Companies & Markets
The market has entered a consolidation phase this week and corrected after Monday’s gains as it displayed range-bound volatility during the day’s trade. Auto and consumer durable sector closed down by 2 to more than 3 per cent as rupee touched a new low of 74.39 per dollar and crude oil price surged by around 1 per cent. The Sensex fell 174 points, or 0.51 per cent, to settle at 34,229.47, and the Nifty 50 Index fell 47 points, or 0.45 per cent, to settle at 10,301.05.
Bank of Baroda on Tuesday said it's loan account to debt-laden Infrastructure Leasing and Financing Services (IL&FS) continues to remain standard at present. It said it continues to lend to non-banking financial companies (NBFCs) and housing finance companies (HFCs).
With an aim to deepen the commodity derivatives market, regulator Sebi on Tuesday allowed trading in the segment by foreign entities with exposure to the Indian physical commodity market.
Extending liquidity support to non-banking financing companies, State Bank of India on Tuesday said it would buy good quality assets worth Rs 45,000 crore from NBFCs.
This, economic affairs secretary Subhash Chandra Garg said in a tweet, should alleviate liquidity concerns of NBFCs to a great extent.
NBFCs and mutual funds have been facing a liquidity crunch from mid-September after a series of loan repayment default by IL&FS and its group companies.
The ministry of corporate affairs (MCA) in its report will incorporate the exaggerated consolidated financial statement of IL&FS, its subsidiaries, associates and joint ventures. The detailed note will be submitted to the NCLT by month-end.
The market rebounded after the last week’s huge correction on the back of bargain hunting in banks and oil sector stocks in a highly volatile session. The Sensex rose 97.39 points, or 0.28 per cent, to settle at 34,474.38, and the Nifty 50 Index rose 31.60 points, or 0.31 per cent, to settle at 10,348.05. However, broader market saw selling as the BSE Mid-cap Index ended 1.99 per cent lower, and the Small-cap Index fell 2.01 per cent.
Technical view
Oil marketing companies (OMCs) may take a hit in their profit in the third quarter as the government’s fuel price cut would partly get financed from their pockets.
As the poll season has begun, brokerages expect further government interventions if oil prices keep rising. It may ask OMCs to cut their margins further. This could lead to days of uncertainty over pricing of auto fuels and hence unpredictability of earnings for the OMCs, a domestic brokerage house said.
The asset base of mutual funds declined by 12.5 per cent to Rs 22 lakh crore in September over the previous month owing to massive outflows from liquid funds and income schemes.
The asset under management (AUM) of the 42-plyaer MF industry stood at Rs 22.06 lakh crore at the end of September against Rs 25.20 lakh crore at August-end, data from the the Association of Mutual Funds in India (Amfi) showed.
The monthly drop in the asset base is mainly due to an outflow of Rs 2.3 lakh crore from mutual fund schemes.
The information technology sector has done well in the July-September 2018 quarter, largely driven by the rupee’s slide against the US dollar and other invoicing currencies.
However, historical trends suggest that only companies with continued strong growth have been able to deliver gains in profitability and the rest all use the surplus back as investment to drive sales momentum.
Even as Yes Bank remains in a state of flux after the RBI refused extension to chief executive Rana Kapoor, it now emerges that Madhu Kapur, widow of co-founder Ashok Kapur, will have a decisive say in the appointment of new CEO and whole-time directors on board.
Amid speculation of estranged promoters going for an out-of-court settlement, sources close to Madhu Kapur said so far no meeting has taken place between Rana Kapoor and Madhu Kapur.
