The BSE Bankex jumped the most— 5.05 per cent at 19952.94, it was followed by BSE Power index (up 3.72 per cent), BSE Realty index (up 3.72 per cent) and BSE Healthcare index (up 3.06 per cent). (Express Photo)

Firm global cues, US Federal Reserve decision to maintain status quo on interest rates and continued negative WPI inflation, giving renewed impetus for a rate cut by the RBI in its monetary policy review scheduled on September 29 and a sharp appreciation in rupee helped the bulls to stage a strong performance on the street. Key benchmark indices registered a sharp rise of over 2 per cent for the week ended September 18.

The BSE Sensex and NSE Nifty advanced 608.70 points and 192.60 points to 26,218.91 and 7,981.90 on September 18 from 25,610.21 and 7,789.30 on September 11.

Barring the Consumer Durables index (down 3.30 per cent), Capital Goods index (down 2.41 per cent) and Auto index (down 0.43 per cent, rest all other sectoral indices on the Bombay Stock Exchange ended the week in green. The BSE Bankex jumped the most— 5.05 per cent at 19952.94, it was followed by BSE Power index (up 3.72 per cent), BSE Realty index (up 3.72 per cent) and BSE Healthcare index (up 3.06 per cent).

In the 30-share index, share price of Axis Bank, Sun Pharmaceutical Industries, NTPC, Wipro and State Bank of India jumped 7.48 per cent, 7.04 per cent, 6.32 per cent, 5.92 per cent and 5.30 per cent to Rs 517.30, Rs 905.10, Rs 127.05, Rs 590.30 and Rs 242.35, respectively, during the week. On the other hand, Tata Motors, Larsen and Toubro and Tata Steel plunged 4.96 per cent, 3.70 per cent and 1.93 per cent to Rs 328.40, Rs 1540 and Rs 228.55, respectively, during the same period.

Shreyash Devalkar, fund manager, equities, BNP Paribas Mutual Fund, said, “A host of positive data released at the end of the week pointed towards a steady improvement in the Indian economy and gave a fillip to the stock market. BoP data showed that India’s current account deficit (CAD) narrowed down to $6.2 billion (1.2 per cent of GDP) in Q1 June 2015 from $7.8 billion (1.6% of GDP) a year ago, while IIP for the month of July 2015 increased by 4.2% yoy.”

Inflation figures eased further in the month on August and raised hopes for a rate cut by the Reserve Bank of India. CPI eased to 3.66 per cent in August from 3.69 per cent in July while WPI stood at -4.95% for August against a reading of -4.05% in July.

Hitesh Agrawal, head research, Reliance Securities, said, “Indian indices continued to build on their gains from the previous week, as the US Fed postponed the interest rate lift-off citing the recent financial and economic market developments. Its commentary was also dovish indicating of a reduced probability of a US rate hike in calendar 2015. This is a sigh of relief in the interim for emerging markets like India. The Nifty surged around 2.5 per cent, which was also supported by the better-than-expected July IIP growth at 4.2 per cent and sustained low inflation data points for August.”

After weeks of uncertainty and market churning debate the Federal Reserve on September 17 left interest rates unchanged, thereby prolonging an era of near zero interest rates in the US. However, the Fed chairman indicated that a rate hike is still likely this year.

“Trend in global markets reacting on outcome of US Fed rate holding the key rates steady, interest of foreign portfolio investors, rupee movement and commodity prices globally will dictate the trend on the bourses. The BSE Sensex and NSE Nifty may remain volatile with positive bias in the week ahead,” said, Gaurav Jain, director, Hem Securities.

Jayant Sinha had on Thursday argued that EPFO’s increased investment will help contain volatility in the stock market

A day after minister of state for finance Jayant Sinha pitched for enhancing the EPFO’s exposure to the stock markets, labour minister Bandaru Dattatreya on Friday said he would rather tread cautiously and assess the returns on such investments being made before any hikes.

“By the end of March 2016, we are putting in the market approximately Rs 5,000-6,000 crore. Depending on the result of this, we will proceed further. I hope the results will be good… (But), I have to go very cautiously,” Dattatreya, who is also the chairman of the trustees board of EPFO, told reporters.

Following a Budget announcement, the labour ministry had in April notified the new investment pattern for EPFO allowing it to invest a minimum of 5% and a maximum of 15% of its incremental deposits in equity or equity-related schemes. However, to start with, it decided to invest 5% of the incremental deposits in exchange traded funds (ETFs) managed by SBI Mutual Fund in the current fiscal. Since August EPFO has invested over Rs 400 in ETFs.

EPFO has a subscribers’ base of over four crore and is expected to receive an incremental deposits of Rs 1 lakh crore in the current fiscal. Favouring EPFO’s increased investment, Sinha had on Thursday argued that it would help contain volatility in the stock market and with that, the cost of capital on equity side for businesses would also slide.

