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Business news

On 16th june 2015

Rupee ends at 21-month low of 64.26 against dollar

Declining for the fourth straight day, the rupee slipped by 10 paise to close at 21-month low of 64.26 on sustained dollar demand from banks and importers amid foreign capital outflows. 

The rupee opened higher at 64.05 from its previous close of 64.16 at the Interbank Foreign Exchange (Forex) market on initial selling of dollars by banks and exporters. 

However, it dropped afterwards to 64.30 before ending at 21-month low of 64.26 on fag-end dollar demand from banks and importers, a loss of 10 paise, or 0.16 per cent, from its last close after moving in a range of 64.05 and 64.30 during the day.

Mutual fund exposure to bank stocks climbs to Rs 79,000 crore

NEW DELHI: Mutual Fund managers have been on a shopping spree for banking stock, raising their allocation to the sector to over Rs 79,000 crore in May in anticipation of a rate cut by the Reserve Bank. 

In comparison, equity fund managers' deployment in banking stocks stood at Rs 48,419 crore in May 2014. 

According to industry experts, fund managers raised their allocation last month to bank stocks expecting a rate cut by the Reserve Bank of India (RBI). 

The allocation is expected to increase further this month as RBI, in its policy review on June 2, had cut interest rate by 25 basis points to 7.25 per cent, they said.

They also said that fund managers cannot take a bearish call on banking stocks, given the high weightage attached to the index. 

As per the data available from Securities and Exchange Board of India (Sebi), overall deployment of equity funds in bank stocks stood at Rs 79,215 crore in May as compared with Rs 74,810 crore in the previous month. 

Besides, exposure to banking stocks was at 20.94 per cent of equity AUM in May as against 20.7 per cent in the preceding month. 

The BSE bankex index inched up 2.3 per cent in May, while the benchmark Sensex witnessed a rise of 3 per cent. 

IT was the second-most preferred sector with fund mangers after banks with an exposure of Rs 35,750 crore, followed by pharma (Rs 29,246 crore), auto (Rs 26,215 crore) and finance (Rs 22,925 crore). 

MFs are investment vehicles made up of a pool of funds collected from a large number of investors and invest in stocks, bonds and money market instruments, among others.

Trade deficit shrinks; exports fall for sixth month in a row

Continuing its declining trend, India’s exports shrank by about 20.19 per cent in May to USD 22.34 billion, marking a fall for the sixth straight month.

The slump in exports is mainly due to global slowdown, dip in crude oil prices and rupee appreciation.

In May 2014, the country’s merchandise exports stood at USD 27.99 billion.

The last time exports registered a positive growth was in November last year when it expanded 7.27 per cent.

The main exporting sectors, including petroleum products, gems and jewellery, engineering and chemicals reported a negative growth in April.

Imports, too, declined 16.52 per cent to USD 32.75 billion. Trade deficit narrowed to USD 10.4 billion in the month under review compared with USD 11.23 billion in May 2014, according to data released by the commerce ministry.

Oil imports dropped 40.97 per cent in May to USD 8.53 billion. Non-oil imports too came down by 2.24 per cent to USD 24.21 billion.

Gold imports, however, grew 10.47 per cent to USD 2.42 billion in May.

During April-May 2015, exports fell 17.21 per cent to USD 44.4 billion. Imports, too, shrank 12.2 per cent to USD 65.8 billion, resulting in a trade deficit of USD 21.39 billion in the first two months of the current fiscal.

In March, country’s exports contracted 21 per cent, the biggest fall in the last six years.

India has missed the annual exports target of USD 340 billion for 2014-15, Last year, exports stood at USD 310.5 billion.

Power play: Gujarat on top, says study

AHMEDABAD: Among 20 major states in the country, Gujarat's performance on power front seems to be the best as it has been able to achieve 0% normal power deficit and nil peak power deficit in 2013-14, according to a recently concluded study by Assocham. 

The study claims that with power deficit of 0.1% and 0.3%, Maharashtra and West Bengal respectively round up the list of top three best performing states that have been able to achieve the least normal power deficit, while power deficit for all-over India stood at 4.2% in 2013-14. 

The study noted Gujarat, Madhya Pradesh, Uttarakhand and Haryana have got nil peak power deficit thereby indicating that demand generated during peak hours by these four states is being fully met by power supply.