The News International Team
1:55 pm Who is a wilful defaultor? Widening the ambit of ‘wilful defualter’, the Reserve Bank of India has issued clarification wherein it has allowed banks to include key executives in the management as defaulters too. The central bank also wants banks to name non-group entities as ‘wilful defaulters’ if they have given guarantees and don’t pay up when the original party defaults.
Discussing the issue, D Narang, Executive Director of United Bank of India, which declared Kingfisher Airlines and its promoter Vijay Mallya wilful defaulter, said the bank has already served notice to UB Holdings, which is the guarantor for KFA.
“They have submitted a reply to us and we have been examining as there are certain legal issues that need to be sorted before we go against UB Holdings,” he said.
Narang said a company or guarantor have every right to challenge the ‘wilful defaulter’ status if bestowed upon.
1:30 pm Macro data: Indian factory output probably slowed further in July as core industries like mining and cement manufacturing were hampered by the monsoon rains, but more encouragingly inflation was seen easing in August, a Reuters poll found. Industrial production was seen growing 1.8 percent from a year earlier in July, slower than June’s 3.4 percent increase, according to the median consensus in a poll of 31 economists.
“This is the time when mining remains weak because of monsoons, so it will not deliver a good number. Manufacturing is also expected to lag,” said Upasna Bhardwaj, economist at ING Vysya Bank.
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The Nifty is in the red for the second day defending the 8100 mark as FMCG and banking stocks show weakness. The 50-share index is down 48.75 points at 8104.20 while the Sensex is down 171.53 points at 27093.79. About 1699 shares have advanced, 1063 shares declined, and 105 shares are unchanged.
Infosys, ITC, SBI, Reliance and M&M are among top laggards in the Sensex. Among the gainers are Tata Power, Bajaj Auto, ICICI Bank, Sesa Sterlite and Bharti Airtel.
Shipping stocks like Mercator, SCI and ABG Shipyard gain 7-12 percent today. In a bid to promote domestic shipbuilding industry, the government is mulling a financial assistance scheme, which could include a shipbuilding fund to provide soft loans to players.
The rupee weakened to its lowest in nearly a month tracking falls in emerging markets due to worries the US Federal Reserve would raise interest rates earlier than expected, although exporters’ dollar sales capped broader falls.
Emerging markets tracked falls in Wall Street and a rise in US bond yields after a San Francisco Federal Reserve Bank paper released on Monday showed investors underestimated the speed at which the Fed might raise interest rates.
That raised concerns the US central bank could signal an earlier-than-expected rate hike at its next policy meeting on Sept. 16-17.