Global trade war is weighing heavily on Indian markets. The rupee continued to reel under severe pressure amid a steady outflow of foreign portfolio money. The domestic currency closed at one-month low of 68.38 against the US dollar on Tuesday, down 40 paise from its previous close. As the political heat also adds to the investor sentiment, experts in foreign exchange said the rupee may test the 70 level towards end-2018.
Companies and Markets
Companies & Markets
Malaysian carrier AirAsia Group Berhad on Tuesday said that lobbying for the removal of 5/20 norm was done without making any “unlawful payments” and all the required approvals for its Indian joint venture with Tatas were obtained through normal channels.
The latest statement comes against the backdrop of the CBI probing AirAsia and other officials, including Group CEO Tony Fernandes, for allegedly trying to manipulate government policies through corrupt means to get international licence for AirAsia India.
In the wake of Indian airlines placing orders for 900 aircraft worth over $45 billion, the government is working on a plan for tapping the big corpus of pension funds and insurance companies to finance acquisition and leasing of airplanes.
Current account deficit (CAD) at 2.5 per cent of GDP won't be a worry as the government has the required instruments to deal with any imbalance created due to foreign fund outflow, Economic Affairs Secretary Subhash Chandra Garg said today.
"2-2.5 per cent CAD is not a problem for us.... If there is stability, in the current year capital account (inflows) should be good enough to take care and we may not worry even if it (CAD) reaches 2.5 per cent," Garg said.
The market ended in the red in a trading session that saw low key volatility on negative global cues with trade war fears escalating. The S&P BSE The Sensex fell 73.88 points or 0.21 per cent to settle at 35,548.26. The Nifty 50 fell 17.85 points or 0.17 per cent to settle at 10,799.85. Selling in the Mid-Cap and Small-Cap indices continued with the BSE Mid-Cap Index down 0.18 per cent and the BSE Small-Cap Index down 0.77 per cent. The market breadth was weak with 1,737 stocks declining against 901 gaining on the BSE.
The government is planning to list two of its railway PSUs--RVNL and IRFC—in the July-September quarter, a senior official said.
The government is launching the initial public offering (IPO) of railway consultancy firm RITES on June 20 and has fixed a price band of Rs 180-185 per share. It hopes to mop up as much as Rs 460 crore from the market.
Shares of Vedanta ended with a nearly 3 per cent loss on the BSE as the 30-share Sensex rejig came into effect from Monday.
Under the reconstitution, Vedanta has entered the benchmark index, while Dr Reddy's Labs has exited. Vedanta shares fell by 2.70 per cent to end at Rs 232.30 on BSE. During the day, it lost 4.16 per cent to Rs 228.80—its 52-week low.
Tata Motors Rating: Buy; Target price Rs 450
Healthy volume/margin outlook across businesses
It was public relations at its worst for Airtel on Monday. After finding itself at the receiving end of Twitterati after a controversy on religious lines, the Sunil Mittal-led company did a somersault to save its reputation. But the damage has already been done. Airtel’s DTH customer, one Pooja Singh, asked for a ‘Hindu representative’ to address her grievance after her complaint was taken up first by a service engineer named Shohaib.
Brokerages representing offshore investors are asking for more concessions to trade in India’s nascent international financial hub in Gujarat, according to people with knowledge of the matter.