Stocks
Sensex, Nifty to record more gains – Monday closing report
We had mentioned in Friday’s closing report that Nifty, Sensex might rally if weekly lows hold. The major indices of the Indian stock markets rallied strongly on Monday to close 1.35%-1.47% over Friday’s close. The trends of the major indices in the course of Monday’s trading are given in the table below:
 
 
Positive global cues lifted the Indian equity markets on Monday. Buying was witnessed in automobile, capital goods and banking stocks. The BSE market breadth was skewed in favour of the bulls - with 2,228 advances and 660 declines. On the NSE, there were 1,316 advances, 155 declines and 42 unchanged.
 
Two and three wheeler major Bajaj Auto on Monday reported a decline of 2% in its total sales for September. According to the company, its total sales during the month under review stood at 376,765 units from an off-take of 384,400 units during the corresponding month of 2015. However, total domestic sales in September were up 21% to 255,592 units from 210,599 units sold during the like month of last year. The overall exports during the last month declined by 30% to 121,173 units from 173,801 units shipped out during the corresponding month of 2015. The company's total motorcycle sales during the month under review increased by one per cent to 331,976 units from 330,228 units sold in the like month of last year. In contrast, the overall commercial vehicle sales declined by 17% to 44,789 units from 54,172 units sold during September 2015. Bajaj Auto shares closed at Rs2,875.30, up 1.52% on the BSE.
 
Automobile manufacturer Hyundai Motor India (HMIL) on Monday reported an overall sales growth of 4.7% in September. According to the company, its total sales for last month stood at 59,211 units -- up from 56,539 units sold in the corresponding month of 2015. The automobile manufacturer's domestic sales grew by 0.2% to 42,605 units, from 42,505 units sold during the like period of last year. Exports during last month rose by 18.3% to 16,606 units from 14,034 units shipped out during September 2015. "We hope that the festive season will see a benchmark growth in the industry with the evenly spread monsoon along with the 7th Pay commission building to positive sentiments in the market," said Rakesh Srivastava, Sr. Vice President Sales and Marketing, Hyundai Motor India. Currently, the company has ten car models across segments -- Eon, i10, Grand i10, Elite i20, Active i20, Xcent, Verna, Creta, Elantra and Santa Fe.  The S & P BSE Auto Index closed at Rs22,774.95, up 2.44% on the BSE.
 
The Indian government is set to spend $7.2 billion on IT products and services in 2016 -- an increase of 2.4% over 2015, a new report said on Monday. The forecast includes spending on internal services, software, IT services, data centre, devices and telecom services, noted the report released by the global research firm Gartner. IT services (which includes consulting, software support, business process outsourcing, IT outsourcing, implementation and hardware support) is expected to grow 9.3% in 2016 to reach $1.8 billion. Telecom services will be a $1.6 billion market, with the mobile network services sub-segment recording the fastest growth with 5.2% in 2016 to reach $909 million. "Government spending on software will total $885 million in 2016, a 4.5% increase from 2015," said Moutusi Sau, principal research analyst at Gartner.  Internal services (salaries and benefits paid to the information services staff of an organisation) will grow 5.8% in 2016 to reach $1.5 billion.  "The e-governance initiatives to simplify digital channels and data-driven initiatives are driving investments in the government and are anticipated to grow through 2020," Sau added. The S & P BSE Information Technology index closed at 10242.78, up 0.13% on the BSE.
 
The pound sterling was the worst performer among major currencies on Monday, after British Prime Minister Theresa May said Britain would kick off the process of separating from the European Union (EU) by the end of March 2017. Speaking at the Tory party's annual conference here, Theresa May ended weeks of speculation and revealed that she will launch formal Brexit talks with EU leaders before the end of first quarter of 2017, meaning Britain is set to leave the EU by summer 2019. The major indices in the Indian stock markets had reacted adversely when the British public voted in favour of the Brexit.
 
With the government cutting the price of domestic natural gas, state-run Indraprastha Gas Limited (IGL) on Sunday announced a reduction in the selling prices of compressed natural gas (CNG) and piped natural gas (PNG) in Delhi and the NCR cities of Noida, Greater Noida and Ghaziabad with effect from midnight. The revision in prices would result in a decrease of Rs1.40 per kg in the consumer price of CNG in Delhi, and Rs1.60 per kg in Noida, Greater Noida and Ghaziabad. As per the release, CNG from Monday will cost Rs35.45 per kg in Delhi and Rs40.60 per kg in Noida, Greater Noida and Ghaziabad would be effective from midnight Sunday, the release said. "This is the third price time in the last one year that prices have been reduced by IGL. The price of CNG in Delhi remains lowest in the entire country," the company said. The company’s share closed at Rs790.45, up 1.78% 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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Government unveils urban agenda for next 20 years
Stressing the need to go for a big push to fully realise the benefits of urbanisation, the government on Monday unveiled its urban development strategy for the next 20 years.
 
