Data showing acceleration in industrial production growth and easing of food price inflation and expectations that above-average monsoon rain will improve the odds for further monetary policy easing from Reserve Bank of India (RBI) helped key benchmark indices register modest gains on the first trading session of the week today, 15 June 2015. But, benchmark indices pared gains during the latter part of the trading session after extending intraday gains in mid-afternoon trade as fears about possible Greek default pulled European stocks lower. The 50-unit CNX Nifty regained the psychological 8,000 mark. The Nifty had settled below the psychological 8,000 mark during the preceding trading session.
The barometer index, the S&P BSE Sensex, garnered 161.25 points or 0.61% to settle at 26,586.55. In percentage terms, the gains for the Sensex were higher than those for the Nifty. The Nifty rose 31 points or 0.39% at 8,013.90. The market breadth indicating the overall health of the market was positive.
Key benchmark indices edged higher for the second trading session in a row today, 15 June 2015.
Auto stocks were in demand. Tata Motors rose after reporting data on global wholesale volumes for May 2015. Shares of Vedanta fell while those of Cairn India edged higher after Vedanta and Cairn India yesterday, 14 June 2015, announced that Cairn India will be merged with Vedanta. FMCG stocks were mixed. Auto stocks were in demand. Bank stocks declined. Shares of state-run banks Punjab National Bank and Bank of India hit 52-week low.
Telecom stocks gained after reports Vodafone has increased pre-paid data tariff for 2G and 3G services in Delhi-NCR by up to 47% and MTS hiked rates of post-paid data pack by 8%. Index heavyweight Reliance Industries (RIL) extended previous session's gains triggered by the company's chairman Mukesh Ambani announcing at the company's annual general meeting (AGM) that Reliance Jio Infocomm will start commercial 4G telecommunication services around December 2015.
Key benchmark indices edged higher today, 15 June 2015, amid optimism above-average monsoon rain may improve the odds for further monetary policy easing. For the country as a whole, the cumulative rainfall during this year's monsoon season was 5% above the Long Period Average (LPA) until 13 June 2015. The Reserve Bank of India (RBI) cut its main benchmark lending rate viz. the repo rate by 25 basis points after a monetary policy review on 2 June 2015. The central bank at that time said that the monsoon and its impact on food costs will be key to further easing. The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Meanwhile, the data released by the government on consumer price inflation and wholesale price inflation for May 2015 showed easing of food price inflation. The tempered food-price pressures suggest that concerns of a spike in prices following damage to crops due to untimely rains in February and March as well as forecasts of below-normal rainfall are proving to be exaggerated. Meanwhile, data released by the government after trading hours on Friday, 12 June 2015, showed that industrial production (IIP) rose at an accelerated pace of 4.1% in April 2015 over a year ago compared with the revised growth of 2.5% in March 2015.
Foreign portfolio investors (FPIs) sold shares worth a net Rs 672.83 crore into the secondary equity market during the previous trading session on Friday, 12 June 2015, as per data from the depositories. Domestic institutional investors (DIIs) bought shares worth a net Rs 705.58 crore on Friday, 12 June 2015, as per provisional data released by the stock exchanges.
In overseas markets, European stocks edged lower as Greece's talks with lenders to avert a default ended with no agreement over the weekend. Asian stocks edged lower as talks between Greece and its European creditors collapsed over the weekend. US stocks dropped during the previous trading session on Friday, 12 June 2015, on fears about possible Greek default.
The S&P BSE Sensex rose 161.25 points or 0.61% to settle at 26,586.55, its highest closing since 10 June 2015. The index jumped 303.30 points at the day's high of 26,728.60 in mid-afternoon trade. The index fell 117.46 points at the day's low of 26,307.84 at the onset of the trading session.
The Nifty rose 31 points or 0.39% at 8,013.90, its highest closing level since 10 June 2015. The index hit a high of 8,057.70 in intraday trade. The index hit a low of 7,944.85 in intraday trade.
