The News International Team
02:50 pm Rate cut? Indian banks would prefer to defer any decision on lending rates until after the RBI holds its monetary policy review on April 7, Bank of India Chairman VR Iyer told reporters on Wednesday.
“Banks would prefer to wait for April policy before taking a decision on interest rates,” said Iyer on the sidelines of a meeting between bankers and government officials.
“There is a possibility of 10-20 bps after the (April) policy,” she added.
Bank of India’s is India’s third-largest lender by assets. The Reserve Bank of India has cut its policy repo rate by 50 basis points since January, but only a few banks have lowered their base lending rates.
02:25pm MTNL, HMT under pressure: Five public sector undertakings (PSUs) will be closed down by the government, which has included some of the best known state-run enterprises like Air India, MTNL and Hindustan Shipyard, in the list of 65 sick PSUs, Lok Sabha was informed on Tuesday.
The five state-run organisations to be closed down include three HMT units whose brand of watches and tractors once ruled the market, Heavy Industries Minister Anant Geete said during Question Hour, adding that their employees were being offered a “very good” VRS package.
However, he did not name the other PSUs which are slated to be closed down.
Air India and MTNL, once market leaders in aviation and mobile telephony sectors respectively, were declared sick as per the criteria for a PSU to be declared as such, after they incurred losses worth 50 percent or more of their average net worth during four preceding years.
The Minister said there were 65 units in the list of sick PSUs as of March 31 last year.
The reasons for their sickness vary from enterprise to enterprise and included obsolete plants and machinery, heavy interest burden, resource crunch, surplus manpower and shortage of working capital, he said.
Air India accumulated losses of Rs 5388 crore, Rs 5490 crore and Rs 7559 crore in years 2013-14, 2012-13 and 2011-12 respectively, according to the figures tabled in the House. MTNL showed profit of Rs 7820 crore in 13-14 but had incurred losses of Rs 5321 cr and Rs 4109 cr in the previous years.
Hindustan Shipyard Limited posted losses of Rs 859 crore, Rs 551 crore and Rs 462 crore in the three years.
02:00pm Market Check
The market continued to be volatile in afternoon trade while the broader markets underperformed benchmarks. Metals and auto stocks dragged while FMCG, HDFC twins and telecom stocks gained.
The Sensex rose 94.36 points to 28804.23 and the Nifty advanced 33 points to 8745.05 whereas the BSE Midcap and Smallcap indices marginally declined.
About 1120 shares have advanced, 1566 shares declined, and 190 shares are unchanged on the Bombay Stock Exchange.
S Naren of ICICI Prudential AMC does not see Fed raising interest rates in the upcoming policy meet and is bullish on the market in the long term. He bets big on infra and banking stocks.
The rupee recovered marginally after hitting a fresh 2-month low following a steep rise in the dollar. Barclays expects the rupee to gradually decline to 64.50 a dollar by year-end.
Hindalco extended losses to 7 percent after a special court summoned Kumar Mangalam Birla along with former PM Manmohan Singh & former coal secretary PC Parakh in the coal allocation scam case. Hindalco in a media statement reiterated that none of their officials used unlawful means to get coal blocks.
European markets rallied 0.5-1 percent, dismissing Fed rate hike jitters. ECB chief, Mario Draghi says financial stability risks are contained and expects the economic recovery to strengthen soon. He says real GDP expectations for the eurozone are revised upwards for 2015 & 2016.