Stocks
Nifty, Sensex in a strong momentum – Tuesday closing report
We had mentioned in Friday’s closing report that Nifty, Sensex have bucked the weakness, and have headed higher. The major indices of the Indian stock markets rallied strongly on Tuesday after the long week-end to close with gains of around 1.50% over Friday’s close. The trends of the indices in the course of Tuesday’s trading are given in the table below:
 
 
Positive global cues and healthy inflow of foreign funds pushed the Indian equity markets to a striking distance of all-time highs by the end of the session on Tuesday as healthy buying was witnessed in all the 19 sub-indices of the BSE, led by stocks of banking, automobile and consumer durables. The BSE market breadth was tilted in favour of the bulls -- with 1,624 advances and 1,126 declines. On the NSE, on Tuesday, there were 938 advances, 524 declines and 60 unchanged. The Indian stock markets were closed on Monday on account of Ganesh Chaturthi.
 
Reliance Capital, a part of the Anil-Ambani-led group, on Tuesday said it has raised $300 million through private placement of debentures with tenures of 5 and 10 years. "The issue size offered was $ 150 million with an option to retain oversubscription by way of a greenshoe option of up to $150 million). The issue was fully subscribed, including the greenshoe option, and will be listed," the company said in a regulatory filing. The company’s shares closed at Rs558.00, up 2.46% on the BSE.
 
Indian drug major Sun Pharmaceutical Industries Ltd on Tuesday said it has signed a strategic distribution agreement with Mitsubishi Tanabe Pharma Corporation. In a statement, Sun Pharma said Japanese company Mitsubishi Tanabe will distribute the 14 prescription brands acquired from Novartis Pharma earlier this year. Mitsubishi Tanabe will also provide information on their proper use to healthcare professionals. "Through this alliance we have the opportunity to leverage Mitsubishi Tanabe Pharma Corporation's specialized expertise to create a strong business foundation for us in Japan," Isao Muramatsu, President & Representative Director, Sun Pharma Japan Ltd, was quoted as saying in the statement. "Sun Pharma will focus on expanding its sales channels in Japan's pharmaceutical market while continuing to ensure a stable supply of medicines and healthcare information," Muramatsu said. The company’s shares closed at Rs782.10, with no change from the previous close, on the BSE.
 
Urjit Patel has taken charge as Governor of the Reserve Bank of India (RBI), an official statement said here on Monday. "Urjit R. Patel assumed charge as the twenty-fourth Governor of the Reserve Bank of India, effective September 4, 2016 after serving as Deputy Governor since January 2013," the RBI statement said. Patel, who has been given a three-year term, succeeds Raghuram Rajan, whose three-year term ended on Sunday. The elevation of Urjit Patel as governor has raised expectation among those who were critical of Rajan for not easing enough the monetary policy by cutting interest rates. "We are in the midst of the age of competitive depreciation and of a beggar-my-neighbour philosophy. It brings to mind an old African saying that when elephants fight, the grass suffers," Patel said at the press conference to announce the policy review, on the trend of accommodative monetary policies being adopted by developed economies. "While the ECB (European Central Bank) and the Bank of Japan are printing money and devaluing their currencies on one hand, the US economy is reviving on the other. Anyone in the middle is getting crushed," he added.
 
The top gainers and top losers of the major 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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Central bank seeks to dispel rumours about KYC guidelines
The Reserve Bank of India has sought to dispel rumours and curb malpractices in banks on the pretext of Know Your Customer (KYC) norms by issuing clarifications on the guidelines.
 
The RBI guidelines say: "If your current address is not the same as the proof submitted to your bank, a simple declaration of your new address is adequate."
 
Even without the "proof of identity and address", anyone can open a savings bank "small account" by submitting a recent photograph and signature and enjoy account balance of up to Rs 50,000, withdrawals of up to Rs 10,000 per month and total credits of up to Rs 1 lakh per financial year, it said.
 
Banks need to reconfirm KYC details only in every 2, 8 or 10 years depending on the risk profile, it added.
 
