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Sensex jumps 150 pts ahead of RBI policy outcome

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Sensex

Mumbai | BSE benchmark Sensex jumped over 150 points in early trade Thursday on sustained buying by domestic and foreign institutional investors, ahead of RBI’s policy outcome later in the day.

The 30-share index was trading 161.53 points, or 0.44 percent, higher at 37,136.76. Similarly, the 50-share NSE Nifty rose 33.05 points, or 0.30 percent to 11,095.50.

On Wednesday, the Sensex soared 358.42 points, or 0.98 percent, to close at 36,975.23; and the broader Nifty jumped 128.10 points, or 1.17 percent, to 11,062.45.

According to traders, domestic investors remained bullish tracking sustained inflow from domestic and foreign funds, amid hopes that the RBI may change its policy stance to ‘neutral’ from ‘calibrated tightening’ on low inflation footprint, even as a rate cut was ruled out by many experts.

The RBI’s Monetary Policy Committee (MPC) is scheduled to announce its policy decision later in the day.

“Central banks in Asian markets from India to Indonesia are expected to halt interest rate hikes and possibly signal rate cuts as falling inflation and US Fed’s decision to put break on tightening interest rate cycle has left enough room for interest rate cuts,” said Sunil Sharma, Chief Investment Officer, Sanctum Wealth Management. “Decline in rates will reduce the cost of capital and potentially fuel rally in equity markets,” he stated.

On a net basis, foreign portfolio investors (FPIs) bought shares worth a net of Rs 694.97 crore Wednesday, and domestic institutional investors (DIIs) were net buyers to the tune of Rs 525.26 crore, provisional data available with BSE showed.

In morning session, Sun Pharma, Bajaj Auto, HCL Tech, Tata Motors, M&M, Yes Bank, Maruti and Hero MotoCorp were the top gainers, rising up to 2.64 percent. On the other hand, Tata Steel, HDFC, Bharti Airtel and Vedanta fell up to 0.51 percent.

Elsewhere in Asia, Japan’s Nikkei fell 0.75 percent, while Korea’s Kospi rose 0.35 percent. Bourses in China were closed for Lunar New Year break.

On Wall Street, Dow Jones Industrial Average ended 0.08 percent lower on Wednesday. The rupee, meanwhile, depreciated 10 paise against US dollar to 71.66. The benchmark Brent crude futures slipped 0.27 percent to USD 62.52 per barrel.

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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Rupee extends slide, down 7 paise to 71.23 vs USD

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Mumbai  The rupee slipped by 7 paise to close at 71.23 against the US dollar on Friday, pressured by heavy foreign capital outflows and firming oil prices.

This is the third straight session of loss for the domestic currency, during which it has depreciated by 53 paise.

On a weekly basis, the rupee registered a loss of 8 paise.

At the Interbank Foreign Exchange (forex) market, the rupee opened lower at 71.22 and fell further to touch the day’s low of 71.44.

The local unit covered some lost ground, before finally ending at 71.23 per dollar, down by 7 paise against its previous close.

On Thursday, the rupee had tumbled 36 paise to close at 71.16 per US dollar.

Forex traders said heavy selling in domestic equities coupled with foreign capital outflows affected the movement of the rupee.

Foreign portfolio investors (FPIs) sold shares worth a net Rs 966.43 crore, while domestic institutional investors (DIIs) bought equities to the tune of Rs 853.25 crore Friday, provisional data showed.

“India’s rupee and sovereign bonds declined owing to the continuous rise in crude prices and sustainable foreign outflow. Domestic equity markets also closed on weak wicket, which also weighed on the rupee,” HDFC Securities’ Head, PCG and Capital Markets Strategy, V K Sharma said.

Sharma further said the rising dollar index also weighed on the local unit.

The dollar index, which gauges the greenback’s strength against a basket of six currencies, rose 0.11 per cent to 97.08.

Meanwhile, brent crude, the global oil benchmark, was trading higher at USD 65.01 per barrel, up by 0.68 per cent.

Benchmark equity indices reeled under selling pressure for the seventh straight session Friday. The 30-share BSE Sensex declined 67.27 points, or 0.19 per cent, to end at 35,808.95. The broader NSE Nifty settled at 10,724.40, down by 21.65 points, or 0.20 per cent.

The Financial Benchmark India Private Ltd (FBIL) set the reference rate for the rupee/dollar at 71.2515 and for rupee/euro at 80.4168. The reference rate for rupee/British pound was fixed at 91.2261 and for rupee/100 Japanese yen at 64.55.

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Taxation

Centre garners Rs 12,000 crore GST from Bengal till December

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Kolkata | The Centre has raked in some Rs 12,000 crore from West Bengal during the current fiscal till December as its share from the Goods and Services Tax from the state and expects to exceed the target of Rs 18,000 crore by March 2019, a revenue official said Friday.

“The CGST share target for the FY19 was Rs 18,000 crore and till December we have already collected Rs 12,000 crore. We hope the target may get exceeded by March,” assistant commissioner of CGST, Pandiyaraj G V said on the sidelines of The Bengal Chamber organised seminar on contentious issues related to GST.

He said the filing of refund which is still semi-online would get streamlined soon.

Tax expert T B Chatterjee said GST is a great step but was introduced without training of officials.

“The GST officials at the local office level, be it from the state or the Centre are incompetent to guide the traders causing disruptions despite being a good tax system,” he said.

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