Amid a rebound in global crude oil prices, key equity benchmark indices in India edged lower in what was a volatile trading session. The barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, hit their lowest closing level in almost two weeks. The Sensex retained the psychological 29,000 level at close, after falling below that mark in intraday trade. The market breadth indicating the overall health of the market was negative. The Sensex fell 122.13 points or 0.42% to settle at 29,000.14.
The Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged at 7.75% after a monetary policy review today, 3 February 2015. The central bank announced a reduction in the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points with effect from the fortnight beginning 7 February 2015 in order to create space for banks to expand credit to the productive sectors so as to support investment and growth in the economy.
The central bank said that it has decided to allow foreign portfolio investors reinvestment of coupons in government securities even when the existing limits are fully utilised. Simultaneously, the RBI has decided that henceforth all future investments by foreign portfolio investors (FPIs) within the limit for investment in corporate bonds will be allowed only in paper with a minimum residual maturity of three years. Furthermore, FPIs will not be allowed to invest incrementally in short maturity liquid/money market mutual fund schemes, the RBI said.
Key equity indices edged lower for the third day in a row today, 3 February 2015.
Bank stocks declined across the board after the Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged after a monetary policy review. Private sector banking major Axis Bank reversed direction after scaling a record high in intraday trade. Punjab National Bank slumped after reporting muted growth in Q3 net profit.
Realty stocks declined after the Reserve Bank of India kept its key policy rate viz. the repo rate unchanged after a monetary policy review today, 3 February 2015. Shares of oil exploration and production (E&P) companies advanced as global crude oil prices rose.
Earlier, the Sensex hit 1-1/2-week low and the 50-unit CNX Nifty hit its lowest level in almost two weeks as these two benchmark indices extended intraday losses in early afternoon trade.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 586.48 crore into the secondary equity market yesterday, 2 February 2015, as per data from Central Depository Services.
In the overseas markets, European stocks edged higher amid hopes that Greece's new government would be able to reach a compromise with its international creditors on the terms of the nation's bailout. Asian stocks were mixed. US stocks ended sharply higher yesterday, 2 February 2015, after a late rally driven by hopes for a Greek debt deal and as energy shares bounced with oil prices.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade.
Brent crude oil futures edged higher on speculation that a sharp decline in US drilling activity will result in supply cuts.
The S&P BSE Sensex fell 122.13 points or 0.42% to settle at 29,000.14, its lowest closing level since 21 January 2015. The index fell 221.86 points at the day's low of 28,900.41 in early afternoon trade. The index jumped 130.79 points at the day's high of 29,253.06 in early trade.
The CNX Nifty fell 40.85 points or 0.46% to settle at 8,756.55, its lowest closing level since 21 January 2015. The index hit a low of 8,726.65 in intraday trade. The index hit a high of 8,837.30 in intraday trade.
The BSE Mid-Cap index declined 30.06 points or 0.29% to settle at 10,768.23. The BSE Small-Cap index declined 30.06 points or 0.26% to settle at 11,426.78. The decline in both these indices was lower than Sensex's decline in percentage terms.
The market breadth indicating the overall health of the market was negative. On BSE, 1,534 shares declined and 1,333 shares advanced. A total of 123 shares were unchanged.
The total turnover on BSE amounted to Rs 4724 crore, higher than turnover of Rs 4201.09 crore during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Auto index (down 0.66%), the S&P BSE Power index (down 0.68%), the S&P BSE Healthcare index (down 0.92%), the S&P BSE Realty index (down 1.43%) and the S&P BSE Bankex (down 2.61%) underperformed the Sensex. The S&P BSE Oil & Gas index (up 1.99%), the S&P BSE FMCG index (up 1.06%), the S&P BSE Metal index (up 0.8%), the S&P BSE Consumer Durables index (up 0.5%), the S&P BSE Teck index (up 0.39%), the S&P BSE IT index (up 0.16%) and the S&P BSE Capital Goods index (up 0.03%) outperformed the Sensex.
