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Feb 09, 2018 10:57 AM IST | Source: Moneycontrol.com
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highlights
US govt officially shuts down as Cong fails to pass spending bill in time
JSW Steel, Tata Steel in tight race for Bhushan Power & Steel
5 firms submit EoI to complete Jaypee Infratech projects: Srcs
China plans sea-based anti-missile shields for Indian Ocean
Here’s what Warren Buffett says to do when the market tanks
The cause of this brutal market sell-off was a piece of good news
Asian stocks slide after US markets sharply sell-off; Nikkei loses about 3%
Wall Street plummets; S&P, Dow confirm correction
US govt officially shuts down as Cong fails to pass spending bill in time
US government funding lapsed Friday as Congress' efforts to pass a spending bill fizzled out in the Senate for the second time in less than a month, reports CNBC. Despite bipartisan support for a massive budget agreement, Congress failed to approve a funding plan before the midnight Thursday deadline. It is just the latest example of gridlock on Capitol Hill during the current GOP-controlled Congress.
In this case, Senator Rand Paul, blocked repeated moves to vote on the measure over concerns about massive spending increases contained in the budget deal. Paul called the spending reckless and pushed for a vote on an amendment to reinstate budget caps, which Senate leadership did not allow. The Senate recessed until early Friday and funding expired at the end of Thursday, leaving the government partially shut down. Some government agencies will run out of money and have to furlough workers.
Hundreds of thousands of federal workers would not go into work Friday if a shutdown lasts through the start of business. Others would work without getting paid at first. A government shutdown is only partial — functions like the postal service and Social Security checks would continue.
JSW Steel and Tata Steel again in a tight race, this time for Bhushan Power & Steel
After squaring off for the auction of Bhushan Steel, JSW Steel and Tata Steel now face each other for yet another asset from the Delhi-based Singhal family. This time it is Bhushan Power & Steel, reports Moneycontrol News’ Prince Mathews Thomas. Both JSW Steel and Tata Steel submitted their bids for Bhushan Power & Steel to Insolvency Resolution Professional (IRP) Mahender Khandelwal at 2 pm on Thursday in Gurgaon.
Though Anil Agarwal's Vedanta, AION Capital and an investor from West Asia had expressed interest, none of them eventually put in a bid. ArcelorMittal too had done due diligence on Bhushan Steel & Power but had pulled off from the race in the early round.
Here are the top headlines at 11 am from Moneycontrol News' Sakshi Batra
A US shutdown is ensured as Senate won't meet again until after midnight
Another US government shutdown is imminent as the Senate recesses until early Friday morning without passing a major budget agreement, reports CNBC. Bipartisan Senate leaders pushed for quick passage of the deal on Thursday before the midnight deadline. But Senator Rand Paul, repeatedly blocked efforts to move forward with the measure, arguing that it would recklessly increase spending.
Earlier, the Trump administration instructed federal agencies to get ready for a possible government shutdown. An Office of Management and Budget official said the office was preparing for funding to lapse. The Trump administration supports the massive bipartisan budget deal working its way through Congress and wants lawmakers to pass it, the official said.
Some government agencies will run out of money and have to furlough workers if Congress lets funding lapse. A shutdown would be the second in less than a month. Hundreds of thousands of workers would not go into work on Friday if a shutdown takes place through the start of the day. Others would have to work without getting paid at first. A government shutdown is only partial — functions like the postal service and Social Security checks would continue.
5 firms submit EoIs to complete Jaypee Infratech projects: Srcs
The National Company Law Tribunal (NCLT) appointed resolution professional Anuj Jain has so far received around five bids from companies willing to pump in at least Rs 2,000 crore to complete the projects floated by Jaypee Infratech that involves nearly 32,000 apartments, plots and villas.
IDBI Bank in August last year moved the NCLT to commence proceedings against Jaypee Infratech under the Insolvency and Bankruptcy Code. Among the companies that have submitted their expression of interest (EoI) include high profile companies such as Adani Group, Sajjan Jindal’s JSW Group, Lodha, Suraksha and Cube, sources said.