The market breadth indicating the overall health of the market was positive. On BSE, 1,440 shares rose and 1,207 shares fell. A total of 141 shares were unchanged.
The BSE Mid-Cap index fell 1.14 points or 0.01% to settle at 10,120.80. The BSE Small-Cap index rose 44.62 points or 0.42% to settle at 10,618.40. Both these indices underperformed the Sensex.
The total turnover on BSE amounted to Rs 2345 crore, higher than turnover of Rs 2204.76 crore registered during the previous trading session.
Among sectoral indices on BSE, the S&P BSE Auto index (up 1.12%), the S&P BSE Healthcare index (up 0.96%) and the S&P BSE Oil & Gas index (up 0.87%) outperformed the Sensex. The S&P BSE Consumer Durables index (down 0.83%), the S&P BSE Metal index (down 0.62%), the S&P BSE Power index (down 0.48%), the S&P BSE Bankex (down 0.4%), the S&P BSE Realty index (up 0.22%), the S&P BSE FMCG index (up 0.31%), the S&P BSE IT index (up 0.32%), the S&P BSE Capital Goods index (up 0.46%) and the S&P BSE Teck index (up 0.54%) underperformed the Sensex.
Bank stocks declined. Among private bank stocks, HDFC Bank (down 0.22%), Kotak Mahindra Bank (down 1.24%), Axis Bank (down 0.24%) and IndusInd Bank (down 2.42%) declined. ICICI Bank rose 0.91%.
Yes Bank fell 0.58%. Yes Bank and The Western Union Company today, 15 June 2015, announced inking a partnership. The collaboration with Yes Bank will allow Western Union's consumers in the US, UK, Canada, Australia and many other countries to send money directly to more than 900 million bank accounts in India. Reflecting the Government of India's focus to increase bank account penetration in the country through Jan DhanYojana and other such schemes, with this service Western Union is leveraging its global presence to facilitate the direct flow of remittances into bank accounts in India, Yes Bank and The Western Union Company said in a joint press release. The Western Union Company is a leader in global payment services.
Among PSU bank stocks, State Bank of India (SBI) (down 1.52%), Bank of Baroda (down 2.62%), Canara Bank (down 0.48%) and Union Bank of India (down 0.86%) dropped.
Punjab National Bank fell 1.29% to Rs 130.45. The stock hit a 52-week low of Rs 130 in intraday trade today, 15 June 2015. The stock hit a high of Rs 133.20 in intraday trade.
Bank of India lost 1.59% to Rs 170.70. The stock hit a 52-week low of Rs 170.10 in intraday trade today, 15 June 2015. The stock hit a high of Rs 175.35 in intraday trade.
Public sector banks and private sector banks unanimously expressed at a meeting between Finance Minister Arun Jaitley with CMDs of public sector banks (PSBs), private banks and Financial Institutions (FIs) on Friday, 12 June 2015, that in a period of 2-3 months, greater transmission of lower rates by commercial banks could be seen. The CMDs of banks, both PSBs and private banks expressed that until the cost of funds/deposits for the banks, as reflected in the re-pricing of their liability book at the new rate comes down and liquidity levels at the new lower costs are tested, full transmission would not be viable, according to a statement issued by the finance ministry after trading hours on Friday, 12 June 2015. Commercial banks were responding to a query by Jaitley as to why the banking system, in response to the Reserve Bank of India's (RBI) rate cut of 75 basis points since January 2015, effected a corresponding rate cut of only 25 basis points. The Finance Minister held the Annual Review Meeting with the CEOs of banks (including private banks), insurance companies and FIs for the year ended 31 March 2015 on Friday, 12 June 2015.
Jaitley also expressed his concern over the modest growth of domestic credit of 7% over the previous year registered by PSBs and took stock of the sectoral profile of the total domestic credit flow of Rs 49.01 lakh crore during 2014-15. The Finance Minister urged the bankers to achieve the target of 20% growth in educational loan asset by the Department of Financial Services (DFS), Ministry of Finance and also attempt to even out the huge regional disparity in such loans. The Finance Minister noted the good growth at 16-18% in the housing sector and also strongly advised the PSBs to achieve a 30% growth in priority sector housing loans, which are intrinsically secure loans and which are required to provide a stimulus to overall growth.