Index heavyweight and cigarette major ITC rose 1% to Rs 364.20. The stock hit a high of Rs 366.95 and low of Rs 360.
Sesa Sterlite surged 5.95% to Rs 210. The stock hit high of Rs 212 and low of Rs 199.85. Sesa Sterlite rose after Chinese iron ore futures rebounded today, 3 February 2015.
Sesa Sterlite surged 5.95% to Rs 210. The stock hit high of Rs 212 and low of Rs 199.85.
Housing finance major HDFC dropped 2.78% to Rs 1,235. The stock hit high of Rs 1,271 and low of Rs 1,227.80.
Shares of oil exploration and production companies advanced on gains in crude oil prices. Cairn India (up 3.95%), ONGC (up 2.57%), and Oil India (up 0.26%) edged higher. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms.
Videocon Industries jumped 7.77%. Videocon Industries during market hours today, 3 February 2015, said that Petroleo Brasileiro SA (Petrobras), the operator of the BM-SEAL-11 Concession announced yesterday, 2 February 2015, the drilling results of the third appraisal well 3-SES-186 (3-BRSA-1286-SES) located 103 KM from the city of Aracaju and about 10 KM from the discovery well Farfan, in the Concession Area BM-SEAL-11, Block SEAL-M-426 in deepwater Sergipe Alagoas Basin. The result obtained in this well confirms the extension of the light oil reservoirs previously discovered by the Farfan discovery well in turbidite sandstones of Upper Campanian age (Calumbi Formation), communicated to stock exchange on 12 August 2013, Videocon Industries said. In addition, the well found presence of a new light oil accumulation with a total thickness of 68 meters in shallower reservoirs, the company said. This accumulation is part of the Sergipe-Alagoas Basin ultra-deep water exploratory project, as provided for in the 2014-2018 business and management plan, Videocon Industries said in a statement.
The consortium Partners will continue implementation of the discovery assessment plan (PAD) as approved by the Brazilian regulatory authority, Agencia Nacional Do Petroleo, Gas Naturale Biocombustiveis (ANP). Petrobras holds 60% Participating Interest in the concession and IBV Brazil (a Brazilian joint venture company equally held by Videocon Energy Brazil, a wholly owned overseas subsidiary of Videocon, and BPRL Ventures N.V., a wholly-owned subsidiary of Bharat Petroleum Corporation) holds the remaining 40% participating interest in the concession. The consortium will carry on operations in the area to further confirm the extent of the hydrocarbons in place and the characteristics of the reservoir conditions encountered.
Shares of public sector oil marketing companies (PSU OMCs) declined on surge in crude oil prices. BPCL (down 3.07%) and HPCL (down 5.19%) edged lower. Higher crude oil prices could increase under-recoveries of PSU OMCs on domestic sale of LPG and kerosene at controlled prices. The government has already decontrolled pricing of petrol and diesel.
Indian Oil Corporation (IOC) fell 2.45%. IOC after market hours yesterday, 2 February 2015, said that its board of directors at its meeting held on 29 January 2015 approved two projects. The first project involves laying of Paradip-Hyderabad Product Pipeline. The product pipeline is proposed for evacuation of the products from the upcoming Paradip Refinery to storage depots in Andhra Pradesh and Telangana. The pipeline having a length of 1,150 KM would have a capacity of 4.5 MMTPA. The pipeline with allied facilities is estimated to cost Rs 2789 crore and would be completed in a period of 36 months after receipt of statutory clearances, IOC said.
The second project involves construction of 0.6 MMTPA LPG Import Facility at Paradip and augmentation of Paradip-Haldia-Durgapur LPG Pipeline. In order to meet the deficit of LPG supply in eastern sector, IOC would construct 0.6 MMTPA LPG Import facility at Paradip at an estimated cost of Rs 690 crore, IOC said. In addition, the existing Paradip-Haldia-Durgapur LPG pipeline would be augmented and extended to Patna and Muzaffarpur to ensure smooth supply of LPG in the region. The pipeline augmentation and extension is estimated to cost Rs 1823 crore. The project would be completed within 36 months from the date of statutory approvals, the company said.
