BSE Sensex wipes off losses, up over 100 points

 
Wiping off its initial losses, the BSE benchmark Sensex gained over 100 points in morning trade on Tuesday. At 10.21 am, Sensex was up 101.76 points at 20002.72. Similarly, Nifty was up 43.35 points at 5933.10 during the same time.

The 30-share index, which lost 745.68 points in the previous two sessions, fell further by 118.18 points, or 0.59 per cent, to 19,782.78 in early trade as banking stocks slumped after international rating agencies downgraded the debt rating of the nation's top three public sector lenders.

Similarly, the wide-based National Stock Exchange Nifty declined by 34.75 points, or 0.59 per cent, to 5,855.00.

The BSE banking index suffered the most by falling 1.48 per cent to 11,458.48 with stocks of SBI declining by 2.75 per cent, Bank of Baroda by 2.35 per cent, Punjab National Bank by 2.59 per cent, ICICI Bank by 0.64 per cent, HDFC Bank by 1.03 per cent and Yes Bank by 1.73 per cent.

Meanwhile, in Asia, Hong Kong's Hang Seng index down by 1.08 per cent, while Japan's Nikkei fell 0.70 per cent in early trade.

The US Dow Jones Industrial Average ended 0.32 per cent lower in Monday's trade.

Gold price falls 0.36% in futures trade on global cues

Gold prices fell 0.36 per cent to Rs 29,678 per 10 gram in futures trade on Tuesday as speculators engaged in trimming positions.

Market analysts said the fall was mostly attributed to a weak trend overseas after a Federal Reserve official said policy makers may start reducing US fiscal stimulus as early as next month.

At the Multi Commodity Exchange, gold prices for delivery in December fell by Rs 108, or 0.36 per cent, to Rs 29,678 per 10 gram in business turnover of 253 lots.

Similarly, metal prices for delivery in October declined by Rs 99, or 0.33 per cent, to Rs 29,775 per ten gram in 2,235 lots.

Meanwhile, gold prices fell 0.4 per cent to settle at USD 1,327 an ounce in New York yesterday

Moody's concerns overblown, misplaced: SBI

 
Country's largest bank State Bank of India (SBI) on Tuesday dismissed the concerns raised by Moody's while downgrading its debt rating, saying that the issues cited by the global credit ratings agency are "overblown and misplaced".

"We had explained our views to Moody's, allaying their concerns on debts, deposits as well as recapitalisation, but still they went ahead with downgrade. We believe Moody's is overly concerned, and that is completely misplaced," SBI MD and CFO Arundhati Bhattacharya said.

At a press conference on Monday evening attended by all the four Managing Directors of the bank, she said: "What Moody's feels is their view and we don't subscribe to that. SBI is and will remain the banking champion of the nation. We have no difficulty in raising deposits with our nationwide presence nor do we have any means in raising funds.

"We still have the highest rating amongst the public sector banks when it comes to bank?s financial stability rating (BFSR) from Moody's."

The agency on Monday downgraded the senior unsecured debt and local currency deposit rating of SBI by a notch to 'Baa3' from 'Baa2', citing asset quality and recapitalisation concerns.

It said: "A combination of increasing pressure on credit fundamentals and ongoing reliance on fiscally constrained government to maintain capital at levels desired by regulators argue for appropriateness of supported debt and deposit ratings at a level no higher than the sovereign," it said.

Discounting the agency's fears on the bank's ability to recapitalised, Bhattacharya said: "We don't believe that Moody's concern on recapitalisation is right. They have their views, but that is not our views. We do believe that they are not completely right in its rating action. We have many ways to raise capital including bringing the government stake down from 62.3 per cent now to raise capital."

Even 4.5-5 per cent GDP growth in FY14 good for India: KPMG

 
Consulting firm KPMG has said achieving gross domestic product (GDP) growth of even 4.5 -5 per cent in 2013-14 "should be good" for India as there has been a gradual slowdown in the country's economic activity.

"Initially, the government was talking of much higher growth. We have gradually come down to now below 5 per cent. My own estimate is that if we are able to even sustain 4.5-5 per cent, between there, it should be good," said Akhil Bansal, Chief Operating Officer, KPMG India.

India's economic growth had slumped to decade low of 5 per cent in 2012-13, and during the first quarter of 2013-14 slowed down further to 4.4 per cent.

Bansal added that the government needs to improve the country's infrastructure to promote growth.

Earlier, speaking on 'Practice of Strategic Consulting in India: Opportunities and Challenges', he said strategic consulting industry in the country is expected to grow at over 20 per cent in the current financial year.

"Consulting is still in nascent stage in India... Strategic consulting is required. I do not see any reason why it should not grow by another 20 per cent plus this year as well," he said.

He said about 70-80 good consulting firms are operating in India, but it (industry) is still pretty small.

"The estimated market size in India is about $300 million, which is very small. But the good thing is the way it is growing. Last year the growth was at about 22 per cent in strategic consulting and it came in an year when the economy was slowing."

Kingfisher Airlines in talks with an investor: Vijay Mallya

 
Bangalore: Criris-hit Kingfisher Airlines is in talks with a foreign investor for potential stake sale, its Chairman Vijay Mallya said Tuesday.

He, however, refused to divulge the investor's name.

"I expect this to take some form or shape in about 90 days. That is in my own estimate. It could be longer or it could be even earlier," Mallya told reporters after the annual shareholders meeting of the company.

Kingfisher Airlines has remained grounded for almost a year now under the burden of huge debts totalling over Rs 7,000 crore and accumulated losses of more than Rs 16,000 crore.

Asked about the investor's profile, Mallya said he is unable to reveal anything at this moment as it is something that would breach the confidentiality of agreement. "The investor is very sensitive to identity being revealed. Let us really give it a good try to get KFA started," he added.

To a query, Mallya said the United Breweries Holdings Limited (UBHL) Board has considered the request of KFA Board for continued funding in the light of the prospective investor and agreed to provide some funding for KFA.

"UBHL itself cannot use its own funds and its assets that it currently has because of the restraining order from the Karnataka High Court. We have in fact applied to the court's permission to use part of this fund, and now it is in the hands of the honourable court," he said.

On the response of the Directorate General of Civil Aviation (DGCA) to the airlines' submission of revival plan in a bid to restart limited operations, Mallya said the company had not heard from the aviation regulator, but gathered informally that they would like to see recapitalisation plan.

Asked whether the UBHL has agreed to pay employees' salaries, Mallya said: "Yes, that is the principle request before the honourable court."

Queried if there is any contingency plan in case the court does not take it up, he said: "I have no contingency plan to violate or deviate from the orders of honourable court."

To a question, Mallya said issues with its creditors are bilateral in nature and would talk to them from time to time.

"Some of them have preferred bilateral negotiations in good faithful spirit and some have gone to court. We have to deal with all these issues as they come along," he added.

On Malaysian low-cost carrier Air Asia impacting the aviation sector in India after its foray into the country, Mallya said KFA was never a low-cost carrier and always challenged the very use of the word. "If at all, it will have an impact on the full service space, but good luck to all those who are starting," he said.

Asked how he saw the aviation sector panning out in next year or so, Mallya said: "If you take all three components - current crude oil prices, the value of rupee versus the dollar etc - as they exist, obviously it is very challenging. And I don't know whether there can be full recovery."