Opening bell 7 October

Opening bell 7 October

The world will miss Steve Jobs. The man who redefined the digital age is no more. Cues from global markets are encouraging. The European Central Bank, even though it held the interest rates steady, said it is ready to buy bonds to provide longer-term cheap money for European lenders.

The optimism led to gains in financial services stocks. The S&P 500 at 1,164 is up 1.83%.

The positive momentum also lifted the Asian stock markets. Japan’s Nikkei rose 1.28% to 8,631 on optimism European officials will protect banks from the region’s debt crisis.

Back home, the government is taking stock of capital requirements of public sector banks and their ratings. The finance ministry asked all public sector banks to furnish details of their latest ratings and indicate their near-term capital-raising plans. Any news-flow on the capital infusion front will be a positive for the stocks.

The finance ministry has said it is committed to maintaining 8% tier-1 capital adequacy for all public sector banks. As of June 30, SBI’s tier-1 capital adequacy ratio stood at 7.60%.

Keep an eye on the Airtel stock. The company’s Nigeria unit is hit by labour union strike. Following a dispute over the job terms, unions are on a nationwide campaign to disrupt operations.

With the labour unrest coming to an end, Maruti Suzuki is working hard to boost its production numbers. The company has reportedly increased its production target by 30-40% compared to September.

Bhel has deferred a plan to promote a finance company that will fund power projects. Uncertainty over policies on land acquisition and fuel allocation, and the poor financial health of state-owned electricity distributors made the company defer its plans.

The shipping ministry has asked the Shipping Corporation of India to scrap plans to expand its fleet. According to reports, the ministry has told the company to operate with the existing fleet and focus on its core business of operating ships. Read more...

A shortage of coal has forced NTPC to shut down three of the four 210 megawatt units at its Dadri plant. The shortage has been caused by derailment of a coal wagon near Lucknow.

Expect positive momentum to continue in the IIFL stock. Private equity firm Carlyle Group has bought 9% stake in the company from the secondary market. At Wednesday’s market price, 9% stake is valued at about $38 million.

Finally, a 30 year mortgage rate in the US has fallen below 4% for the first time on record to 3.94%. The mortgage rates fell to record low on fears that the US economy may slide into recession. In India, home loan rates are hovering at around 12%. Read more...