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Nifty at 8750, Sensex falls 150 pts; RBI cuts SLR by 50 bps


The News International Team

11:57 am ETF: India plans to raise Rs 5000 crore  by selling additional units of a fund made up of shares in public sector companies, a source involved in the discussions told Reuters, a move which would boost government efforts to trim its deficit.

The previous government had set up the exchange traded fund (ETF) last year as a way of selling shares in 10 state-owned companies. It raised 30 billion rupees in an oversubscribed offering as investors welcomed access to a basket of firms.

The government of Prime Minister Narendra Modi, elected last May, hopes to again tap appetite for a fund that has outperformed the Indian market, already one of Asia’s strongest performers.

11:55 am The Reserve Bank of India (RBI) is on “pause” on interest rates until there is more data on the broader economy and prices, but inter-meeting moves remain “on the table”, governor Raghuram Rajan said at a press conference after the bank’s policy review.

11:50 am Market check: The market has started to slide as the Sensex is down 153.46 points at 28968.8. The Nifty is down 46.90 points at 8750.50. About 1236 shares have advanced, 1209 shares declined, and 251 shares are unchanged.

11:47 am Results: Punjab National Bank (PNB) missed street expectations with the third quarter net profit rising 2.5 percent year-on-year to Rs 774.6 crore. The profit was impacted by elevated provisions and slow growth in net interest income, but was helped by strong other income.

Net interest income remained almost flat at Rs 4,233 crore during October-December quarter compared to Rs 4,221 crore in same quarter last year.

A CNBC-TV18 poll had expected profit of the public sector lender at Rs 930 crore and net interest income at Rs 4,396 crore for the quarter.

11:35 am: HDFC Bank is expected to sell shares worth up to Rs 10000 crore as early as this week, with an offering that will include overseas and domestic stock, sources with direct knowledge of the matter said to Reuters.

India’s largest lender by market capitalisation, which is also listed in New York, last week received government approval for the share sale on the condition that its foreign ownership should not exceed 74 percent.

While HDFC Bank has said it does not have any immediate capital requirement, the share sale will help it build a buffer as credit growth picks up with an expected recovery in the economy.

11:30 am  Bond & rupee: Bonds fell while the rupee trimmed earlier gains as the central bank held benchmark interest rates steady at 7.75 percent after easing monetary policy just three weeks ago.

The 10-year benchmark bond yield gained 4 basis points to 7.68 percent while the rupee trimmed intraday gains to 61.76 per dollar.

11:25 am Earnings poll: FMCG major Marico’s third quarter consolidated profit after tax is seen going up 12.3 percent year-on-year to Rs 152 crore, according to the average of estimates of analysts polled by CNBC-TV18.

Total income is seen rising 24.1 percent to Rs 1,490 crore in the quarter ended December 2014 from Rs 1,201 crore in same quarter last fiscal. Operating profit may jump 14 percent year-on-year to Rs 230 crore but margin may decline 140 basis points to 15.4 percent during October-December quarter.

11:22 am Raghuram Rajan says:  Will be on pause till we get more data on macro economy, prices. Want a real risk-free policy rate of around 1.5-2 percent. Need to see what steps government takes to control veg prices. Domestically, conditions for growth are slowly improving. Looking for developments on disinflationary process, Budget.

11:18 am RBI says: CAD for FY15 likely to be at 1.3 percent of GDP. Real GDP growth may rise to 6.5 percent in FY16. Greater flexibility in pricing of instruments, securities. System level liquidity to come into effect from February 7. Inflation likely to be around 6 percent by January 2016

11:10 am Movers & gainers:  Bank Nifty is flat. SBI, ICICI Bank, IndusInd Bank, Bank of Baroda and YES Bank are top gainers among banking stocks. HDFC twins, Axis Bank and Kotak Mahindra are in red.

11:07 am Market check: The market starts to slide as the Sensex is down 31.34 points  at 29090.93 and the Nifty is down 5.80 points at 8791.60.  About 1240 shares have advanced, 1031 shares declined, and 239 shares are unchanged.

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The market seems to be unmoved as the central bank keeps repo rates unchanged but cuts SLR by 50 basis points to 21.5 percent. The Sensex is up 9.22 points at 29131.49 and the Nifty is up 5.05 points at 8802.45.

About 1275 shares have advanced, 975 shares declined, and 241 shares are unchanged.

A CNBC-TV18 poll of the bankers and economists suggested only 10 percent of the respondents are still looking forward to another rate cut of 25 bps, but the majority believed the rates will remain unchanged this time.

Oil futures continued to firm adding to gains of more than 11 percent in the prior two sessions, but persistent worries over China’s demand outlook capped prices.
Some investors are betting a bottom has formed to the seven-month long rout on the market, with signs that a fall-off in drilling activity into US shale deposits has raised concerns about future production.

OPEC delegates, though, said prices may stay depressed until summer due to weak seasonal demand even as Saudi Arabia’s strategy of curbing the output growth of rival producers shows results.


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