Mumbai: A day after the Reserve Bank of India surprised markets and cut interest rates by 50 bps to boost growth and stimulate investments, the International Monetary Fund (IMF) has lowered India’s growth target for 2012 to 6.9% from 7% projected in January. IMF has attributed the moderating growth outlook to policy uncertainty, supply bottlenecks, high interest rates and low external demand, reports Business Standard.
Wall Street indices rebounded following increasing appetite for Spanish debt and rally in technology shares. Spain sold more debt than it anticipated on Tuesday, with yields on 10-year government bonds declining below 6% after the auction. The Dow Jones Industrial Average closed up 1.5%, the S&P 500 climbed 1.6% and the Nasdaq Composite gained 1.8%, reports MarketWatch.
Asian markets were trading higher on Wednesday morning following firm cues from Wall Street as concerns of Europe’s finances eased a bit, reports MarketWatch. Japan’s Nikkei Stock Average jumped 1.6%, China’s Shanghai Composite was up 0.3% and Hong Kong’s Hang Seng gained 1.1%. Commodity producers and banking shares were leading the gains.
In India, Indraprastha Gas Ltd (IGL) will be in focus as market regulator is investigating the possibility of insider trading in shares of IGL and other gas transportation companies, reports Mint. The Securities and Exchange Board of India is investigating whether people with prior knowledge of the regulator’s order of reducing the charge of transportation and compression shorted the stocks of IGL and other gas transporters.
Vodafone Group Plc has challenged the government’s budget proposals to amend tax laws with retrospective effect, citing a violation of legal protection granted to Vodafone under an international treaty, reports Mint. The proposals could result in the reversal of an apex court verdict which said that Vodafone did not have to pay more than $2 billion in taxes for buying controlling stake in the Indian unit of Hong Kong based Hutchison Telecommunications Ltd.
The Reserve Bank of India has asked banks to reduce their regulatory exposure ceiling in a single NBFC having gold loans to 50% or more of its total financial assets, bringing the exposure down to 7.5% from 10%, reports Economic Times. RBI has taken this action to avoid concentration or systemic risk in the system.
Coal India (CIL) will be watched since power producers are planning to approach the Prime Minister’s Office (PMO) on a recent decision by the CIL board to set a lower penalty level under the fuel supply agreements, reports Business Standard. On Monday the board reduced the penalty level to 0.01 from 10% if CIL was not able to meet 80% of the coal supply agreement. The power industry believes that the latest penalty clause of 0.01% will not have any effect on the company’s profits and may not incentivize CIL to boost production.
Indian Oil Corporation has threatened to raise prices to consumers after a revenue loss of Rs 2,236 crore in 2011-12 for not being able to pass on the petrol price hike, reports Business Standard. IOC has urged the government to regulate petrol prices or cut taxes on the fuel. Since the price cut of Rs 0.65 a litre in December 2011, international petrol prices have gone up. Other oil retailers like Bharat Petroleum and Hindustan Petroleum could also follow suit.
Lastly, Jet Airways and Indigo have pulled out from makemytrip.com in protest against the opaque fares scheme which the portal deployed on its website, reports Economic Times. Opaque fares was a scheme offered by a few travel portals which offered heavily discounted air tickets without disclosing the airline name until the payment was made. The aim of the scheme was largely to get rid of Kingfisher Airline tickets.