As regards non-performing assets (NPAs), the PSBs continue to be under stress on account of their past lending. Jaitley advised that the RBI, Government Departments and the financial institutions should collectively examine solutions that work, so as to de-bottleneck those critical projects of economic value. Jaitley suggested that Secretary, Department of Financial Services (DFS) obtain a list of all major projects stalled purely due to financial reasons and attempt to sort out the sticky issues along with the concerned banks. He also suggested that DFS and RBI should interact to examine and sort out the regulatory issues in NPAs and the scope for their modification to ease the pressure on banks. The Minister of State for Finance Jayant Sinha mentioned an additional view that banks should sell off their non-core assets. Jaitley himself said he would like to sort out issues which relate to state governments and other central government ministries.
In another separate announcement, the finance ministry after trading hours on Friday, 12 June 2015, said that in order to assess capital requirement of PSBs, all PSBs have been requested to make presentations to the Department of Financial Services, Ministry of Finance. Earlier, during the Quarterly Review of Public Sector Banks' performance held on 11 March, 2015, it was discussed that the banks should work-out/find-out their own resources for raising capital and also work-out their own plan for raising capital from market, the finance ministry said.
Telecom stocks gained after reports Vodafone has increased pre-paid data tariff for 2G and 3G services in Delhi-NCR by up to 47% and MTS hiked rates of post-paid data pack by 8%. MTNL (up 1%), Tata Teleservices (Maharashtra) (up 0.77%), and Idea Cellular (up 3.11%) gained. Bharti Airtel shed 0.29%.
According to reports, Vodafone has also made changes in most of the pre-paid plans and has also reduced validity of various packs. The increase in tariffs comes in the aftermath of March spectrum auction wherein telcos had paid around Rs 1.1 lakh crore to acquire airwaves, as per reports. In a bid to improve profitability, telcom firms have been cutting back on discounts and freebies. Earlier, Bharti Airtel and Idea Cellular had increased the tariffs for mobile data.
Reliance Communications (RCom) rose 1.45%. RCom after market hours today, 15 June 2015, announced that the company and AFK Sistema have entered into exclusive discussions on a potential merger between the Indian telecom business of Sistema Shyam TeleServices (SSTL) and RCom through a stock swap. The discussions are indicative and non-binding in nature and remain subject to due diligence, definitive documentation and approvals, as may be necessary, RCom said. There is no certainty that any transaction will result, it added.
Index heavyweight Reliance Industries (RIL) extended previous session's gains triggered by the company's chairman Mukesh Ambani announcing at the company's annual general meeting (AGM) that Reliance Jio Infocomm will start commercial 4G telecommunication services around December 2015. The stock was up 1.17% to Rs 899.55. The financial year 2016-17 will be the first full year of commercial operations for Reliance Jio Infocomm, Ambani said in a speech during RIL's AGM in Mumbai on Friday, 12 June 2015.
Ambani said that RIL has embarked on a journey of investing over Rs 2 lakh crore in building new facilities and creating new businesses that will come to fruition in the next 12 to 18 months. These investments will build new capacities, strengthen the company's global positions, improve the return on capital and make the company's existing refinery and petrochemical businesses among the most competitive in the world.
Meanwhile, RIL on Saturday, 13 June 2015 said that its CFO has received summons from Mumbai Police in the matter concerning the road accident involving Ms. Jhanvi Ghadkar. This is being disclosed to the stock exchanges as he is a key managerial personnel, RIL said.
