Opening bell 22 September

Opening bell 22 September

Mumbai: As expected, the Federal Reserve announced a new plan to boost. This time the central bank is planning to invest $400 billion in long-term Treasury securities over the next nine months, using the money raised by selling its holdings of short-term debt. Read more...

But what spooked the markets is the central bank’s dismal outlook for the economy. The Federal Reserve saw little prospect of the economy expanding. In a statement, the central bank pointed to ‘strains in global financial markets’ and said there are significant ‘downside risks to economic outlook’.

The warning led to a sell-off in the US stock markets. Equities suffered their worst sell-off in a month on selling in shares of financial services companies. The S&P 500 at 1,166 is down 2.94%.

The grim diagnosis statement by the US Federal Reserve has led to a weak opening in Asian stocks. Japan’s Nikkei slumped 1.77% on selling in stocks of companies that derive significant earnings from overseas markets.

The IMF has rung alarm bells again. Releasing the Global Financial Stability Report, IMF officials cautioned that emerging market economies such as India faced an abrupt reversal of capital flows if foreign portfolio investors perceived that the strong prospects of economic growth were being reversed.

Back home, microfinance institutions in Andhra Pradesh may heave a sigh of relief. The state government is planning to ask commercial banks to assist micro-lenders in restructuring loans given to distressed debtors. The move might help SKS Microfinance as the company has significant exposure to Andhra Pradesh. Read more...

Expect positive momentum to continue in GVK Power and Infrastructure stock. The group, which recently agreed to acquire coal mines from Hancock Group for $1.26 billion, is in talks with Indonesia’s PT Kideco Jaya Agung for divesting part of its stake in the coal mines. The stake sale will bring in much required funds.

After receiving approval for the Reliance Life Insurance-Nippon Life deal, Reliance Capital is now looking to sell a 26% stake in the general insurance business. According to reports, the company is looking at a valuation close to what Nippon Life has paid for the life insurance business.

Keep an eye on NDTV stock. The company is in talks with a Tamil Nadu based newspaper to sell its Chennai centric television channel. The stock surged 13% yesterday.

The Mazagon Dock-Pipavav tie-up is in troubled waters. According to reports, the defence ministry has asked Mazagon to submit a detailed report on the selection of Pipavav as its partner. The move comes after L&T and ABG Shipyard alleged lack of transparency in the selection process.

Finally, China suspended a popular television talent show off the air after it exceeded broadcasting time limits. Episodes of talent show Super Girl, akin to American Idol, were supposed to run for a maximum of 90 minutes, but sometimes exceeded time limits. The authorities replaced it with programs that ‘promote moral ethics.’ Read more...