The Reserve Bank of India (RBI) will be conducting a special fixed rate term repo auction at 4.75% per annum (p.a.) against eligible securities for Rs 600 billion on Monday, Sep. 7, 2009.
The move will provide liquidity to mutual funds (MF), non-banking financial companies (NBFC) and housing finance companies (HFC) either on incremental or on rollover basis.
The reversal of the auction will take place on Sep. 22, 2009. There is no amount outstanding under this facility as on Aug. 31, 2009.
The apex bank had increased the daily liquidity adjustment facility (LAF) till Mar. 31, 2010 up to a cumulative amount of Rs 600 billion on outstanding basis exclusively for the purpose of meeting requirements of MFs, NBFCs and HFCs.
It was bad week for the Indian equity markets , but there was a glimmer of hope seen towards the end of the week. After two days of downfall, the markets saw smart recovery. However, for the week, the markets closed in the red. The Nifty and Sensex ended down 5.7% and 4.5% respectively.
Experts’ views on the road ahead for the markets:
Andrew Holland of Ambit Capital:
If global markets do take a hasty retreat than what we have seen more measured falls recently so I think the risk to that is higher than the more recent fall that we have been seeing in global markets. I could easily make a case for 12,000 but if things are more measured then 13,000-13,500 on the Sensex can be a short term base.
I think we will be buying on dips partly because with the government having the mandate it has, has changed our views in terms of the longer-term growth potential for India.
Atul Suri, Trader :
What is most important for the markets right now is for this bull market to sustain. I would not be bothered till we breach 4,100. If you look at these current moves, the post-circuit scenario when we went to 4,200-4,300, we retraced to 4,100 and then we got into a newer top, which is 4,600-4,700 on the Nifty. So essentially what has happened is that we have made a higher top at 4,100. So for this bull market to continue, I think 4,100 will hold and the market may exhaust a little bit, retrace a little bit from these levels.
Sunil Singhania, Reliance MF:
In the near-term there can always be a short-term correction but the way things are progressing and the way the scenario is emerging both fundamentally as well as technically, we don’t see a major reaction even in the short term. But from our perspective we are looking at India from a longer-term perspective and the way things are actually moving and even the government focus on infrastructure, increasing the gross domestic product (GDP), I think we are headed for some decent days ahead for India.
Trading ideas on specific stocks:
Sudarshan Sukhani, Technical Analyst:
One stock which I have been referring to is Hindalco. It has come through a very good correction, at this point there is a buying opportunity with a target of somewhere around Rs 105 or Rs 110. Now if the investment does not work out, which means there is a correction that continues downwards, you either get out with a Nifty stop loss of 4,200 or you add more to the stock, somewhere around 3,800 for the Nifty or Rs 70 for the share.
Read more....... http://www.moneycontrol.com
Experts’ views on the road ahead for the markets:
Andrew Holland of Ambit Capital:
If global markets do take a hasty retreat than what we have seen more measured falls recently so I think the risk to that is higher than the more recent fall that we have been seeing in global markets. I could easily make a case for 12,000 but if things are more measured then 13,000-13,500 on the Sensex can be a short term base.
I think we will be buying on dips partly because with the government having the mandate it has, has changed our views in terms of the longer-term growth potential for India.
Atul Suri, Trader :
What is most important for the markets right now is for this bull market to sustain. I would not be bothered till we breach 4,100. If you look at these current moves, the post-circuit scenario when we went to 4,200-4,300, we retraced to 4,100 and then we got into a newer top, which is 4,600-4,700 on the Nifty. So essentially what has happened is that we have made a higher top at 4,100. So for this bull market to continue, I think 4,100 will hold and the market may exhaust a little bit, retrace a little bit from these levels.
