Indian rupee gains past 62/dollar as RBI cuts repo rate

The Indian rupee gained past 62 a dollar in early trade on Thursday as the Reserve Bank of India (RBI) slashed repo rate by 25 basis points to 7.75 percent.

The currency appreciated by 30 paise to trade at 61.88 per dollar against previous day's closing value of 62.18 a dollar.

RBI kept cash reserve ratio (the amount of funds that every bank has to keep with the RBI) unchanged. Governor Raghuram Rajan says inflation may be below 6 percent by January 2016.

The dollar nurses losses, having retreated across the board after a surprisingly big fall in US retail sales pulled US yields sharply lower.

Also Read - RBI cuts repo rate by 25 basis points ahead of Feb 3 policy

Mohan Shenoi of Kotak Mahindra Bank said, "Global markets are swinging between risk-on and risk-off based on US data and growth/deflation scare. The dollar is showing mixed trends by holding stable against Euro while mildly losing ground to Yen and GBP. The USD-INR is expected to trade in a range of 62-62.30/dollar today."

Delhi poll battle: Dear BJP, what about Kiran Bedi's own history as a bhagora?

Kiran Bedi’s past is so full of many U-turns, controversies, spats with seniors, courts, lawyers and outbursts against Narendra Modi that an entire issue of Charlie Hebdo could be dedicated to satirizing her career.

Her opinion on Modi, before she inexplicably (or was it part of a political strategy?) changed her mind is well known, courtesy her tweets. Till a few months before Modi became the PM -- a fact that must have inspired Bedi to rearrange her thoughts and realign her political philosophy -- she was continuously attacking him for the Gujarat riots.

In March, Bedi tweeted: "One day NaMo will need to respond with clarity about riots massacre. Despite Courts clearing him so far."

And in April 2012, she has argued that Modi may have passed the SIT exam but was yet to clear the test of ‘prevailing perception of serious incidents’ under his watch.

But, hey, now that the BJP desperately needs somebody to take on Arvind Kejriwal, all such past sins are forgiven.

The public spotlight that comes with an election may be less merciful. Now that she has taken the plunge into politics, Bedi will have to undergo a serious scrutiny of her career, persona and politics. There may not be Charlie Hebdo cartoons, but there will be uncomfortable questions.

Why was Bedi, for instance, bypassed for the post of Delhi’s police commissioner? And why was she not found suitable for a filed posting after being reprimanded by an enquiry committee for ordering a lathi charge on lawyers?

In July 2007, Bedi proceeded on a three-month ‘protest leave’ when she was overlooked for the Delhi commissioner’s post. Bedi claimed she was a victim of gender bias, and declared that she was weighing all ‘options including legal’. She instead suddenly changed her mind, cancelled her leave, resumed office and finally applied for voluntary retirement. The government accepted her application and relieved her immediately.

At the time, many critics challenged her claim that her ‘merit has been compromised’ and she has an ‘outstanding record.’

Writing for the Hindustan Times, Karan Thapar said he had invited Bedi to discuss her grievances on his TV show, but she failed to turn up. So he instead shot a volley of questions at Bedi, some of which were serious, including the grave suspicion that Bedi could not be ‘trusted with classified information and security.’

“To begin with, you've received neither the Indian Police Medal for Meritorious Service nor the President's Police Medal for Distinguished Service. Given that these are routinely awarded after completing a certain number of years of service, isn't your not getting them proof that your record is neither meritorious nor distinguished?

Secondly, is it true that on 4 separate occasions you failed to complete your tenure and at least twice left your post without permission which is tantamount to desertion of duty? (She didn't complete her tenure as Superintendent of Police in Goa, DIG (Range) in Mizoram, Inspector General (Prisons) Tihar Jail and Inspector General of Police in Chandigarh. The posts that she left without permission were Goa, in 1983, and Mizoram, in 1992. Speaking to the Sunday Observer on the 27th September, 1992, she said of Mizoram: "I left without asking". Her letter of 25th January, 1984 to the Inspector General of Police in Goa, Mr Rajendra Mohan, establishes that she left on leave that had not been sanctioned.)

