9:55 am China:
Liberalizing China’s interest rates is a key element of financial reform, the country’s central bank said on Monday, adding that cutting borrowing costs and lowering the amount of cash banks must keep as reserves do not equate to quantitative easing.
The comments come after the central bank cut interest rates on Friday for the sixth time in less than a year, and again lowered the reserve requirement ratio (RRR) for banks in a bid to jump start growth in China’s stuttering economy.
Lowering interest rates and cutting RRR are “normal monetary policy” practice, the bank said in a statement published on its website on Monday.
The PBOC cut the one-year benchmark bank lending rate by 25 basis points to 4.35 percent while the one-year benchmark deposit rate was lowered by 25 basis points to 1.50 percent. The RRR was cut by 50 basis points for all banks, taking the ratio to 17.5 percent for the biggest lenders.
9:45 am FII view: Whether it is the European Central Bank (ECB) talking about extending quantitative easing (QE) or extending the size of it or the Chinese central bank lowering interest rates with the aim of infusing stimulus are all signs of growth slowing down, is the word coming in from Arvind Sanger of Geosphere Capital Management. But, on the brighter side, it will ease liquidity pressures, he adds. Viktor Shvets of Macquarie too broadly concurs with Sanger’s view on these being signs of slow growth. He, however, feels there will a contraction in liquidity from hereon. Sanger says, as far as India is concerned, he is buying what he likes, but is being patient on valuations. “Liquidity will be plentiful, but growth will be rare,” he told CNBC-TV18. He is looking for companies with comfortable growth trajectory.
9:30 am Alibaba in soup? Chinese e-commerce giant Alibaba Group Holding Ltd’s second-quarter revenue growth is likely to have slumped to half the year-earlier rate, undermining hopes consumer spending will temper a slowdown in the world’s second-biggest economy.
Beijing is hoping that private consumption will pick up the slack as exports fall and it tries to rebalance the economy – now heading for its slowest full-year growth in 25 years – away from a reliance on trade and government spending.
But Alibaba’s second-quarter results due on Tuesday are expected to cloud the increasingly grim outlook for consumer spending, which accounted for 60 percent of China’s economic growth in the first half of 2015.
9:20 am Results: Bharti Airtel’s second quarter earnings beat analysts’ expectations on all parameters Monday with consolidated profit falling 2 percent sequentially to Rs 1,522.7 crore. Revenue increased by 0.8 percent to Rs 23,852 crore in quarter ended September 2015 compared to Rs 23,670.9 crore in preceding quarter.
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The market kickstarted on a fim note but soon turned flat. The Sensex is up 147.33 points or 0.5 percent at 27618.14. The Nifty is up 20.50 points at 8315.95. About 462 shares have advanced, 149 shares declined, and 37 shares are unchanged.
Vedanta, Hindalco, Tata Motors, Bajaj Auto and Dr Reddy’s Labs are top gainers while Lupin, HDFC, GAIL, ONGC and M&M are among losers in the Sensex. Bharti Airtel is up 1 percent after it announced better-than-expected Q2 results.
The Indian rupee opened lower by 17 paise at 65 per dollar against previous close of 64.83. Agam Gupta of Standard Chartered said, “The ‘risk on’ sentiment from equities will translate into some USD supply from FPIs. Exporters will also be looking to hedge their forward receivables on upticks.”
Euro slipped, hitting a low against the dollar not seen since early august after ECB Chief Mario Draghi signalled further monetary easing could be on deck for the euro zone.
Asia markets opened in green in early morning trade as investors welcome the Chinese Central Bank’s (PBoC) interest rate cut for the sixth time in the past 11 months.
Japan’s Nikkei rallied 1 percent to reclaim the 19,000 mark for the first time in more than two months
The US markets ended with solid gains on Friday with the Nasdaq closing at a two-month high post China’s rate cuts. Investors also digested a new batch of earnings, including reports from tech giants alphabet, Amazon and Microsoft, all of which beat analysts’ expectations.
Brent crude is trading around USD 48 per barrel while Nymex declined to USD 44 mark.
Precious metal, gold, meanwhile, was trading around USD 1160 an ounce.