Due to risks from high inflation and high current account and fiscal deficits the scope for supportive monetary policy action is constrained, says the central bank ahead of its third quarter monetary policy
Mumbai: Citing high inflation and widening current account deficit (CAD) as big constraints, the Reserve Bank of India (RBI) on Monday said there is limited scope for monetary actions like interest rate cut to boost growth in the third quarter policy to be announced on Tuesday, reports PTI.
“Given the preponderance of non-monetary factors behind the current slowdown in an environment where risks from high inflation, current account and fiscal deficits still remain, the scope for supportive monetary policy action is constrained”, RBI said in its report on Macroeconomic and Monetary Developments issued on the eve of policy.
The central bank, however, said that with the government executing economic reforms measures, it would be possible for the monetary policy to increasingly focus on revival of growth.
Meanwhile, the professional forecasters sponsored by the RBI have lowered the growth projection for the current fiscal to 5.5% from 5.6% projected earlier. They have also cut the growth forecast for the next financial year to 6.5% from 6.6%.
As regards inflation, RBI said it was likely to moderate below its projection of 7.5% by March-end. However, it added, “suppressed inflation continues to pose a significant risk to the inflation in 2013-14. As some of the risks materialises, inflation path may turn stick.”
Referring to recent reforms initiatives, it said, “(they) have reduced immediate risks, but there is a long road ahead to bring about a sustainable turnaround for the Indian economy. Business sentiments remain weak despite reform initiatives and consumer confidence is edging down.”
During the all-party meeting convened by the Centre on Telangana in New Delhi on 28th December last year, Shinde had said the issue would be resolved within a month while Chidambaram, on 9 December 2009 had announced on initiating process to create Telangana state
Hyderabad: A local court on Monday directed police to investigate into the allegations whether Union ministers Sushilkumar Shinde and P Chidambaram ‘cheated’ the people of Telangana region by their statements on the statehood issue, reports PTI.
Based on a complaint filed by Telangana Junior Advocates’ Association president Naresh Kumar, the Second Metropolitan Magistrate Court directed the LB Nagar police to investigate into the matter and file a status report before it by 14th February.
Kumar, in his petition, had mentioned about the statements of Shinde and Chidambaram on the Telangana issue and sought the court’s directions to refer the matter to the police for investigation under section 420 (cheating) of the IPC.
During the all-party meeting convened by the Centre on Telangana in New Delhi on 28th December last year, home minister Sushilkumar Shinde had said the Telangana issue would be resolved within a month.
On 9 December 2009, the then Union home minister P Chidambaram had announced on initiating process to create Telangana state. However, on 23 December 2009 Chidambaram modified the statement following an agitation in coastal Andhra and Rayalseema regions of Andhra Pradesh.
Meanwhile, Cyberabad Police Commissioner Ch Dwaraka Tirumala Rao said they were yet to receive the court orders in this regard.
Asked if the police would lodge any case against the Union ministers, the senior police officer said, “We have to first go through the order copy and act accordingly.”
The RBI has to make a big rate cut to surprise the market. This seems unlikely. The Nifty’s direction will be known only after that
The market ended flat on nervousness ahead of the RBI’s quarterly credit policy, to be announced tomorrow. As of now, the market remains trapped in a range. The RBI has to make a big rate cut to surprise the market. This seems unlikely. The Nifty’s direction will be known only after that. The National Stock Exchange (NSE) recorded a volume of 62.07 crore shares and advance-decline of 870:815.
The Indian market opened in the green tracking its Asian peers which were higher in morning trade on the on the positive trend in Chinese industrial companies and reports that the South Korean consumer confidence climbed to the highest level in eight months in January. However, nervousness was evident among domestic investors a day ahead of the Reserve Bank of India’s (RBI) review of its monetary policy.
The Nifty opened seven points higher at 6,082 and the Sensex resumed trade at 20,129, a rise of 25 points over its previous close. Buying in realty, banking and auto stocks led the market to its intraday high in early trade. At the highs, the Nifty rose to 6,088 and the Sensex went up to 20,172.
However, profit taking at the highs saw the benchmarks paring their early gains amid volatile trade. Selling pressure in oil & gas, power, consumer durables and capital goods sectors pushed the market into the red in late morning trade. The decline led the market to its lows at around 12.30pm. At the lows, the Nifty fell to 6,061 and the Sensex declined to 20,063.