In 1990, Bedi was indicted by an enquiry committee headed by Justice DP Wadhwa for gross irregularities in dealing with a strike by Tis Hazari lawyers in Delhi. In a damning indictment of her role, the committee said the lathi-charge on agitating lawyers ordered by Kiran Bedi, the then deputy commissioner of police (north), a week after the incident was "indiscriminate and unjustified".

Worse, it declared that Bedi had connived with a municipal councilor in organising and transporting a mob to Tiz Hazari who then assaulted the lawyers. Bedi maintained that she was discriminated against during the enquiry. But it was accepted by the home ministry and tabled in the Parliament with an assurance to lawyers that Bedi will never be posted in Delhi in any important position.

Bedi was later sent to Mizoram where her actions stirred up another controversy. People of the state poured into the streets when it was revealed that Bedi had secured her daughter’s admission to an MBBS course in Delhi’s Lady Hardinge College under the Mizoram quota.

Bedi argued that she was within her rights to avail the quota since she was at that time posted in Mizoram. But protesters claimed the purpose of the reservation was to ensure local students get its benefit and Bedi had taken advantage of a loophole in the law. When Mizoram became too hot to handle, Bedi once again left. Incidentally, her daughter also dropped out of the course later.

Incomplete tenures, unauthorised leaves and lots of flip-flops. And let’s not forget the words Thapar used to describe her actions while in the police of force: “desertion of duty”.

The Delhi elections is now a battle of the bhagoras. Voters will have to decide whose dereliction of duty matter more: Arivnd Kejriwal’s 49-day tenure or Kiran Bedi’s many hasty exits.

Censor Board chief Leela Samson quits over MSG nod, govt denies interference

A day after Censor Board chief Leela Samson quit over clearance to controversial film Messenger of God, the government denied any interference in the board's functioning.

"There was no government interference in clearing the film Messenger of God", minister of state for Information and Broadcasting, Rajyavardhan Rathore told reporters.

Hitting out at Samson, Rathore said, "The Censor Board is an independent body, it needs to behave like one."

He also said that the decision of the Film Certification Appellate Tribunal (FCAT) over the film should be final and acepted by all. 

Leela Samson announced her resignation after the tribunal's reported to clear Messenger of God featuring Dera Saccha Sauda chief Gurmeet Ram Rahim Singh ina lead role.

Asked if she was aware of media reports that the nod has been given by FCAT to the film's screening, Samson told PTI that "I hear so. Nothing in writing yet. Yet, it is a mockery of Central Board of Film Certification. My resignation is final. Have informed the (I&B) secretary".

The Censor Board had referred the issue of clearance to "Messenger of God" to FCAT. The film was slated to hit the screens on Friday.

Asked why she has decided to quit, she did not specifically refer to the reported clearance to the film but said the reasons cited are alleged "interference, coercion and corruption of panel members and officers of the organization who are appointed by the ministry."

According to Samson, "...having to manage an organization whose Board has not met for over nine months as the ministry had no funds to permit the meeting of members."

She said the term of all the members and the chairperson of the Censor Board "are over. But since the new government failed to appoint a new Board and Chairperson, a few were given extension and asked to carry on till the procedure was completed."

"However, recent cases of interference in the working of the CBFC by the ministry, through an 'additional charge' CEO, and corrupt panel members has caused a degradation of those values that the members of this board of CBFC andcChairperson stood for," Samson alleged.

Meanwhile, a spokesperson of Sirsa (Haryana)-based Dera Sachcha Sauda said "as per our information, FCAT has cleared the movie for release. But a written order is awaited."

Live Market Updates: Bulls on rampage: Nifty hits 8500, Sensex soars 780 pts

3:30 pm Market close: The market ended with some very strong gains. The Sensex was up 728.73 points or 2.7 percent at 28075.55, and the Nifty ended up 216.60 points or 2.6 percent at 8494.15.  About 1693 shares advanced, 1206 shares declined and 322 shares were unchanged.

3:10 pm Acche din aa gaye? Confident that RBI's decision to cut interest rates would give a major fillip to the economy, Chief Economic Advisor Arvind Subramanian today said it signals a shift in the policy stance and direction going forward. "It will provide a fillip to the economy, both directly and indirectly," he said, adding that directly it will increase spending by private sector - both consumers and firms- and indirectly it should help by improving both balance sheets of private sector and banks. It's a really welcome move and consistent with the strong ongoing disinflationary pressures in the economy."

