Category Archives: Business

Rupee jumps 37 paise, storms to fresh 17-month high at 65.04

MUMBAI: Scripting its second biggest single-day gain this year, the rupee on Monday zoomed by 37 paise to close at a fresh 17-month high of 65.04 on the back of panic dollar selling by speculative traders and exporters.

This is the highest closing for the domestic unit since October 28, 2015 when it had closed at 64.93.

Expectations of more reforms that will boost long-term economic growth reinforced investor optimism including the much awaited labour, agricultural and banking reforms.

Robust capital inflows and weakness of the dollar against other currencies overseas predominantly boosted the rupee value against the dollar, a forex dealer said.

Foreign investors have pumped in about $6 billion in capital markets so far this month, buoyed by expectations that BJP’s victory in assembly polls is a precursor to more “bold, reformist policies” in India.

Heightened volatility in greenback characterised foreign exchange market sentiment following the failed passage of the US healthcare reform through the US Congress last weekend.

However, worries of policy gridlock and the possible knock-on effects of that sent global financial markets into a tailspin which expect a radical pro-growth agenda.

Domestic equities couldn’t find the magic and endured a massive sell-off on the back of profit-taking across the spectrum as investors preferred to remain cautious ahead of F&O expiry amid lack of support from global peers.

The home currency resumed on a firm footing at 65.27 from last Friday’s closing value of 65.41 at the Interbank Foreign Exchange (Forex) market.

Maintaining its buoyant momentum, the local unit hit an intra-day high of 65.01 in late afternoon deals before ending at 65.04, showing a massive spike of 37 paise, or 0.57 per cent.

The RBI, meanwhile, fixed the reference rate for the dollar at 65.0892 and for the euro at 70.6739.

The US dollar index, which measures the greenback’s strength against a trade-weighted basket of six major currencies, plunged to a 4-month low of 98.75 in early trade.

In cross-currency trade, the rupee retreated against the British pound and finished lower at 81.89 from 81.68 per pound and softened against euro to settle at 79.67 from 70.66.

It also declined against the Japanese Yen to conclude at 58.99 per 100 yens compared with 58.90 last weekend.

Meanwhile, country’s foreign exchange reserves surged by whopping USD 2.671 billion to USD 366.781 billion for the week ended March 17.

On the equity front, the flagship index dropped over 184 points to end at 29,237.15, while broader Nifty slipped 62.80 points to finish at 9,045.20.

In the forward market, premium for dollar displayed a steady trend in the absence of necessary buying support.

The benchmark six-month premium for August ended steady at 134-136 paise, while the far-forward February 2018 contract settled a tad higher at 286-288 paise from 284-286 paise on Friday.

The forex and money market will remain closed tomorrow on account of ‘Gudhi Padwa’.

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26 companies want to collaborate with India Post Payments Bank

NEW DELHI: Communications minister Manoj Sinha on Monday said 26 banking and non-banking companies have shown interest to collaborate with India Post Payments Bank.

“The Department is in various stages of discussions with them. A decision on formal partnerships will be taken after carefully evaluating the entire value proposition they propose for the common man,” Sinha said in a reply to a question in the Rajya Sabha.

The India Post Payments Bank had launched its two branches in Raipur (Chhattisgarh) and Ranchi (Jharkhand) on January 30 with basic products and banking services in partnership with the Punjab National Bank.

Some of the banks and non-banking companies that have shown interest to partner with India Post Payments Bank are YES Bank, Union Bank, State Bank of India , Deutsche Bank, Barclays, HSBC and Royal Sundaram.

The payments banks are different from regular banks and are not allowed to undertake lending activities directly.

They can accept demand deposits only that is savings and current accounts and will initially be restricted to holding a maximum balance of Rs 1,00,000 per individual customer.

Following the Reserve Bank of India guidelines for licensing of payments banks, it cannot accept Non Resident Indian deposits. Payment banks cannot set up subsidiaries to undertake non-banking financial services.

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GST Compensation Fund: Centre to get greater chunk

NEW DELHI: The Centre will have a greater share of the residual amount in the compensation fund at the end of the 5-year period as the GST Bill now provides for equal sharing of the amount as against the earlier formula which favoured states.

