Stocks
Nifty, Sensex may rally a bit more – Thursday closing report
We had mentioned in Wednesday’s closing report that Nifty, Sensex might record more gains. As expected, the major indices of the Indian stock markets advanced further and closed on Thursday with upto 1.88% over Wednesday’s close. Trading volumes were high on the NSE (more so since it was the derivatives expiry day) and no one was in doubt about the strength of the rally. The trends of the major indices in the course of Thursday’s trading are given in the table below:
 
 
Positive global cues, along with fresh influx of foreign funds and a rise in global crude oil prices, lifted the global and Indian equity markets on Thursday. Besides, healthy quarterly results and a strong rupee pushed both the key benchmark indices to their new highest monthly levels. The key indices made substantial gains during the mid-afternoon trade session as healthy buying was witnessed in capital goods, banks and automobile stocks. The BSE market breadth was tilted in favour of the bulls -- with 1,304 advances and 1,142 declines. In terms of broader markets, the midcap and smallcap indices gained more than half a percent each. Initially on Thursday, the key indices opened on a higher note, in-sync with their Japanese peers, and a positive close to the US markets on Wednesday. The domestic indices moved on their upward trajectory aided by positive global cues emanating out of US and Europe. Besides, value buying and fresh influx of foreign funds helped domestic indices surge. In addition, higher crude oil prices and a strong rupee cheered investors. There is however, a word of caution for short-term investors that the market can turn volatile owing to F&O (Futures and Options) expiry session, according to market analysts.
 
Reserve Bank of India Governor Raghuram Rajan on Thursday said the central bank had been moderating extreme currency volatility through interventions. "The RBI has been moderating periods of extreme volatility in currency through exchange intervention -- though only when the movement is excessive -- and increasing access to foreign exchange reserves, including pooling of reserves," Rajan said while inaugurating a meeting of SAARCFINANCE. On the Indian situation, Rajan described the steps taken to reduce the fiscal deficit, of containing inflation through a combination of better food management, and on a new inflation framework and calibrated monetary policies. India had also embarked "on a clean-up of bad debts in the banking system so as to free bank balance sheets to support growth", he added. The stability of the rupee is important for FIIs to maintain the ability to take back stock market capital gains to their home country in US dollars, and this is clearly a time when FIIs are bullish on the Indian stock markets.
 
As the government fine-tunes tax regime with countries it has the Double Taxation Avoidance Agreement (DTAA) with, India Inc. has asked the Income Tax department to ensure that Indian firms are not subjected to double taxation. “Difference in accounting practices followed by different countries would lead to a double taxation on the income of an Indian taxpayer,” the Associated Chambers of Commerce and Industry of India (Assocham) said in a statement.  The association said it has made a presentation to the Central Board of Direct Taxes (CBDT) suggesting changes in the proposed Foreign Tax Credit (FTC) rules to ensure the Indian taxpayer is not subjected to double tax incidence on income. “A high-level delegation led by Rajesh Garg, chairman of the Assocham national council on direct taxes, recently called on CBDT member Rani Singh Nair and held detailed discussion on the issue,” the statement said.  Assocham said it may be possible that in the initial years, FTC exceeds the amount of Indian taxes whereas in the subsequent years, the Indian taxes exceed FTC. The tax policy of the Indian government is important as India is an attractive destination for both FDI and FII investment.
 
Tata Steel on Wednesday posted a net loss of Rs.3,279 crore for the fourth quarter ended March caused by one-off costs associated with its European business. The company said in a statement that fourth quarter earnings were impacted due to one-off costs associated with the Britain business, such as impairment of non-current assets (Rs.1,724 crore), employee separation compensation (Rs.239 crore) and restructuring and other provisions (Rs.856 crore), among others. "While the pressure on the product prices continued during the quarter both in India and in Europe, our operations during the quarter were very resilient across most of the geographies and have reported much improved underlying performance compared to the previous quarter," said Tata Steel ED (Finance) Kaushik Chatterjee. The company's consolidated revenues for the quarter in question of Rs.29,507 crore were down 12.4% from Rs.33,666 crore in the same period a year ago. Earnings before interest, tax, depreciation and amortisation (EBITDA), or operating income, during the fourth quarter of Rs.2,270 crore, increased 43.7% from Rs.1,580 crore last year. From its India business, the company recorded a net profit of Rs.676 crore and EBITDA of Rs.2,188 crore on revenues of Rs.10,522 crore. "Despite muted market environment, Tata Steel India operations recorded strong growth in the quarter and volumes grew by 16% on the back of growth in high value segments like auto and branded products," the company said. Tata Steel shares closed at Rs325.00, up 0.20% on the BSE.
 