The market fluctuated between losses and gains in amid intense choppiness as the European markets opened flat. The benchmarks continued their sideways movement in late trade in the absence of any triggers and nervousness ahead of the central bank’s policy review on Tuesday.
The market closed flat as investors await the RBI’s policy review. The Nifty added 0.15 points 6,075 while the Sensex shed 0.18 points to settle at 20,103.
Among the broader markets, the BSE Mid-cap index rose 0.02% and the Mid-cap index gained 0.27%.
The min sectoral gainers were BSE Realty (up 1.84%); BSE Auto (up 1.03%); BSE Bankex (up 0.68%); BSE IT (up 0.44%) and BSE Metal (up 0.28%. The key losers were BSE Oil & Gas (down 1.14%); BSE Consumer Durables (down 0.91%); BSE Capital Goods (down 0.65%); BSE Power (down 0.52%) and BSE PSU (down 0.46%).
Fifteen of the 30 stocks on the Sensex closed in the positive. The chief gainers were Tata Motors (up 2.49%); Hero MotoCorp (up 1.84%); Hindalco Industries (up 1.72%); Sterlite Industries (up 1.60%) and ICICI Bank (up 1.52%). The top losers were ONGC (down 1.76%); Reliance Industries (down 1.56%); Hindustan Unilever (down 0.98%); NTPC (down 0.97%) and State Bank of India (down 0.92%).
The top two A Group gainers on the BSE were—Bharat Electronics (up 5.34%) and Adani Ports and SEZ (up 4.86%).
The top two A Group losers on the BSE were—Adani Power (down 4.40%) and Jain Irrigation (down 3.88%).
The top two B Group gainers on the BSE were—Nouveau Global Ventures (up 19.93%) and LGB Forge (up 19.63%).
The top two B Group losers on the BSE were—DHP India (down 14.14%) and Shasun Pharmaceuticals (down 12.79%).
Out of the 50 stocks listed on the Nifty, 23 stocks settled in the positive. The major gainers were DLF (up 2.83%); Tata Motors (up 2.52%); Axis Bank (up 2.18%); Hero MotoCorp (up 1.99%) and HCL Technologies (up 1.84%). The main losers were Reliance Infrastructure (down 2.37%); Jaiprakash Associates (down 1.96%); ONGC (down 1.79%); RIL (down 1.69%) and UltraTech Cement Company (down 1.65%).
Markets in Asia closed mostly lower on concerns of subdued corporate earnings. The Nikkei, which hit its 32-month high in intraday trade, settled lower.
The Shanghai Composite jumped 2.415; the Hang Seng gained 0.395; the Straits Times rose 0.14% and the Taiwan Weighted advanced 0.55%. On the other hand, the Jakarta Composite lost 0.47%; the Nikkei 225 declined 0.94% and the Seoul Composite fell 0.365.
At the time of writing, the key European indices were flat with two of the three benchmarks marginally lower. At the same time, the US stock futures were trading with minor gains.
Back home, foreign institutional investors were net buyers of shares totalling Rs586.87 crore on Friday while domestic institutional investors were net sellers of equities amounting to Rs331.91 crore.
Pharma major Glenmark Pharmaceuticals’ US subsidiary, Glenmark Generics, has received the US health regulator's approval to market Mupirocin Calcium Cream, used for treating skin diseases, in the American market. According to IMS Health sales data for the twelve-month period ending September 2012, the product generated sales of $56.5 million. Glenmark Pharma declined 1.58% to close at Rs506.80 on the NSE.
Wind power major Suzlon Energy today said it has received an order for supplying turbines for setting up a 22 MW project in Tamil Nadu. The project comprises nine units of 1.25 MW and five units of 2.1 MW wind turbines," Suzlon Energy said in a statement. The stock gained 1.66% to close at Rs21.45 on the NSE.
Adani Ports & SEZ’s board of directors has decided, in principle, to divest its significant stake in entities controlling the Abbot Point Coal Terminal in Queensland, Australia, to the Adani family, subject to requisite approvals, formalities and clearances, at a valuation determines by an independent valuer. The move would enable the company to focus on the high growth Indian ports and logistics sector and maintain its leadership position in India. The stock jumped 5.49% to close at Rs137.45 on the NSE.