The News International Team
11:55 am Rate cut? The January Consumer Price Inflation (CPI) inflation, As per the new series, rose to 5.11 percent from 4.28 percent in December which by all measure is in the comfort zone of the Reserve Bank of India. With lower oil prices, normal monsoons and a reformist government at the Centre, hopes of another round of rate cut has started building up once again.
In an interview to CNBC-TV18, Jayesh Mehta, Managing Director & Country Treasurer at Bank of America says he expects three more rate cuts from the RBI going into new fiscal and sees March inflation at 5.5 percent. Mehta talks about rising rate cut expectations in the bond market after the January data. The yield on 10-year paper is likely to be in 7.55-7.7 percent range and can go down to 7.45-7.55 percent range if the RBI slashes rates pre-policy.
11:45 am Gold: Gold held above a five-week low amid a weaker dollar and uncertainty over debt-laden Greece, but the safe-haven metal was set to close down for a third straight week on expectations of higher US interest rates.
Spot gold had climbed 0.4 percent to USD 1,227 an ounce by 0323 GMT. The metal hit a five-week low of USD 1,216.45 in the previous session, before recovering to close up 0.3 percent.
“Support for gold was well pronounced around the 100-day moving average of USD 1,216 and this level should hold over the short term as we await Monday’s renewed Greek debt negotiations,” said MKS Group trader Sam Laughlin, adding that the next level of support was at USD 1,200.
11:30 am Interview: Financial services major, Reliance Capital reported 28 percent rise in its third quarter net profit at Rs 213 crore on robust growth in insurance and mutual fund businesses. The total income for the quarter ended December 2014 rose 11 percent to Rs 2,105 crore.
Sam Ghosh, CEO, Reliance Capital, said the AMC business market conditions have been positive. The company’s current debt stands at Rs 22,000 crore, which it expects to reduce going forward. Japanese life insurance major Nippon Life is likely to raise its stake in Reliance Capital Asset Management to 49 percent from the existing 26 percent. Nippon will be investing Rs 657 crore for an additional 9 percent stake in the first tranche to reach 35 percent and will acquire further 14 percent stake in multiple tranches.
Don’t miss: BHEL falls 6%, analysts cut target: Will its order book improve?
The market is still holding on its gains the Sensex is up 82.59 points at 28887.69 and the Nifty is up 35.15 points at 8746.70. About 1324 shares have advanced, 948 shares declined, and 182 shares are unchanged.
SBI, Sun Pharma, TCS, Wipro and Hero Motocorp are top gainers in the Sensex. Among the losers are BHEL, GAIL, ONGC, Tata Motors and HDFC.
Bonds rise to more than one week highs reacting to the January CPI data on a new base that was released last evening and the rupee gains for the first time in five sessions.
Most Asian markets post gains today taking positive cues from the US markets overnight. Brent crude holds above 59 dollar per barrel, up almost 2 percent this week so far. US crude futures were up 55 cents at USD 51.76, following similar swings earlier in the week.
Preliminary quarterly gross domestic product (GDP) figures for Germany and the Eurozone are due to Friday and could support prices if up slightly.
Amid this week’s ups and downs, oil volatility reached its highest level since the financial crisis, jolting traders who had been adjusting to a period of predictable declines following a near 60-percent crude crash between June and January.