World
Negative interest rate comes into force in Japan

The measure, announced on January 29 by the BoJ, applies a negative interest rate of minus 0.1% to deposits that Japanese financial institutions place at the BoJ

 

The negative interest rate recently approved by the Bank of Japan (BoJ) for certain bank deposits, came into force on Tuesday, a historic measure intended to boost the growth of the world's third largest economy.
 
It is the first time that the benchmark rate falls into negative territory in Japan, after data on Monday showed a contraction in the gross domestic product (GDP) in the October-December quarter, showing the effects of a global deceleration on the Japanese economy, EFE news reported.
 
The measure, announced on January 29 by the BoJ, applies a negative interest rate of minus 0.1% to deposits that Japanese financial institutions place at the BoJ.
 
The decision, which penalises financial institutions for storing excess funds, aims to stimulate investment and credit and is meant to force a reduction of interest rates applied by banks -something which has already begun to translate into rebates for some deposits and mortgage rates.
 
Initially, the measure would affect roughly 10 trillion yen (about $88 billion) in bank funds, about 4 percent of all deposits at the BoJ.
 
Shortly after the announcement, the yield on Japanese 10-year bonds briefly slipped into negative territory for the first time in history, showing the first effects of the BoJ measures on banks which have opted for Japanese debt as a safe haven to mobilise their assets.

 

 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article

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Nifty, Sensex to rally – Monday closing report
Nifty has to stay above 7,050 for the rally to continue
 
We had mentioned in Friday’s closing report that Nifty, Sensex would struggle and that the indices were showing no strength and would struggle to come out of the doldrums. The major indices of the Indian equity markets improved on encouragement from the government and favourable global cues. The trends in the major indices of the Indian stock markets during Monday’s trading are given in the table below:
 
 
Short-covering, coupled with value buying and positive global indices buoyed the Indian equity markets on Monday. The gains at the bellwether indices of the Indian equity markets came a week after, they had plunged by more than 6.50% each. The massive corrections made prices attractive and triggered value buying. Initially, both indices opened on a positive note, following a major rise in the Japanese Nikkei and healthy gains recorded at the US markets on last Friday. Besides, a rise in crude oil prices which climbed around the $30 a barrel mark (one barrel is equal to 159 litres) led investors to chase stock prices higher. In addition, a better-than-expected annual inflation rate and a stable rupee supported the equity markets rally. Moreover, investors' confidence was restored after Finance Minister Arun Jaitley made comments on the upcoming budgetary announcements and expected banking sector reforms. The BSE market breadth favoured the bulls -- with 1,985 advances and only 673 declines.
 
Meanwhile, data on the index of industrial production (IIP) last week showed India's factory output declined again in December by 1.3%. There was a growth of 3.6% in December 2014. Although the December output growth continued to be in the negative as compared to 3.6% growth in December 2014, it was somewhat better than the 3.42% decline registered in the month before. December IIP was dragged lower by a 2.4% drop in manufacturing activity. 
 
Also, official data on Monday showed that India's annual wholesale rate of inflation declined marginally to (-)0.90% for January from (-)0.73% for the month before. It was the 15th straight month since November 2014 that deflationary pressure persisted and wholesale inflation has remained in the negative zone.
The annual inflation, however, stood higher at (-)0.95% during January 2015. 
 
As per the wholesale price index numbers released by the Ministry of Commerce and Industry, though the annual food inflation declined, it was still high at 6.02%, against 8.17% in the month before, with pulses dearer by 44.91 and vegetables up 12.52%. Potato prices were down 17.08%.
The annual inflation rates of other major categories such as fuels and manufactured products remained in the negative -- at (-)9.21% and (-)1.17%, respectively.
 
