun to address structural factors that have weakened the investment climate and growth prospects, notably regulatory uncertainty, delays in government approvals of investment projects and supply bottlenecks, for example, in the power and mining sectors,” it said. The establishment of a Cabinet Committee on Investment should help to fast-track infrastructure-related projects and the government has made it easier for FDI to access a range of industries.
“Nonetheless, the investment climate could benefit from further reforms, such as the new land acquisition bill, some liberalisation of insurance and pension provision and public procurement, which are pending parliamentary approval,” Fitch said. It said addressing the structural issues in the power and mining sectors would further boost investor confidence.
Referring to inflation, Fitch said the pressures have begun to show more pronounced signs of easing in response to weaker economic conditions and the tightening of monetary conditions by the RBI. “The recent weakness of the exchange rate may, however, complicate policy management and limit the scope for further cuts in RBI policy rates,” it added.
A close above 5,845 on the Nifty may be the first indicator of a change in the trend
The market closed in the red on concerns about the economy as industrial growth declined to 2% in April and retail inflation eased less-than-expected. A close above 5,845 on the Nifty may be the first indicator of a change in the trend. The National Stock Exchange (NSE) reported a lower turnover of 59.60 crore shares and advance-decline ratio of 549:847.
The market opened in the negative ahead of the release of the industrial output and retail inflation numbers. In the global arena, the decline in the Asian markets continued today taking cues from the US and European markets which closed lower on Tuesday.
The Nifty opened 17 points down at 5,772 and the Sensex resumed trade at 19,104, a decline of 39 points from its previous close. The indices, which were in the negative terrain, witnessed choppy trade in the morning session.
Reports of industrial growth slowing to 2% in April and retail inflation easing marginally to 9.31% in May led the market to its lows in noon trade. The Nifty fell to 5,939 and the Sensex dropped to 18,969.
However, select buying in oil & gas, realty, banking, healthcare, capital goods and power saw the benchmarks bouncing back from the lows and making a struggled effort to emerge into the positive. The upmove helped the indices hit their intraday highs around 1.00pm. At the highs the Nifty rose to 5,793 and the Sensex inched up to 19,143.
Concerns about the slowdown in economic growth as highlighted by the economic indicators saw the benchmarks paring their gains and edging lower and settling in the red for the second day in a row.
The Nifty closed 29 points (0.49%) lower at 5,760 and the Sensex declined 102 points (0.53%) to 19,041.
The broader indices underperformed the Sensex today, as the BSE Mid-cap index declined 0.60% and the BSE Small-cap index fell 0.56%.
BSE Healthcare (up 0.46%), BSE Oil & Gas (up 0.45%) and BSE 0.01%) were the sectoral gainers today. The main losers were BSE Consumer Durables (down 7.37%); BSE Metal (down 1.75%); BSE IT (down 1.45%); BSE TECk (down 1.17%) and BSE Fast Moving Consumer Goods (down 0.97%).
Out of the 30 stocks on the Sensex, 10 settled higher. The top gainers were Jindal Steel & Power (up 3.80%); Cipla (up 1%); Mahindra & Mahindra (up 0.78%); Reliance Industries (up 0.65%) and State Bank of India (up 0.62%). The major losers were Tata Power (down 3.03%); Coal India (down 2.69%); Tata Steel (down 2.61%); Hero MotoCorp (down 2.37%) and Hindalco Industries (down 2.27%).
The top two A Group gainers on the BSE were—United Breweries (up 5%) and IPCA Laboratories (up 4.94%).
The top two A Group losers on the BSE were—Titan Industries (down 13.32%) and Adani Enterprises (down 7.31%).
The top two B Group gainers on the BSE were—Venus Universal (up 20%) and Filatex Fashions (up 20%).
The top two B Group losers on the BSE were—Liberty Phosphates (down 20%) and Tata Coffee (down 20%).
Of the 50 stocks on the Nifty, 21 ended in the in the green. The main gainers were JSPL (up 3.47%); IndusInd Bank (up 2.96%); Jaiprakash Associates (up 2.53%); IDFC (up 2.04%) and Lupin (up 1.97%). The major losers were Reliance Infrastructure (down 3.95%); Axis Bank (down 3.28%); Coal India (down 3%); Tata Power (down 2.85%) and Tata Steel (down 2.76%).