FMCG stocks were mixed. Tata Global Beverages (up 0.66%), Marico (up 0.25%), Britannia Industries (up 0.84%), Dabur India (up 1.67%), Colgate Palmolive India (up 0.05%), and Hindustan Unilever (up 0.89%) gained. Jyothy Laboratories (down 1.97%), GlaxoSmithkline Consumer Healthcare (down 0.8%), Bajaj Corp (down 2.61%), Procter & Gamble Hygiene and Health Care (down 0.18%) and Godrej Consumer Products (down 0.06%) declined.
Nestle India lost 1.84%. Nestle India after market hours today, 15 June 2015, announced that the company is in the process of withdrawing MAGGI Noodles stock from the market and destroying it. The estimated sales value of the stock in the market, including those with the company's trade partners is around Rs 210 crore. In addition, there were MAGGI Noodles and related materials lying at factories and distribution centres when the withdrawal was announced and the estimated value of these is around Rs 110 crore. These are broad estimates because it is impossible to calculate the final figure while the withdrawal is taking place, Nestle India said. There will be additional costs to take into account, for example bringing stock from the market, transporting the stock to the destruction points, destruction cost etc, the company said. The final figure will have to be confirmed at a later date, Nestle India said. These costs and other unforeseen costs associated with the withdrawal of MAGGI Noodles stock from the market will be dealt with in line with the applicable accounting standards at the time of announcing the financial results on the due dates, Nestle India said.
On 5 June 2015, the Food Safety and Standards Authority of India (FSSAI) directed Nestle India to withdraw and recall all the nine approved variants of its MAGGI Instant Noodles from the market, having been found unsafe and hazardous for human consumption.
Bharat Heavy Electricals (Bhel) shed 0.36%. Bhel during market hours today, 15 June 2015, said that the company has successfully commissioned all the four units of NTPC's 400 megawatts (MW) Koldam Hydro Electric Project (HEP) in Himachal Pradesh. Significantly, all the four units of the project have been commissioned by the company within a short span of just 75 days, commencing with the commissioning of the first unit on 30 March 2015, Bhel said.
NTPC fell 0.4%. The company on Saturday, 13 June 2015, said that the unit no. 4 of 200 megawatts (MW) of Koldam Hydro Power Project has been commissioned on Friday, 12 June 2015. With this, the total installed capacity of Koldam Hydro Power Project has become 800 MW and the total installed capacity of NTPC group has become 44,798 MW, the company said.
Auto stocks rose on renewed buying. Maruti Suzuki India (up 0.71%), Mahindra & Mahindra (M&M) (up 2.03%), Bajaj Auto (up 2.03%), and TVS Motor Company (up 1.67%) gained. Hero MotoCorp (down 0.07%) and Ashok Leyland (down 0.84%) declined.
Tata Motors rose after reporting data on global wholesale volumes for May 2015. The stock was up 1.04%. Tata Motors' group global wholesales, including Jaguar Land Rover, rose 2.15% to Rs 79,244 units in May 2015 over May 2014. Tata Motors' global wholesales of all commercial vehicles - Tata, Tata Daewoo and the Tata Hispano Carrocera range fell 0.33% to 29,063 units in May 2015 over May 2014. Global wholesales of all passenger vehicles rose 3.64% to 50,181 units in May 2015 over May 2014. Global wholesales of Tata passenger vehicles rose 20.02% to 11,302 units in May 2015 over May 2014. The company announced the global sales data after market hours on Friday, 12 June 2015.
Global wholesales for Jaguar Land Rover (JLR) totaled 38,879 vehicles in May 2015. This includes figures of CJLR. CJLR is a joint venture between JLR and Chery Automobiles and is an unconsolidated subsidiary for JLR.
Eicher Motors rose 3.57% on reports a foreign brokerage has initiated coverage on the stock with a buy rating. The foreign brokerage reportedly said that the structural growth from Royal Enfield is likely to continue and it expects Eicher Motors to deliver sector-leading growth. The brokerage noted that the industry demand is shifting towards premium bikes and Eicher's premium valuations are likely to be sustained going ahead, as per reports.
