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US Fed hikes interest rate by 25 basis points to 2-2.25%

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Washington/Mumbai, Sep 27 : The US Federal Reserve has raised its key interest rate by 0.25 per cent for a third time in 2018 bringing it to the two to 2.25 per cent range.

In a statement on Wednesday, following its two-day meeting in Washington, the Federal Open Market Committee also dropped its earlier “accommodative” stance on monetary policy.

The majority of Fed members also said they expect another hike in rates before the end of 2018. The nine-member committee voted unanimously for the hike.

In continuing with its policy of gradual rate rises, the latest one marks the Fed’s eighth rate hike since 2015, indicating its favourable assessment of the US economy.

The Fed statement said that growth and employment gains in the domestic economy have been strong and inflation has remained near the US central bank’s target of two per cent.

“The committee expects that further gradual increases in the target range for the federal funds rate will be consistent with sustained expansion of economic activity, strong labour market conditions and inflation near the committee’s symmetric two per cent objective,” the statement said.

America’s GDP in the second quarter of 2018 grew at over four per cent, while the unemployment rate continued to stay below four per cent.

According to Fed projections released after the meeting, the US economy was expected grow by 3.1 per cent in 2018.

Noting the rising concerns from businesses about the risk from new US trade tariffs, US Fed Chairman Jerome Powell, however, also warned that a permanent shift to a “more protectionist world” would hurt US and global economies.

Key Indian equity market indices on Thursday opened higher despite a muted trend in Asian markets and rate hike by the US Fed. The Sensitive Index (Sensex) of the BSE, which had closed at 36,542.27 points on Wednesday, opened higher at 36,691.93 points.

Fears over a rise in US interest rates along with profit booking ahead of the September Futures and Options expiry subdued the Indian equity markets on Wednesday.

According to market observers, high crude oil prices and caution over a likely default by some of the major players in the non-banking financial sector eroded investors’ risk-taking appetite.

A rate hike by the US Fed can potentially drive away foreign funds from emerging markets such as India.

On the currency front, the Indian rupee closed on Wednesday at 72.61 per US dollar, weaker eight paise from its previous close of 72.69 per greenback.

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Bharti Airtel, VIL shares plunge after Jio unleashes postpaid tariff war

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Jio Bharti Voda

Mumbai, Sep 23 : Shares of telecom majors Bharti Airtel and Vodafone Idea Ltd (VIL) were under pressure on Wednesday after Reliance Jio announced a range of postpaid plans with several benefits, to take on both Airtel and Vodafone Idea in the postpaid segment.

Brokerages retained their bullish stance on Bharti Airtel NSE -7.64 % even after billionaire Mukesh Ambani-led Reliance Jio on Tuesday unveiled postpaid plans, bundling up to 500 GB of data and subscription to Netflix, Amazon Prime and Disney + Hotstar.

Shares of Bharti Airtel, however, traded 5.78 per cent lower at Rs 443.80 at around 11:30 am (IST), while Vodafone Idea traded 5.56 per cent down at Rs 9.68 at around the same time. On the other hand, the benchmark BSE Sensex was up 0.62 per cent at 37,966.

JioPostPaid Plus for mobile customers will have a monthly tariff varying from Rs 399 to Rs 1,499 with different benefits, the company said in a statement.

According to ICICIdirect, the move creates a new layer of tariff-based competition in the segment that was so far unchallenged and lucrative.

“Both Airtel, Vodafone Idea (VIL) are exposed to this risk of churn, the pressure on VIL will be more. The theme of prepaid tariff hike in near term also remains questionable. We await incumbent’s move before incorporating any impact in our financials and valuations. We retain ‘Buy’ on Airtel with an unchanged target price of Rs 700 given comfortable leverage and superior customer quality. However, we maintain ‘Sell’ on VIL with an unchanged target price of Rs 6 per share, given the difficult path ahead to assure survival.”

Reliance Jio added that the main objective of the newly-launched JioPostpaid Plus service is to provide superior services across connectivity, entertainment, and experience.

“There can’t be a more opportune time to introduce JioPostpaid Plus. After having earned the trust of close to 400 million satisfied customers in the prepaid smartphone category, we want to extend our customer obsession to the postpaid category,” Akash Ambani, Director, Jio, said in a statement.

Axis Capital sees this as an attempt by Reliance NSE 1.21 % Jio to add high-Arpu customers and shift some of its customers from prepaid to postpaid.

“There will be no impact on incumbents as only 5 per cent and 8 per cent of Bharti Airtel and VIL customers are on postpaid plans. Most postpaid are enterprise customers who are sticky and incumbents also have comparable plans which can match Jio with some tweaking. Incumbents provide additional features like handset protection. We see it as a positive for the sector as it will attract a new generation of OTT aficionado subscribers which will expand the postpaid market,” Axis said while maintaining a positive stance on Airtel and Reliance Industries.

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Airlines on verge of collapse, may shut if situation doesn’t improve: GoAir to SC

SC deferred the hearing of the case for refund of air tickets booked during lockdown period till September 25

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New Delhi: A day after aviation regulator Directorate General of Civil Aviation (DGCA) informed the Supreme Court (SC) that passengers who booked tickets during lockdown are eligible for refunds, the government recommended that airlines pay 0.5% interest for delayed refunds.

While both Vistara and AirAsia opposed the levy of interest stating that many of their customers prefer credit shell, country’s largest airline IndiGo said it refunded the tickets for the lockdown period in full.

The government also said it is open to considering the interest of any particular segment of passengers if adversely affected.

New Delhi: A day after aviation regulator Directorate General of Civil Aviation (DGCA) informed the Supreme Court (SC) that passengers who booked tickets during lockdown are eligible for refunds, the government recommended that airlines pay 0.5% interest for delayed refunds.

While both Vistara and AirAsia opposed the levy of interest stating that many of their customers prefer credit shell, country’s largest airline IndiGo said it refunded the tickets for the lockdown period in full.

The government also said it is open to considering the interest of any particular segment of passengers if adversely affected.

Meanwhile, GoAir pleaded with the apex court that many airlines were on the brink of collapse and might shut down if If the situation doesn’t improve.

SC has deferred the hearing on airlines’ fare refund case for September 25.

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YSRCP leaders spreading lies on TDP, destroying Amaravati: Chandrababu Naidu

According to Naidu, Reddy has no faith in any religion but only indulges in theatrics to safeguard his vote banks.

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Amaravati, Sep 22 : Andhra Pradesh opposition leader and former Chief Minister N Chandrababu Naidu on Tuesday said YSRCP leaders are spreading false information about erstwhile TDP projects with a plan to destroy Amaravati capital city.

“The evil-minded YSRCP leaders were only spreading misinformation campaigns on TDP projects with a plan to destroy Amaravati Capital city,” alleged Naidu.

During an online interaction with senior party leaders and candidates from all the 175 constituencies, he claimed that the ruling party MPs were not fighting for the people’s issues and did not raise the minimum support price issue for farmers in their protests.

Naidu alleged that Chief Minister Y. S. Jagan Mohan Reddy is indulging in vote bank politics, and claimed that he is not condemning attacks on temples, dalits, BCs and minorities.

“The Chief Minister did not bother to visit one single temple and failed to give a strong warning to the perpetrators of these crimes,” he asserted.

According to Naidu, Reddy has no faith in any religion but only indulges in theatrics to safeguard his vote banks.

The TDP supremo claimed that multiple investigations against him were carried out in the past but none of them yielded any proof of wrongdoing.

“Even Reddy ordered many inquiries after becoming CM but he could not find fault with the TDP regime in the past 15 months,” he claimed.

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