Markets across Asia continued to settle lower on the Bank of Japan’s reluctance to make any fresh commitments on easing the volatility in the market and concerns of the US Federal Reserve tapering its bond buying programme.
The KLSE Composite declined 0.25%; the Nikkei 225 fell 0.21%; the Straits Times dropped 0.53%; the Seoul Composite lost 0.56% and the Taiwan Weighted settled 0.54% lower. Bucking the trend, the Jakarta Composite jumped 1.91%. Markets in China and Hong Kong were closed Dragon Boat holidays.
At the time of writing, the key European indices were trading higher on merger and acquisition news. At the same time, the US stock futures were trading with gains, indicating a higher opening for US stocks later in the day.
Back home, foreign institutional investors were net sellers of shares totalling Rs885.85 crore on Tuesday while domestic institutional investors were net buyers of equities worth Rs313.42 crore.
Bangalore-based IT services company Wipro on Wednesday announced the expansion of its operations in Germany. As part of strengthening its business the company plans to triple its employee strength in Germany over the next three years, by hiring over 1,000 professionals. The stock shed 0.01% to Rs345 on the NSE.
Apollo Tyres on Wednesday said it has acquired US-based Cooper Tire & Rubber Company, in an all cash transaction of Rs14,500 crore. The deal has been approved by the boards of directors of both companies in which Cooper stockholders will receive $35 per share in cash. Apollo Tyres gained .74% to close at Rs92 on the NSE.
Construction major Larsen & Toubro (L&T) has bagged a Rs 900-crore contract from Wave Group’s realty arm Wave Infratech to build residential towers in Noida. L&T will construct the residential towers of the first phase of the project and ensure delivery by 2016. L&T fell 0.41% to close at Rs1,397.30 on the NSE.
Three customers of HDFC Bank found money withdrawn using their debit card in Greece while all of them were in Mumbai. Is this limited to just one bank?
It is happening again. Somebody is withdrawing money using peoples’ debit or credit cards from several places across the world. According to our information, at least three customers of HDFC Bank working in same office at Mumbai reported cash withdrawal in Greece by using their debit cards.
While all the three were in Mumbai, here is a message received by one of them. It says “Thank you for using your HDFC Bank DEBIT Card ending xxxx for Rs9103.98 towards ATM WDL in GEORGIOUPOLI at GEORGIOUPOLI on 2013-06-10:20:48:15.”
HDFC Bank, when asked said, “Prima facie, it appears that unsuspecting customers across several banks have fallen prey to a skimming attack by fraudsters. As it involves more than one bank, it would only be fair if we comment further only once we have ascertained the facts. We would like to state that our system is secure and this matter has nothing to do with the recent system upgrade,” HDFC Bank said in an email reply.
Last week, HDFC Bank took a two-day’s break to upgrade its system. During this period the bank’s customers from across the country were not be able to do shopping, both online and offline, ATM transactions, phone banking, net banking and mobile banking as well as booking of term deposits through online banking.
According to a report from The Hindu, several customers of State Bank of India (SBI) from Ganjam, Gajapati and Kandhmal districts in Odisha have alleged that money had been withdrawn illegally from their accounts. Most of these illegal withdrawals have been made through ATM centres in Indore and Bhopal. It was suspected that a well-organised racket was behind this, the report says.
Similarly, according to a report from the Times of India, a Tardeo-based businessman has also alleged that his wife’s credit card had been used in over 20 transactions within 12 hours across four continents to run up a bill of over Rs2 lakh, while the family was in Mumbai.
The businessman, found alerts from the private bank about the 20 transactions between December 13 and 14 across Australia, Hong Kong, the US and several countries in Europe at apparel, computer, pharmaceutical and departmental stores, to buy airline tickets and procure services and also direct marketing totalling Rs2.06 lakh. He or his wife had not received any SMS alert about the spend varying from .01 Australian dollar to buy medicines, $607.96 in a departmental store and Euro 817.01 to buy airline tickets, says the newspaper report.