State-run gas utility GAIL (India) on Wednesday reported a healthy 51% rise in net profits at Rs.770 crore for the fourth quarter ended March buoyed by higher volumes of gas transmission and bigger trading margins. The company posted a net profit of Rs.511 crore in the same period a year ago, GAIL chairman B.C. Tripathi told reporters. "Profit was higher because of higher transmission and trading margins," Tripathi said. GAIL's turnover in the quarter, however, fell 18.3% to Rs.11,627 crore. In the same quarter last year, the company's turnover was Rs.14,235 crore. Sales fell due to a 15% drop in petrochemicals prices and a 38 percent decline in LPG price realisations, the chairman said. For the full fiscal 2015-16, GAIL reported a net profit of Rs.2,299 crore on a turnover of Rs.51,614 crore. In the previous fiscal, the company had a net profit of Rs.3,039 crore. GAIL will import 55 shiploads of 3.5 million tons of liquefied natural gas (LNG) in 2016-17, which was the same volume imported in the previous fiscal, Tripathi said. Gail India shares closed at Rs380.10, down 0.31% on the BSE.
 
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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Subramanian Swamy’s 6-point ‘chargesheet’ seeks Raghuram Rajan’s ‘termination'
BJP MP Subramanian Swamy, who has the Reserve Bank of India (RBI) governor in his crosshairs, has fired off a six-point 'charge sheet’ to the Prime Minister seeking Dr Rajan’s ‘termination’ even before his term ends. This letter is a follow up to his earlier one which insisted that Dr Rajan’s term should not be given another term as governor.  The issue of Dr Rajan’s second term has attracted unprecedented media attention, with Amul, a government-run milk cooperative also jumping into the fray with pitch for another term. 
 
Here is what Dr Swamy has alleged: 
(a) Dr Rajan raised interest rates at a crucial stage leading to recession in small and medium industries which led to massive unemployment of semi-skilled labour. For a labour intensive economy like India, rising unemployment is as wilful and anti-national as rising inflation and it shows RBI policy to have been insensitive
 
(b) Dr Rajan insisted on permitting Sharia compliant financial institutions to be set up. The Prime Minister however, intervened and ordered a stay on 1 December 2014.
 
(c) Dr Rajan has continued to hold on to his US Green Card which is essentially a transitional visa arrangement for acquiring US citizenship. While holding office as RBI Governor, he has been continued annually to renew his Green Card by making the mandatory trip for at least one day residence in USA. More patriotism is required from a senior Government policy-maker in India like Dr Rajan!
 
(d) As a senior man in the Indian government, he has not restricted himself to correspondence with his office email address. He has an unsecure personal email address [email protected] from University of Chicago. Using this address he has sent confidential and sensitive financial information to friends and associates around the world in reckless disregard of his official duties as RBI Governor.
 
(e) Despite being a government official, he has been publicly disparaging of the BJP government. Is he frustrated? Does he have a grievance in spite of holding high office? He has been involved in pejorative sarcasm instead of being part of the accountability required of senior men.
 
(f) Dr Rajan is a member of the US dominated Group of 30 (www.group30.org ) which is known to defend the US’ dominant position in the global economy. It has been observed that Dr Rajan while taking policy decisions has been involved in a sell-out to the foreigners, in particular, to the US. While no pecuniary gain has been made by Dr Rajan for such policy swinging, it reflects a clear lack of patriotism and confidence in India as a growing economy.
 
At a time when the debate is about a second term for the RBI Governors, Dr Swamy ends the letter by saying that it is in India’s national interest to “terminate the tenure of Dr Rajan”.

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COMMENTS

MG Warrier

9 months ago

This is a great idea. Let us wish Dr Swamy happiness in his endeavours. I remember Dr Swamy suggesting sometime back that 'Dr Rajan should be sent back' and Dr Vaidyanathan(a familiar face for Moneylife readers) should be made RBI Governor. Lord Clive was answering to a loger charge sheet back in England. At some stage, he wondered, "After listening to the 'opportunities' , I find even the charges are too insignificant"
Remembered, when I tried to connect Dr Rajan's contribution to India's financial sector and economic development after he came back to India and the six charges 'framed' by the Hon. RS MP. I maintain, GOI has been acting, by and large, with mturity in matters like this.

REPLY

Ramesh B Mhadlekar

In Reply to MG Warrier 9 months ago

I have sent to Swamyji the documents received under RTI proving recruitment Scam under the Regime off Raghuram Rajan

MG Warrier

In Reply to Ramesh B Mhadlekar 9 months ago

Thanks...May be it may help Swamyji. His 6-Point CS was weak!