The top gainers and top losers of the major Indian indices are given in the table below:
 
 
The closing values of the major Asian indices are given in the table below:
 

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Day Three of 'Make in India' gets down to specifics
Mumbai : Day Three of the mega 'Make in India Week' here got down to specifics, with central and state ministers explaining why today's investment climate in the country is conducive for global investors in a host of areas, ranging from from energy to entertainment.
 
If Maharashtra Chief Minister Devendra Fadnavis, who was among the first to take to the stage on Monday, said his state has seen memoranda of understanding worth $94 billion signed for 2,463 projects, central Power Minister Piyush Goyal said his sector needed $1 trillion in investment.
 
Similarly, if Petroleum Minister Dharmendra Pradhan outlined the existing and future policies to attract funds into downstream and upstream oil projects, Heavy Industries Minister Anant Geete unfolded a policy to nearly double the share of capital goods in exports to 40 percent.
 
"The objective of the 'National Capital Goods Policy' is to increase production from Rs.230,000 crore in 2014-15 to Rs.750,000 crore in 2025, and raising the direct and indirect employment from the current 8.4 million people over 30 million," Geete said.
 
Fadnavis, on his part, said one of the biggest shortcomings of his state was that infrastructure had not kept pace with industrial growth. Assuring stakeholders a focus on this area, the chief minister said a new airport here, for example, will be ready by 2019.
 
Goyal, who also oversees the coal portfolio, said a few years ago this fossil fuel was a scarce commodity, despite abundance of mining opportunities in the country, and states were clamouring for supplies. "Now states call us not to send coal supplies. It is in surplus today," he said.
 
He also said the emphasis was on clean, green energy.
 
"Considering the initiatives taken by the government to enhance its renewables capacity, we estimate that the renewable sector alone will attract investment to the tune of $1 billion in the next five years," Goyal said.
 
Defence Minister Manohar Parrikar said there were a host of opportunities to make equipment and wares for the forces and promised conducive norms towards that. "The defence procurement policy will be out by next month and become effective from April 2," he said.
 
"We'll have a new category -- 'indigenously designed, developed and manufactured' -- as the most preferred category for procurement. It will boost domestic private and small scale industry," he said. "The government promises to make the defence market more lucrative for Indian industry."
 
One of the sessions, chaired by Commerce Minister Nirmala Sitharaman, added some glamour to the otherwise serious event. She was candid enough to admit before a host of designers and luxury industry stalwarts that Indian fashion industry had grown with little help from the government.
 
"Our fashion industry is a dynamic one which brings new things on board. So far, fashion has been far away from the government's trajectory. Now, the ministry is actively engaged in promoting it in the country. We do recognise we have to propel the fashion industry into a bigger role."
 
Some studies and surveys, too, were released. The one by KPMG, titled "India Soars High", said the country was set to become a stable and more attractive investment destination owing to the favourable macro-economic policies and conditions. 
 
The third day of the event also had a fair share of corporate houses announce their plans to Make in India, notably, Mahindra and Mahindra, the Sajjan Jindal Group, Mercedez-Benz, Godrej, Posco, Vedanta, Ikea and Tatas.
 
As regards the anxious moments, and even embarrassment, caused by an on-stage fire on Sunday when a host of dignitaries were watching a cultural show, both the authorities and the participants sought to put the episode behind, even as Chief Minister Fadnavis ordered a probe.
 
Prime Minister Narendra Modi had opened the 'Make in India Week' on Saturday at the National Sports Club of India's indoor stadium here that was packed beyond its 5,000 capacity. He himself set the tone for the event, promising all that is pocssible to make India a top investment destination.
 
Disclaimer: Information, facts or opinions expressed in this news article are presented as sourced from IANS and do not reflect views of Moneylife and hence Moneylife is not responsible or liable for the same. As a source and news provider, IANS is responsible for accuracy, completeness, suitability and validity of any information in this article.
 

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COMMENTS

PPM

10 months ago

For his part, the Maharashtra CM, Mr.Fadnavis is improving the infrastructure in the state by giving away valuable land to dance schools.

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