Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 7 points at the opening bell. Asian stocks were mostly lower on Tuesday, 19 February 2013, as a holiday in the US left investors without the usual trading cues, with Japanese shares moving lower after ending sharply higher in the previous session.
GAIL (India) after trading hours on Monday, 18 February 2013, said it has commenced supply of gas to the city of Bengaluru. A Gas Transmission Agreement was also signed between GAIL (India) and Karnataka Power Corporation (KPCL) in the presence of Minister for Petroleum and Natural Gas Dr. M Veerappa Moily, GAIL (India) said. Dr. Moily also laid the foundation stone to mark the beginning of the construction of gas pipeline to Chikballapur, GAIL (India) said.
The gas supply to Bengaluru has been commenced from GAIL (India)'s Dabhol-Bengaluru 1,000 km pipeline constructed at an investment of Rs 4500 crore with a design capacity of 16 MMSCMD of natural gas, GAIL (India) said in a statement. This initiative of GAIL (India) will bring natural gas to the people of Karnataka for the first time, GAIL (India) said. The pipeline passes through Belgaum, Dharwad, Gadag, Bellary, Devanagere, Chitradurga, Tumkur, Ramanagaram, Bengaluru Rural and Bengaluru Urban. It traverses through 18 National Highways, 382 other Road crossings, 20 Railway crossings, 83 Cased crossings and 276 Watr Body crossings including Asia's largest river crossing in rocky terrain at Ghatprabha. The project involved laying of 73 km of 18 inch diameter pipeline in the city of Bengaluru. With only 25 km stretch passing through Reserve Forest Area, it goes through 11 major river crossings including Zuari, Shastri, Ghad and Ghatprabha, GAIL (India) said.
The Gas Transmission Agreement between GAIL (India) and KPCL provides for supply of 2.1 MMSCMD of natural gas from GAIL (India)'s Dabhol-Bengaluru pipeline to feed KPCL's power plant for 700 MW of power generation at Bidadi. The supplies shall begin within the next 30 months, GAIL (India) said.
Key benchmark indices eked out small gains on Monday, 18 February 2013, as index heavyweight Reliance Industries (RIL) edged higher in volatile trade. The BSE Sensex advanced 32.93 points or 0.17% to settle at 19,501.08, its highest closing level since 13 February 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 142.91 crore on Monday, 18 February 2013, as per provisional data from the stock exchanges.
PSU disinvestment and 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. The government has set target of Rs 30000 crore from PSU divestment for the fiscal year ending 31 March 2013. Meanwhile, 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.
The Reserve Bank of India governor D. Subbarao reiterated over the weekend in Moscow that he sees limited room for further interest rate cuts.
The annual rate of inflation, based on monthly wholesale price index (WPI), decelerated to 6.62% in January 2013 from 7.18% in December 2012 and 7.24% in November 2012, data released by the government on 14 February 2013 showed. This is the first time since November 2009 that the inflation rate has dropped below 7%. The non-food manufacturing inflation or core inflation decelerated to 4.08% in January 2013 from 4.19% in December 2012.
Inflation based on the combined consumer price index for urban and rural India edged up to 10.79% in January 2013, from 10.56% in December 2012, another data released by the CSO on 12 February 2013 showed. Within the consumer price index, inflation in the category 'food and beverages' stood at 13.36% in January 2013.
The Reserve Bank of India (RBI) on 29 January 2013 announced a 25 basis points reduction in its key policy rate viz. the repo rate to 7.75% from 8% after a monetary policy review. The central bank also announced a reduction of 25 basis points in the cash reserve ratio (CRR) to 4% from 4.25% effective the fortnight beginning 9 February 2013.
With headline inflation likely to have peaked and non-food manufactured products inflation declining steadily over the last few months, there is an increasing likelihood of inflation remaining range-bound around current levels going into 2013-14, the Reserve Bank of India (RBI) said. This provides space, albeit limited, for monetary policy to give greater emphasis to growth risks, the central bank said in its policy guidance. This policy guidance will, however, be conditioned by the evolving growth-inflation dynamic and the management of risks from twin deficits viz. the current account deficit and fiscal deficit, RBI said. The next mid-quarter review of Monetary Policy for 2012-13 will be announced on 19 March 2013.