Shares of Vedanta fell while those of Cairn India edged higher after Vedanta and Cairn India yesterday, 14 June 2015, announced that Cairn India will be merged with Vedanta. Vedanta shed 1.52% to Rs 181.20. The stock hit high of Rs 189.20 and low of Rs 180.05 in intraday trade.
Cairn India rose 3.24% to Rs 186.60. The stock hit high of Rs 188.85 and low of Rs 176 in intraday trade.
As per the merger scheme, minority shareholders of Cairn India will receive one equity share of Vedanta for each share held in the company. The minority shareholders of Cairn India will additionally get one 7.5% redeemable preference share (RPS) of Vedanta of a face value of Rs 10 each for each share held in the company. No shares will be issued to Vedanta or any of its subsidiaries for their shareholding in Cairn India. Approximately 75.2 crore of each of equity shares and RPS will be issued to the minority shareholders of Cairn India by Vedanta pursuant to the merger. Post completion of the transaction, Vedanta plc's ownership in Vedanta is expected to decrease to 50.1% from its current 62.9% shareholding. Cairn India minority shareholders will own 20.2% and Vedanta minority shareholders will own a 29.7% stake in the enlarged entity. The transaction is expected to be tax-neutral for Vedanta, Cairn India and their shareholders under Indian law. Vedanta would further consider consolidation of some of its wholly owned foreign subsidiaries. Vedanta will continue to be listed on the BSE and NSE, with American Depository Shares (ADS) listed on the New York Stock Exchange (NYSE), and Vedanta plc will continue to be premium listed on the London Stock Exchange (LSE). Cairn India's BSE and NSE listings will be cancelled following completion of the merger.
This merger accounting would be done under pooling of interest method. As part of this accounting treatment, goodwill appearing in the books of Vedanta and Cairn India would be adjusted against reserves including securities premium account. This will have no impact on cash or the profit and loss account. The transaction is expected to close in the first quarter of calendar year (CY) 2016.
Pharma stocks gained on a weak rupee. Weakness in rupee could boost sales of pharma companies in rupee terms as pharma firms derive substantial revenue from exports.
Sun Pharmaceutical Industries (up 2.67%), Cipla (up 0.06%), Wockhardt (up 0.04%), GlaxoSmithKline Pharmaceuticals (up 0.65%), Dr Reddy's Laboratories (up 0.08%), Divi's Laboratories (up 0.43%) and Cadila Healthcare (up 1.21%) gained. Aurobindo Pharma (down 0.42%) and Lupin (down 0.64%) fell.
Glenmark Pharmaceuticals rose after the company announced that its US-based unit, Glenmark Pharmaceuticals Inc., USA, was granted final approval by the United States Food & Drug Administration (USFDA) for the extended-cycle oral contraceptive, Levonorgestrel/Ethinyl Estradiol Tablets USP, 0.15 mg/0.03 mg, the AB-rated generic version of Seasonale by Teva Women's Health. The stock rose 0.8%. The announcement was made before trading hours today, 15 June 2015.
Seasonale is indicated for the prevention of pregnancy in women who elect to use oral contraceptives as a method of contraception. According to IMS Health sales data for the 12 month period ending April 2015, the Seasonale market achieved annual sales of approximately $53.7 million in the US, Glenmark Pharmaceuticals said in a statement.
IT stocks rose on a weak rupee. Tech Mahindra (up 0.49%), HCL Technologies (up 1.69%), and Wipro (up 0.92%) edged higher. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.
TCS rose 0.24%. With respect to news titled "US opens probe against TCS, Infosys for H1-B visa violations", TCS clarified during market hours that it maintains rigorous internal controls to ensure it is fully compliant with all regulatory requirements related to US immigration laws including those related to H-1B visas.
Infosys gained 0.28%. With regard to news item titled "TCS, Infosys face US probe for H-1B visa violations", Infosys after market hours on Friday, 12 June 2015, said in a clarification that it has not received any notification or intimation with respect to H-1B visa violations. Infosys also stated that it is committed to complying with US immigration laws. The US Department of Labor (DOL) regularly selects a percentage of visa and labor condition applications for extra scrutiny in this industry, and the company works closely with the DOL to assist DOL in this activity in the ordinary course of its business, Infosys said. Infosys said it has received no indication of any broader investigation of the company's visa practices.
