Nik's Diary
The Indian market opened
flat tracking similar opening in SGX Nifty and most other Asian
markets. The US market moved mostly higher over the course of the trading
day on Tuesday after seeing some volatility in morning trading. This volatility
came as Federal Reserve Chairman testified before the Senate Banking Committee.
The positive sentiment was on the back of upbeat reports on new home sales and
consumer confidence. The US new home sales surged up by 15.6% in January
2013. With this increase, sales rose to their highest rate since July
2008. Also, consumer confidence index jumped to 69.6 in February 2013 from a
revised 58.4 in January 2013. The European markets also showed significant
moves to the downside on the day due to the uncertainty created by the results
of the Italian elections. After two days of voting in crucial elections, Italy
appears headed for political gridlock, sparking fears of eventual comeback of
European financial crisis Meanwhile, Indian shares fell sharply on Tuesday,
mirroring extremely weak Asian and European cues as inconclusive Italian
elections stoked fears about the outlook for the Eurozone economy. The
underlying sentiment remained cautious as investors await the upcoming Union
Budget this week for directional cues.
Elections deadlock in
Italy unfavorable for investor sentiments
The FTSE-100 index closed 1.3% lower after an 84.93 point
fall to 6270.44, while Italy's MIB plunged nearly 5% and markets in France and
Germany fell by more than 2% as the deadlock is expected to make it harder for
Italy to pass the reforms it needs to reduce its debts. Wall Street shrugged
off the eurozone worries as the Dow Jones Industrial Average rose more than 50
points in early trade after US new-home sales saw the biggest jump in nearly
two decades last month and as US Federal Reserve chairman Ben Bernanke
reinforced his commitment to the Fed's bond-buying programme. This failed to
ease declines on the London market as investor sentiment was also hit by weak
manufacturing figures from China and the prospect of spending cuts in America
ahead of a deal to trim the budget deficit. Yesterday's sharp decline for the
FTSE comes after the top flight approached a fresh five-year high on Monday,
despite the fall-out from the decision of ratings agency Moody's to strip the
UK of its AAA status. The pound, which received a battering after the ratings
blow, fell further despite euro weakness after Bank of England deputy governor
Paul Tucker said he was open to more monetary easing and that the pound may need
to fall further. Sterling fell to $1.51 and just under €1.16 as he also
revealed to MPs that policymakers had discussed the possibility of negative
interest rates. Banks were hardest hit in the market sell-off, with Barclays
down 14.7p at 297p, Royal Bank of Scotland off 15.3p at 339.5p and Lloyds
Banking Group 1.8p lower at 53.1p. They were joined by leisure group Whitbread
after it reported slower sales growth in the 11 weeks to February 14. The
figure of 2.7% compared with 3.3% in the previous quarter but the Premier Inn,
Costa and Beefeater owner said some of the slowdown reflected the wintry
conditions last month. Shares in the top flight stock fell 94p to 2469p. In the
FTSE 250 Index, shares in Sports Direct International were 5% lower after it
emerged that Mike Ashley has sold a 4% stake worth £100 million. The discounted
price of £4 raised eyebrows, while there are fears Mr Ashley was calling the
top of the share price after a rally that has seen the stock jump 46% over the
past year. The disposal of 25 million shares will still leave Mr Ashley with a
64% stake. Sports Direct shares were 21.5p lower at 409p. Source: HeraldScotland
Railway Budget 2013 –
2014
Railway
minister Pawan Kumar Bansal, presenting his maiden Rail Budget, tried to play
to the gallery by not raising passenger fares, but he was forced to cut short
his speech after MPs from Uttar Pradesh, Bihar, West Bengal and Tamil Nadu
erupted in protest and trooped to the Well of the House. While passengers have
been spared any direct hike, they will have to cough up more with the minister
raising the Tatkal, reservation and cancellation charges. Bansal, facing a
severe funds crunch, also unveiled an increase in freight rates averaging
around 5.8 per cent that will give the Railways an extra Rs 4,200 crore a year.