NTPC rose 1.06%. NTPC after market hours yesterday, 2 February 2015 in a clarification with regard to news item titled "NTPC Shortlists GVK, Essae, Avantha Plants for Stake Buy" said that the news item is media speculation based on the companies who applied against the Expression of Interest issued by NTPC in early 2014, which is in process. It is difficult for NTPC to comment on genesis of such information, the company said.
NHPC rose 2.82%. NHPC's net profit fell 30.66% to Rs 179.83 crore on 4.8% decline in total income to Rs 1397.01 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 3 February 2015. In view of the seasonal nature of business, the financial results of the current quarter may not be comparable with other quarters of the current financial year, NHPC said.
Automobile stocks edged lower after the Reserve Bank of India kept its key policy rate viz. the repo rate unchanged after a monetary policy review today, 3 February 2015. Maruti Suzuki India (down 1.75%), Eicher Motors (down 2.17%), Mahindra & Mahindra (down 3.12%) edged lower. Tata Motors rose 0.88%.
Among two-wheeler stocks, Bajaj Auto (down 3.73%) and TVS Motor Company (down 1.22%) declined.
Hero MotoCorp fell 0.16%. Hero MotoCorp reported 0.4% fall in sales to 5.58 lakh units in January 2015 over January 2014. The despatches were severely impacted during the two-day long transporters' strike during January 2015, Hero MotoCorp said. The announcement was made after market hours yesterday, 2 February 2015.
Bank stocks declined across the board after the Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged after a monetary policy review. Among private sector banks, HDFC Bank (down 2.3%), Kotak Mahindra Bank (down 3.89%), Federal Bank (down 1.28%), Karnataka Bank (down 3.7%), South Indian Bank (down 2.14%), and ING Vysya Bank (down 4.2%), ICICI Bank (down 1.56%), Yes Bank (down 3.63%) and IndusInd Bank (down 2.39%) edged lower.
Axis Bank dropped 5.14% to Rs 585.35. The stock reversed direction after scaling a record high of Rs 625.90 in intraday trade.
Among public sector banks, Allahabad Bank (down 4.07%), Andhra Bank (down 2.24%), Bank of Baroda (down 1.73%), Bank of India (down 4.72%), Corporation Bank (down 4.72%), Indian Overseas Bank (down 3.84%), IDBI Bank (down 3.41%), Syndicate Bank (down 2.5%), UCO Bank (down 4.95%), Union Bank of India (down 2.48%), United Bank of India (down 2.15%), Vijaya Bank (down 0.5%), and Bank of Maharashtra (down 0.96%) edged lower.
After the conclusion of monetary policy review, the RBI today, 3 February 2015, said that in the case of a delayed project where there has been a change in ownership and management, the RBI has decided to provide further flexibility to lenders by allowing a further extension of the envisaged date of commencement of commercial operations (DCCO) of the project without adversely affecting the asset classification of loans to such projects, subject to certain conditions.
Under the Framework for Revitalising Distressed Assets in the economy, banks are allowed to reverse the excess provision on sale of non-performing assets (NPAs) to securitisation companies/reconstruction companies when the cash received (by way of initial sale consideration and/or redemption of security receipts/pass-through certificates) is higher than the net book value (NBV) of the asset, with a view to incentivising banks to recover appropriate value in respect of their NPAs, subject to certain conditions. This dispensation is currently available on a prospective basis only with regard to NPAs sold on or after 26 February 2014. The RBI has now decided to extend this to NPAs sold prior to 26 February 2014.