According to the Goods and Services Tax (Compensation to States) Bill, as introduced in the Lok Sabha on Monday, they will receive provisional compensation bi-monthly from the Centre for loss of revenue from implementation of GST. The draft law had provided for payment of compensation every quarter.

Tweaking the provision of the draft, which was made public in November 2016, the GST Compensation Bill said that “any residual amount left in the Compensation Fund after five year compensation period shall be shared equally between the centre and the states”.

As per the earlier draft, any excess amount after the end of five year tenure in the ‘GST Compensation Fund’ were to be divided between Centre and states as per the specified formula under which 50 per cent of the excess amount was to be devolved between Centre and States as per statute.

The remaining 50 per cent would have to be given to the states in the ratio of their total revenues from SGST in the last year of the transition period.

The bill, as cleared by the GST Council, has simplified the structure for sharing of the residual amount in the Compensation Fund.

The GST Council, comprising Union finance minister and state representatives, had decided to set up a compensation fund by levying cess on demerit and luxury goods. The proceeds from the fund would be utilized to compensate the states for revenue loss in the initial five years of GST roll out, which is likely from July 1.

The bill also provides for audit of accounts relating to Compensation Fund by the Comptroller and Auditor General. Also the final adjustment of compensation to be paid to the states would be done after audit of accounts of the year by the CAG.

The Bill also stipulates that the base year for calculating the revenue of a state would be 2015-16 and a secular growth rate of 14 per cent would be used for calculating the revenue of each state in the first five years of implementation of GST.

The loss of revenue to a state will be the difference between the actual realisation to a state under Goods and Services Tax (GST) regime and the tax revenue it would have got under the old indirect tax regime after considering a 14 per cent increase over the base year of 2015-16.

It also provides that in case of the 11 special category states, the revenue foregone on account of exemption of taxes granted by states shall be counted towards the definition of revenue for the base year 2015-16.

The revenues of states that were not credited to the Consolidated Fund of the states but were directly devolved to “mandi” or “municipalities” would also be included in the definition of ‘revenue subsumed’, the bill said.

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Sensex skids 184 points, Nifty goes below 9,100, RIL tanks

MUMBAI: Equities started the week on a dull note as the Sensex on Monday tumbled over 184 points to end at 29,237, weighed down by heavyweight RIL, which tanked after Sebi banned the company from equity derivatives trading for one year.

Investors were downbeat amid weak global cues due to heavy losses in Asia and a lower opening in Europe following Donald’s Trump failure to push through his healthcare legislation, traders said.

Falling for the first session in three, the 30-share index stayed in the negative zone throughout the day and settled down by 184.25 points, or 0.63 per cent, at 29,237.15 after touching a low of 29,163.54.

The broader Nifty also succumbed to selling and slipped below the 9,100-mark in early trade to hit a low of 9,024.65 before recovering partially to close 62.80 points or 0.69 per cent lower at 9,045.20.

The rally in the rupee sent IT shares lower. Meanwhile, the rupee hit a nearly 1-1/2 year high to trade at 65.04 (intra-day) against the dollar at the forex market.

Stocks of drugmakers also retreated, with Sun Pharma and Lupin ending lower by up to 1.76 per cent.

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Coffee Board predicts 9% dip in production for 2016-17 season

NEW DELHI: The Coffee Board has predicted about 9 per cent dip in production for the 2016-17 season due to erratic rains in February and March in the Western Ghats, Parliament was informed today.

Changing climatic conditions especially erratic rainfall and high temperature have aggravated the problem, Commerce and Industry Minister Nirmala Sitharaman said in a written reply to the Lok Sabha.

She also said that the white stem borer is one of the major pests affecting Arabica coffee in India.

“The Coffee Board has predicted a decline of about 9 per cent in coffee production for the 2016-17 season in comparison with the previous year (2015-16),” the minister said.

The main coffee growing states include Karnataka, Tamil Nadu and Kerala. India is one of the major exporters of the commodity.