Sunil Singhania, Reliance MF:
In the near-term there can always be a short-term correction but the way things are progressing and the way the scenario is emerging both fundamentally as well as technically, we don’t see a major reaction even in the short term. But from our perspective we are looking at India from a longer-term perspective and the way things are actually moving and even the government focus on infrastructure, increasing the gross domestic product (GDP), I think we are headed for some decent days ahead for India.
Trading ideas on specific stocks:
Sudarshan Sukhani, Technical Analyst:
One stock which I have been referring to is Hindalco. It has come through a very good correction, at this point there is a buying opportunity with a target of somewhere around Rs 105 or Rs 110. Now if the investment does not work out, which means there is a correction that continues downwards, you either get out with a Nifty stop loss of 4,200 or you add more to the stock, somewhere around 3,800 for the Nifty or Rs 70 for the share.
Read more....... http://www.moneycontrol.com
(Reuters) - U.S. banks will be briefed by regulators as early as Friday on how they performed in government "stress tests," before the results are made public later, The Wall Street Journal reported, citing government officials.
Reuters - The Wall Street entrance to the New York Stock Exchange is pictured March 27, 2009. REUTERS/Eric Thayer ...
Some estimates of likely losses that were used in the stress tests were tougher than expected, the newspaper said.
"Under a more adverse scenario, which assumes a 10.3 percent unemployment rate at the end of 2010, banks would have to calculate two-year losses of up to 8.5 percent on their first-lien mortgage portfolios, 11 percent on home-equity lines of credit, 8 percent on commercial and industrial loans, 12 percent on commercial real estate loans, and 20 percent on credit card portfolios," the paper said, citing a confidential document from the Federal Reserve.
On Tuesday, Treasury Secretary Timothy Geithner said most U.S. banks have enough capital to keep lending, but a pile of bad debts is fostering doubts about their health and slowing a recovery.
An official at the Federal Reserve said last week that results of the tests, designed to see how the nation's 19 largest banks would fare should the U.S. recession prove unexpectedly severe, would be made public on May 4.
The official said regulators will try to prove the rigor of the tests by releasing a document on Friday that explains the underlying assumptions. The document will outline the methodologies employed and serve as a guide on how to interpret the results.
Thanks to http://finance.yahoo.com
Mumbai, Apr 22 (PTI) In high volatility, the Bombay Stock Exchange 30-share Sensex today failed to maintain its initial gains and ended lower by 81 points due to persistent selling pressure in view of political uncertainty and fall in US index futures.
Realty, consumer durables, capital goods and auto were the main losers despite key rate cuts by the Reserve Bank of India yesterday.
Dealers attributed the volatility in the market to investors' cautious approach as also the uncertain political situation because of no clear indication as to who will form the next government.
The Bombay Stock Exchange bellwether Sensex showed signs of recovery in the morning with a jump of 138 points in response to the Reserve Bank's rate cuts yesterday but it failed to maintain its rally in the afternoon session.
The BSE-30 share index resumed higher at 10,968.60 and hovered in a range of 11,036.24 and 10,715.66 before finishing the day at 10,817.54, showing a net loss of 80.57 points or 0.74 per cent from its previous close.
The 50-share Nifty of the National Stock Exchange also fell by 35 points or 1.04 per cent to end at 3,330.30 from its last close.
Foreign institutional investors (FIIs) pulled out Rs 191.01 crore yesterday, as per provisional figures issued by stock exchanges.
Thanks to http://www.ptinews.com
Realty, consumer durables, capital goods and auto were the main losers despite key rate cuts by the Reserve Bank of India yesterday.
Dealers attributed the volatility in the market to investors' cautious approach as also the uncertain political situation because of no clear indication as to who will form the next government.
The Bombay Stock Exchange bellwether Sensex showed signs of recovery in the morning with a jump of 138 points in response to the Reserve Bank's rate cuts yesterday but it failed to maintain its rally in the afternoon session.
The BSE-30 share index resumed higher at 10,968.60 and hovered in a range of 11,036.24 and 10,715.66 before finishing the day at 10,817.54, showing a net loss of 80.57 points or 0.74 per cent from its previous close.
