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Reports India

Indian stock market and companies daily report (June 20, 2013, Thursday)

June 20, 2013, Thursday, 06:44 GMT | 01:44 EST | 10:14 IST | 12:44 SGT
Contributed by Angel Broking

Indian markets are expected to open in the red tracking SGX Nifty which is down by 1.2%. The other Asian indices too are trading in the negative zone.

The US markets closed lower on Wednesday after the Federal Reserve's announcement on quantitative easing. The Federal Reserve has left interest rates unchanged and maintained the pace of its asset purchase program at $85 billion a month. The statement from Federal Reserve at the end of two-day meeting said that downside risks to the outlook for the economy and the labor market have diminished considerably. The Federal Reserve also acknowledged further improvement in labor market conditions. The European markets closed mostly lower on Wednesday as investors were cautious ahead of the announcements from Federal Reserve which were made post the market hours.

Indian markets which traded lower for most part of the trading session on Wednesday showed a strong pull-back in the late afternoon trade and finished flat.

Markets Today

The trend deciding level for the day is 19,207/ 5,810 levels. If NIFTY trades above this level during the first half-an-hour of trade then we may witness a further rally up to 19,313 - 19,381 / 5,841 - 5,860 levels. However, if NIFTY trades below 19,207 / 5,810 levels for the first half-an-hour of trade then it may correct up to 19,139 - 19,033 / 5,791 - 5,759 levels.

Fed to continue its liquidity infusion through asset purchases

As expected, the Federal Reserve's stance in its monetary policy remains unchanged. The Fed would continue with its ultra accommodative monetary policy stance keeping interest rates near zero until employment improves and price stability is maintained at or below its 2% medium-term objective. The policy rate has been maintained at a near-zero level of 0.25%. The FOMC has also decided to continue its asset purchases of USD85bn per month (USD45bn in treasury securities and USD40bn in mortgage-backed securities) to maintain downward pressure on interest rates.

The latest projections peg unemployment rate in 2013 at 7.2-7.3% and estimate a fall to 6.5-6.8% in 2014. Inflation is expected to remain below 2%. The fed has reiterated its commitment to supporting growth through accommodative policy until employment remains above 6.5% and price stability is maintained. Presently, unemployment rate at 7.6% remains higher than the Fed's comfort zone of 6.5% and CPI inflation at 1.4% yoy in May 2013 and 1.1% yoy in April 2013. We expect asset purchases to continue at least until December 2013 post which tapering may ensue.

Bharti Airtel slashes data usage rates by 90% in Punjab, Haryana

Bharti Airtel yesterday announced that the company has slashed data usage charges by 90% for pre-paid subscribers in Punjab and Haryana, a day after Vodafone lowered data charges by 80% for its pre-paid and post-paid customers in three circles. Bharti Airtel said that the volume based charges on its recharge vouchers for 2G data usage of three denominations have been reduced to 1 paisa per 10 KB from 10 paisa per 10 KB. The recharge vouchers of Rs.22, Rs.25 and Rs.125 carry a free download limit of 125 MB for five days, 150 MB for seven days and 1 GB for 28 days. After the free download, the customers were presently charged at 10 paisa per 10 KB which have been reduced to 1 paisa per 10 KB with immediate effect. Also, the validity of the Rs.22 and Rs.25 recharge vouchers has been increased to 30 days and that of Rs.125 recharge vouchers increased to 90 days. Vodafone had yesterday reduced the price from 10 paisa per 10 KB to 2 paisa per 10KB for Karnataka, UP West and Madhya Pradesh and Chhattisgarh circles for both pre-paid and post-paid customers using the 2G network. We expect other players in the industry to follow Bharti Airtel's and Vodafone's move to make internet access affordable for customers who use mobile internet in a limited way and inturn increase the share of data subscribers in the overall subscriber base. We maintain our Buy rating on Bharti Airtel with a target price of Rs.328.

Bharti Airtel to invest US$125mn in Gabon

Bharti Airtel has said that the company will invest US$125mn more in Gabon to develop the communications network in the central African country. As per the company, Bharti will use the money to expand 3G and 4G telecommunications networks and on some social programmes in the country. Gabon aims to have a countrywide digital infrastructure by 2016, enabling the development of a wide range of e-services, which will give rise to a major qualitative improvement in social services and create the foundations for Gabon. With high hydrocarbon reserves and foreign investment inflows, Gabon counts among the more prosperous countries in Sub-Saharan Africa with a per capita income of nearly US$12,000. Bharti Airtel currently has operations in 20 countries across Asia and Africa. We maintain our Buy rating on Bharti Airtel with a target price of Rs.328.

Economic and Political News

- Govt sets export target of $50 billion this fiscal: Rao

- India to sell $ 7.15bn in debt quotas to foreign investors

- India to consider allowing extra wheat exports

- Fin Min turns down Pawar's proposal to hike sugar import duty

- FDI dips by 6% in Jan-March 2013

- Govt extends import ban on milk items from China by one year

Corporate News

- Tata Motors plans Nano upgrades, new SUVs with Land Rover

- Tata Coffee commissions new instant coffee plant at Theni

- Glenmark gets USFDA approval for sclerosis treatment drug

- Dr Reddy's sued for 'infringement' of thyroid injection patent

- EU fines Ranbaxy, 8 others Euro 146mn

- Tata Steel signs sale pact with Safran Group

- CIL invites bids from cos to advise on modernisation of mines