- RBI cuts policy rate by a steep 0.50 per cent, first rate cut in 3 years
- Vodafone serves notice against India on proposed tax amendment
- Sensex rises 207 points on rate cut, ADAG stocks soar
- Monsoon to be normal in 2012, says Met department
- Oil firms threaten to raise petrol prices
- Brokerages bullish on Tata Motors
- Murdoch's Star to exit news business in India
- Earnings Central: J&J, Coca-Cola, Goldman Sachs, Crisil, M&S
- Apple shares fall for 5th day, m-cap dips by $60 billion
- Stubborn Euro zone inflation shows no signs of easing
RBI cuts policy rate by a steep 0.50 per cent, first rate cut in 3 years
The Reserve Bank of India cut the repo rate by 0.50 per cent to 8 per cent. Repo rate is the rate at which banks borrow money from RBI. This is a reference rate used by banks to lend to their customers like companies and individuals. The reverse repo rate, or the rate at which it sucks out liquidity from the system by taking money from banks, has also been reduced by 0.50 per cent. (Read More)
India Inc, experts, brokerages as well as markets were surprised by the quantum of cut. SBI has hinted that it will cut lending rates next week. Home, auto and corporate loans are likely to become cheaper as RBI has signaled banks to cut rates. Finance Minister Pranab Mukherjee says the rate cut will help revive investment and boost business sentiment. (Read More)
(Read full text of policy)
RBI has also abolished prepayment penalty on home loans, also known as foreclosure charges. Home loan consumers not happy with their bank can switch their loan to another bank without having to pay 1-2 per cent prepayment penalty charged by many banks currently. (Read More)
Also Read: Credit policy: Are Government, RBI on the same page?
Vodafone serves notice against India on proposed tax amendment
British telecom operator Vodafone Group said it had served the Indian government with a notice of dispute regarding India's proposal to retrospectively tax overseas transactions. (Read More)
Vodafone said in a statement on Tuesday that the 2012 finance bill proposals violated international legal protections granted to Vodafone and other foreign investors in India. It said would take whatever steps were necessary to protect shareholder interests, including beginning treaty arbitration proceedings, if the government does not abandon the retrospective amendments.
Here is a lowdown on what the notice is about and how things are likely to proceed from here.
Sensex rises 207 points on rate cut, ADAG stocks soar
The BSE Sensex witnessed its biggest point gain in over a fortnight on the back of a deeper-than-expected-cut in repo rate by the Reserve Bank on Tuesday. The BSE Sensex rose 207 points or 1.2 per cent to close at 17,358 while the broader Nifty index advanced 63.50 points to 5,289.70.
Though sentiments improved, profit booking in rate-sensitive-stocks, especially banks, was witnessed. Banks (0.8 per cent) and auto (0.8 per cent) closed off the day's high. (Read More)
Monsoon to be normal in 2012, says Met department
India is likely to have average rainfall in 2012 despite fears that the El Nino weather pattern may emerge in the second half of the season, the country's top weather official said, pointing to a third straight year without drought.
The June-September monsoon, vital for agricultural output and economic growth, irrigates around 60 per cent of farms in India, the world's second-biggest producer of rice, wheat, sugar and cotton. Agriculture accounts for about 15 per cent of India's nearly $2 trillion economy, Asia's third biggest. (Read More)
Oil firms threaten to raise petrol prices
Fuel retailers have threatened to hike petrol prices by about 15 per cent if the government does not temporarily regulate prices and compensate them for losses on sales, further evidence that the liberalized market really remains under New Delhi's control. The Reserve Bank of India (RBI) in its policy review on Tuesday also advocated raising the retail price of petrol.
India freed pricing of petrol in June 2010 but continues to subsidize prices of petrol, kerosene and cooking gas to protect the poor from the impact of any inflation pressures. (Read More)
Brokerages bullish on Tata Motors
India's largest automobile company Tata Motors has emerged as a favourite among brokerage houses on the back of strong global sales. More and more brokerages - firms that facilitate the buying and selling of financial derivatives between a buyer and a seller- are revising their recommendation on Tata Motors.
CLSA upgraded Tata Motors on Tuesday to buy from outperform and raised the target price to Rs 370 per share from Rs 310 per share. "FY13-14 earnings per share is likely to rise by 16-18 per cent factoring in higher volumes... Operating leverage to benefit margins in coming quarter," CLSA said in its note.
Here are five reasons why brokerages are bullish on Tata Motors.
Murdoch's Star to exit news business in India
The Star Group, a unit of Rupert Murdoch's News Corp, has ended its brand association with its Indian television news channel joint venture partner, the company said, blaming the split on regulatory headaches.
"Given the current regulatory environment and structural issues ailing the Indian cable and satellite television market and the news genre in particular, Star took this extremely difficult decision to withdraw its brand from the genre," Star India said in a statement. (Read More)
Earnings Central: J&J, Coca-Cola, Goldman Sachs, Crisil, M&S
Johnson & Johnson, Coca-Cola, Goldman Sachs, Marks & Spencer and Crisil have announced earnings figures for the January-March quarter. While J&J, Goldman Sachs quarterly profits beat forecasts, M&S and Crisil missed street expectations. Coca-Coal revenue per share was in sync with expectations.
Meanwhile, here are 5 things to know before HCL Tech reports Q3 earnings on Wednesday.
Apple shares fall for 5th day, m-cap dips by $60 billion
For most of the year, Apple has propelled the Nasdaq composite index forward. Now Apple is sliding the other way and taking the Nasdaq with it.
Apple stock dropped more than $25 on Monday, its fifth straight day of declines. The losing streak has wiped out about $60 billion of Apple's market value. That's more than the most optimistic projections of the value of Facebook. (Read More)
Stubborn Euro zone inflation shows no signs of easing
High world oil prices offered no respite for the euro zone's stubborn inflation in March as the EU's statistics agency revised upwards an initial reading for the month even at a time when the currency area's economy likely tipped into recession.
Consumer prices in the 17 nations sharing the euro were up 2.7 per cent in March from a year ago, the EU's statistics office Eurostat said on Tuesday, the same level as in February but up from a first estimate for March of 2.6 per cent. (Read More)