It is a significant move because it signals a shift in the stance and direction of policy going forward," Subramanian added. The Chief Economic Advisor said that the RBI Governor Raghuram Rajan had earlier said he does not want to cut rates and therefore this rate cut is consistent with strong disinflationary pressures. However, any further rate cut will be depend on aggregate demand on economy, he added.

2:50 pm MF exposure to banks:  The mutual fund industry is betting big on banking stocks as its equity exposure to the sector climbed to an all-time high of nearly Rs 73,000 crore in December. This also marks the third consecutive rise in MF industry's exposure to banking stocks. MFs collect funds from various investors for investing in securities such as stocks, bonds, money market instruments and similar assets.

Their investments in banking stocks stood at Rs 72,835 crore as on December 31, 2014, accounting for 21.88 per cent of their total equity assets under management (AUM) of Rs 3.33 lakh crore, according to data available with the Securities and Exchange Board of India (Sebi). The previous high was November this year when investment in the sector surged to Rs 70,575 crore. MFs had been raising their exposure to banking shares since January but their investment level in the sector dropped in September.

2:40 pm Market outlook: Hailing the Reserve Bank’s move to pare repo rate by 25 basis points , Raamdeo Agrawal, joint managing director, Motilal Oswal Financial Services, says the cut was imminent for the Indian market due to global deflation and fall in inflation. In an interview t Agrawal says the rate cut will give a momentum to the economy and he sees more rate cuts in the upcoming days. “But don’t try to time the market,” advises Agrawal who believes that retail investor participation will now increase significantly. “Though we may not get very large foreign instituitional investor (FII) flows, if we get USD 15 billion from FIIs and a similar figure from domestic instituitional investor (DIIs), then we’ll still be very comfortable,” he adds.

2:36 pm Market check: The Nifty has hit 8500, up 230.30 points or 2.8 percent at 8507.85. The Sensex is up 781.86 points or 2.9 percent at 28128.68. About 1718 shares have advanced, 1069 shares declined, and 320 shares are unchanged.

HDFC is up 6 percent while SBI and ICICI Bank are up 5 percent each.

02:15pm More rate cut possible? Brokerage house Morgan Stanley says a big rate cut cycle is underway, and it sees the RBI cutting interest rates by 125 basis points over the next 12 months.

It sees the RBI cutting the repo rate by 25 basis points more at its monetary policy review on February 3.

“We expect the RBI to front load the rate cuts by potentially taking up a 50bps rate cut in one of the monetary policy meetings after February 3,” said the Morgan Stanley note to clients, penned by Chetan Ahya and Upasana Chachra.

“Our rate cut forecasts is predicated on our view that CPI inflation will stay at closer to 5% in most of the calendar year 2015, as the reduction in fiscal deficit, sustained deceleration in rural wages and lower global commodity prices will mean that inflationary pressures in the economy will be contained,” said the note.

02:00pm Market Check

Bulls are in complete control of the street today as the frontline indices rallied 2.5 percent each and the rupee touched two-month high in afternoon trade after the Reserve Bank of India surprised the market with rate cut.

The 30-share BSE Sensex gained 693.94 points at 28040.76 and the 50-share NSE Nifty rallied 206.05 points to 8483.60 while the broader markets underperformed benchmarks. The BSE Midcap and Smallcap indices climbed 1.5 percent and 1.2 percent, respectively.

About 1627 shares have advanced, 1095 shares declined, and 327 shares are unchanged on the Bombay Stock Exchange.

The Reserve Bank of India slashed repo rate by 25 basis points to 7.75 percent and left cash reserve ratio unchanged at 4 percent ahead of its February policy meeting.

BSE Realty Index topped the buying list among sectoral indices, up 8 percent followed by Bankex with 3.5 percent upside. HDFC, ICICI Bank, L&T, SBI and M&M rallied 4-6 percent.

Meanwhile, the Indian rupee jumped to 61.48 a dollar, the highest level since November 2013. The currency appreciated by 65 paise to 61.52 a dollar.

