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Rupee recovers 38 paise against US dollar in early trade

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Mumbai  |  The rupee today recovered from its all-time low by rising 38 paise to 69.77 against the US dollar in early trade at the Interbank Foreign Exchange market on fresh selling of the greenback by exporters and banks ahead of US-China trade talks this week.

Besides, the dollar weakened against other currencies overseas as demand for the safe-currency receded on optimism over a reduction in US-China trade tensions, helping the domestic currency rebound, forex dealers said.

A higher opening in the equity market also supported the rupee’s recovery, they said.

The BSE benchmark Sensex rallied by 178.77 points, or 0.47 per cent, to quote at an all-time high of 38,126.65 (intra-day) in early trade today. The broader NSE Nifty too breached the 11,500-mark for the first time.

The Indian currency had collapsed to a historic intra-day trading low of 70.40 before closing at a fresh lifetime low of 70.15 per dollar on Thursday, down by 26 paise or 0.37 per cent.

Forex market was shut on Friday on account of Parsi New Year.

Meanwhile, foreign institutional investors (FIIs) bought stocks worth a net of Rs 147.31 crore, while domestic institutional investors (DIIs) accumulated stocks worth a net of Rs 151.89 crore on Friday.

Capital Markets

Yes Bank, No Bank !

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Just when shareholders of Yes Bank found reason to cheer after being given a clean chit by the Reserve Bank of India (RBI) after a risk assessment report, the 4th largest private lender was again reprimanded by the RBI just a day after its jubilation. The share price of Yes Bank surged 31% on Thursday, its biggest single day gain in 14 years on the back of news that RBI had given it a clean chit and stated that there was a NIL divergence with regard to income recognition and asset classification.

Yes Bank, however, did not seem to disclose the full extent of the report and only made public that part of a “confidential” report that suited its needs. The RBI has warned Yes bank that it might face regulatory action for violating a confidentiality clause by disclosing a nil divergence report via a letter to the private lender. The letter stated that “Nil divergence is not an achievement to be published and is only compliance with the extant Income Recognition and Asset Classification norms”.  The regulator viewed the disclosure of only part of the report as a deliberate attempt to mislead the public and plans action against the lender.

Earlier, the RBI had found massive divergences in the reported amount of gross NPAs by Yes Bank – almost three times the amount the amount of gross NPAs, and divergences to the tune of a whopping 6,355 crore ₹ were discovered, which led to RBI coming down hard and insisting that incumbent CEO & MD Rana Kapoor be ousted. Last month, the bank announced that Ranveet Gill, MD of Deutsche Bank will succeed Kapoor and join the bank by March 1st 2019 as its MD & CEO. After the massive rally on Thursday, the bank’s stock closed at ₹ 218.70 on Friday, down by 1.04% from previous day’s close.

 

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Capital Markets

Sensex rallies over 250 pts, Nifty tests 10,700 level

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Sensex

Mumbai | The BSE benchmark Sensex on Wednesday rallied over 250 points on heavy buying in metal, IT and banking stocks amid positive cues from other Asian markets ahead of US-China trade talks and US Fed policy meet outcome.

The 30-share index was trading 188.10 points, or 0.5 per cent, higher at 35,780.60.

Similarly, the 50-share NSE Nifty jumped 51.55 points, or 0.48 per cent, to 10,703.75.

On Tuesday, the Sensex ended 64.20 points lower at 35,592, and the Nifty edged lower by over 9 points to close at 10,652.

In morning session on Wednesday, Axis Bank was the biggest gainer on both indices, rallying over 6 per cent after the third largest private sector lender Axis Bank Tuesday reported a 131 per cent surge in net income for the December quarter at Rs 1,681 crore boosted by a huge jump in recoveries from written-off accounts.

Shares of ICICI Bank too rallied 4 per cent ahead of its quarterly results, scheduled to be released later in the day.

Tata Steel, Yes Bank, Bajaj Finance, Vedanta, Tata Motors, Reliance and M&M were the other top gainers, rallying up to 4 per cent.

While, HDFC Bank, ONGC, PowerGrid, Hero MotoCorp, Bajaj Auto, HDFC, Kotak Bank and HUL were the biggest losers, shedding up to 1.07 per cent.

On a net basis, foreign portfolio investors (FPIs) sold shares worth a net of Rs 354.36 crore Tuesday, while domestic institutional investors (DIIs) were net buyers to the tune of Rs 81.27 crore, provisional data available with BSE showed.

“With the interim budget set to be announced this Friday; expectation of the government breaching the fiscal deficit is high in order to boost rural sector,” said Hemang Jani, Head – Advisory, Sharekhan by BNP Paribas.

The market may take it in its stride even if the fiscal deficit target is breached by a small amount, provided that the government is able to convincingly back its actions with a push for growth-oriented policies and display its reforms orientation to be intact, he added.

Global investor sentiment was positive, but the gains were capped as investors were cautious ahead of crucial talks crucial trade talks between American and Chinese officials on January 30 and 31.

Market is also awaiting the outcome of the US Federal Reserve’s meeting later in the day.

Elsewhere in Asia, Hong Kong’s Hang Seng rose 0.20 per cent, Shanghai Composite Index was up 0.09 per cent higher, Kospi gained 0.58 per cent, while Japan’s Nikkei dropped 0.53 per cent in early trade.

On Wall Street, Dow Jones Industrial Average ended 0.21 per cent higher on Tuesday.

The rupee, meanwhile, was trading depreciated 21 paise against US dollar to 71.32.

The benchmark Brent crude futures rose 0.44 per cent to USD 61.47 per barrel.

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Capital Markets

Finally a Yes for Yes Bank

News Desk

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Quarter 3 results are being declared by listed companies in full swing. Among those to be declared today was that of private lender Yes Bank. Yes Bank has registered a 7% fall in its December quarter net profit at Rs 1,001 crore against Rs 1,076.9 crore in the same quarter last year. This net profit figure even missed a consensus estimate of analysts by Bloomberg which expected a figure of Rs 1,086 crore. This decline came in spite of growth in Net Interest Income which was at Rs 2,667 crore (analysts had estimated this figure at Rs 2,519 crore). The advances grew as well by 42.2% to Rs 2,43,885 crore and deposits were up 29.7% at Rs 2,22,758 crore. Its provisions fell 41% to Rs 550 crore. The bad news was that gross NPAs rose and net NPAs expanded as well. The company’s exposure to IL&FS group stood at Rs 2,530 crore.

The private lender announced the name of its new MD & CEO, Deutsche Bank’s Ravneet Gill. The uncertainty around its new MD & CEO ever since RBI rejected Rana Kapoor’s appointment for 3 years, has caused investors many concerns and has remained an overhang on the price of its shares which has fallen roughly 45% in the last 12 months. Rana Kapoor, current CEO and co-founder will step down by the month end after RBI denied his extension after the regulator pointed out discrepancies in the way Yes Bank reported its bad loan number and accused it of window dressing.

After trading in a range for the entire week, the bank’s shares shot up towards the end of today’s trade on the announcement of its new MD & CEO. Shares were up 9.20% or 18.15 points at day’s end. The share now trades at Rs 215.40 a piece.

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