Cube Highways is a joint venture of private equity firm I Squared Capital and International Finance Corp (IFC), the private investment arm of the World Bank. Mumbai-based Suraksha Group provides an integrated security services to various establishments, offices, such as industry houses, factories, industrial estates, housing societies, bungalows etc, within the country.
China plans sea-based anti-missile shields for Indian Ocean
China is developing a sea-based anti-missile systems and plans to deploy them in the Asia-Pacific and Indian Ocean, military experts told the South China Morning Post. Testing of the anti-ballistic missile system that could shield China from a ballistic missile attack is part of efforts to catch up with the top nuclear nations with anti-missile technology, the United States and Russia. China previously carried out tests of the system in 2010 and 2013.
Beijing is also working on a sea-based system for the Asia-Pacific region to breach the cold war era line of containment, according to observers. The "first island chain" is a series of archipelagos lying between China and the world's largest ocean that Beijing says has been used by the United States as a natural barrier to contain it since the cold war.
Trump, Modi discuss situation in Maldives over phone call
US President Donald Trump and Prime Minister Narendra Modi have expressed concern about the political situation in Maldives over a phone call, as they also discussed the situation in Afghanistan and enhancing security in Indo-Pacific region, the White House said. "Both leaders expressed concern about the political crisis in Maldives and the importance of respect for democratic institutions and rule of law," the White House said.
Bank of England warns of early interest rate rises
The Bank of England froze its key interest rate at 0.5% but cautioned that it could rise more quickly than expected to help bring down inflation, reports AFP. The BoE also ramped up its outlook for the British economy, despite persistent uncertainty surrounding Brexit.
The central bank's nine-strong monetary policy committee "voted unanimously to maintain bank rate at 0.5%", it said in a statement, but warned that borrowing costs could rise sooner than expected "in order to return inflation suitably to target". "Monetary Policy would need to be tightened somewhat earlier and by a somewhat greater degree over the forecast period than anticipated," it added.
SBI board meet today to consider raising Rs 8,800cr via pref issue
Country's largest lender State Bank of India said its board will meet today to consider a proposal to raise Rs 8,800 crore from the government. The bank said its board will also consider implementation of reforms agenda for responsive and responsible public sectors banks (PSBs) of the government.
"The central board of the bank at its meeting scheduled for February 9 will consider the proposal of raising equity capital by way of preferential allotment of equity shares of government of India to the tune of Rs 8,800 crore," State Bank of India (SBI) said in a BSE filing.
Muthoot Finance Q3 net profit jumps 59% YoY to Rs 464 cr
Muthoot Finance post market hours on Thursday reported a 59% jump in its consolidated net profit to Rs 464 crore for the third quarter ended December 31, the highest ever quarterly gains on increased demand for loans. The company had made a net profit of Rs 291 crore during the corresponding quarter of 2016-17.
Total income grew by 16% to Rs 1,567 crore during the quarter, as against Rs 1,346 crore in the same period last fiscal, the company said in a statement. The loan asset size of Muthoot Finance stood at Rs 28,265 crore at the end of December quarter.
Reliance Capital Q3 net profit up 50% YoY to Rs 315cr
Reliance Capital reported a 50% rise in its net profit to Rs 315 crore in the third quarter ended December 31 post market hours on Thursday. Net profit was Rs 209 crore in the same period of previous fiscal. Total income grew by 20% to Rs 4,771 crore in the December quarter of 2017-18 as against Rs 3,964 crore in the same quarter last fiscal, the company said in a statement.
Anil Ambani owned Reliance Capital said it witnessed strong improvement in profitability across all business verticals during the quarter. Total assets of the company increased by 18% to Rs 92,109 crore as on December 31, 2017.
Glenmark Pharma Q3 net dips 78% YoY to Rs 104.7cr
Glenmark Pharmaceuticals said its net profit dropped 78% to Rs 104.7 crore for the quarter ended December on sharp decline of US sales, despite growth in domestic formulations as well as other geographies. The company declared its result post market hours on Thursday. The company reported a net profit of Rs 477.10 crore for the previous corresponding quarter. Glenmark's consolidated revenue also declined by 13.07% at Rs 2,203.66 crore for the third quarter ended December 31, as against Rs 2,535 crore.