The RBI also said that it is in discussions with the Securities & Exchange Board of India (Sebi) for waiver, under certain specific circumstances, of the requirement of compliance with the Issue of Capital and Disclosure Requirements (ICDR) regulations and the Substantial Acquisition of Shares and Takeovers (SAST) regulations by bank for conversion of a company's debt into equity under a loan restructuring arrangement.
The RBI also said that it has decided to allow issue of non-callable term deposits by banks and that it will soon issue guidelines in this regard.
State Bank of India (SBI) fell 2.7% at Rs 299.50. The stock hit a high of Rs 311.70 and a low of Rs 299. Reliance Industries rose 3.21% to Rs 937. SBI and Reliance Industries (RIL) said in a joint statement issued after market hours yesterday, 2 February 2015, that RIL has applied for a Payments Bank license. RIL will be the promoter and State Bank of India (SBI) will be the joint venture partner with equity investment of upto 30%. The payments bank will leverage SBI's nationwide distribution network and risk management capabilities alongwith the substantial investments made by RIL in its retail and telecom businesses, the two companies said in a press release. It will deploy state-of-the-art technology, build scalable infrastructure and create extensive branch and business correspondent network in order to provide last-mile access and intuitive user experience to all sections of society, the press release added.
Canara Bank fell 4.33% at Rs 435.05. The stock hit a high of Rs 461.35 and a low of Rs 435.05. The bank after market hours yesterday, 2 February 2015, said that as per the powers delegated by the Board of the bank, the Bond Committee, during the course of its meeting held on 2 February 2015, decided to raise additional Tier- I instruments amounting to Rs 1500 crore through issue of BASEL-III complaint additional Tier-I perpetual bonds by way of private placement.
Punjab National Bank (PNB) tumbled 8.44% at Rs 175.80. PNB's net profit rose 2.53% to Rs 774.56 crore on 8.24% growth in total income to Rs 12904.85 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 3 February 2015.
PNB's ratio of gross non-performing assets (NPAs) to gross advances stood at 5.97% as on 31 December 2014 compared with 5.65% as on 30 September 2014 and 4.96% as on 31 December 2013. The ratio of net NPAs to net advances stood at 3.82% as on 31 December 2014 compared with 3.26% as on 30 September 2014 and 2.8% as on 31 December 2013.
The bank's provisions and contingencies declined 7.68% to Rs 1467.77 crore in Q3 December 2014 over Q3 December 2013. Provision coverage ratio as on 31 December 2014 stood at 57.27%.
PNB's Capital Adequacy Ratio (CAR) as per Basel III stood at 11.54% as on 31 December 2014 compared with 11.79% as on 30 September 2014 and 11.02% as on 31 December 2013.
HCL Technologies rose 0.35%. The company after market hours today announced the opening of a new service delivery centre in Oslo, to support its ongoing growth in the Nordics. The new centre will enhance HCL's delivery capabilities and serve as a hub to provide transformational IT infrastructure and application services to its customers in the region. This is HCL's third delivery centre in the Nordics besides Espoo (Finland) and Stavanger (Norway). Located in the heart of Oslo's BARCODE business area, the new centre will support more than 100 seats.
ACC fell 0.72% at Rs 1,515.15. The stock hit a high of Rs 1,570 and a low of Rs 1,498.80. ACC's consolidated net profit rose 18.31% to Rs 326.22 crore on 1.81% growth in total income from operations (net) to Rs 2837.03 crore in Q4 December 2014 over Q4 December 2013. The result was announced during market hours today, 3 February 2015.
ACC said that that the company continues to focus on enhancing customer value and cost optimization through its institutionalizing excellence programme. Consequent to an order of the Supreme Court restraining mining under deemed extension of second and subsequent renewals of mining leases, limestone mining operations at Chaibasa and Bargarh plants remained temporarily suspended during Q4 December 2014, resulting in an exceptional increase in cost. As per New Mining Ordinance of January 2015, the company said it expects these operations to commence shortly.
