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Asian markets were trading higher after China's unexpected rate cut to support its ailing economy
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China’s rate cut boosts Asian markets
Asian markets were trading higher on Monday morning after China’s unexpected rate cut on 23 October to support its ailing economy. China’s Shanghai Composite gained 0.7%, Hong Kong’s Hang Seng 0.6% and Japan’s Nikkei Stock Average was up 1.1%. Investors will be closely watching Bank of Japan’s meeting on 30 October for any signs of stimulus.
The People’s Bank of China cut the benchmark interest rate by 0.25 percentage points to 4.35%, and the reserve requirement ratio for commercial banks was cut by 0.5 percentage points to 17.5%. This is the sixth cut in the last 12 months.
All eyes on the Fed meet
On 23 October, Wall Street indices ended sharply higher, following the surprise rate cut by China. The Dow Jones Industrial Average, S&P 500 and Nasdaq Composite gained around 0.9% to 2% each. All eyes are on the US Federal Reserve policy meet this week where they interest rates may be left unchanged. This is after the European Central Bank indicated last week that they may have zero interest rates for a longer period.
Net sales growth slowest in over 6 years so far in Q2
Indian companies that have reported earnings for the September quarter so far have shown almost no growth in net sales from a year ago, making it the worst quarter for topline growth in at least six-and-a-half years as demand continues to remain weak. The only silver lining is expansion in margins on the back of lower commodity prices, read more.
JP Associates sells wind power assets for ₹ 180 crore
Shares of Jaiprakash Associates Ltd will be in focus as Sudhir Valia, brother-in-law of Sun Pharmaceutical Industries Ltd’s founder and managing director Dilip Shanghvi, has agreed to buy wind power assets of ₹ 180 crore, reports Mint.
Wipro may extend CEO TK Kurien’s term
Wipro Ltd is likely to extend T.K. Kurien’s tenure as chief executive officer for at least a year after his current five-year term ends in January, curbing speculation about an imminent change of guard. The extension will give chairman Azim Premji and the board more time to find a successor to Kurien, reports Mint.
IIFCL Ltd, IRFC Ltd and NTPC Ltd to issue rupee denominated bonds
India Infrastructure Finance Co. Ltd, Indian Railway Finance Corp. Ltd and NTPC Ltd are among the companies laying the groundwork to issue rupee-denominated bonds sometime early next year. This is follows the Reserve Bank of India guidelines allowing domestic companies to raise rupee-denominated overseas bonds, read more.
BSNL, MTNL to share spectrum with private operators
Government-owned telecom service providers Bharat Sanchar Nigam (BSNL) Ltd and Mahanagar Telephone Nigam (MTNL) Ltd have started discussion with private telecom companies to share spectrum, reports Business Standard. BSNL made a loss of ₹ 7,600 crore, while MTNL made a loss of ₹ 745 crore in FY15.
Demand for tractors and motorcycles slides in rural India
Lastly, demand for tractors and motorcycles have collapsed in rural India, down 20.2% and 4.1% in the first six months of the year, respectively. As a result, companies are seeking government support for the troubled farm sector. They are also redrawing their investment plans and slashing costs in response, read more.
Earnings in focus
Bharti Airtel Ltd, HDFC Ltd, Inox Wind Ltd and Wonderla Holidays Ltd will be in focus as they are expected to announce their September quarter earnings.
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