Union Minister for Housing & Urban Poverty Alleviation M. Venkaiah Naidu released the "India Habitat III - National Report", ahead of the UN Habitat III Conference in Quito, Ecuador, slated for later this month. A global "New Urban Agenda" for the next 20 years is likely to be adopted at the conference.
 
Speaking at the launch ceremony in Vigyan Bhavan here, Naidu on Monday said: "The agenda for the next two decades proposed in the national report will be ensuring economic growth and productivity, improving quality of life, and importantly, addressing issues of inclusivity, sustainability and climate change." 
 
The challenge is about ensuring sustainable development while taking advantage of economic growth that results from rapid urbanisation in the country, he said. 
 
"For long, urbanisation has been looked at from the limited perspective of providing basic services. But our contemporary response shall be wide ranging, aiming at serving larger macro-economic transformational goals together with meeting local priorities. We need to go for a big push to harness fully the potential of urbanisation," said Naidu.
 
Elaborating on the strategy for transforming urban India, the minister said it would be achieved through elimination of barriers to the flow of factors of production, like capital, land and labour, and development of rural and urban areas, in a synergetic manner.
 
The minister said that the outcomes of new urban agenda based on sustainable urban planning would include reducing water and electricity use by 50 per cent from that of normal use, enabling over 60 per cent of urban travel by public transport, generating half of power from renewable sources, and compact and cluster urban development, among others. 
 
"It's an eloquent testimony of India's commitment to sustainable development," said Naidu on India ratifying the Paris Agreement on Climate Change on Sunday. 
 
Naidu also announced that under the Pradhan Mantri Awas Yojana (Urban), construction of 10,10,424 houses for urban poor has been approved.
 
"An investment of Rs.59,771 crore has been approved with the central assistance of Rs.14,955 crore," he added.
 
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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Interesting to see how MPC will tackle monetary policy: Fitch
A day before the Reserve Bank of India announces 2016-17's fourth monetary bi-monthly policy, rating agency Fitch said it is waiting to see how the newly-formed Monetary Policy Committee tackles it, hinting that a low inflation targeting could positively impact the country's rating.
 
"The inflation targeting framework now in place, should reduce the impact of pressures, but it will be interesting to see how this will play out in the Monetary Policy Committee (MPC), in which members appointed by both the government and RBI, will have a vote on monetary policy," Thomas Rookmaaker, Director, Asia-Pacific Sovereigns Group, Fitch Ratings, told IANS.
 
"Structurally low inflation would positively impact the sovereign rating profile as it would improve the investment climate and, hence, contribute to sustainable growth," he added.
 
Fitch implied that it expected no rate cuts with a focus on containing inflation in Tuesday's policy, which will be also the first under the leadership of new Governor Urjit Patel.
 
"The fact that Dr. Patel has served as deputy governor in the past three years, suggests continuation of the current policy direction in the years ahead. Dr. Patel was part of the team at RBI that set in motion significant policy changes to deal with both high inflation and weak bank balance sheets, including through the set-up of new policy frameworks," Rookmaaker told IANS in an e-mail interview.
 
The elevation of Patel has raised expectations among those who were critical of his predecessor Raghruam Rajan for not easing enough the monetary policy by cutting rates, though Patel's moorings are as monetarist and he is considered to attach the same importance to inflation control.
 
The MPC, which is now tasked with the job of taking a call on the interest rates, would theoretically target the range around the mid-point and not one of the outer points specifically, though it was early to tell if inflation in practice will remain skewed to one side of the range, Rookmaaker said.
 
The government has set an annual inflation target of four per cent, plus or minus two percentage points.
 
"The inflation target range that the RBI will use in the medium term seems rather broad, in the sense that 2 per cent seems quite low and 6 per cent quite high for an emerging economy like India. But it seems to make sense to have a rather broad range around the 4 per cent mid-point, as food and oil price movements can have a large impact on headline inflation," Rookmaaker said.
 
Wholesale food price inflation was 5.3 per cent during financial years 1996 to 2005 but increased to 9.2 per cent between financial years 2006 and 2016. Clearly, the fight on the inflation front, particularly food inflation, is far from over.
 
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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