For KYC norms, one "proof of identity" and "proof of address" and a recent photograph are enough to open a bank account, RBI stated.
 
The Aadhaar card, a driving license, voters' identity card, passport or National Rural Employment Guarantee Act (NREGA) card serves as both proof of identity and proof of address while PAN card serves only as proof of identity, the apex bank clarified.
 
For any grievances about the KYC process, a person can complain to the bank and if unsatisfied with the response, can directly complain to the RBI's Banking Ombudsman, the notification said.
 
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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Patel's 'handover' at RBI is low key, unlike other governors
In keeping with the low-key style he is known for, Reserve Bank of India's new Governor Urjit Patel began his first working day on Tuesday away from media spotlights, unlike the practice followed by RBI governors in the past. There were no milling photographers at the "handover".
 
Patel had officially assumed charge on Sunday when the term of his predecessor Raghuram Rajan expired. Monday was a holiday here on account of the Ganesh Chaturthi, which kicked off the 10-day Ganesh festival.
 
An RBI spokesperson said photographs of the official ceremony of Patel assuming office would be released later on Tuesday.
 
Patel has taken over the bank's charge from Rajan after serving as RBI Deputy Governor since January 2013.
 
He has also worked at the International Monetary Fund (IMF), and was a consultant to the Union Finance Ministry from 1998 to 2001.
 
The RBI said Patel has a Ph.D. in Economics from Yale University, an M.Phil. from the University of Oxford and a B.Sc. from the University of London.
 
Following his departure from the RBI, Rajan on Monday cautioned governments and central bankers across the world against relying too much on low interest rates to propel growth or use it as a substitute for undertaking key structural reforms in the economy.
 
He told the New York Times in an interview that lower policy rates are often an easy solution. However, these can trap economies in a fear of psychosis that when they normalise the rates eventually could hurt growth and distort markets, thereby making a low interest rate policy difficult to abandon.
 
When Rajan took charge at the RBI in 2013, at a time the US Federal Reserve had declared its intent to wind down its stimulus programme, the rupee plunged in value in respect of the US dollar on fears about a spiralling current account deficit.
 
In a series of measures, Rajan managed to stabilise the currency that also brought back investors to the country. 
 
"Rajan's disciplined and focussed approach in leading the Reserve Bank during his first year as governor was remarkably impressive," British magazine Central Banking said while awarding Rajan its 'Central Banker of the Year' award for 2015.
 
Predicting the 2008 financial meltdown that is still affecting global economy, Rajan in 2005 argued that increasingly complex markets with myriad instruments of credit and mortgage-backed securities in ever greater quantities made the global financial system a risky place.
 
Almost a decade down the line, Rajan is stronger in his belief that global markets now are at the risk of a crash due to the competitive loose monetary policies being adopted by developed economies.
 
Pointing to the very low interest rate policies of the US Federal Reserve, the Bank of Japan and the Bank of England in a bid to stimulate their economies, Rajan has been warning that emerging markets are especially vulnerable to big shifts in capital flows triggered by the unprecedented monetary accommodation in rich countries.
 
The elevation of Urjit Patel as Governor has naturally raised expectation among those who were critical of Rajan for not easing enough the monetary policy by cutting rates.
 
When talking about the challenges for Patel as the Governor, it should also be kept in mind that his moorings are as monetarist as his predecessor Rajan's were, and he is considered to attach the same importance to inflation control as did Rajan.
 
His views on monetary policy were expressed at the time Rajan held rates in the February 2015 review after making an unexpected rate cut a month edarlier -- the first in nearly two years.
 
Patel at the time elaborated on the "important backdrop" to Rajan's move to hold rates.
 
"We are in the midst of the age of competitive depreciation and of a beggar-my-neighbour philosophy. It brings to mind an old African saying that when elephants fight, the grass suffers," Patel said at a press conference to announce the policy review, on the trend of accommodative monetary policies being adopted by developed economies.
 
"While the ECB (European Central Bank) and the Bank of Japan are printing money and devaluing their currencies on one hand, the US economy is reviving on the other. Anyone in the middle is getting crushed," he pointed out.
 
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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