The central bank on 29 January 2013 also signaled that there is less room for aggressive policy rate cuts amid any negative surprise emanating from inflation and the twin deficits.
Investors' focus is now on Union Budget 2013-14 to be presented to the Parliament on 28 February 2013. Investors will focus on changes, if any, in excise duty and service tax in the Budget. It remains to be seen if the government announces measures to revive weak investment growth. It also remains to be seen if the government announces more economic reforms. A key figure to watch out is the divestment target for 2013-14. It remains to be seen if the Budget contains a clear roadmap for the implementation of Goods and Services Tax (GST). There has been some debate over taxing the super-rich. It remains to be seen if the Budget provides a clear roadmap to cap the government's subsidy bill. It also remains to be seen if there are measures to increase agriculture production to rein in food inflation.
India will have to pursue domestic policy initiatives to help achieve any near-term improvement in its current account deficit as global growth may only be slightly better in 2013 and commodity prices are unlikely to ease sharply, Moody's Investor Service said on 14 February 2013. While recent government moves to cut subsidies and woo foreign investment would help narrow the external deficit, these policies need to be persisted for any significant success, Moody's said.
Moody's said it would be watching the assumptions underlying India's budget deficit target for the new fiscal year that begins on April 1, as well as the expenditure and revenue policies announced in order to meet that goal. "Policies that trigger private investment and curb inflationary pressures in the near term are more likely to help narrow the account deficit," it said. "Deficit targets based on an assumption of accelerating growth rates are more likely to be missed, leading to higher government borrowing requirements and likely inflationary pressure, both of which have negative implications.
If funding for the current account deficit shifted away from external debt and towards foreign direct investment, the sovereign credit profile would benefit, Moody's said. Moody's has a Baa3 rating for India with a stable outlook.
The Budget Session of the Parliament begins on Thursday, 21 February 2013, and is likely to 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 intends to present the revised National Food Security Bill in the Parliament during Budget Session for consideration and passage, so that the people are ensured of its benefits at the earliest, the Ministry of Consumer Affairs, Food & Public Distribution said in a statement on 13 February 2013. The Bill, to provide food security for all in a rights based manner, is being finalised in the light of recommendations of Parliamentary Standing Committee, it said.
Economic affairs secretary Arvind Mayaram on 9 February 2013 said that the fiscal deficit for the current financial year ending 31 March 2013 will not exceed the projected 5.3% of the country's gross domestic product. He said that the government will stick to its fiscal deficit aim and its borrowing plan. Finance Minister, P. Chidambaram on 9 February 2013 said he it confident of a 5.5% growth rate in the economy for this year. In the second half of this fiscal year, there are indications of green shoots in the economy, he said, adding it is imperative for the country to achieve a growth rate of 8%.
The Central Statistics Office (CSO) on 7 February 2013 said that the growth in India's GDP during 2012-13 is estimated at 5%, the lowest in a decade and significantly lower than the growth rate of 6.2% in 2011-12. The dimmer forecast is due to continued weakness in manufacturing and farm output growth, data from the ministry of statistics and implementation showed.
The Ministry of Finance on 8 February 2013 said that since the GDP growth is turning around, it is likely that the CSO's advance estimate of 5% GDP growth for 2012-13 will be revised upwards and the final estimate will be closer to the finance ministry's estimate of a growth rate of 5.5% or slightly more. Early sign of an upturn in the economy are evident in the year on year growth in Union Excise Duty of 16% and of 33% increase in service tax in April-December 2012.
The Purchasing Manager's Index (manufacturing) has started moving up since October 2012. This has been accompanied by a seasonally adjusted stabilization of the index of industrial production since October 2012, the finance ministry said in a statement. The finance ministry also said that lower interest rates will help support growth.