With regard to future business outlook, ACC said that based on present indications, the company sees a modest but steady revival for the Indian economy in 2015 leading to some improving trends in all sectors of the economy. The infrastructure, housing and construction sectors are expected to register faster growth in the near term with a positive impact on demand for cement, ACC said in a statement.
ACC's board of directors at its meeting held today, 3 February 2015, recommended payment of a final dividend of Rs 19 per share for the year ended 31 December 2014.
Lupin fell 0.51% at Rs 1,547.70. The stock hit a high of Rs 1,576 and a low of Rs 1,523.55. Lupin's consolidated net profit rose 26.3% to Rs 601.50 crore on 5.4% growth in net sales to Rs 3144.90 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 3 February 2015.
Lupin's EBITDA (earnings before interest, taxation, depreciation, and amortization) rose 19.9% to Rs 966.30 crore in Q3 December 2014 over Q3 December 2013.
Commenting on the company's performance, Mr. Nilesh Gupta, Managing Director, Lupin said: "The company's continued focus on improving operational efficiencies has led to sustained margins and profit growth notwithstanding regulatory delays that have resulted in pressures on the topline. The performance for the three quarters taken as a whole is more representative of the growth enjoyed by the company
Britannia Industries rose 0.75%. On a consolidated basis, the company reported 36.51% rise in net profit to Rs 137.28 crore on 14.2% rise in total income to Rs 2052.92 crore in Q3 December 2014 over Q3 December 2013. The company announced the result after market hours today, 3 February 2015.
Marico fell 3.5% at Rs 347.90. The stock hit a high of Rs 367.60 and a low of Rs 339. Marico's consolidated net profit rose 18% to Rs 160 crore on 21% growth in revenue from operations to Rs 1452 crore in Q3 December 2014 over Q3 December 2013. The result was announced during market hours today, 3 February 2015.
Marico's EBITDA (earnings before interest, taxation, depreciation, and amortization) rose 17% to Rs 237 crore in Q3 December 2014 over Q3 December 2013.
Marico said that FY 2016 could witness a muted topline growth due to deflation as a result of reducing raw material prices. However, the company will aim at a volume growth of 8-10%, Marico said. The company will focus on building capabilities to set it up for growth in the long run, Marico said in a statement.
Adani Ports and Special Economic Zone fell 2.53%. With respect to media reports titled Adani, JSW in race for Rs. 350 cr. Project," Adani Ports and Special Economic Zone after market hours today replied that the company discusses various alternatives as may be feasible to pursue.
Realty stocks declined after the Reserve Bank of India kept its key policy rate viz. the repo rate unchanged after a monetary policy review today, 3 February 2015. DLF (down 2.49%), Unitech (down 2.85%), Housing Development & Infrastructure (HDIL) (down 5.9%), Anant Raj (down 4.05%) and Indiabulls Real Estate (down 4.27%) edged lower. Godrej Properties (up 2.32%), and Oberoi Realty (up 1.18%) edged higher.
Purchases of both residential and commercial property are largely driven by finance.
Telecom stocks edged lower. Reliance Communications (down 3.6%), Mahanagar Telephone Nigam (down 2.24%), Tata Teleservices (Maharashtra) (down 1.31%) and Idea Cellular (down 0.16%) edged lower. Bharti Airtel gained 3.67%.
Shree Cement rose 1.04%. Shree Cement's net profit declined 18.88% to Rs 93.68 crore on 17.81% growth in total income to Rs 1564.63 crore in Q2 December 2014 over Q2 December 2013. The result was announced during market hours today, 3 February 2015.
Bajaj Corp rose 3.84% to Rs 438 after scaling a record high of Rs 441.25 in intraday trade.
Tata Elxsi jumped 4.47% to Rs 793 after scaling a record high of Rs 823.30 in intraday trade.
