1:50 pm FII viiew:
UBS downgraded India’s GDP forecast for FY16 and FY17. Discussing the underlying reasons for the cut, Edward Teather, Senior Economist-ASEAN & India at UBS Investment Bank pointed at longer-than-expected time to reap benefits of low oil price, weak agriculture and poor pick up in manufacture.
He said GDP numbers in the last few quarters depict a slow down despite a collapse in commodity prices making one wonder “where the benefit from low oil prices actually went?” He clarified that benefits from lower oil prices are being used to repair balance sheets and with time it will help in building a solid base.
Teather sees the RBI cutting rates by 0.75 percent in remaining part of the fiscal.
1:30 pm Aviation deal: Aerojet Rocketdyne Holdings Inc submitted a USD 2 cash billion offer to buy United Launch Alliance (ULA), a satellite launch provider jointly held by Lockheed Martin Corp and Boeing Co, sources familiar with the matter said Tuesday, a deal that would further consolidate the space business. Aerojet Rocketdyne board member Warren Lichtenstein, the chairman and chief executive of Steel Partners LLC, approached ULA President Tory Bruno and senior Lockheed and Boeing executives about the bid in early August, the sources said.
1:15 pm Details: The Cabinet approved of the telecom spectrum trading norms, allowing telcos to buy or sell airwaves from each other. The telecom companies will now be able to trade un-utilised spectrum thereby consolidating the sector. The government will also garner additional revenue from the spectrum trading as levies on incomes.
The government also have its nod to the gold monetisation scheme that would allow gold depositors to earn interest on their metal accounts. Once the gold is deposited in metal account, it will start earning interest on the same. The scheme was announced by Finance Minister Arun Jaitley in his Budget 2015-16.
1:05 pm Flash: Cabinet has approves gold monetisation and gold bond schemes.
Don’t miss: Expect India to deliver 15-18% returns in 3-4 yrs, says JPMorgan
The market surges ahead. The Sensex is up 483.16 points or 1.9 percent at 25801.03 and the Nifty is up 150.95 points or 1.9 percent at 7839.20. About 1861 shares have advanced, 582 shares declined, and 83 shares are unchanged.
Vedanta, Hindalco, Tata Steel, NTPC and Tata Motors are top gainers in the Sensex. Telecom stocks like Bharti Airtel, Idea and Reliance Communications are up as the government has approved spectrum trading norms.
At a time when volatility-hit street is hinting at jettisoning equities in favour of fixed income, JP Morgan believes equities will beat all other asset classes in 3-5 years.
JP Morgan Chief India Economist Sajid Chinoy suggest that collapsing commodity will keep emerging market wobbly but is good for global growth on the whole. India specifically will be a beneficiary.
Meanwhile, the government is seeking to resolve pending tax disputes with investors and hopes to resolve “legacy” issues in short order, Finance Minister Arun Jaitley said.
Arun Jaitley was speaking after the finance ministry decided last week not to press claims for a Minimum Alternate Tax (MAT) against foreign portfolio investors. India remains locked in major back-tax disputes with telecoms group Vodafone and Cairn Energy.