Ramesh B Mhadlekar

In Reply to MG Warrier 9 months ago

Yes also Raghuram Rajan is abusing his power while allowing his wife or spouse and children to use the red beacon official car meant exclusively for him.

Suketu Shah

In Reply to Ramesh B Mhadlekar 9 months ago

Great work done by you.Dishonest people in India always true to prove(in vain) that honest people are dishonest.Well done!Keep it up.

Ramesh B Mhadlekar

In Reply to Suketu Shah 9 months ago

Wife of Dr. Raghuramrajan is abusing the RED Beacon official Car meant for the Governor by using the same for her personal use.

Kingshuk samanta

9 months ago

subramanyam swamy is not a honest man.his past records are dubious.rajan is one of the best rbi governor we indians ever had

REPLY

Ramesh B Mhadlekar

In Reply to Kingshuk samanta 9 months ago

Is Mr. Raghuram Honest? He is involved in Recruitment Scam in RBI and the same is proved by RTI documents.

Srinivasan Subramanian

9 months ago

After planting cronies in Central universities, CBI, Bank Boards, dangerous plan to invade RBI by removing Governor Rajan.All to help donor Corporates with lower interest

REPLY

Nataraj S K

In Reply to Srinivasan Subramanian 9 months ago

So that one more RSS Loyalist can be brought into this Premier Institution.

Suketu Shah

9 months ago

1)Check Dr Swamy's track record.Whatever he has stated in the past has turned out to be correct.

2)Also why are congress supporters creating the impression that only Rajan can be RBI governor and no one else?Clearly Rajan is working against the interest of the country and his bosses are worried once he goes the new RBI governor appointed by NaMo wl turn the economy on its head in 2 yrs.

Anand Vaidya

9 months ago

I think Swamy is usually ahead of the curve... and always right. I will support Swamy's stand on Rajan.

SuchindranathAiyerS

9 months ago

Quite independently here is what I has to say a few weeks ago:

1) Rajan is Anti-India.He joined Obama's tolerance chorus like any Body Shopping Magnate or other PANGOLIN* Notable, Awardee or other Camp Follower. This is unacceptable in a Governor of the Reserve Bank of India. In doing so he has abused Indian hospitality like a worthless Black Yank or Italian Bar Maid,

2) Instead of doing Central Banking, which should be felt not seen, he is seen and not felt. For example instead of watching M2 (Money supply), he is conducting public classes in Dosa Economics to distract the already diseducated public from the menace of inflation.

3) Instead of auditing Banks and Banks' lending norms and methods, he is raising political canards against individual borrowers like a politician or a PANGOLIN journalist.
In brief, Rajan seems more of a Bollywood Khan, a Tendulkar Group Captain or a Nehruvian Romila Ashokan than a Central Banker. India already has too many of these.

And what I had to say several months ago:

Raghu Ram Rajan should remember that he is a Central Banker and neither a politician nor a Nehru-Gandhi "Economist". Central Bankers should not be heard but be felt in the value of the rupee, the fiscal discipline of the Government and the integrity of the Banking system. Instead of taking time off from his work to lecture on inflation and dosas or wag a "tolerance" finger at the Prime Minister as part of the Obama-Sonia "parivar-that-loots-together-to-stay-together" chorus of Fifth Columnists, he should study M. H. De Kock, R. S. Sayers, Beckart, Altman's "Z", Tamari's Index of Risk etc. and learn to measure up to his job. Unless, of course, he is as erudition, integrity, culture and arithmetic challenged as India's Indian educated Judiciary, Bureaucracy, Police, Professors and others appointed and promoted on the basis of birth and Tehsildar's certificates. His instruments are OMO, BR, Audit, fines, and capping government over drafts. Not his mouth.

*Note: PANGOLIN: An enemy of India who believes in inequality under law, exceptions to the rule of law and persecution of some for the benefit of others. At present, the sole purpose of the Indian Republic, Constitutional or otherwise, is to pamper and provide for certain constitutionally preferred sections of society who the British found useful to hold and exploit India at the cost of those who the British hated and persecuted. The Pangolin is a creature that is unique to India and feeds on ants that are known in nature to be industrious and hard working if not quite as fruitful as bees who flee to better climes. (PANGOLIN is an acronym for the Periyar-Ambedkar-Nehru-Gandhi-Other (alien) Religions-Communist Consensus that usurped the British Mantle and has worn it with elan to loot, plunder, and rape India since 1921 and re write History and laws to their exclusive benefit since 1947)

PPM

9 months ago

I am not Swamy supporter and what he is telling now is correct. Raghuram rajan is an Economic Hit Man (EHM) and he is working against the interests of India. He should be removed immediately from the position of RBI governor.

