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Global indices, stock-specific buying lift Indian equities

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Sensex

Mumbai, Feb 12: Positive global indices, coupled with healthy buying in capital goods, auto, banking, healthcare and metal stocks, lifted the key Indian equity indices on Monday.

Market observers said investors awaited the retail and industrial inflation data due to be announced in the evening which is expected to give direction to the central bank’s next course of action on raising interest rates.

The wider Nifty50 of the National Stock Exchange held the 10,500-mark and closed higher by 84.80 points or 0.81 per cent at 10,539.75 points.

On the BSE, the barometer 30-scrip Sensitive Index (Sensex) closed at 34,300.47 points — up 294.71 points or 0.87 per cent from its previous close.

The Sensex touched a high of 34,351.34 points and a low of 34,115.12 points during the intra-day trade.

The BSE market breadth was bullish as 2,050 stocks advanced as against 764 declines.

In terms of the broader markets, the S&P BSE mid-cap index edged higher by 1.31 per cent and the small-cap index by 1.60 per cent.

“Markets bounced back on Monday after the correction seen on last Friday. The gains came on the back of strong global cues,” Dhruv Desai, Director and Chief Operating Officer of Tradebulls, told IANS.

“Major Asian markets closed on a positive note, barring the Hang Seng index. European indices like FTSE 100, DAX and CAC 40 traded in the green,” he added.

Last week on Friday, the key equities had plunged into the negative territory amid a global sell-off, with the Sensex shedding 407.40 points or 1.18 per cent and the Nifty50 was down 121.90 points.

Vinod Nair, Head of Research, Geojit Financial Services, said: “On Monday, market reversed from previous day’s losses owing to positive global cues and expectation of marginal decline in January CPI (Consumer Price inflation) inflation today.”

“Mid and small-caps outperformed the benchmark indices as investors start accumulating the over sold stocks. The economy is forecast to improve in the long-term with strong earnings growth which is likely to provide a safety to the ongoing consolidation,” he added.

The Central Statistics Office (CSO) is slated to release the macro-economic data points of the CPI and IIP (Index of Industrial Production) on Monday evening.

On the currency front, the Indian rupee strengthened by nine paise to close at 64.31 against the US dollar from its previous close at 64.40.

In terms of investments, provisional data with the exchanges showed that foreign institutional investors sold scrips worth Rs 814.11 crore while domestic institutional investors bought stocks worth Rs 1,342.70 crore.

Sectorwise, the S&P BSE capital goods index surged by 317.88 points, followed by auto index by 266.55 points and banking index by 197.62 points.

On the other hand, the S&P BSE IT index edged lower by 52.47 points and the Teck (technology, media and entertainment) index by 22.59 points.

Major Sensex gainers on Monday were: Tata Steel, up 4.22 per cent at Rs 712.50; Yes Bank, up 2.89 per cent at Rs 334.95; Power Grid, up 2.51 per cent at Rs 198.05; IndusInd Bank, up 2.12 per cent at Rs 1,686.45; and Hero MotoCorp, up 1.94 per cent at Rs 3,615.

Major Sensex losers were: State Bank of India, down 2.67 per cent at Rs 288.50; Infosys, down 0.72 per cent at Rs 1,103.80; ITC, down 0.53 per cent at Rs 269.85; Mahindra and Mahindra, down 0.43 per cent at Rs 746.70; and ICICI Bank, down 0.23 per cent at Rs 326.

The Indian equity markets will remain closed on Tuesday (February 13) for Mahashivratri.

IANS

 

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Some want IBC not to be implemented: ArcelorMittal

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Sunil Mittal-wefornews

New Delhi, Jan 22 After years of trying to get a foothold in India through a greenfield project and almost getting it via a brownfield acquisition, the world’s largest steelmaker ArcelorMittal on Tuesday castigated corporate rivals for trying to sabotage its takeover bid of Essar Steel under the new bankruptcy rule.

“It appears there are certain parties in India who would like that the Insolvency and Bankruptcy Code (IBC) not be implemented according to the law.

“The IBC was introduced for a very serious reason – to address a major problem with bad loans. If the law is not implemented correctly and the rules are flouted, as suggested by some, this sends a negative signal about the certainty of India as an investment destination,” ArcelorMittal India tweeted.