Replying to a separate question, the minister said Asian Development Bank has submitted the final report on conceptual development plan of Visakhapatnam-Chennai Industrial Corridor.

ADB has approved $631 million (Rs 4,165 crore) in loans and grants for infrastructure development along VCIC in September last year.

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Gold climbs Rs 100 after dollar trips,silver retakes Rs 42,000

NEW DELHI: A positive global trend took gold higher by Rs 100 to Rs 29,430 per 10 grams on Monday, with local jewellers adding to the tempo.

Silver retook the Rs 42,000-mark per kg by jumping Rs 200 in the wake of increased offtake by industrial units and coin makers.

Traders said overseas gold soared to a month’s high on the back of the dollar’s weakness following President Donald Trump‘s failure to push through his healthcare legislation.

Globally, gold climbed 1.22 per cent to $1,258.10 an ounce, the highest since February 28, and silver by 0.96 per cent to $17.91 an ounce in Singapore.

Besides, increased buying by local jewellers at the domestic spot market provided support.

In the national capital, gold of 99.9 per cent and 99.5 per cent purity surged Rs 100 each to Rs 29,430 and Rs 29,280 per 10 grams, respectively. It had shed Rs 20 on Saturday.

Sovereign, however, remained steady at Rs 24,400 per piece of eight grams.

In line with gold, silver ready moved up by Rs 200 to Rs 42,000 per kg and weekly-based delivery by Rs 205 to Rs 41,735.

Silver coins, however, traded at the previous level of Rs 71,000 for buying and Rs 72,000 for selling of 100 pieces.

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Arun Jaitley tables Central GST Bill in Lok Sabha

NEW DELHI: Four bills aimed at rolling out the much-awaited Goods and Services Tax (GST) and usher in landmark tax reforms in the country were tabled in the Lok Sabha today.

The Opposition objecting to it saying the introduction of these measures was not listed in today’s agenda for the House.

Finance Minister Arun Jaitley introduced the Central GST, Integrated GST, Union Territory GST and the Compensation Law for passage by Parliament to implement the one-nation, one-tax regime.

The government proposes to launch GST from July 1. It is estimated that rolling out of the GST can add up to 2 per cent to India’s economic growth.

On Saturday, Jaitley had emphasised the urgency to pass the GST laws during the current session of Parliament, saying the Centre and the states will otherwise lose their right to collect indirect taxes after September 15.

The approval of Parliament, coupled with separate nods by all the State Assemblies, will complete the legislative process for the roll out of one-nation, one-tax regime by merging central taxes like excise duty and service tax as well as state levies like VAT.

The GST Council has already approved four-tier tax slabs of 5, 12, 18 and 28 per cent plus an additional cess on demerit goods like luxury cars, aerated drinks and tobacco products. The work on for putting various goods and services in the different slabs is slated to begin next month.

The introduction of the Bills by Jaitley was objected to by a number of Opposition MPs for the manner in which this was being done, saying they were not given enough time to study the proposed legislation.

Raising his objection, Congress member K C Venugopal said the introduction of these bills was not listed in today’s agenda and asserted that parliamentary procedures must be followed while dealing with important issues.

Minister of State for Parliamentary Affairs S S Ahluwalia said the bills were uploaded on the government website on the midnight of Friday.

The Opposition MPs took strong objection to the statement saying how could the government expect the members to check the website at midnight and why the issue was not discussed at the meeting of Business Advisory Committee last week.

Congress leader Mallikarjun Kharge, All India Majlis-e- Ittehadul Muslimeen leader Asaduddin Owaisi and TMC’s Saugata Roy were among those who opposed the way the GST bills were introduced.

Dismissing the opposition objections, Speaker Sumitra Mahajan said the bills were sent to the MPs on Saturday morning and there was nothing wrong in these being tabled.

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Arun Jaitley tables Central GST Bill in Lok Sabha

NEW DELHI: Union finance minister Arun Jaitley on Monday tabled the Central Goods and Services Tax (GST) Bill 2017 in the Lok Sabha.

Looking forward to a consensus on GST Bill, Union parliamentary affairs minister Ananth Kumar earlier in the day expressed hope that the above legislation is passed in the ongoing Budget Session of Parliament.