Meanwhile, in the global commodities market, Brent crude futures extended previous session's losses as high production offset strong refinery runs. Brent for July settlement was off $1.05 a barrel at $62.82 a barrel. The contract had fallen $1.24 or 1.9% a barrel to settle at $63.87 a barrel during the previous trading session. Near month July contract expires today, 15 June 2015. Brent for August settlement was down 59 cents at $64.05 a barrel.
The decline in global crude oil prices and deregulation of diesel price announced by the Indian government in October 2014 will help reduce the government's fuel subsidy burden and help contain its fiscal deficit. The slide in global crude oil prices will also help India in containing its current account deficit and fuel price inflation. However, a weakness in rupee against the dollar will restrict the benefit of falling global crude oil prices to that extent. A weak rupee raises the cost of imports. India imports 80% of its crude oil requirement.
In the foreign exchange market, the rupee edged lower against the dollar. The partially convertible rupee was hovering at 64.10 compared with its close of 64.065 during the previous trading session.
The Sensex has risen 215.57 points or 0.81% in the preceding two trading sessions from a recent low of 26,370.98 on 11 June 2015. The Sensex has lost 1,241.89 points or 4.46% in this month so far (till 15 June 2015). The Sensex has lost 912.87 points or 3.31% in this calendar year so far (till 15 June 2015). From a 52-week low of 24,878.66 on 23 June 2014, the Sensex has risen 1,707.89 points or 6.86%. The Sensex is off 3,438.19 points or 11.45% from a record high of 30,024.74 hit on 4 March 2015.
India's industrial production rose at an accelerated pace of 4.1% in April 2015 over a year ago compared with the revised growth of 2.5% in March 2015. The growth in industrial production for March 2015 was scaled up to 2.5% in the first revision compared with 2.1% reported provisionally. Meanwhile, the growth in January 2015 has been revised slightly upwards to 2.83% in the second and final revision compared with 2.77% at the first revision and 2.55% released provisionally. The government released the industrial production data for April 2015 after trading hours on Friday, 12 June 2015.
Meanwhile, the data released by the government on consumer price inflation and wholesale price inflation for May 2015 showed easing of food price inflation. The tempered food-price pressures suggest that concerns of a spike in prices following damage to crops due to untimely rains in February and March as well as forecasts of below-normal rainfall are proving to be exaggerated. Inflation based on consumer price index (CPI) moved up slightly to 5.01% in May 2015 from 4.87% in April 2015. An increase in inflation for transportation and communication contributed to the rise in overall CPI inflation, while food items inflation declined restricting the increase in overall CPI inflation in May 2015. The rate of inflation of the food and beverages group declined to 5.1% in May 2015 from 5.4% in April 2015. The core CPI inflation rose to 4.4% in May 2015 from 4% in April 2015 and 3.9% in March 2015. The data on CPI for May 2015 was announced after market hours on Friday, 12 June 2015.
Meanwhile, data released by the government today, 15 June 2015, showed that the annual rate of inflation based on the monthly wholesale price index (WPI) remained in negative zone in May 2015. WPI inflation was negative 2.36% (provisional) for the month of May 2015 as compared to a reading of negative 2.65% (provisional) for April 2015. Inflation of food items (food articles and food products) eased to 2.3% in May 2015 from 3.5% in April 2015.
Meanwhile, the weekly data released by the Ministry of Agriculture after trading hours on Friday, 12 June 2015, showed that the total sown area for Kharif crops as on 12 June 2015 stands at 75.10 lakh hectares, which is lower than 82.87 lakh hectares at this time last year.
