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need2know: Monsoon magic, Mohan Bhagwat on Air India sale & other macro cues for your day on D-Street

Here’s a lowdown on top macro triggers that may move market on Tuesday. This report was compiled from agency feeds.

Met Predicts Normal Monsoon, Relief for Govt
The India Meteorological Department (IMD) on Monday predicted a ‘normal’ monsoon this year and said there is a “very less possibility” of a deficient monsoon. Though the IMD pegged the season’s rainfall in the lower end of the normal range, at 97% of the long period average (LPA), its prediction matches private forecaster Skymet weather’s forecast, raising hopes of a normal monsoon. The prediction for a normal monsoon will spell relief for the government ahead of the 2019 Lok Sabha election.

Air India Should be Owned by Indian Firm: Mohan Bhagwat
RSS chief Mohan Bhagwat said yesterday that Air India should be owned by an Indian player who can run it efficiently, amid the government initiating the disinvestment process for the debt-laden national carrier. Cautioning the government against “losing control and ownership of its skies”, Bhagwat said Air India’s operations have not been managed properly. “Air India should be handed over to anyone who can run it efficiently. The new operator must be an Indian player,” the RSS supremo said, delivering a talk on ‘Indian Economy and Economic Policies: Long-term Perspective’ here.

Gas Hub, Gas Benchmark on Anvil
The government plans to launch a natural gas trading hub by October, creating an Indian gas benchmark which will spark a surge in consumption of the cleaner-burning fuel. Oil regulator PNGRB has sought bids to hire a consultant to help develop a regulatory framework for operationalising the gas trading/exchange hub. Currently, the government fixes the price of the bulk of domestically produced natural gas. The rate, arrived at using price prevalent in gas-surplus nations of US, Canada, UK, and Russia, is $3.06 per million British thermal unit for six month period beginning April 1. The cost of imported LNG into India is around $7.5.

Anti-dumping probe on Chemical from Brazil, Indonesia, Thailand
India has initiated probe into alleged dumping of a chemical used in paint and leather industry from Brazil, Indonesia and Thailand following a complaint from a domestic player. The commerce ministry’s investigation arm – Directorate General of Antidumping and Allied Duties (DGAD) – has stated that it has found sufficient evidence of dumping of ‘non-plasticised industrial grade nitrocellulose excluding nitrocellulose damped in Ethanol and waterwet’ from these three countries.

Fortis Rejects IHH Offer, Board to Consider ‘All Eligible Options’
Malaysian healthcare group IHH on Monday said India’s Fortis Healthcare rejected its offer to acquire the hospital chain citing its binding agreement with a consortium of Manipal Health and TPG. The development comes even as Fortis announced that its board would meet this week to look “all eligible options” for a deal. IHH offered to buy Fortis last week at a valuation of $1.3 billion, higher than the $1.2 billion valuation by Manipal. Sunil Munjal’s Hero Enterprise and the Burman Family Office have also offered to make an investment worth Rs 1250 crore ($191.5 million) in Fortis.

Key Flipkart Investors Agree to Sell Stake to Walmart
A number of key shareholders in India’s largest online retailer Flipkart have agreed to sell their stakes in the Bengaluru-based company to Walmart but the biggest of them, Soft-Bank, is holding out for a better price, said people aware of the development. Walmart has reached an agreement on buying the stakes of New York-based investment firm Tiger Global Management, South African media conglomerate Naspers, venture capital firm Accel and China’s Tencent Holdings, they said. Flipkart founders, Sachin Bansal and Binny Bansal, may sell a part of their stake in the company, they told ET.

SC Stays R-Infra Tower Sale for 2 Days
The Supreme Court on Monday stayed till April 18 an insolvency tribunal order that allowed a Reliance Communications unit to sell its towers and fibre assets, temporarily halting the troubled telco’s attempt to pare debt, causing its shares to fall over 5%. The apex court stayed National Company Law Appellate Tribunal’s (NCLAT) interim order after hearing arguments by HSBC Daisy Investments and some other minority shareholders of Reliance Infratel, RCom’s tower unit, on how they will get hurt if the tower firm’s assets are sold to a third party.

China Economy Grows 6.8%, Beats Forecast
China’s economy grew 6.8% in the first quarter of 2018, the statistics bureau reported on Tuesday, topping a consensus estimate of 6.7% year-over-year growth for the quarter, marking the third-straight quarter of 6.8% growth for the world’s second-largest economy.

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Growth Forecast: The World Bank yesterday forecast a growth rate of 7.3% for India this year and 7.5% for 2019 and 2020, and noted that the country’s economy has recovered from the effects of demonetisation and the Goods and Services Tax.

WPI Eases in March: Wholesale inflation remained almost unchanged in March from the month before as a decline in food inflation offset a rise in fuel and power cost. Inflation as measured by the Wholesale Price Index (WPI) slowed to an eight-month low of 2.47% in March, compared with 2.48% in February and 5.11% a year earlier.

Rupee at 6-mth Low: The India rupee closed at 65.49 against US dollar on Monday — a level last seen on 3 October 2017, down 0.41% from Friday’s close of 65.22 as the nation’s trade deficit widened more than estimated in March.

Bonds Down: Government bonds (G-Secs) slipped on selling pressure from banks and corporates. The 7.17% 10-year benchmark bond maturing in 2028 slid to Rs 97.8250 from Rs 98.20 previously, while its yield edged up to 7.49% from 7.43%. The 6.68% G-Secs maturing in 2031 declined to Rs 91.3825 from Rs 91.85, while its yield rose to 7.72% from 7.66%. The 6.79% G-Secs maturing in 2027 went-down to Rs 94.40 from Rs 94.72, while its yield moved up to 7.66% from 7.60%. The 8.20% G-Secs maturing in 2022, the 7.16% G-Secs maturing in 2023 and the 6.84% G-Secs maturing in 2022 were also quoted lower to Rs 102.8475, Rs 98.80 and Rs 97.81 respectively.

Call Rates up: The overnight call money rates finished higher to 6.05% from last Friday’s closing level of 5.85%. Its resumed higher to 6.00% and moved in a range of 6.08% and 5.70%.

Liquidity: The Reserve Bank of India, under the Liquidity Adjustment Facility, purchased securities worth Rs 8610 crore in 13-bids at the overnight repo operations at a fixed rate of 6.00% as on Monday, while its sold securities worth Rs 32,599 crore in 72-bids at the 3-days reverse repo auction at a fixed rate of 5.75% as on April 13.

Source: Economic Times