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10 macro triggers that matter for market today

The Reserve Bank of India has cracked whip on 50 more corporate defaulters having Rs 2 lakh crore outstanding. Last June RBI had sent out the first list of 12 accounts that added up to about Rs 2.5 lakh crore in money owed. The second list of companies to be referred to NCLT for a time-bound resolution are expected to be in steel, power, infrastructure and commodity sectors.

Here’s a lowdown on ten macro triggers that are likely to impact the market on Wednesday. This report was compiled from agency feeds.

Tax Demand From Hutchison
India’s income tax authorities have demanded over Rs 32,300 crore from Hutchison Holdings in taxes, interest and penalty on the alleged gains the Hong Kong company made by selling its Indian mobile phone business to Vodafone Group Plc back in 2007, for about $11 billion. In a local stock exchange filing, CK Hutchison Holdings has said its unit, Hutchison Telecommunications International (HTIL), has been served with a tax demand of about Rs 7,900 crore, Rs 16,430 crore interest and another Rs 7,900 crore in penalty, one which the company disputes. This is the first time that India has raised a tax demand from Hutchison, having so far only chased Vodafone for paying tax on the deal through which the UK telco entered India.

RBI’s Second List
The Reserve Bank of India (RBI) has directed banks to refer 50 dud accounts to bankruptcy court if they are unable to find a resolution in three months, in the second such list that the regulator has sent out in bid to clean up the bad corporate debt problem. The new list is said to include companies such as Videocon Industries, Uttam Galva, Essar Projects and Ruchi Soya, all of which have debt classified as non-performing as of June in the books of at least 60% of lenders. Other names in the second list are said to include Jaiprakash Associates, Visa Steel, Videocon Telecom, Monnet Power, Orchid Chemicals, SEL Manufacturing, Nagarjuna Oil Refinery, Castex, Jayswal Neco, East Coast Energy, Soma Enterprises, Asian Colour, Unity Infraprojects, Jai Balaji Industries, Shakti Bhog, Ushdev International, East Coast Energy and Transstroy India. The move will pinch banks even more as they make higher provisions on loans of companies referred to the insolvency process.

NSE Rejigs Indices
National Stock Exchange (NSE) will include Bajaj Finance, Hindustan Petroleum Corp and United Phosphorus (UPL) into its benchmark Nifty 50 from September 29. These stocks will take the places of ACC, Bank of Baroda, Tata Powerand Tata Motors DVR. “The above replacements will also be applicable to Nifty50 Equal Weight Index,” the statement added. The exchange made changed to the broader indices, too. In the Nifty 100, Divi’s Laboratories and United Breweries have been excluded while Avenue Supermarts and MRF will be included.

Mumbai Rains
Mumbai came to a standstill on Tuesday as heavy rains accompanied by strong winds lashed the city, reviving memories of a similar night of terror in July 2005 when severe flooding caused death and destruction on a large scale. Parts of the maximum city received rainfall of over 200 mm forcing arterial roads to be shut and train services to be suspended. The Bandra-Worli sea link, which was shut due to waterlogging, was reopened late in the evening. The Mumbai-Pune expressway was closed too. Airport operations were shut due to poor visibility but services resumed later in the evening. Schools and offices closed earlier but financial markets and banks functioned normally. The weather office is expecting heavy rains today too.

Stock Limit on Sugar Mills
The government has imposed stock limits on sugar mills for the next two months to keep prices under control during the festival season. Sugar production in India, the world’s second largest producer, is estimated to decline to around 21 million tonnes (mt) in 2016-17 season ending September from 25 mt in the previous year. The stock limit for September has been kept at 21% of the total sugar available with the mills during entire 2016-17 marketing year (October- September). The stock limit for October will be 8% of the total sugar availability during the current marketing year, the minister said.

Anti-dumping Probe
The government has started investigations into alleged dumping of Chinese belting fabric used for making conveyor belts following complaint from SRF Ltd. The commerce ministry’s investigating arm – Directorate General of Antidumping and Allied Duties (DGAD) in a notification has said “sufficient prima facie evidence of dumping” of the product from China exists to justify initiation of the probe. Anti-dumping duties are levied to provide a level playing field to local industry by guarding against below-cost import. The period of investigation covers April 2016 and March 2017.

IOC’s Capex Plan
To meet the rising demand for petrochemicals, especially plastics and polymers, largest public sector company Indian Oil will invest Rs 32,000 crore to ramp up its output by fiscal 2021. This investment is part of the overall Rs 1.8 trillion capex planned for the next five to seven years. The petchem business contributes a quarter of the most profitable PSU’s profit, which rose to the highest at Rs 19,106 crore in fiscal 2017.

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FUNDAMENTALS
Rupee Down : The rupee on Tuesday weakened against the US dollar tracking losses in the global markets after North Korea fired a ballistic missile over Japan. The rupee closed at 64.02 a dollar, down 0.16% from its Monday’s close of 63.91.

Bonds Up : Government bonds (G-Secs) firmed up on good buying support from banks and corporates. The 6.79% government security maturing in 2027 surged to Rs 101.81 from Rs 101.56 on Monday, while its yield moved down to 6.53% from 6.57%. The 6.79% government security maturing in 2029 gained to Rs 99.57 from Rs 99.2575, while its yield softened to 6.84% from 6.88%. The 7.68% government security maturing in 2023 climbed to Rs 105.3650 from Rs 105.22, while its yield fell to 6.62% from 6.65%. The 7.35% government security maturing in 2024 were also quoted higher to Rs 103.4750 from Rs 103.32, while its yield declined to 6.70 from 6.73%.

Call Rates Up : The overnight call money rates ended stable at its previous level of 5.80%. Its commenced higher to 6.00% and trading in a range of 6.00% and 5.70%.

Liquidity : The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 2575 crore in 4-bids at the overnight repo operations at a fixed rate of 6.00% as on Tuesday, while its sold securities worth Rs 35082 crore in 57-bids at the overnight reverse repo auction at a fixed rate of 5.75% as on Aug 28.

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