Indian stocks will react to the government's decision on Tuesday, 16 July 2013, to relax overseas-investment rules for a number of sectors. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 12.50 points at the opening bell. HDFC Bank unveils Q1 June 2013 results today, 17 July 2013. Asian shares were trading mixed on Wednesday, 17 July 2013.
The government on Tuesday, 16 July 2013, eased overseas-investment rules for a number of sectors. The government has allowed 100% foreign direct investment (FDI) in telecom. FDI in the telecom services sector was increased from 74% to 100%, but all investments above 49% will continue to be routed through the FIPB.
In power exchanges and petroleum refiners, foreign investors won't have to seek government approval for up to 49% ownership, which is also the total cap for these sectors.
In defence, 26% FDI through the FIPB route has been maintained for state-of-the-art technologies. The increase in defence FDI will be on a case-to-case basis and will take place after consent from the Cabinet Committee on Security.
In a boost to the power sector, the government has allowed FDI in power exchanges through the automatic route. This means that no FIPB approval will have to be sought. However, it has retained the cap at 49%.
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FDI cap for private insurers would be raised to 49% but that would need Parliament's approval. The FDI limit for credit information firms was raised from 49% to 74% --all of it may come through the automatic route, against the requirement for clearance from the Foreign Investment Promotion Board (FIPB) at present.
In single-brand retail, though there is no FDI limit at present, the investment has come only after FIPB clearance. This has been eased to allow up to 49 per cent investment through the automatic route.
The tea sector too had some reason to cheer as the condition of divestment to Indian partners has been deleted.
The government didn't take any decisions on increasing FDI caps in multibrand retail and print and electronic media. Commerce Minister Anand Sharma said that that the government will come out with clarifications related to multibrand retail policy soon.
JSW Steel after trading hours on Tuesday, 16 July 2013, said that as a policy the company does not respond to speculative stories and market rumours after media reports said that JSW Steel is in talks to purchase a significant stake in Sandur Manganese and Iron Ores to improve its access to iron ore and cut logistics costs. Earlier, Sandur Manganese during trading hours on Tuesday, 16 July 2013, had denied stake sale reports. Neither Sandur Manganese nor its promoters have appointed any investment bankers to scout for a buyer, Sandur Manganese had said.
Torrent Pharmaceuticals after trading hours on Tuesday, 16 July 2013, said it has fixed 24 July 2013 record date for 1:1 bonus share issue.
UltraTech Cement turns ex-dividend today, 17 July 2013, for dividend of Rs 9 per share for the year ended 31 March 2013 (FY 2013).
Berger Paints India turns ex-dividend today, 17 July 2013, for dividend of Rs 1.80 per share for the year ended 31 March 2013 (FY 2013).
Shriram City Union Finance turns ex-dividend today, 17 July 2013, for final dividend of Rs 6 per share for the year ended 31 March 2013 (FY 2013).
Tata Communications turns ex-dividend today, 17 July 2013, for dividend of Rs 3 per share for the year ended 31 March 2013 (FY 2013).
Key benchmark indices dropped on Wednesday, 17 July 2013, after the Reserve Bank of India (RBI) after trading hours on Monday, 15 July 2013 announced liquidity tightening measures to prevent a sharp depreciation of the rupee against the dollar. The S&P BSE Sensex lost 183.25 points or 0.91% to settle at 19,851.23, its lowest closing level since 11 July 2013.
Foreign institutional investors (FIIs) sold shares worth a net Rs 357.40 crore on Tuesday, 16 July 2013, as per provisional data from the stock exchanges.
Asian shares were trading mixed on Wednesday ahead of congressional testimony from Federal Reserve Chairman Ben Bernanke, due later Wednesday and again on Thursday. Key benchmark indices in Japan, Taiwan and Singapore were down 0.14% to 0.56%. Key benchmark indices in Hong Kong, South Korea and Indonesia were up 0.64% to 0.76%. China's Shanghai Composite was up unchanged.
US stocks fell on Tuesday, with Coca-Cola Co. and Goldman Sachs Group Inc. losing ground after their quarterly results, and as investors considered Kansas City Fed President Esther George's comment that the Federal Reserve should pare its bond purchases sooner rather than later.
Federal Reserve Chairman Ben Bernanke kicks off his two-day testimony on monetary policy in Washington today, 17 July 2013. In comments last week, Bernanke had eased concerns that the Fed would quickly unwind its monetary stimulus.
The minutes of the Fed's June meeting released on 10 July 2013 showed that while several members judged that a reduction in asset purchases would likely soon be warranted, many want to see further improvement in the labor market before reducing the central bank's $85 billion-a-month quantitative easing program. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth. At a press conference following the June 18-19 meeting, Bernanke said the central bank could start reducing its $85 billion in monthly bond purchases later this year if the economy continues to improve in line with its forecasts.
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