The market may extend recent gains on firm Asian stocks. Trading of Nifty futures on the Singapore stock exchange indicates that the CNX Nifty could gain 9.50 points at the opening bell.
Political worries may weigh on the domestic bourses after the DMK on Saturday, 9 March 2013, warned the UPA government that it would not remain a mute spectator if the Centre continued to toe a soft line on the Sri Lanka issue. DMK chief M Karunanidhi said it was worrisome that the UPA government and the Congress were speaking in different voices. The issue in focus is whether India should vote against Sri Lanka on a US-sponsored resolution before the UN Human Rights Commission on the alleged war crimes against the Tamil Tiger rebels in 2009. DMK-backed Tamil Eazham Supporters' Organisation (TESO) has called for a general strike in Tamil Nadu on 12 March 2013 to mount pressure on the Centre to support US-sponsored resolution against Sri Lanka at the UN Human Rights Council.
Mahindra & Mahindra (M&M) after trading hours on Friday, 8 March 2013, said that it would carry out replacement of certain parts for a select batch of its XUV500 model. This is in keeping with its customer centric approach as well as in compliance with the recently announced voluntary code on vehicle recall, M&M said. The company said it will carry out preventive replacement of some parts in a select batch of XUV500s manufactured during 2011 and 2012. The replacement of three parts, including the fluid hose, front power window units as well as the left wiper blade cover, would be carried out with immediate effect, M&M added. This replacement would be free of cost for XUV500 customers who would be individually contacted by the company, M&M said.
The World Bank has reportedly suspended L&T from bidding for World Bank contracts for six months after it found evidence that an employee of the company had forged documents to win a supply deal five years ago. The World Bank's anti-graft investigators found that L&T had failed to prevent the employee from falsifying documents to help secure a contract to supply ultrasound scanners for a health project funded by the multilateral lender in Tamil Nadu in 2008. The World Bank has barred L&T from bidding for World Bank contracts between 7 March 2013 and 6 September 2013.
Rashtriya Chemicals & Fertilizers (RCF) will be in focus after the finance ministry after trading hours on Friday, 8 March 2013, said the Offer for Sale (OFS) for divestment of Government of India's (GoI) 12.5% stake in RCF was subscribed over 1.3 times on Friday, 8 March 2013. The GoI will receive approximately Rs 310 crore from the sale proceeds. The issue was subscribed by all categories of investors including retail investors, the finance ministry said. After the successful completion of the divestment, the GoI's stake in RCF has declined to 80% from earlier 92.5%.
Aviation stocks will be in focus after the Cabinet Committee on Security (CCS) on Friday, 8 March 2013, cleared Flexible Use of Airspace (FUA) by civil and military users. The primary objective of FUA is to enhance airspace capacity, minimize delays, fuel conservation, emission reduction and ultimate benefits to travelling public, the Ministry of Civil Aviation said in a statement. Implementation of FUA through efficient civilian military co-ordination is an essential requirement to foster the traffic growth with ultimate benefit to the nation's economy. FUA permits both military and civil user to efficiently and effectively utilize the available airspace on sharing basis to gain optimum usage, thereby enhancing its capacity, which results into efficient operations. In this model a coordinated procedure between the civil and the military and vice versa, as per need and on a real time basis if it is not being used by the user assigned with the responsibility for its control.
With the implementation of FUA, there will be a fuel saving of 20,29,380 kg per annum and reduction of carbon dioxide emission by 63,93,600 kg per annum by direct routing between seven city pairs of Delhi-Mumbai, Delhi-Kolkata, Delhi-Chennai, Delhi-Hyderabad, Delhi-Begaluru, Kolkata-Chennai and Chennai-Mumbai for which the information is available, the Ministry of Civil Aviation said.