Kumar told the media here that all parties have been consulted on the GST.

“Hope everyone will support the government on it. The government is committed to ensure the passage of GST in the ongoing Budget Session,” he added.

The GST Council and Union Cabinet have already given their nod to the Central GST, Integrated GST, Union Territory GST and Compensation Bill.

Along with these four bills, amendments to the Excise and Customs Act to abolish various cess as well as furnishing bills for exports and imports under the new GST regime will be placed before the Parliament.

The Business Advisory Committee of the Lok Sabha is likely to meet on Monday to decide on the duration of discussion on the Bills. States cabinet too will need to approve the State GST and then need the same to be passed by respective state assemblies to roll out the new tax regime.

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Rupee hits near 1-1/2 year high against US dollar

MUMBAI: The rupee hit a nearly 1-1/2 year high against the dollar on Monday, tracking gains in Asian currencies after US President Donald Trump‘s failure to pass a healthcare reform bill raised concerns about the chances of a US fiscal stimulus.

The Reserve Bank of India stepped in to cap broader gains in the rupee, traders said, adding that some of the gains were also due to the strong $6.1-billion foreign investment into debt and equities this month.

The gains in the local unit spurred by strong dollar inflows helped spark a rally in bond markets, sending the benchmark 10-year bond yield down as much as 12 basis points to 6.71 percent, the lowest since Feb. 8 when the central bank unexpectedly changed its monetary policy stance to “neutral” from “accommodative.”

However, shares fell as software services exporters and drug makers were hit by worries about the impact of a stronger rupee. The broader Nifty was down 0.75 percent at 9,039.60 by 0635 GMT, while the benchmark Sensex was 0.69 percent lower at 29,218.19.

Movements in India broadly tracked regional markets after Trump’s inability to get enough support from his own Republican Party to reform healthcare was seen raising questions about his ability to push the rest of his agenda.

“Both global and domestic factors are riding the market today,” said Vinod Nair, head of research at Geojit Financial Services.

At 12:56pm, the rupee was trading at 65.0575 after earlier strengthening to as much as 65.01 per dollar, the strongest level since October 2015.

The rally in the rupee sent IT shares lower, with Tech Mahindra Ltd down 2.2 percent and HCL Technologies Ltd down 1.9 percent.

Drug makers also fell, with Lupin Ltd and Aurobindo Pharma Ltd falling 2 percent and 1.8 percent respectively.

Among other decliners, Reliance Industries Ltd fell as much as 2.42 percent after the Securities and Exchange Board of India accused the company of having committed a “fraud” in taking a short trading position at the time of selling a stake in a unit 10 years ago.

Reliance strongly denied the ruling and said it would appeal.

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Nifty slips below 9,100 on global weakness

MUMBAI: The benchmark Sensex fell almost 97 points and the NSE Nifty cracked below the 9,100-mark in early trade on Monday as investors took profit in recent gainers amid weak Asian cues.

The 30-share barometer declined 96.80 points, or 0.32 per cent, to 29,324.60 with sectoral indices led by metal, teck, IT, healthcare, oil&gas, FMCG and auto trading in negative zone with losses up to 0.86 per cent.

The index had risen about 254 points in the previous two sessions.

Also, the NSE Nifty slipped below the crucial 9,100-level by falling 33.15 points, or 0.36 per cent, at 9,074.85.

Brokers said that apart from profit-booking in recent gainers, a weak trend in Asia following Donald Trump‘s failure to push through his healthcare legislation kept shares depressed here.

Major losers that dragged down the key indices included Coal India, Reliance Industries, Tata Steel, Hero MotoCorp, Asian Paint, Tata Motors, Wipro, Lupin, Sun Pharma and Bharti Airtel, falling by up to 2.37 per cent.

In the Asian region, Hong Kong’s Hang Seng shed 0.16 per cent, while Japan’s Nikkei was down 1.51 per cent in early sessions. Shanghai’s Composite Index, however, was up 0.16 per cent.

The Dow Jones Industrial Average ended 0.29 per cent lower in Friday’s trade.

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