± Six core industries grew by 9.4% yoy in January 2010. (BS)
± Power Tariffs across the country may have to be revised upwards in excess of 7% annually if the Government goes by the recommendation of the 13th Finance Commission. (ET)
± Government has invited applications from telecom operators for bidding for 3G and Broadband wireless access spectrum to be auctioned starting April 9. (BL)
± Gujarat proposes 5% increase in tax on tobacco products. (BL)
Today, is the Big Budget day. No point in speculating now on what it will have in store for the India Inc. and the people in general and the market in particular. Let’s wait and listen. With the Finance Ministry having accepted most recommendations of the 13th Finance Commission, there is not much suspense left so far as fiscal consolidation is concerned. The fact that the fiscal stimulus has to be unwound is a no-brainer. Some announcement on GST implementation is likely. Some sops may be retained for sectors that are yet to recover fully.
Expectations of big bang reforms are minimal. One space which needs to be dealt with urgently though is the huge subsidies, especially to the oil sector.Whether the Finance Minister takes any concrete step in this direction is anybody’s guess. On the whole, the market will be volatile, which is a given on the Budget day. The start will be nervous due to mixed global markets.
The ministry's economic survey for the financial year 2009-10 urged a calibrated exit from fiscal stimulus, which cushioned India's economy from the worst of the global downturn but pushed the fiscal deficit to a 16-year high of 6.8% of GDP.
The report, presented in Parliament ahead of Friday's Union Budget, forecast economic growth at 8.25%-8.75% in 2010-11, accelerating to over 9% the year after, compared with projected growth of 7.2%-7.5% in the current year.
SBI plans to raise up to US$4.3bn through a rights equity issue in 2010-11. The bank needs about half the amount to sustain growth over the next 5 years, the chairman was quoted as saying.
SBI to raise Rs200bn via right issue; needs over Rs500bn capital in the next five years. (ET)
ONGC is looking to enhance its presence in Africa and Latin America. (ET)
Wipro wins 10-year outsourcing deal from Punjab and Sind Bank. (BS)
SBI to buy significant stake in Tata Motor Finance says SBI chairman. (ET)
Bharti Airtel eyes US$7bn offshore loans to back its offer to buy Zain’s African cellular assets. (BS)
Government puts on hold the IPO of Satluj Jal Vidyut Nigam following poor response to the FPO of NTPC and REC. (ET)
Rahul Bajaj sells stake in Bajaj Electrical to Shekhar Bajaj. (BS)
ITC plans to foray the food market of UAE and Gulf Co-operation Council. (BS)
Mindtree to raise debt upto US$100mn. (BS)
Today Listing
Hathway Cable
(BSE Code: 533162)
Today,the fact that master blaster Sachin Ton-dulkar has overshadowed Mamata Banerjee is proof enough of how disappointing Railway Budget is. Populism took precedence over pragmatism. One only hopes the Finance Minister doesn’t fall prey to the temptation. Those batting around conventional wisdom of making some quick gain on railway-related stocks had to make a hasty retreat less their capital evaporates further.
Meanwhile, the Economic Survey will be unveiled today. Here again, we have seen that the Survey always talks of a spate of reforms urgently needed to accelerate India’s growth. But, the Budget hardly incorporates any recommendations made in the Survey. The key is to keep expectations low and one will not be disheartened. As for the markets, they are set for another colorless show. The opening is likely to be sedate to say the least. There might be some more volatility today due to the F&O expiry. Global cues are inconclusive. US market ended higher on reassurances from Federal Reserve chairman Ben Bernanke that he will keep rates at record low for some time to come. Asian markets are mixed. European shares managed modest gains.
The market is in a predicament and a bit nervous ahead of Budget. The NSE Nifty has been stuck in a range of 4800-4930 of late and is unlikely to make a big move anytime soon- at least not today. A long overdue breakout in either direction could take place only post the Budget. At the same time, one has to take into account the emerging global situation before jumping the gun.
FIIs were net buyers in the cash segment on Wednesday at Rs4.85bn on a provisional basis while the local funds were net sellers of Rs1.54bn, according to figures published on the NSE's web site. In the F&O segment, the foreign funds were net sellers of Rs7.47bn. On Tuesday, FIIs were net buyers of Rs7.44bn in the cash segment.
Railway Minister Mamata Banerjee could be inspired to chart her on course when she presents Railway Budget today. She is unlikely to follow her predecessor though, who brought back glory to the Railways and earned plaudit for himself.
Cairn India's 670km long crude carrier pipeline is nearing completion and will be commissioned next month. (BL)
Maruti Suzuki admitted to recalling 100,000 A-Stars which were manufactured before August 22, 2009 to replace faulty components that could cause fuel leakages. (BS)
HDFC has ruled out any immediate hike in its lending rates given the surplus liquidity in the system and low credit demand. (ET)
The Punjab government has cleared the phase-I of Super Mega Mixed Use Integrated Industrial Park being developed by DLF Home Developers Ltd over an area of 1,250 acres, with an investment of Rs27bn in Mullanpur Local Planning Area. (BS)
Public sector banks and insurance majors step in to salvage the FPO of state-owned Rural Electrification Corporation which closed with the issue being oversubscribed 3x. (BS)
Axis Bank’s private equity arm Axis Private Equity is mulling to separate itself from the parent company in the coming weeks - a move that is part of the group’s overall restructuring plan. (ET)
UK-based GlaxoSmithKline’s plan to buy about 5% stake in Dr Reddy’s Laboratories for US$150-160mn is stuck and unlikely to happen. (ET)
Though Railway Minister Mamata Banerjee could chart her on course, she is unlikely to replicate the success of her predecessor, who brought back glory to the Railways and earned plaudit for himself. With an eye on West Bengal polls, ‘Didi’ might be inclined to play to the gallery. Too much populism and less emphasis on revenue generation could mar the sentiment further. A ‘Peace Train’ may be in the offing between Kanyakumari to Kashmir.
As for the markets, there is no peace or happiness at start. We expect a soft start owing to weak global markets. By itself, the Railway Budget is not expected to swing the mood on the bourses. That might happen when the Union Budget is out on Friday. But, even that might not be able to do so, given the concerns on local as well as global front. In short, the choppy consolidation phase may prevail for a while before the market breaks out of the current rangebound activity. The best way to overcome near-term uncertainty is to stay put and not do anything adventurous.