Shares of PSU OMCs and auto stocks will be in focus after the Minister of Petroleum & Natural Gas Dr. M. Veerappa Moily informed the Lok Sabha in a written reply on Friday, 8 March 2013, that out of the total projected under recovery of Rs 163969 crore (as per the Refinery Gate Price effective 1 March 2013) of the Public Sector Oil Marketing Companies (PSU OMCs) on sale of sensitive petroleum products during 2012-13, under recovery on sale of diesel accounts for around 57%. In order to reduce under-recovery of the PSU OMCs on sale of diesel, the government decided in January 2013 to authorize the PSU OMCs to sell diesel to all consumers taking bulk supplies directly from the installations of the PSU OMCs at the non-subsidized market determined price. OMCs have implemented the decision with effect from 18 January 2013, Dr. Moily said. The primary objective behind the pricing reforms undertaken by the government is the growing imperative for fiscal consolidation, the need for reducing the subsidy burden on petroleum products so as to allocate more funds to social sector schemes for the common man and for ensuring country's energy security in the long term, Dr. Moily said.
Dr. Moily also emphasized that the oil ministry has advised PSU OMCs to take sufficient safeguards and all necessary measures to avoid diversion of subsidized diesel from their retail outlets. Replying to another question, the oil minister informed that in order to insulate the common man from the impact of rise in oil prices in the international market and in view of the domestic inflationary conditions, the government continues to modulate the retail selling price (RSP) of diesel (partially), PDS Kerosene and Subsidized Domestic LPG, resulting in incidence of under-recoveries to the PSU OMCs.
Telecom stocks will be in focus after the Ministry of Communications & Information Technology on Friday, 8 March 2013, said that tariff for mobile services has been showing continuous downward trends for the past several years. However, recently some telecom access service providers hiked certain components of mobile tariff. In many cases the hike is in the nature of withdrawal of concessions, reduction of free minutes and/or reduced validity in Special Tariff Vouchers. The hikes, however, have not substantially altered the average outgo per outgoing minute, Mr. Milind Deora, Minister of State for Communications & Information Technology said in a written reply to a question in Rajya Sabha.
As per the current tariff framework, tariff for mobile services is under forbearance except for national roaming where ceiling tariff has been specified. Mobile operators have the flexibility to offer different tariffs depending on the market conditions and other commercial considerations.
Pantaloon Retail (India) (PRIL) after trading hours on Friday, 8 March 2013, said that the company has entered into Share Purchase Agreement (SPA) with Industrial Investment Trust (IITL) to sell its part holding in Future General India Life insurance Company (FGILICL), representing 22.5% of the equity share capital of FGILICL. IITL is an investment company duly registered as a non-banking financial company (non deposit taking) with the Reserve Bank of India (RBI). The transaction is subject to the receipt of the necessary approvals from governmental and regulatory authorities, including the CCI, the IRDA and the RBI, PRIL said. Post completion of the transaction, Future Group consisting of PRIL and Sprint Advisory Services shall continue to hold 52% shares in FGILICL with the other shareholders being Participatie Maatschappij Graafschap Holland NV (which is a subsidiary of Assicuranzioni Generali S.P.A) and IITL, PRIL said.
Shares of hospitality firms will be focus after Tourism Minister Mr. K Chiranjeevi on Sunday, 10 March 2013, announced a major initiative to bring in transparency in granting approvals for hotel projects and classification status to functioning hotels. The hotel promoters and owners seek voluntary approval from the Ministry of Tourism for their projects and classification from one Star to Five Star Deluxe by submitting applications. These requests are processed for a final decision within 90 days from the receipt of complete applications. At present, the applicants remain unaware of the status of their applications till the final decision is conveyed to them. With the new move, all information relating to such applications indicating the latest status will be put on the website of the Ministry of Tourism www.tourism.gov.in. This measure will bring in more transparency, make officials more accountable in working and enable the applicants to access information and check status of their applications sitting at their own places, the tourism ministry said in a statement. The endeavour of the Ministry will remain to give a final decision on all applications complete in all respects, it said. The new system will be introduced from 1 April 2013.
Key benchmark indices surged on Friday, 8 March 2013, as upbeat Chinese exports data for February 2013 suggested increasing demand for Chinese goods and a rebound in the global economy. The S&P BSE Sensex jumped 269.69 points or 1.39% to settle at 19,683.23 on that day, its highest closing level since 4 February 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 1283.58 crore on Friday, 8 March 2013, as per provisional data from the stock exchanges.