Ramesh B Mhadlekar

9 months ago

Swamiji you can include the 7 th charge of Mr Rajan being involved indirectly as head of RBI in recruitment scam of class IV employees which is contrary to Art 14 and 16 of the Indian constitution and also the SC decisions in the matter of Public employment.

REPLY

Ramesh B Mhadlekar

In Reply to Ramesh B Mhadlekar 9 months ago

In similar recruitment Scams IOB officers and union leaders have gone to Jail and also chauthals are living example, but RBI officials are roaming scot free. It appears laws are applied according to persons and their face value in India. I have RTI's to prove the recruitment scams of RBI.
\

Nataraj S K

9 months ago

I would request readers to read Anuvab Pai's piece,on Page 12 of today's ET, "STAY ye chosen one"-- is a superb one Re butting Swamy's rambling nonsense. The end line of the article is very aptly superb,and I recommend readers to savour the" sweet,buttery " ending note.

Nataraj S K

9 months ago

I would advise Dr. Swamy to return to the U.S.A., to resume his teaching assignment, which he gave up many years back. He needs to brush up on what changes the world's economy's been through since the time he left. It will surely serve him well,and do the country a lot of good.

REPLY

B. Yerram Raju

In Reply to Nataraj S K 9 months ago

Who will take him as economics professor at Harvard unless it has decided to teach nonsense through Swamy? Swamy is after all living at the munificence of the ruling party by sitting in Rajya Sabha. How can he represent the voice of entire India and call a person guarding the economy as gatekeeper of the Indian Financial System? If he has accepted rewards so were many in the past from several Universities. Holding a university email address as an alumni is not bad. How can Swamy say that the mails sent through this mail address carried information against the interests of India and Indian economy unless he has hacked them? Reading other's emails sent on personal count is a crime. Swamy has no ethical ground to question Rajan. He has done commendable job during his tenure and in spite of fiscal profligacy and changed GDP accounting, he kept the economy hold its head high. His comments are against exuberance and complacency of the powers that be.

Ramesh B Mhadlekar

In Reply to Nataraj S K 9 months ago

You are supporting a man who does not believe in Constitution of India or SC decisions, he has no place in India and his supporters should go along with him from India. He is involved in Class IV recruitment scam ion RBI.RBI is not a private shop where any Tom and Dick and Harry can absorb near and dear ones of Union leaders.

SAMUEL WARBAH

9 months ago

Even Jim Rogers wish that Dr.Rajan was Chairman of the Federal Reserve. So much about the respect that people have on Dr.Rajan.

Nilesh KAMERKAR

9 months ago

Not even a single person has been able to prove Dr Swamy wrong. Why?

REPLY

Ramesh B Mhadlekar

In Reply to Nilesh KAMERKAR 9 months ago

He is absolutely right, the earlier he is sacked it is better for India.

Ramesh B Mhadlekar

In Reply to Ramesh B Mhadlekar 9 months ago

Dr. R Rajan is a liability to India, he pretends to be well wisher of Indian economy but he is not.

Cabinet approves National Capital Goods Policy
The union cabinet on Wednesday approved National Capital Goods Policy aimed at increasing capital goods production from the current value of Rs.2,30,000 crore to Rs.7,50,000 crore by 2025.
 
"The policy envisages increasing exports from the current 27 percent to 40 percent of production. It will increase the share of domestic production in India's demand from 60% to 80% thus making India a net exporter of capital goods," said an official statement.
 
Also with an aim to improve technology depth across sub-sectors, increase skill availability, ensure mandatory standards and promote growth and capacity building of MSME, the National Capital Goods Policy envisages to raise direct and indirect employment from 8.4 to 30 million.
 
"The policy will help in realising the vision of building India as the world-class hub for capital goods. It will also play a pivotal role in overall manufacturing as the pillar of strength to the vision of 'Make in India'," said the statement.
 
The Department of Heavy Industry mooted the idea of National Capital Goods Policy to Prime Minister Narendra Modi during a 'Make in India' workshop in December 2014.
 
Likewise, the same department will meet the objectives of the approved policy in a time-bound manner, procuring the green signal for schemes according to the roadmap of policy interventions, the statement said.
 
"The aim of the policy is to create game-changing strategies for the capital goods sector. Some of the key issues addressed include availability of finance, raw material, innovation and technology, productivity, quality and environment-friendly manufacturing practices, promoting exports and creating domestic demand," the statement added.
 
Reacting to the development, FICCI president Harshavardhan Neotia said: "India has the potential to be the net exporter of capital goods as against the net importer currently. National Capital Goods Policy is definitely the need of the hour."
 
He added that the National Capital Goods Policy will propel the capital goods sector and go a long way in achieving the vision of 'Make in India'.
 
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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