Shanthi Gears dropped 4.04% after net profit fell 18.61% to Rs 3.76 crore on 3.29% rise in total income from operations (net) to Rs 42.98 crore in Q3 December 2014 over Q3 December 2013. The company announced Q3 results after market hours yesterday, 2 February 2015.
Shanthi Gears said that the Tamil Nadu Generation and Distribution Corporation through its Executive Engineer disconnected the supply power to the Foundry unit of the Company on 31 January 2015 based on a direction from the Tamil Nadu Pollution Control Board. The company is seeking legal remedy to restore the power supply since the company is in compliance with all relevant pollution control laws and regulations, Shanthi Gears said.
Key indices edged lower for the third day in a row today, 3 February 2015. The Sensex has declined 681.63 points or 2.29% in three trading days from a recent high of 29,681.77 on 29 January 2015. The Sensex fell 182.81 points or 0.62% in this month so far (till 3 February 2015). The Sensex has risen 1,500.72 points or 5.45% in this calendar ear so far (till 3 February 2015). From a 52-week low of 19,963.12 on 4 February 2014, the Sensex has risen 9,037.02 points or 45.26%. The Sensex is off 844.02 points or 2.82% from a record high of 29,844.16 hit on 30 January 2015.
In the foreign exchange market, the rupee edged higher against the dollar in choppy trade. The partially convertible rupee was hovering at 61.72, compared with its close of 61.80 during the previous trading session.
Brent crude oil futures edged higher on speculation that a sharp decline in US drilling activity will result in supply cuts. Brent for March settlement was up $1.71 a barrel at $56.46 a barrel. The contract had jumped $1.76 a barrel or 3.32% to settle at $54.75 a barrel during the previous trading session.
The Reserve Bank of India (RBI) kept its main lending rate viz. the repo rate unchanged at 7.75% after a monetary policy review today, 3 February 2015. The RBI announced a reduction in the statutory liquidity ratio (SLR) of scheduled commercial banks by 50 basis points with effect from the fortnight beginning 7 February 2015 in order to create space for banks to expand credit to the productive sectors so as to support investment and growth in the economy. The RBI has decided to replace the export credit refinance (ECR) facility with the provision of system level liquidity with effect from 7 February 2015. In pursuance of the Dr. Urjit R. Patel Committee's recommendation to move away from sector-specific refinance, the ECR limit has been gradually lowered since June 2014. Continuing with this rationalisation, it has been decided to merge the facility with system level liquidity provision with effect from 7 February 2015, the RBI said. The central bank said it will continue to meet system wide liquidity needs as per the revised liquidity adjustment framework announced on 22 August 2014.
The RBI said that as per its assessment, inflation is likely to be around its target level of 6% by January 2016. As regards the path of inflation in 2015-16, the Reserve Bank of India will keenly monitor the revision in the consumer price index (CPI), which will rebase the index to 2012 and incorporate a more representative consumption basket along with methodological improvements. The RBI said that the upside risks to inflation stem from the unlikely possibility of significant fiscal slippage, uncertainty on the spatial and temporal distribution of the monsoon during 2015 as also the low probability but highly influential risks of reversal of international crude prices due to geo-political events. Heightened volatility in global financial markets, including through the exchange rate channel, also constitute a significant risk to the inflation assessment, RBI Governor Dr. Raghuram G. Rajan said in a statement.
The outlook for growth has improved modestly on the back of disinflation, real income gains from decline in oil prices, easier financing conditions and some progress on stalled projects. These conditions should augur well for a reinvigoration of private consumption demand, but the overall impact on growth could be partly offset by the weaker global growth outlook and short-run fiscal drag due to likely compression in plan expenditure in order to meet consolidation targets set for the year. The RBI has retained its baseline projection for growth using the old GDP base at 5.5% for 2014-15. The RBI has forecast real GDP growth at 6.5% for 2015-16, with risks broadly balanced. The revised GDP statistics (base 2011-12) released on 30 January 2015 along with advance estimates for 2014-15 expected on 9 February 2015 will need to be carefully analysed and could result in revisions to the RBI's growth projections for 2015-16, the central bank said.