The Securities and Exchange Board of India (Sebi) on Friday, 8 March 2013, approved the SEBI (Issue and Listing of Non-Convertible Redeemable Preference Shares) Regulations, 2013 thereby providing a comprehensive regulatory framework for issuance and listing of non-convertible redeemable preference shares. The proposed regulations provide framework for public issuance of non-convertible redeemable preference shares and also listing of privately placed redeemable preference shares, Sebi said in a statement. Considering the risks involved in the instrument, certain requirements like the minimum tenure of the instruments of three years and minimum rating of "AA-" or equivalent etc. have been specified in case of public issuances, Sebi said. For listing of privately placed non-convertible redeemable preference shares, minimum application size for each investor is fixed at Rs 10 lakh.
As per Basel III norms, banks can issue non-equity instruments such as Perpetual Non-Cumulative Preference Shares and Innovative Perpetual Debt Instruments, which are in compliance with the specified criteria for inclusion in Additional Tier I Capital. The proposed regulations shall, mutatis mutandis, be applicable to these instruments issued by banks, subject to compliance with the provisions of Companies Act, 1956 or/and any other applicable laws and such other conditions that may be specified by SEBI and subject to making adequate disclosures and relevant risk factors in the offer document, Sebi said.
The Sebi board on Friday, 8 March 2013, also announced simplification and rationalization of registration requirements for brokers. With a view to simplifying and rationalizing the registration requirement, the Sebi board has decided to amend the regulations for stock brokers so that there may be one certificate of registration per stock exchange for a stock broker, Sebi said.
Finance minister P. Chidambaram on Friday, 8 March 2013, said that the government has delivered on its promise to narrow its fiscal deficit, throwing the ball back into the central bank's court which has often shown reluctance to cut interest rates. On fiscal consolidation, the government has walked the talk, Chidambaram said. Of course, the Reserve Bank of India (RBI) will take into account not only that, but also overall economic situation and what happens between now and 19 March 2013 and take a call on rate cut, Chidambaram said. RBI undertakes mid-quarter monetary policy review on 19 March 2013. Chidambaram said the government's market borrowing plan announced during the budget showed it was following a fiscally prudent path.
Chidambaram said the government's demand to spend a net Rs 40960 crore more this fiscal year had already been accounted for in budget projections and won't affect the 5.2% deficit target for 2012-13. The government on Friday, 8 March 2013, placed in parliament its demand for the extra spending that will mainly be used for providing subsidies on food, fuel and fertilizers.
At a customary post-Budget meeting of the Central Board of the Reserve Bank of India held in New Delhi on Friday, 8 March 2013, the Finance Minister reiterated that the government is committed to the fiscal deficit targets in the Budget. RBI governor Dr. D. Subbarao complimented the finance minister on the efforts towards fiscal consolidation in the Budget, which was formulated in difficult times.
It is expected that the move towards fiscal consolidation will impart confidence in the economy, support domestic and foreign investments and will boost supply side initiatives, Chidambaram said. The Finance Minister stated that 15% investment allowance has been given to give a boost to the manufacturing sector. The Finance Minister said that the Budget also focussed on infrastructure investment to restart the growth engine and that it has addressed divergent constraints in this regard.
To protect savings from inflation, especially those of the poor and middle classes, the Budget has announced various measures including the introduction of inflation indexed bonds, Chidambaram said. He hoped that these measures would also incentivise the household sector to save in financial instruments rather than purchase gold.
Separately, Subbarao said at conference of bankers on Friday, 8 March 2013, that the RBI doesn't accept high inflation as normal and believes that stable prices are critical for sustained economic growth. Neither theory nor empirical evidence presents a credible case for acquiescing in a new normal for inflation in India, Subbarao said. The RBI governor said he was responding to criticism that the central bank should accept a higher level of inflation as normal and adopt a looser monetary policy stance.
The Reserve Bank of India (RBI) undertakes mid-quarter review of Monetary Policy 2012-13 on 19 March 2013. The central bank on 29 January 2013 signaled after a monetary policy review that there is less room for aggressive policy rate cuts amid any negative surprise emanating from inflation and the twin deficits viz. the current account deficit and the fiscal deficit.
