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Last hour rebound lift equity indices, Sensex ends 113 pts up

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Sensex Nifty Equity

Mumbai, Feb 4: Amidst fears over fiscal slippage, the Indian equity market made gains on Monday as buying picked up in the last hour of the day’s trade.

According to analysts, healthy buying in specific stocks along with expectations over lowering of interest rate and major Interim Budget announcements like farm package and enhancement of tax rebate limit guided the equity indices.

However, both the key domestic equity indices languished deep in the red for the better part of the day as investors feared fiscal slippage due to populist measures announced in the Interim Budget on Friday.

“The market rallied from the day’s low led by few set of domestic focused companies, oriented at consumption and private banks,” said Vinod Nair, Head of Research, Geojit Financial Services Ltd.

Nair added that the market was also looking at the upcoming RBI policy, hoping for a change from calibrated tightening to neutral.

Consequently, the S&P BSE Sensex closed 113.31 points higher at 36,582.74 while the broader Nifty finished at 10,912.25, up 18.60 points.

Consumer durables, energy and oil and gas stocks witnessed healthy buying, while the key healthcare, capital goods and automobile stocks ended in the red.

Stocks price of Reliance Communications (RCOM) declined up to 48 per cent while Dewan Housing Finance Corp (DHFL) lost 10 per cent earlier in the day.

“Market is fearing a fiscal slippage because of various announcements in the Interim Budget, like the higher borrowing programmes of the government.

“Also, the government’s estimate of GST collection in FY19 is on the higher side. The nominal GDP growth rate of 11.5 per cent is also difficult to achieve,” Rusmik Oza, Head, Fundamental Research, Kotak Securities, told IANS.

He said the capital expenditure provided for in the next year’s budget is 6 per cent, which is very low. In addition, the bond market is not happy with the Interim Budget, leading to negative impact on the investors.

According to Deepak Jasani of HDFC Securities, the Budget will continue to have an effect on the market for some more days.

“Fears of slippage is because of government’s fiscal deficit target of 3 per cent in FY21. The 3.4 per cent target for next year is also not good.

“It is not possible to reduce 0.4 per cent in a year,” he added.

The other factor was the volatile movements in specific stocks like Zee, DHFL and RCOM which is pushing away the retail investors, the analysts noted.

ONGC and Reliance closed with gains over 3 per cent on the BSE while Bajaj Auto, Kotak Mahindra Bank and HDFC gained up to 2 per cent.

Power Grid, Yes Bank, Sun Pharma, NTPC and Mahindra and Mahindra decilined in the range of 2 to 3 per cent.

IANS

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Markets open on positive note

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Sensex Nifty Equity

Mumbai, Feb 20: The 30-scrip Sensitive Index (Sensex) on Wednesday opened on a positive note during the morning session of the trade.

The BSE Sensex opened at 35,564.93 before touching a high of 35,581.14 and a low of 35,520.21.

It was trading at 35,528.69 up by 176.08 points or 0.50 per cent from its Tuesday’s close at 35,352.61.

On the other hand, the broader 50-scrip Nifty at the National Stock Exchange (NSE) opened at 10,655.45 after closing at 10,604.35.

The Nifty is trading at 10,656.25 in the morning.

IANS

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PF funds’ investment in IL&FS bonds have no government guarantee: Finance Ministry

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New Delhi, Feb 19 (IANS) The provident and pension fund trusts that invested in the IL&FS bonds now fear loss of money as the debt-ridden company’s bonds are unsecured debt, and the Finance Ministry says superannuated bonds do not carry any government guarantee and all such instruments have to face all market-related risks.

“Since these are investments in bonds, the government does not ensure any guarantee on them as such and if these are invested in stock markets, they carry the market risks as applicable. It is between the bond issuer and bond holders…,” the Finance Ministry said in response to IANS queries.

Thousands of crores of money of more than 15 lakh employees of both public and private sector companies have exposure to IL&FS bonds.

However, queries sent to the EPFO Commissioner and Labour Minister Santosh Gangwar remained unanswered.

Over 50 funds that manage retirement benefits of over 15 lakh employees have exposure to IL&FS. PF trusts of state electricity boards, public sector undertakings (PSUs) and banks are among them. The provident and pension fund trusts have filed intervening applications in the National Company Law Appellate Tribunal (NCLAT) stating that they stand to lose all the money since the bonds are under unsecured debt.

Usually, retirement funds have a low-risk appetite and invest in “AAA” rated bonds (which IL&FS bonds used to be once upon a time) and get assured returns with low interest rates.

The worries of pension and provident fund trusts come from the classification of IL&FS profiling its companies as to which can meet the dues obligations. Many important trust managing funds of PSUs like MMTC, IOC, Hudco, SBI and IDBI are among those filing petitions. From private sector, HUL and Asian Paints are among the petitioners.

IL&FS is currently under resolution process at the National Company Law Tribunal (NCLT). The process will decide under Section 53 of the IBC the order of priority for distribution of proceeds of the process.

The beleaguered company has informed the NCLT that of the 302 entities in the group, 169 are Indian companies, out of which only 22 are emerging as those which can meet all obligations (green), while 10 firms can pay to only secured creditors (Amber). There are 38 companies of IL&FS (red) which cannot meet any obligations of payment, and 120 entities are still being assessed.

These PF and provident funds trusts are worried that if payment is limited to secured creditors, then only financial creditors like banks will receive the dues while unsecured bond-holders will be get any payments.

IL&FS bonds attracted investments by PF trusts as it had the shareholding of SBI and LIC giving its bonds the comfort factor.

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Sachin Bansal invests Rs 650 crore in Ola

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Bengaluru, Feb 19 (IANS) Internet entrepreneur and Flipkart co-founder Sachin Bansal has invested Rs 650 crore, or about $92 million, in ride-hailing platform Ola in his personal capacity as investor, the company said in a statement on Tuesday.

This investment is part of Ola’s larger Series J funding round. It is also the largest investment by an individual in Ola to date, it said.

“Ola is one of India’s most promising consumer businesses that is creating deep impact and lasting value for the ecosystem. On one hand, they have emerged as a global force in the mobility space and on the other, they continue to build deeper for various needs of a billion Indians through their platform, becoming a trusted household name today,” Bansal said.

He further said he has known Ola founder Bhavish Aggarwal as entrepreneur and friend over the years and that he has great respect for what he and the team at Ola have built in 8 years.

“We are extremely thrilled to have Sachin onboard Ola as an investor. Sachin is an icon of entrepreneurship and his experience of building one of India’s most respected businesses ground up, is unparalleled,” Ola CEO Bhavish Aggarwal said.

Ola integrates city transportation for customers and drivers onto a mobile technology platform ensuring convenient, transparent, safe and quick service fulfilment, the statement added.

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