The Ministry of Finance in its initial reaction to the CSO's advance estimate had said on 7 February 2018 that the finance ministry is keeping a watch on the situation adding that it has taken and will continue to take appropriate measures to revive growth.
The Ministry of Finance on 14 January 2013 said that the government has decided to defer the implementation of the General Anti Avoidance Rules or GAAR by two years until 1 April 2016 and that it has accepted major recommendations of the Parthasarathi Shome Committee on GAAR with some modifications. The provisions of GAAR will apply to only those foreign institutional investors (FIIs) who seek to take advantage of the double taxation avoidance treaties India has with different countries. The rules won't apply to the non-resident individual investors who put money with the FIIs. Any investments made before 30 August 2010 won't be examined under GAAR. Finance Minister Mr. Chidambaram said that the GAAR provisions strike a balance between the government's need for revenue generation and investors' interests.
Commerce, Industry and Textiles Minister Mr. Anand Sharma on 9 January 2013 said that the Joint Working Group on Indo-Mauritius Double Taxation Avoidance Convention (DTAC), which is scheduled to meet in February 2013, would be able to take the deliberations forward.
Finance Minister Mr. P. Chidambaram on 31 January 2013 reiterated the commitment of the government for observing the path of fiscal consolidation and imposition of fiscal targets and policies that will make necessary fiscal correction needed for the economy and take the economy back to the path of higher growth. Chidambaram highlighted the efforts being made to turn the economy around and create a more investor-friendly climate. Chidambaram said that to encourage foreign flows into India and offer reassurance on the positive investment climate, he had recently held discussions with a cross section of international investors at Singapore, Hongkong, London and Frankfurt last month and hoped to get positive results. He was speaking at the Sixth Meeting of the Financial Stability and Development Council.
The finance ministry in October 2012 announced a five-year plan to cut fiscal deficit. The deficit target is 5.3% of gross domestic product for the current fiscal year through March, 4.8% in the next fiscal year, and 3% by the end of the year through March 2017.
The government on 17 January 2013 allowed PSU OMCs to increase diesel prices by a small margin from time to time, a decision aimed at reducing the government's oil subsidy burden and fiscal deficit and improving the government's finances. Oil Minister Veerappa Moily said after a meeting of the Union Cabinet that there was an earlier proposal to deregulate diesel prices, and in pursuance of that, oil companies have been authorised to make price corrections from time to time. Finance Minister P. Chidambaram on 17 January 2013 said the government will factor in the reduction in subsidies and its impact on the deficit once the retailers say how much they intend to increase prices by.
The government on 17 January 2013 also said it has increased the limit of subsidized cooking-gas cylinders to nine per year a family from six now. Mr. Moily said that the raising of the cap will cost the government about an additional Rs 10000 crore a year.
RBI said after Third Quarter Review of Monetary Policy 2012-13 on 29 January 2013 that a staggered increase in diesel prices will percolate through to overall costs and inflation. However, these price pressures will dissipate over time, and the consequent reduction entailed in the fiscal deficit will bring about an enduring reduction in inflation and inflation expectations, the central bank said at that time.
Bahujan Samaj Party (BSP) chief Mayawati slammed the UPA government last month for its decision to deregulate diesel prices and said that it would affect prices and hit common man badly. She, however, ruled out the possibility of withdrawing BSP's support to the government, saying she did not want to destabilise it as the general election is not too far. BSP provides outside support to the Congress led UPA government which has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year.
Asian stocks were mostly lower on Tuesday, 19 February 2013, as a holiday in the US left investors without the usual trading cues, with Japanese shares moving lower after ending sharply higher in the previous session. Key benchmark indices in Hong Kong, China, and Indonesia and Japan were down by 0.08% to 0.85%. Key benchmark indices in Singapore, South Korea and Taiwan rose by 0.22% to 0.66%.
The US stock market was closed on Monday, 18 February 2013, for the Presidents Day holiday.
Powered by Capital Market - Live News