Given that there have been no substantial new developments on the disinflationary process or on the fiscal outlook after 15 January 2015 -- the day when the RBI cut repo rate by 25 basis points in an unscheduled monetary policy review, it is appropriate for the RBI to await them and maintain the current interest rate stance, Rajan said.
The RBI said that despite a generalised fall in the cost of funds, commercial banks have yet to pass through these effects, as also the effects of the RBI's repo rate cut announced on 15 January 2015, into the spectrum of lending rates.
The RBI further said that the global financial markets remain vulnerable to uncertainty surrounding monetary policy normalization in advanced economies (AEs) as well as possibly weaker growth in China and oil exporting emerging market economies.
After the latest monetary policy review, the central bank said that it has decided to allow foreign portfolio investors reinvestment of coupons in government securities even when the existing limits are fully utilised. Simultaneously, the RBI has decided that henceforth all future investments by foreign portfolio investors (FPIs) within the limit for investment in corporate bonds will be allowed only in paper with a minimum residual maturity of three years. Furthermore, FPIs will not be allowed to invest incrementally in short maturity liquid/money market mutual fund schemes, the RBI said.
The RBI has decided to allow the stock exchanges to introduce cash settled interest rate futures (IRF) contracts on 5-7-year and 13-15 year Government of India Securities. At present, IFR contracts are allowed only in cash settled IRF contract on 10-year Government of India (GoI) Security.
With regard to currency futures, the RBI said that domestic entities and FPIs will henceforth be allowed to take foreign currency positions in the USD-INR pair up to $15 million per exchange without having to establish the existence of any underlying exposure. In addition, they shall be allowed to take foreign currency positions in EUR-INR, GBP-INR and JPY-INR pairs, all put together up to $5 million equivalent per exchange, without having to establish the existence of any underlying exposure. Domestic entities and FPIs who want to take a position exceeding the above limits in the exchange traded currency derivatives (ETCD) market will have to establish the existence of an underlying exposure, the RBI said.
For importers of goods and services, the limit up to which they can take appropriate hedging positions in ETCD markets will be determined as 100 per cent of the higher of the average of their last three years' imports turnover or the previous year's turnover, compared with 50% at present. Documentation and other administrative requirements for hedging on the ETCD markets are also being rationalised, the RBI said.
European stocks edged higher today, 3 February 2015, amid hopes that Greece's new government would be able to reach a compromise with its international creditors on the terms of the nation's bailout. Key indices in Germany, France, and UK were up 1.2% to 1.31%.
Greece's new government has proposed ending a standoff with its international creditors by swapping its outstanding debt for new growth-linked bonds, Finance Minister Yanis Varoufakis was quoted as saying yesterday, 2 February 2015.
Asian stocks were mixed today, 3 February 2015. Key indices in China, Hong Kong, Taiwan and Indonesia were up 0.29% to 2.45%. Key indices in Japan, South Korea and Singapore were off 0.04% to 1.27%.
The Reserve Bank of Australia (RBA) cut its key policy rate by a quarter percentage point after a monetary policy review today, 3 February 2015, citing weak inflation and a stronger-than-desired currency. The move put the cash rate at a historic low of 2.25%. In comments accompanying the move, RBA Governor Glenn Stevens said that the consumer price index recorded the lowest increase for several years in 2014 and it appears likely that inflation will remain consistent with the target over the next one to two years given weak growth in labor costs. Meanwhile, Stevens repeated the RBA view that the Australian dollar remained above most estimates of its fundamental value, particularly given the significant declines in key commodity prices.
Trading in US index futures indicated that the Dow could gain 44 points at the opening bell today, 3 February 2015. US stocks ended sharply higher yesterday, 2 February 2015 after a late rally driven by hopes for a Greek debt deal and as energy shares bounced with oil prices.
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