Telecom Regulatory Authority of India (TRAI) has rejected Department of Telecommunications' proposal for higher 3G price of Rs 3,899 crore and reiterated its old stance on 3G spectrum price. Bharti Airtel and Idea Cellular gained more than a percent while Reliance Communications and Tata Teleservices climbed nearly 4 percent.

In the broader space, Atul surged 7 percent as US FDA has approved its Dapsone manufacturing facility in Valsad, Gujarat.

Sensex, Nifty surge 2%; Bajaj Auto up 3% post Q3 results

1:50 pm Bullish stance: Shares of Maruti Suzuki hit record high at Rs 3616.40, up 3 percent intraday. Bank of America Merrill Lynch has raised target price on the auto major to Rs 4100 per share, indicating a 9 percent upside. The brokerage expects Maruti to register 34 percent earnings per share (EPS) CAGR despite lowering earnings forecasts by 6 percent in FY16 and 2 percent in FY17.

"The target price is still premium over past trends due to superior growth on much larger addressable opportunity (including UVs, LCVs) and higher return ratios on account of more liberal dividend payout policy," says the brokerage. It also further adds that that four-wheeler manufacturer will continue gaining share due to better franchise, extensive reach and launches, including foray in segments absent so far.

1:30 pm  Buzzing: Shares of PC Jeweller rallied 10.7 percent intraday after the government allowed the company to directly import precious metals for domestic business. The move would help the company to reduce its cost to buy precious metals, PC Jeweller Managing Director Balram Garg said. In a filing to the BSE, PC Jeweller informed that the "company, has been designated as Nominated Agency under Paragraph 4A.4 of Foreign Trade Policy 2009-14 (RE-2012), by the Additional Director General of Foreign Trade (CLA), Ministry of Commerce & Industry, Department of Commerce."

"This permission makes the company eligible for direct import of precious metals (gold/silver/platinum) for domestic business," it added.

1:20 pm Earnings: Bajaj Auto's net profit fell 4.8 percent year-on-year to Rs 861.2 crore on revenue of Rs 5,657 crore for the quarter ended December 2014. Profit of the two-wheeler maker was supported by better operational performance but was impacted by lower other income.

However, numbers were ahead of street expectations. According to the average of estimates of analysts polled profit was expected at Rs 850 crore on total income of Rs 5,591 crore for the quarter.

Total income from operations during the quarter grew by 10.3 percent to Rs 5,657 crore compared to Rs 5,131 crore in same quarter last fiscal, supported by higher export sales. Other income more than halved to Rs 95.3 crore from Rs 222 crore during the same period.

Don't miss: Goldman Sachs removes ITC from conviction list, retains buy

The market continues to surge supported by banks, auto and realty stocks. The

Sensex is up 665.49 points or 2 percent at 28012.31 and the Nifty is up 199.75 points or 2.4 percent at 8477.30. About 1596 shares have advanced, 1005 shares declined, and 341 shares are unchanged.

HDFC, ICICI Bank, SBI, M&M and Tata Power are top gainers in the Sensex. Bajaj Auto is up 3 percent after it posted better-than-expected December quarter results.

Crude oil dipped after a volatile session the previous day, when prices rebounded sharply from near-six-year lows that reflected a global oversupply.Jefferies said the use of floating storage would, in the near term, absorb barrels from the market in excess of physical demand, but noted that "those same barrels will eventually be delivered and could moderate a future price recovery". 

New year surprise: Rupee trading at fresh 1-month high of 61.75

Mumbai, Jan 15:   

The rupee spurted 43 paise to trade at a fresh one-month high of 61.75 against the dollar at 11.55 am local time as the RBI cut interest rates by 25 bps to 7.75 per cent. 

After opening strong at 61.72 at the Interbank Foreign Exchange market, the domestic unit hovered in the range of 61.71 and 62.19 in the morning trade. 

Forex dealers said a strong domestic equity market and dollar’s weakness against other Asian currencies also supported the rupee. 

The rupee had ended four paise lower at 62.18 on fresh dollar demand from banks and importers in yesterday’s trade in view of a fall in crude oil prices. 

Meanwhile, the benchmark BSE Sensex was trading at 27,881.68, up 535.79 points in the pre-noon session.