The 50-share Nifty of the National Stock Exchange also fell by 35 points or 1.04 per cent to end at 3,330.30 from its last close.
Foreign institutional investors (FIIs) pulled out Rs 191.01 crore yesterday, as per provisional figures issued by stock exchanges.
Thanks to http://www.ptinews.com
The US markets reversed early losses led by financials, after Goldman posted strong first quarter profit.
Financial stocks had been among the session's worst performing sectors in the first few minutes of action, falling as much as 2.7% as traders took profits following the strong gains that financials registered late last week. However, buyers provided support by buying the dip in financials.
The market was also buzzing about President Barack Obama's press conference on the economy later today. The president is expected to talk about government's recession-busting actions.
However, earlier in the session, shares of General Motors tumbled 16% as the treasury department instructed the auto maker to prepare for a bankruptcy filing by first June deadline. Also Read - How ADRs performed
The Dow Jones Industrial Average slipped 25.57 points, or 0.3%, to 8,057.81. The S&P 500 Index was up 2.17 points, or 0.3%, to 858.73, and the Nasdaq Composite Index rose 0.77 points, or 0.1%, to 1,653.31.
Richard Bove, Financial Strategist, Rochdale Securities said, “The reason numbers are good is because their core business, which is trading did extraordinarily well. You had a whole series of things working in Goldman’s favour. The competition is gone away; all of the firms are no longer in business. Goldman has pricing power because there are so few competitors, or weaker competitors, Goldman has doubled the price of transaction in the first quarter."
In Commodities
Crude prices slipped below USD 50/bbl mark, extending yesterday's 4.2 percent loss, after the international energy agency forecasted that 2009 demand may slump to the lowest level in five years amid the global economic recession.
Copper climbed to the highest in almost six months in London, pacing an advance in industrial metals, as investors sought to catch up on gains made in shanghai and New York.
Futures in China and the US advanced after the Chinese government said it is considering additional stimulus measures to spur economic growth. Government plans to spur growth in the US, Europe, Japan and China helped trigger a 58 percent rally in London prices this year.
Thanks to http://www.moneycontrol.com
Financial stocks had been among the session's worst performing sectors in the first few minutes of action, falling as much as 2.7% as traders took profits following the strong gains that financials registered late last week. However, buyers provided support by buying the dip in financials.
The market was also buzzing about President Barack Obama's press conference on the economy later today. The president is expected to talk about government's recession-busting actions.
However, earlier in the session, shares of General Motors tumbled 16% as the treasury department instructed the auto maker to prepare for a bankruptcy filing by first June deadline. Also Read - How ADRs performed
The Dow Jones Industrial Average slipped 25.57 points, or 0.3%, to 8,057.81. The S&P 500 Index was up 2.17 points, or 0.3%, to 858.73, and the Nasdaq Composite Index rose 0.77 points, or 0.1%, to 1,653.31.
Richard Bove, Financial Strategist, Rochdale Securities said, “The reason numbers are good is because their core business, which is trading did extraordinarily well. You had a whole series of things working in Goldman’s favour. The competition is gone away; all of the firms are no longer in business. Goldman has pricing power because there are so few competitors, or weaker competitors, Goldman has doubled the price of transaction in the first quarter."
In Commodities
Crude prices slipped below USD 50/bbl mark, extending yesterday's 4.2 percent loss, after the international energy agency forecasted that 2009 demand may slump to the lowest level in five years amid the global economic recession.
Copper climbed to the highest in almost six months in London, pacing an advance in industrial metals, as investors sought to catch up on gains made in shanghai and New York.
Futures in China and the US advanced after the Chinese government said it is considering additional stimulus measures to spur economic growth. Government plans to spur growth in the US, Europe, Japan and China helped trigger a 58 percent rally in London prices this year.
Thanks to http://www.moneycontrol.com
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