Chennai rains: According to Eicher Motors, due to the downpour, as many as 4,000 motorcycles could not be produced. (Photo: Reuters)

Shares of Royal Enfield maker Eicher Motors Eicher Motor Ltd on fell on Friday after the company on Thursday said it has closed down its plants here and at Oragadam near Chennai due to heavy rains.

At 11.11 am, Shares of the company were trading 1.22 per cent down at Rs 16441.00. The scrip opened at Rs 16,551.00 and touched the high and low of 16,680 and 16,369.10 respectively.

“The unprecedented rainfall in Chennai has severely affected the city including our employees, our manufacturing facilities and offices. The floods caused by the rain have also impacted logistics and our supply-chain, resulting in disruption of our production. As a consequence, we have shut down our offices in the city and our plants in Thiruvottiyur and Oragadam since December 1st,” the company said.

According to Eicher Motors, due to the rains, as many as 4,000 motorcycles could not be produced.

With inputs from IANS

RBI is seeking to prevent wild swings in bond markets by agreeing to pay higher interest rates to investors at bond auctions, people with knowledge of the central bank’s operations say. (Reuters)

Haunted by memories of India’s 2013 markets crash, Reserve Bank of India (RBI) is engaging in a tricky balancing act with domestic yields to keep volatility out of its bond markets ahead of the Federal Reserve’s historic policy decision this month.

The country’s central bank, is seeking to prevent wild swings in bond markets by agreeing to pay higher interest rates to investors at bond auctions, people with knowledge of the central bank’s operations say, while also buying bonds in the open market to stop yields rising too much.

Although India has outperformed many emerging markets this year, the country has not been immune to Fed jitters, with foreign investors selling around $1.7 billion in bonds and shares last month.

The people familiar with RBI operations say it is worried weak market participation at its auctions ahead of the Fed’s Dec. 15-16 meeting could trigger a selloff. In 2013, Fed “taper” fears sent the rupee to a record low

“It is best to avoid adding any negative news before the Fed,” said one of the people.

“When there is so much (bond) supply, yields can’t stay low.”

The RBI has in its past two weekly government bond auctions allotted tenders to bidders below market prices, effectively paying higher-than-normal yields.
Typically, the RBI sets a maximum cut-off yield for bids and employs a process known as “devolvement” for weak bond tenders in which the auction’s underwriting dealers buy up the shortfall in undersubscribed tenders at the cut-off yield.

“A devolving auction could mean that there is not enough demand for bonds, which sends a negative signal,” the person said.

This is why the RBI has avoided devolvement at its Nov. 27 and 20 auctions, despite tepid appetite, and has chosen to accept all bids, even those demanding yields above the majority of the bidders.

The RBI’s last devolved auction took place in June when demanded yields rose to rates that were uncomfortably high for the central bank.

Last Friday, the RBI sold 150 billion rupees of bonds, almost half of which were 10-year benchmark bonds priced at a 7.76 percent yield, 4-5 basis points higher than market rates on that day.

Another person familiar with RBI operations said the central bank is also likely to avoid devolved auctions ahead of the government’s budget in February.
“It is a conscious decision to not devolve and keep things on the safer side ahead of the Fed and the budget,” the person said, adding that devolvement will only happen if yields rise dramatically.

An RBI spokesperson did not have a comment on central bank operations.

A surprise RBI announcement on Wednesday to buy $1.5 billion of government bonds in the secondary market, however, is targeted at countering the recent rise in yields and easing tight cash conditions. The move helped push yields down six basis points on Thursday.

And as a result, yields at this week’s RBI bond auction on Friday are also likely to be lower.

However, analysts say the RBI’s current strategy comes with hazards and may perversely create more problems.

An entrenched practice of accepting bids at high yields, while supporting short-term demand, will push up the government’s 6 trillion rupee borrowing costs while open market purchases could add to inflationary pressures.

“In the past, the RBI devolved bonds when they were uncomfortable with high yields,” said Ashish Vaidya, head of trading at DBS Bank in Mumbai.

“This time, the RBI not devolving makes us believe that probably the signal is yields should be higher given demand supply dynamics.

“Having tasted the success of getting stock at higher yields, market participants will be tempted to further bid at higher yield.”

