Indian Stock Market News, Information, Tips, Investment, IPO Details, Analysis Report

The Reserve Bank of India has left all key rates unchanged, the repo, the reverse repo and the CRR are held at current levels. The bank rate too is left static. The GDP target is revised downwards to 7% with a downward bias, this versus a previous target of between 7.5% to 8%. Inflation targets for the fiscal year are marked down to as low as 3%, versus an earlier target of below 7%.

RBI said that the financial markets globally continue to face crisis of confidence. RBI expects CPI to fall further with decline in input prices. It has also upped bank credit target to 24% from 20% while money supply target has been upped to 19% from 16.5-17%.

RBI has also extended refinance facility for MFs, NBFCs HFCs to September 30, 2009. It has also extended the refinance facility for commercial banks to September 30, 2009. It further added that there is slowdown in deposit growth and the lending rates have to come down with slowdown in deposit growth.

RBI is of the view that global crisis will dent India’s growth trajectory and there is a period of painful adjustment ahead. The growth will be lower due to declining exports and industry slowdown, it added.

RBI said that it is uncertain about when the bottom of asset, business cycle will be seen. There is an emerging consensus that there will be no recovery till late 2009. It further stated that crisis has been spread to emerging economies contrary to decoupling expectations.

RBI FY09 stance is to give comfortable liquidity to meet loan growth. It expects fiscal deficit at 5.9% of GDP vs 2.5% earlier. RBI feels that revenue surplus of states may not materialise. It sees full effect of CRR cut felt in 4-6 months time.

RBI said that there is a slowdown in deposit growth in private, foreign banks. Banks’ SLR rose from 25.8% in October 2008 to 28.9% in January 2009. It is of the view that lending rates have to come down.

RBI said that the fall in inflation will not commensurate with sharp fall in WPI and CPI will decline with a lag effect. It said it will take into account all price indices and their components.

The central bank also believes that there is distinct evidence of slowdown due to global downturn. The aggregate deposit growth target is also revised to 19% from 17%. It said that the capital flow reversals has stabilised since September, October 2008. International credit channels continue to be constrained and capital market valuations remain low, it added.

RBI said that the transmission of policy rate signal to credit market is subdued and transmission of policy rate signal to G-Sec market is effective. According to RBI, there is more room for bank to cut rates in response to policy cues.

It further said that the cash flow to commodity sector is down to Rs 4.85 lakh crore vs Rs 4.99 lakh crore (YoY). RBI will take caliberated monetary policy actions as necessary. “The export growth turned negative during October-November 2008. Overall business sentiment has deteriorated whereas domestic financial markets are functioning in an orderly manner.”

RBI stated that the response to actions over last quarter is still unfolding. Financial markets globally continue to face crisis of confidence and there are no signs of early resolution as collateral damage continues, it added.

RBI believes that major global concern will forestall the worst ever recession since 1930. Monetary ammunition has exhausted in many countries and slowdown of the world trade deeper than expected. It also expects exports to advanced countries to decline further.

RBI expects CPI to fall with decline in input prices. It also stated that government will lose 0.6% of GDP due to excise and customs duty cuts.

Larsen & Toubrp has increased its stake in Satyam Computer Services from 4% to 12%. Bulk of the buying was done by the infrastructure giant on Friday. The Satyam stock witnessed huge volumes during the day. The company has not yet commented on the move.

As per records on the NSE website, L&T bought 3.9 crore Satyam shares at Rs 34.52 per share. Sources said L&T increased the stake to protect the company’s interest in Satyam.

Earlier, L&T had picked up a 3.95% stake in Satyam, when the IT company was already facing rough weathers for its attempt to acquire Maytas Infra and Maytas Properties. The full-blown Rs 7,000-crore corporate scandal, however, had not broken then.

Texmo Pipes and Products Limited, presently engaged into manufacturing of PVC and HDPE pipes, proposes the expansion of product range and setting up of manufacturing facilities for injection mouldings/fittings and woven sacks.

To fund this expansion plan, the Company proposes to enter the Capital markets with a public issue of 50,00,000 Equity shares of Rs 10 each through 100% book building process. The Issue would constitute 44.37% of the fully diluted post issue paid-up capital of the Company. Almondz Global Securities Ltd is the Book Running Lead Manager for the Issue and Karvy Computershare Pvt Ltd is the registrar.

Texmo Pipes and Products Limited has two production units at Burhanpur in Madhya Pradesh, where it  manufactures PVC and HDPE pipes to meet the requirements of application in irrigation, agriculture, potable water supply schemes, sewerages and drainage systems, construction industry, telecom industry and bore/tube well for underground water suction.

Some of its clients during the financial year 2007-08 were Idea Cellular, Reliance Communication Infrastructure Ltd., and Videsh Sanchar Nigam Ltd. With the increase in demand for various types of pipes, the Company intends to expand its product range by venturing into manufacturing of CPVC, DWC and drip in-line pipes. Also in order to facilitate its clients with accessories for the pipes, it plans to venture into manufacturing of injection mouldings/fittings. The Company also intends to diversify in the manufacturing of woven sacks.

Today Sensex Down -229.02 and Nifty Down -49.60 Points.

Today’s top gainers were Power grid corporation, NTPC, Reliance Infra, BPCL, Tata Power and Losers were Zee Entertainment, Tata Steel, Siemens, Ambuja Cements & Bharti Airtel.

The UK government in a bid to save its stuttering economy has unveiled its second bank bailout plan. The country is staring at a record level of unemployment numbers and recession. Technically, recession is defined by two successive quarters of negative output. The country saw negative GDP growth in Q3. Its Q4 figures are to be announced on Friday.

Justifying the bailout, Gordon Brown, the British Prime Minister, said the move was required as the overall credit availability is inadequate to support the economy. The bailout, he said, will aim at expanding lending necessary for credit worthy institutions. The Bank of England will give more details of the new facilities on Tuesday.

In October, UK extended a 37 billion pounds lifeline to banks. This was at the height of the global financial crisis and was accompanied by similar such steps by various other countries. The justification for the move at that time too was shoring up of the country’s financial system. Even Gordon Brown had said this will help build financial stability.