Meanwhile, the pension fund manager has decided to increase the insurance payout under Employees Deposit Linked Insurance Scheme 1976 to Rs 6 lakh from Rs 3.6 lakh to dependents of deceased EPF members. This move will benefit 4 crore EPF members.

In fact, last year it paid 30,000 beneficiaries over Rs 180 crore under the scheme.

The board has also recommended removal of the one year continuous employment under current employer clause for being eligible for the insurance benefits.

Sun Pharma has announced the acquisition of Insite Vision US for the sum of $48 m in equity value (net debt of $3.5n on December14).

The transaction is valued at around 6.3x FY14 sales. Sun will commence a tender offer at a price of $0.35/ share, a 30% premium to the implied share price of the terminated acquisition between Insite and a competitor bidder’s price. Insite’s lifetime high and low share prices are $0.93 in April 2011 and $0.25 in Sep 2010. Its last closing price was $0.34, and it has a market cap of $46.8 m.

Insite Vision generated sales of $8.2/30.8/21.6 m in FY14/13/12 respectively, with R&D of $9.1/11.5/15.4 m. FY13 sales included one-time sales of rights of $15.5 for Besivance, and FY12 included a minimum royalty true-up payment of $11.9mn for Azasite. For the six months ended Jun 15, sales / EBITDA / net income were $3.8 /-6.4 /-7.5 m respectively.

The company expects to close the acquisition by December 2015.

Insite Vision focuses on the development of specialty ophthalmic products. The company operates in two major ophthalmic segments —anti-infective ($2bn market size) and ocular inflammation and pain ($1.7bn market size).

Sun is the process of establishing branded ophthalmic business in the US. It actively targets to expand its basket of specialty products and increasing sustainable source of revenue.

Besides a status quo on interest rates by the US Federal Reserve which gave a thrust to entire equity market, banking stocks rallied during Friday’s trade on increasing hope of rate cut by RBI at its next monetary policy review meeting scheduled on September 29.

Amidst increasing hopes of an interest rate cut, banking stocks witnessed increasing buying momentum on Friday.

The Bank Nifty rose 444 points or 2.62%, while broader Nifty closed 1% higher at 7981.90. Private sector lenders Axis Bank and Federal Bank rallied the most with 4.7% gain while public sector banks such as Bank of Baroda and Canara Bank advanced 4.2% and 3.4% respectively.

Expectations of a cut in the repo rate — the benchmark lending rate, have compounded after consumer price inflation (CPI) slowed to 3.66% in August and stood way below the RBI’s target of 6% by January 2016.

Kotak Institutional Equities, in a research report said that it sees CPI inflation undershooting RBI’s 6% objective by ~50 bps in January 2016. “This, in conjunction with a dovish Fed should pay the way for a 25 bps repo rate cut at the upcoming RBI meeting,” it added.

While cooling inflation has attracted investors’ inclination towards rate sensitive stocks, media reports suggesting governments’ plans to increase FDI limit in private banks to 100% from the current 74% augmented buying interest in private sector lenders.

The combined traded volumes of Axis Bank on both BSE and NSE jumped over two-fold to 1.97 crore shares against 30-day average volume. Nearly 31 lakh shares of Kotak Mahindra Bank were traded on both the bourses, two times higher than its 30-day average volume.

Private lenders IndusInd Bank and HDFC Bank have gained between 10-15% so far in 2015 against a 4% drop by Nifty index.

Markets regulator Sebi has notified new norms that will dilute its chairman’s powers on conduct of search and seizure of defaulters’ properties, with permission for such operations being required from a special court. (PTI)

Markets regulator Sebi has notified new norms that will dilute its chairman’s powers on conduct of search and seizure of defaulters’ properties, with permission for such operations being required from a special court.

Under the new norms, Sebi will have to seek permission from special courts to conduct search and seizure operations, as against earlier regulations that had provided the capital markets regulator chief to directly authorise such actions.

These regulations would be called the Securities and Exchange Board of India (Procedure for Search and Seizure) Repeal Regulations, 2015.

The move comes following demands that the greater powers need to be balanced with necessary safeguards.

Sebi Chairman was earlier authorised to conduct search and seizure operations against suspected entities, but the new notification provides that permission for such actions would need to be obtained from a Magistrate or Judge of a designated court.

Earlier in August last year, the government had notified a new law empowering the capital market regulator to pass orders for attachment of properties, arrest of defaulters and to access call data records.

The Securities Laws Amendment Act which had come into force through a gazette notification dated August 2014, is part of the government and regulator’s efforts to tighten the noose around fraudsters in the wake of several cases of illicit money-pooling activities including ponzi operators in various parts of the country.