Prime Minister Dr. Manmohan Singh on Friday, 8 March 2013, said in Rajya Sabha that India's economy needs a growth rate of 8 to 9 per cent to get rid of chronic poverty and large scale unemployment of youth. This would require a rapid pace of industrialization, Dr. Singh said. He said that India needs economic reforms to realise its full developmental potential.
Data on advance tax payment for the final installment of the current fiscal year which is 15 March 2013, could provide cues on the likely Q4 March 2013 corporate earnings.
Reduction of promoter stake to meet the Securities & Exchange Board of India (Sebi) mandated minimum public shareholding of 25% for private companies and 10% for state-run firms will result in supply of equity in the market over the next few months. As per the Sebi mandated minimum public shareholding rule, private-sector companies must cut founders' stake to adhere to the rules by 13 June 2013, while the deadline for state-run firms is 13 August 2013. PSU divestment will also add to share sale glut in FY 2014. The government has set a target of Rs 40000 crore from divestment of government stake in state-run firms and Rs 14000 crore from divestment of stake in non-government companies for FY 2014.
The Central Statistics Office (CSO) will unveil data on industrial production for January 2013 and also data on the combined consumer price index for rural and urban India for February 2013 tomorrow, 12 March 2013. The CSO will unveil data on inflation based on the wholesale price index for February 2013 on 14 March 2013.
The Budget Session of the Parliament which began on 21 February 2013 will conclude on 10 May 2013. In order to enable the Standing Committees to consider the Demands for Grants of Ministries/Departments and prepare their Reports, the two Houses will adjourn for recess on 22 March 2013 to meet again on 22 April 2013.
The government has lined up a number of key bills for consideration and passing during the ongoing Budget session of the parliament, which include The Forward Contracts (Regulation) Amendment Bill, 2010, The Pension Fund Regulator and Development Authority Bill, 2011, The Land Acquisition, Rehabilitation and Resettlement Bill, 2011, The National Food Security Bill, 2011 and The Insurance Laws (Amendment) Bill, 2008.
Asian stocks rose on Monday, 11 March 2013, as US jobs data beat estimates and Japanese exporters gained on the yen's drop to a 3-1/2-year low against the dollar. Key benchmark indices in China, Hong Kong, Indonesia, Japan and Taiwan rose by 0.01% to 0.92%. Key benchmark indices in Singapore and South Korea fell by 0.05% to 0.09%.
China's industrial production and retail sales rose less than forecast in the first two months of the Calendar year 2013, evidence of a moderating economic rebound that may slow the fastest consumer-price gains in 10 months. Factory output increased 9.9% from a year earlier, the National Bureau of Statistics said Saturday. Retail sales jumped 12.3% and fixed-asset investment excluding rural households rose 20.7%, the Beijing-based agency said on its website. Consumer prices rose a more-than-estimated 3.2% in February.
Japan's machinery orders plunged 13% in January, the biggest decline in eight months, signaling limits on corporate investment as Prime Minister Shinzo Abe tries to drive an economic revival.
The Dow Jones Industrial Average hit yet another record closing high on Friday, 8 March 2013, as the nonfarms payrolls report for February 2013 surpassed even the most optimistic forecasts. Hiring in the United States jumped in February with non-farm payrolls adding 236,000 last month. The unemployment rate fell to 7.7 percent, the lowest since December 2008.
In January, US wholesale inventories increased 1.2% to $504.4 billion -- the fastest pace of growth since December 2011. The strong January reading followed a revised 0.1% rise in December 2012.
The Federal Open Market Committee (FOMC) holds a two-day meeting on the interest rates in the United States on 19 and 20 March 2013.
Ratings agency Fitch added to Italy's mounting problems on Friday by cutting its credit rating due to the political uncertainty after recent national election, deep recession and rising debt. Fitch lowered Italy's sovereign rating by one notch to BBB-plus, with a negative outlook, raising the risk its next ratings change will be a further downgrade. The election produced a hung parliament, with a centre-left coalition winning the lower house but falling short of control of the Senate, which has equal legislative powers.
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