The News International Team
9:50 am Result poll: Top private sector lender ICICI Bank is expected to report a 15 percent growth each (year-on-year) in profit after tax and net interest income in July-September quarter, according to the average of estimates of analysts polled by CNBC-TV18. Profit may increase to Rs 2,713 crore from Rs 2,352 crore and net interest income is seen rising to Rs 4,647 crore from Rs 4,043 crore during the same period. Loan growth is likely to moderate or similar to Q1FY15.
Analysts expect a 13 percent growth in credit on yearly basis led by retail that has picked up over last few quarter. In Q1FY15, credit growth was up 15 percent with retail up 26 percent Y-o-Y while corporate loan growth was 8 percent. Net interest margin is expected to be at 3.4 percent in Q2FY15, flat compared to previous quarter and up 10 basis points compared to same quarter last year.
9:30 am Cap infusion? The fiscal is likely to face pressure as demands for additional funds are already knocking at the government’s door. CNBC-TV18 has learnt that the finance ministry is likely to seek Parliament’s nod for additional spending of Rs 10,000-11,000cr for capital infusion into public sector banks in the current fiscal. The government so far has budgeted Rs 11,200cr for capital infusion into public sector banks in FY15, but this may not be sufficient to meet their capital requirements.
Hence, there could be a need for supplementary demand for grants. In the meanwhile, finance ministry is likely to seek the Cabinet’s nod to lower its stake to 52 percent in public sector banks, only towards the end of November. Significantly, the Cabinet nod will also include further capital infusion over a four-year period into these banks. Simultaneously, the revenue department has also raised a demand of Rs 16,000 cr as first tranche payment for CST arrears to state governments.
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The Nifty has hit 8100 on October F&O expiry day. The 50-share index is up 10.45 points at 8100.90. The Sensex is up 40.25 points at 27138.42. About 581 shares have advanced, 257 shares declined, and 34 shares are unchanged.
Dr Reddy’s Labs, Infosys, GAIL, HDFC and Wipro are top gainers in the Sensex. Among the losers are BHEL, Tata Motors, Sesa Sterlite, Hindalco and NTPC.Realty stocks are in focus with Sobha Developer, Prestige Estate and DLF as big gainers.
The Indian rupee slipped in early trade. It has opened lower by 16 paise at 61.51 per dollar against previous day close of 61.35.
The dollar index rises after the Federal Reserve ended its monthly bond purchase program and signaled confidence the US economic recovery would remain on track despite signs of a slowdown in many parts of the global economy.
Mohan Shenoi of Kotak Mahindra Bank said, “As expected QE3 and Fed’s bond buying program was ended in the FOMC meet yesterday. Chances of a rate hike in US in June 2015 has increased which led to a dollar rally against major currencies.”
He further added, “The dollar is expected to strengthen against the rupee as well. The range for USD-INR is seen between Rs 61.30-61.70/dollar.”
US stocks closed with slight losses, finishing off their lows of the session, after the Federal Reserve ended its stimulative monthly bond-buying program and expressed confidence in US economic prospects.
Major indexes were volatile following the central bank’s statement, with the S&P 500 down as much as 0.8 percent before pulling back. Material shares were lower throughout the session, a decline in Facebook pressured the Nasdaq, but strength in energy and financial shares helped the market recover.
In a statement after a two-day meeting, the Fed ended its quantitative easing program of bond purchases, as had been expected. At its peak, the program pumped USD 85 billion a month into the financial system. The Fed also dropped a characterization of US labor market slack as “significant” in a show of confidence in the economy’s prospects.
Brent crude prices slipped to USD 86 a barrel after the Fed announced it would end its two-year-old bond-buying stimulus program. Gold prices dropped over a percent following a strong dollar.