Also, passenger fares may be hiked soon after the Union Cabinet gives its
approval to the setting up of the proposed Rail Tariff Authority. As the
minister was speaking, members belonging to the Samajwadi Party, Trinamul
Congress, JD(U) and AIADMK trooped into the Well of the House, accusing him of
ignoring their states for new rail projects and new trains, shouting slogans
like “Rail budget waapas lo (take it back)”. The BJP even went to the extent of
calling this year’s Rail Budget as a “Rae Bareli budget”. Unperturbed, Mr
Bansal continued with his presentation amid the din and was later helped by
parliamentary affairs minister Kamal Nath to complete his truncated speech. In
the evening, he also ruled out any rollback of the charges, saying these would
affect only three per cent of total tickets booked, and the steps would deter
touts. Prime Minister Manmohan Singh, praising Bansal, said: “The Budget
presents a realistic picture of the Railways, which is reformist and
forward-looking.” As reported earlier by this newspaper, Bansal has clearly
favoured the parliamentary constituency of Congress president Sonia Gandhi: Rae
Bareli has now got a wheel factory along with a Rail Neer plant, in addition to
the Rail Coach Factory, besides a couple of new trains. Bansal, who represents
Chandigarh in the Lok Sabha, has also prominently favoured Punjab and Haryana
with broad gauge lines, new trains and projects. This year’s exercise is also
significant for its thrust on mountain trains, as a link to Arunachal Pradesh
has been proposed, which would also boost the movement of security forces.
Also, the minister has proposed more rail connectivity to Manipur, Uttarakhand
and Himachal Pradesh. Bansal has also brought cheer to Mumbai suburban
passengers by proposing AC coaches in local trains, while further augmenting
these services. Bansal, the first Congressman to present a Rail Budget in 17
years, announced introduction of a “dynamic” tariff revision system. He
proposed “fuel adjustment component-linked revision for freight tariff”, which
will be implemented from April 1, 2013. Apart from a freight tariff hike, the
minister’s proposal to bring in hikes in other charges will give the railways
an extra Rs 482 crore. The FAC will come in effect twice a year in response to
diesel price revisions. Bansal stressed on safety and said a new generation
e-ticketing system will be in place by the end of this calendar
year. Tickets can also soon be booked by SMS. The minister announced 67
new express trains in his speech. The reservation charges and supplementary fee
for superfast trains will now go up by Rs 5 on second class to Rs 25 on AC-1
and Executive Class, while Tatkal charges will be up by Rs 15 on sleeper class
and `100 on Executive Class. Also, clerkage and cancellation charges will go up
by Rs 5 on second class to Rs 50 on Executive Class. Source: Deccan chronicle
2G spectrum auction: No applicant for GSM waves
It's
deja vu for India's spectrum auction to be held on March 11 as
Sistema Shyam became the sole bidder for CDMA airwaves with no takers for GSM
frequency. Monday was the last day for filing applications to participate in
the upcoming 2G spectrum auction, and with just one bidder -SSTL- the
auction is all but over even before it started. Three months back, in November
auction, the government could garner only Rs 9000 crore against the expected Rs
40,000 crore, as the bidding process got over in just two days with many
lucrative circles remaining un-auctioned. The failure of the
November auction was attributed to high reserve price but despite
slashing the base price by one third, the next spectrum auction also did not
excite many bidders. Analysts say the base price is still too high and there
are many loopholes and uncertainties in the current policy which discourages
the operators to participate in the bidding. The government will begin the
auction process on March 11 in 1,800 Mhz band for three circles - Delhi, Mumbai
and Karnataka- that remained un-auctioned in November. This will be followed by
the auction of 800 Mhz spectrum band where Sistema Shyam is the sole bidder.
The company lost its license to operate in the country post the apex court's
cancellation of 122 licenses in February last year. Finally, the auction for
900 Mhz spectrum will take place where the reserve price has been fixed at a
double price that of 1,800 Mhz. Many incumbent operators stayed out of this
auction as the government has linked the outcome of the auction to licence
renewal and airwaves refarming fee. The licences of large operators like
Vodafone and Bharti Airtel are set for renewal in 2014. Source: ciol
Hindalco locks out Silvassa plant
Aditya
Birla Group flagship firm Hindalco Industries today announced a lock-out at its
Silvassa plant in Dadra and Nagar Haveli following continuation of workers’
strike.“...due to continuation of illegal strike by workmen at company’s
Silvassa plant, the company is forced to declare a lock-out there,” Hindalco
said in a BSE filing. It said, however, that the company does not expect any
adverse impact on financials due to the lock-out. Hindalco has eight other
manufacturing facilities. When contacted, the company spokesperson declined to
give the number of people who work at the plant. The Silvassa plant, covering
97 acres, is located 180 km from Mumbai. It has 30,000 tonnes per annum
aluminium foil and converted products manufacturing capacity. The plant was up
in technical collaboration with Reynolds Metal, USA, in 1998. It has five
rolling mills, two foil separators, two re-winders and six annealing furnaces
with inert gas facility among others. The Silvassa plant caters to Hindalco’s
key customers in pharmaceutical packaging such as Glaxo Smithkline, Pfizer,
Lupin, Aventis, Aristo, Macleods, Cadila and Torrent among others, according to
company website. “The unit exports to over 11 countries across Europe, the
Middle East, South Asia, Australia and the Far East,” it said. Source:thehindubusinessline
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