The outburst of the company headed by NRI Lakshmi Niwas Mittal, is significant as it follows the decision by India’s largest lender State Bank of India (SBI) to put on sale its entire loan exposure of Rs 15,431 crore in bankrupt Essar Steel, which is undergoing resolution proceedings since August 2017, much beyond the mandatory 270 days allowed under the IBC.

In October 2018, the Committee of Creditors (CoC) to Essar Steel, led by SBI, had approved ArcelorMittal’s proposal of Rs 42,000 crore to the lenders and an additional Rs 8,000 crore towards capital expenditure in Essar Steel.

However, a group of creditors including the promoters of Essar Steel have challenged the decision of the CoC. Last week, the CoC filed an application at NCLAT requesting for a speedier disposal of the case within the next three weeks.

The company, in its tweeted statement, said that the opportunity to make an offer for the assets in the IBC process has been very transparent and no company or individual can say they were not aware of the process and therefore should not expect to come in at a late stage, providing no details as to the financing of their offer after a decision has been taken by the CoC.

Soon after the CoC of the debt laden firm had declared ArcelorMittal as the highest bidder in the auction for the steel company, promoters of Essar Steel came up with its offer to repay Rs 54,389 crore seeking withdrawal from insolvency proceedings.

The plan included an upfront cash payment of Rs 47,507 crore to all creditors, including Rs 45,559 crore to the senior secured financial creditors, i.e. 100 per cent recovery.

“In the case of Essar Steel, opportunities have been provided to bidders for nearly a year to first be eligible and second, to make a compelling offer.

“ArcelorMittal has followed the process from the start. We fully expect the process to continue to be implemented correctly and as per the law and that statements attempting to convince otherwise not be given any credibility,” it concluded.

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Sensex down 130 points minutes after opening in green

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Sensex equity Nifty

Mumbai, Jan 22: The S&P BSE Sensex declined around 130 points minutes after opening on a positive note on Tuesday, tracking weakness in the major Asian markets.

The NSE Nifty50 also traded over 40 points lower than its previous close.

At 9.37 a.m., the Nifty50 traded at 10,917.95, lower by 43.90 points or 0.40 per cent from its previous close.

The BSE Sensex, traded at 36,439.17 points, lower by 139.79 points or 0.38 per cent from the previous close of 36,578.96 points.

It had opened at 36,649.92 points and so far it touched an intra-day high of 36,650.47 and a low of 36,413.30 points.

IANS

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RSS affliates warn against farm loan waiver in interim budget

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Farmers Protest

New Delhi, Jan 21 (IANS) Four BJP governments in states had rolled out farm loan waiver schemes but RSS affiliates have strongly warned against these in the interim budget, saying such a move would only worsen the agrarian crisis and put further pressure on the banks.

This comes in the midst of speculation that the Narendra Modi government may be showering sops on farmers in its interim budget before the Lok Sabha polls.

Instead, the sangh parivar affliates want a social security net and various forms of assistance for the farmers.

With agrarian distress expected to be a major plank for the opposition and the Congress promise of farm loan waiver that helped it majorly in its victory in the Hindi heartland state, there are indications that the Modi government may walk a similar path making the February 1 exercise more significant than a vote on account.

Buoyed by the Congress coming to power in Rajasthan, Madhya Pradesh and Chhattisgarh, party President Rahul Gandhi has flayed Modi for waiving corporate loans while ignoring the plight of farmers. He has even asserted that an “united opposition will not let Modi sleep” until and unless farmers’ loans across the country were waived.

While the Congress’ farm loan waiver attracted much ridicule from Prime Minister Modi, it was he who had triggered the trend of waiving farm loans when ahead of Uttar Pradesh elections he had announced relief for the farmers in February, 2017. Subsequently the Yogi Adityanath-led BJP government announced a loan waiver package for around 86 lakh small and marginal farmers.

The BJP governments in Maharashtra and Rajasthan in 2018 had announced waiver of loans taken by small and marginal farmers.

Soon after the Congress executing its pre-poll promise of loan waiver in the three Hindi heartland states, the BJP regime in Jharkhand in December last followed suit, giving farmers financial assistance of Rs 5,000 per acre for the kharif season.