At 9.19 am, Sensex was down 237.50 points. All the 30 components of Sensex were trading in red. ITC, HDFC and Lupin were trading over 1 per cent down in the early trade. (Photo: PTI)

10.48 am: Meanwhile, Sun Pharmaceutical announced that one of its subsidiaries has received final approval from US FDA for its Abbreviated New Drug Application (ANDA) for generic version of Gleevec, Imatinib Mesylate tablets 100mg and 400mg. These tablets are indicated for the treatment of chronic myeloid leukemia. Share price of Sun Pharma was trading 5.72 per cent up at Rs 768.45. The BSE Healthcare index was up 1.37 per cent at 16662.05.

10.40 am: Tree House shares jumped 9.98 per cent to Rs 222.60 and hit upper circuit on Friday after the company informed BSE that the Board of Directors met on December 4 and accorded in-principle approval for exploring consolidation option with Zee Learn. The share price of Zee Learn was trading 6.58 per cent up at Rs 45.35. Sensex was down 162.93 points at 25,723.

10.35 am: Ujaas Energy informed BSE on Thursday that it has bagged EPC order of 10MW Canal Bank Grid Connected Solar Photovoltaic Power Plant at Vadodara, Gujrat and its operation and maintenance for 25 years as issued by Sardar Darovar Narmada Nigam. The company has received Letter of Acceptance-cum work order issued by General Manager (HP) Sardar Sarovar Narmada Nigam, Gandhinagar. The approximate amount for the work is around Rs 91.78 crore. The share price of Ujaas Energy was trading 5.16 per cent up at Rs 21.40.

This is a consecutive win of the company in last four months. After 9MW of Oil India Rajasthan, 10MW at Teesta Cananl West Bengal, 1000 KWp at Andaman & Nicobar and 6MW at Daman & Diu .

10.26 am: Brokers said persistent selling by participants following hefty losses across Asia and other global markets, as an anticipated revision of the European Central Bank’s stimulus programme fell short of expectations, mainly dampened the sentiments. Furthermore, depreciating rupee against the dollar also negatively impacted sentiment. Sensex was down 181 points at 25,705.

10.04 am: Meanwhile, shares of Tata Consultancy Services hit new 52-week low of Rs 2,322. The BSE IT index was down 0.83 per cent at 10,702.18. Sensex was down 151 points at 25,735.

9.56 am: Sensex was down 171.92 points at 25,714. IT solutions company Mastek on Thursday said it will make no further investments towards development of ‘Veyo’, a platform built to help in conveyancing process. The share price of Mastek was trading 1.16 per cent down at Rs 195.20.

9.46 am: The Indian rupee slumped to an over two-year low on Friday, tracking weakness in global markets after the European Central Bank’s stimulus package fell short of expectations and renewed fears of a US rate hike.

9.30 am: Future & Option (F&O) total turnover stood at 1,43,471.74 crore on December 03 and the total number of contracts traded on the day were 24,89,348. Of the total turnover, Index Futures contributed Rs 11,694.36 crore, Stock Futures Rs 22,908.53 crore and Index Options Rs 98,662.99 crore, while the contribution of the Stock Options was of Rs 10,205.86 crore. For the day, the total F&O PutCall ratio (PCR) stood 0.66 while Index Options PutCall ratio was 0.68 and that of Stock Options was 0.48. The top five scrips with highest PCR on OI were UCO Bank (1.90), JSW Steel (1.26), STAR (1.24), ACC (1.18) and GAIL (1.18).   

9.19 am: Sensex slid 237.50 points in the early trade. All the 30 components of Sensex were trading in red. ITC, HDFC and Lupin were trading over 1 per cent down in the early trade.

9.16 am: Sensex was down 173 points at 25,713. Nifty was down 56.20 points at 7,807. Shares of Dabur India was trading 2.46 per cent down at Rs 271.10.  Dabur has become the first major private Indian company to be hit by prevailing political tension in Nepal as the homegrown FMCG giant is expecting its juice sales to dip 10-15 per cent in October-November due to disruption of supplies from its plant in the Himalayan nation.

9.15 am: The BSE Sensex and NSE Nifty opened in red on Friday tracking weak global markets. Sensex opened 76.56 points down at 25,810.06, while NSE Nifty50 index opened 46.55 points down at 7,817.60.

Shares of public sector lender Dena Bank will remain in focus as the bank has got board approval for dilution of government holding to up to 52 per cent and raise capital up to Rs 2,500 crore from various bonds. Government shareholding in the bank was 65 per cent at the end of September 30.

Asian shares slipped while the euro retained lavish gains on Friday, a day after its biggest one-day surge in nearly seven years as the European Central Bank’s stimulus package fell well short of markets’ high expectations.

