Mumbai: Global markets are hit by another bout of selling. This time the trigger has come from Spain, whose economy is already in recession.
Citing weak economy and low capitalisation levels Moody’s Investor Service downgraded 16 Spanish banks. The downgrade has sparked a rally in Spanish bonds and rattled the global markets.
With the government finances already stretched investors are worried that the country may require an international bailout. Read the Reuters report.
Also fuelling concerns is the weak economic data from the US. After six months of increases, a gauge of the US economic activity fell in April.
The Philadelphia Federal Reserve’s index of business conditions has hit its lowest level since September.
The weak economic data and deepening economic crisis in the Euro zone is making investors wary of the risky assets.
Overnight, US stocks tumbled to four month low on broad based selling. S&P 500 lost 1.51% to 1,304. Asian markets also opened on a weak note. Japan’s Nikkei at 8,650 is down 2.55%.
The heightened risk aversion, though, has one positive side-effect. Brent crude fell below $110 to $106.73 a barrel. Crude prices fell on speculation that weakening recovery in the US and turmoil in Europe will crimp demand for the fuel.
Back home, coal auctions could face delay as the ministry is considering a move to first assess deposits at the blocks. If the ministry goes ahead with the proposal, it could delay the government’s ambitious plan to boost coal output, reports Mint.
Keep an eye on companies that sell more power in the merchant markets. Power tariffs in the spot market are likely to rise by at least 16-17% in June, reports Mint.
According to the Central Electricity Regulatory Commission, the rates are likely to rise from Rs 3.31 per kilowatt hour to Rs. 3.86 per kilowatt hour.
Telecom stocks could also be in focus. With Bharti Airtel slashing 3G tariffs by as much as 70% a new round of price war is expected to take place in the telecom market. Read the Business Standard report.
SKS Microfinance is pinning revival hopes on the proposed micro finance law. According to the company, the draft law would let micro lenders improve debt collection and help them raise funds. Read the Mint report.
DLF has got Rs 2,900 crore offer for its 17-acre plot in Mumbai’s Lower Parel area, reports The Economic Times.
According to the report, the sale deal is expected to be completed by end of next month.
Another real estate firm, HDIL is close to selling its 14-acre plot in Bangalore to Godrej Properties for around Rs 100 crore, reports Business Standard.
Like DLF, the sale, if fructifies, will help the company pare its debt.
Finally, in a biggest initial public offering by a technology company, Facebook Inc. will raise at-least $16 billion by selling shares in the social networking site. The company priced the IPO at the top of its target range of $38 a share. That values the firm at $104 billion. Read the Bloomberg report.