However, the Bharatiya Kisan Sangh (BKS), a sangh parivar affliate, asserts that the Modi government should desist from indulging in populist measures. Its has warned about pitfalls of farm loan waivers.

“The last thing the government should do is resort to farm loan waivers. Rather than being a solution, loan waiver would further deepen the miseries of our farmers. Indeed farmers are in distress and the way the opposition parties for their electoral sake, have raised the issue, the government may deem it to be a political compulsion. But it would be a mistake if it does so,” BKS organisational secretary Dinesh Kulkarni told IANS.

Explaining the opposition to the “short-cut” of loan waiver, Kulkarni said such a move only encourages the practice of defaulting on loans contending that only a handful of farmers benefit.

“The Congress governments in Rajasthan, Madhya Pradesh and Chhattisgarh have waived farm loans but has it solved the crisis of the farmers. The only thing that it did is pressuring the banks and making them wary of giving further loans to the farmers,” Kulkarni said.

He said that unless there was holistic mechanism to ensure that farmers get the right price for their produce and middlemen are eliminated, the vicious circle of debt will continue.

“Loan waiver may halt the vicious debt circle for a short period of time but it won’t bring them out of that. Without a mechanism to make agriculture profitable or even allowing the farmers to recover their cost of production, they will be back to being debt ridden from the next season,” said Kulkarni adding that the government must sit with peasant bodies and other stakeholders to chalk out long term plans to resolve the agrarian distress.

Talking about its expectations from the budget, the RSS’ labour wing the Bharatiya Mazdoor Sangh (BMS) said the focus should be on expanding the social security net to the unorganised sector including agriculture workers and also advocated against farm loan waiver.

While admitting that the government may be inclined towards presenting a populist budget, BMS President C.K. Saji Narayanan said farmers should be incentivised to procure seeds , fertilisers and equipments rather than waiving their loans.

“Our farmers are in distress and indeed need lot of assistance from the government but loan waiver should be the last thing. Waiver as a short term measure is acceptable but then it has its long term effects on the economy which the government should guard against.

“The need is put up a mechanism to ensure that farmers gets right price of their produce. They should be given subsidy to purchase seeds, fertilisers and equipments instead of loan waiver,” Narayanan said.

A critic of the Modi government’s labour and economic policies, Narayanan said the budget should focus on giving relief to the middle class and urorganised sector workers.

“This government for most part of its tenure, has functioned like Congress-led UPA. But in the last year or so there has been substantial change in its attitude. However, with elections on the horizon, it may indulge in populist measures. But that doesn’t mean it should go for loan waivers.

Narayanan said the government in the budget should look to providing relief to the middle class and the workers in the unorganised sector.

“Our major demand is that the income tax exemption limit should be raised to Rs 10 lakh besides that we hope that government will no more neglect our workers especially contract labourers. In addition to hiking contract labour’s wages, unorganised sector has to be brought under social security net including agricultural labours,” he added.

While Prime Minister Modi and his government have been touting GDP growth as FDI inflow as its major achoevemnets, the Swadeshi Jagaran Manch (SJM), the economic wing of the RSS said, job-less growth was meaningless.

“GDP growth or FDI inflow should not be the parameters for development, what matters is how much employment is generated.

“As regards the agrarian crisis, the question is why our farmers are debt ridden, and answer to that question can never be loan waiver,” SJM National Co-Convener Ashwani Mahajan said.

He held the “historic neglect” of the agriculture sector by successive governments to be the core issue.

“Besides their persistent failure to even recover their cost of production, the steady rise of prices of farm inputs and farm equipments being under GST, has further pauperised the farmers,” he said.

He said instead of giving the farmers “alms” in form of loan waiver, the need was concrete policies aimed at reforming and reviving the farm sector and making it economically viable and profitable.

“There are large numbers of seasonal agricultural labourers who are rendered jobless for a large part of the year. The focus should be on rehabilitating them as also come with policies to make agriculture profitable.

Mahajan recommended giving major focus on food processing, oil seeds protection, change in crop production, subsidizing farm inputs.

“The one thing that must be immediately done is to exempt farm equipments from GST. We sincerely hope the government will use this budget to lay out long term plans to revitalize the economy and resolve the agrarian crisis instead of falling trap to electoral populism,” added Mahajan.

(Anurag Dey can be contacted at [email protected])

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