Petronet LNG Q3 net profit surges 33% YoY to Rs 529cr
Petronet LNG, India's biggest liquefied natural gas importer, reported its highest ever quarterly profit in the three months to December 31 as it processed record gas volumes. The company reported its Q3 results post market hours on Thursday. Net profit of Rs 529 crore in October-December period was 33% higher than Rs 397 crore in the same quarter a year ago.
Here’s what Warren Buffett says to do when the market tanks
During times of stress and uncertainty, Oracle of Omaha Warren Buffett recommends keeping a level head. In response to wild market fluctuations back in 2016, he told CNBC that buy-and-hold is still the best strategy. "Don't watch the market closely," he advised those worried about their retirement savings at the time.
"If they're trying to buy and sell stocks, and worry when they go down a little bit…and think they should maybe sell them when they go up, they're not going to have very good results." Most analysts still consider this drop to be a normal correction, as opposed to a sign of an incipient bear market.
Bond and stock sell-off due to inflation concerns, says expert from CNBC.
The cause of this brutal market sell-off was a piece of good news
The moment the walls started coming off for the market happened about 7pm last Friday, reports CNBC. That was when the Labour Department reported that average hourly earnings had increased more-than-expected in January, to a pace that now stood at 2.9% over the past year.
While that may have been a good-news moment for workers who had suffered through a decade of nearly flat paychecks, the market didn't take it well. Investors instead found themselves confronted by their worst fears, namely that wage pressures were building that in turn would stoke wider inflation through the economy.
The practical implications would be that the Federal Reserve would have to hike interest rates faster than the market had been anticipating. Given that the stock gains over the past nearly nine years have been fed by low rates, the signal was foreboding.
Then the financial markets went to work. Stock market futures Friday immediately declined, and the equity markets have been on a rough-and-tumble ride since. Even though government bond yields remained fairly contained, the damage to the stock market has been substantial. Moreover, treating good news as bad news is an ugly harbinger, another classic sign of a late-stage bull market that chills trading floors.
The SGX Nifty is trading at 10,360, down 201 points or 1.9%.
Asian stocks slide after US markets sharply sell-off; Nikkei loses about 3%
Asian shares took a tumble early on Friday, taking cues from US indexes which extended sharp losses in the last session, reports CNBC. Japan's Nikkei 225 fell 2.95% in early trade, with losses seen in most sectors. Automakers, financials, manufacturers and technology stocks traded firmly in negative territory. The Nikkei 225 is in correction territory, having declined around 12% from its 52-week high. Across the Korean Strait, the Kospi lost 2.16%, with most sectors trading in negative territory.
Wall Street plummets; S&P, Dow confirm correction
US stocks plunged around 4% on Thursday in another dramatic session, confirming a correction that has thrown the market’s nearly nine-year bull run off course, reports Reuters. The bottom of this recent slide remained elusive for investors, who have been whipsawed this week by huge swings that have shaken a market that had only climbed steadily for months.
With Thursday’s drops, the benchmark S&P 500 and the Dow industrials confirmed they were in correction territory, both falling more than 10% from January 26 record highs. The S&P 500 slumped 3.8% on Thursday, while the Dow dropped 4.2% as losses accelerated late in the trading day.
The S&P 500 last confirmed a correction in January 2016, when it fell 13.3% amid concerns about a slump in oil prices. The S&P closed below the intraday low it had hit on Tuesday, a key level traders had been watching.
The Dow Jones Industrial Average fell 1,032.89 points, or 4.15%, to 23,860.46, the S&P 500 lost 100.66 points, or 3.75%, to 2,581 and the Nasdaq Composite dropped 274.83 points, or 3.9%, to 6,777.16. All 11 major S&P sectors finished lower, with financials and technology the worst-performing groups. All 30 components of the blue-chip Dow finished negative.