Investors are now focused on US jobs data, which is likely to cement expectations that the Federal Reserve will hike interest rates later this month, barring surprisingly weak readings.

The S&P 500 suffered its biggest daily drop since late September on Thursday as the European Central Bank disappointed market hopes for greater stimulus. The Dow Jones industrial average fell 252.01 points, or 1.42 per cent, to 17,477.67, the S&P 500 lost 29.89 points, or 1.44 per cent, to 2,049.62 and the Nasdaq Composite dropped 85.70 points, or 1.67 per cent, to 5,037.53.

Back home, benchmark indices fell for the second day in a row on Thursday after hawkish comments from the US Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month. Market sentiment also hurt after a business survey released on Thursday showed India’s services industry barely expanded in November, growing at its weakest pace in five months.

The BSE Sensex closed 231.23 points down at 25,886.62, while Nifty50 index settled 67.20 points down at 7,864.15.

The BSE Sensex and NSE Nifty may see gap down opening on Friday tracking SGX Nifty and weak global markets. (Reuters)

The BSE Sensex and NSE Nifty may see gap down opening on Friday tracking SGX Nifty and weak global markets.

At 8.31 am (IST), SGX Nifty was down 59.50 points, or 0.76 per cent, at 7,826.

Asian shares slipped while the euro retained lavish gains on Friday, a day after its biggest one-day surge in nearly seven years as the European Central Bank’s stimulus package fell well short of markets’ high expectations.

Investors are now focused on US jobs data, which is likely to cement expectations that the Federal Reserve will hike interest rates later this month, barring surprisingly weak readings.

The S&P 500 suffered its biggest daily drop since late September on Thursday as the European Central Bank disappointed market hopes for greater stimulus.

The Dow Jones industrial average fell 252.01 points, or 1.42 per cent, to 17,477.67, the S&P 500 lost 29.89 points, or 1.44 per cent, to 2,049.62 and the Nasdaq Composite dropped 85.70 points, or 1.67 per cent, to 5,037.53.

Back home, benchmark indices fell for the second day in a row on Thursday after hawkish comments from the US Federal Reserve Chair Janet Yellen reinforced the case for an interest rate hike later this month. Market sentiment also hurt after a business survey released on Thursday showed India’s services industry barely expanded in November, growing at its weakest pace in five months.

The BSE Sensex closed 231.23 points down at 25,886.62, while Nifty50 index settled 67.20 points down at 7,864.15.

Shares of public sector lender Dena Bank will remain in focus as the bank has got board approval for dilution of government holding to up to 52 per cent and raise capital up to Rs 2,500 crore from various bonds. Government shareholding in the bank was 65 per cent at the end of September 30.

(With inputs from agencies)

Capital markets regulator Securities and Exchange Board of India (Sebi) on Thursday proposed new norms for issuing and listing of green bonds, with an aim towards financing of green projects in India worth $2.5 trillion by 2030. Sebi has invited public comments on these norms by December 18.

Sebi said issuance of green bonds in India does not require any amendment to the existing regulations, but mandated the issuer of green bonds to disclose additional information on the criteria of identifying projects, assets or activities as ‘green’ as prescribed under the Green Bond Principles, 2015.

Sebi noted broad areas —  renewable and sustainable energy, clean transportation, sustainable water management, climate change, biodiversity conservation, among others — where money may be invested. In addition, the regulator has mandated companies to furnish clear details on use of proceeds in the offer document and state periodic reporting of fund allocation. Companies will also be required to provide details of the portfolio, assets, and projects that are identified for re-financing.

According to the concept paper, Sebi described green bonds similar to any other debt instrument issued by an entity for raising funds. However, proceeds are ‘ear-marked’ strictly towards financing green projects, Sebi said, adding that the current description is based on market practice and there is no standard definition of green bonds.

India’s Intended Nationally Determined Contribution document puts forth the stated targets for the  country’s contribution towards climate improvement and following a low-carbon path to progress.

“The document also impresses upon the need of financing needs for achieving the stated goals, where a preliminary estimate suggests that at least $2.5 trillion (at 2014-15 prices) will be required for meeting India’s climate change actions between now and 2030,” Sebi said in the paper.

“In this regard, the document talks about the introduction of tax-free infrastructure bonds of Rs 50 billion ($794 million) for funding of renewable energy projects during 2015-16,” Sebi said.