Meanwhile, the India Meteorological Department (IMD) said in its daily monsoon update yesterday, 14 June 2015, that the southwest monsoon has further advanced into some parts of north Arabian Sea & Gujarat region, remaining parts of Maharashtra, some parts of Saurashtra and Madhya Pradesh and some more parts of Chhattisgarh, south Odisha and northwest Bay of Bengal. The IMD said that conditions are favourable for further advance of southwest monsoon into some more parts of north Arabian Sea, Gujarat state, Madhya Pradesh, Chhattisgarh and Odisha, remaining parts of Coastal Andhra Pradesh, northwest Bay of Bengal and West Bengal and some parts of Jharkhand and Bihar during next 3 days. The Southwest Monsoon has been vigorous over West Madhya Pradesh, Chhattisgarh and Telangana and active over Arunachal Pradesh, Gangetic West Bengal, Odisha, East Madhya Pradesh, Konkan & Goa, Marathawada, Vidarbha, Coastal Andhra Pradesh and Kerala during past 24 hours, the weather office said.
For the country as a whole, the cumulative rainfall during this year's monsoon season was 5% above the Long Period Average (LPA) until 13 June 2015. Region wise, the southwest monsoon was 22% above the LPA in East & Northeast India, 10% below the LPA in Northwest India, 6% below the LPA in Central India and 4% below the LPA in South Peninsula.
The June-September southwest monsoon is critical for the country's agriculture because a considerable part of the country's farmland is dependent on the rains for irrigation.
Meanwhile, data on the first installment of advance tax payment by corporate taxpayers may provide cues on likely Q1 June 2015 corporate earnings. Companies have to pay 15% of the full year's estimated tax liability as the first installment of the advance tax on or before 15 June every year.
The Reserve Bank of India (RBI) on Friday, 12 June 2015, issued final guidelines for introduction of 6-year and 13-year cash settled interest rate futures (IRF) on Government of India Securities with residual maturity of 4-8 years and 11-15 years respectively. The RBI also expanded the residual maturity for the existing 10-year cash settled IRF from 9-11 years to 8-11 years. This would provide market participants greater choice and flexibility to hedge their interest rate risk across different tenors, the RBI said in a press release.
In overseas markets, European stocks declined today, 15 June 2015, as Greece's talks with lenders to avert a default ended with no agreement over the weekend. Key benchmark indices in UK, France and Germany were off by 0.75% to 1.56%.
The International Monetary Fund last week halted bailout talks with Greece over a lack of progress toward a deal to avert a Greek default. Greece has a debt repayment of 1.6 billion euros ($1.8 billion) due at the end of this month to the International Monetary Fund after the European nation bundled all its four June repayments into one.
Greece Finance Minister Yanis Varoufakis reportedly told a German newspaper that he would rule out a 'Grexit', or the country's exit from the euro zone, because it's not a sensible solution. Varoufakis told the newspaper that his country could reach a deal with creditors quickly if there was a restructuring and if German Chancellor Angela Merkel was part of talks. Varoufakis said that Greece doesn't want any more money as it has been given far too much already, according to reports.
The eurozone's trade surplus widened in April as imports fell, but the growth of exports slowed in a fresh sign the weakened euro is delivering only a modest boost to the currency area's economic recovery. The European Union's statistics agency said today, 15 June 2015, that the eurozone had a surplus in its trade in goods with the rest of the world of 24.9 billion euros ($28.05 billion), up from EUR14.9 billion in April 2014.
Asian stocks edged lower today, 15 June 2015, after Greece's talks with lenders to avert a default ended with no agreement over the weekend. Key benchmark indices in China, Singapore, Hong Kong, Taiwan, Indonesia, Japan, and South Korea shed by 0.09% to 2%.
US stocks dropped during the previous trading session on Friday, 12 June 2015, on fears about possible Greek default.
A two-day meeting of the Federal Open Market Committee (FOMC) to review US monetary policy starts tomorrow, 16 June 2015. The FOMC meeting is being keenly watched for further indication of the timing of an expected rate hike by the US central bank later this calendar year.
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