2:35 pm Further rate cut?:
There is room for a 50 basis point rate cut by the Reserve Bank over the next few months with 25 bps each likely in February and April, says Bank of America Merrill Lynch.
RBI is expected to pause on the December 7 monetary policy review that rate cut would be a “bullet wasted”.
According to the global financial services major, the “dovish” RBI MPC minutes released last week, signal towards a more accommodative policy stance in the coming months.
“We add a 25 bps RBI rate cut in April in addition to the 25 bps penciled on February 7 after dovish RBI MPC minutes were released last week,” BofA-ML said in a research note.
2:20 pm Stake sale: The finance ministry is likely to propose to the Cabinet at least five different methods, including relative peer review and discounted cash flow, for valuation of over a dozen PSUs across sectors identified for strategic stake sale.
With privatisation of PSUs being considered after a gap of over 12 years, the ministry feels that valuation of equity becomes important in the case of strategic sale of companies that are not listed or in cases where capital markets may not fully reflect the intrinsic worth of a share disinvested earlier.
“The use of a particular method of valuation will depend on health of the company, the sector in which it operates and the company’s intrinsic strength,” an official told PTI.
For this, the ministry has proposed at least five different valuation methodologies, including balance sheet method, transaction multiple, and asset valuation procedure, for these PSUs which will be up for outright sale or involves lowering of government equity below 50 percent.
Also read – US policy not likely to change a lot if Trump wins: UR Bhat
2:00 pm Market Check
Equity benchmarks extended gains in afternoon trade with the Sensex rising more than 150 points, driven by ICICI Bank, ONGC and Tata Motors. Positive European cues also supported the market.
The 30-share BSE Sensex was up 154.04 points at 28231.22 and the 50-share NSE Nifty rose 38.25 points to 8731.30. The market breadth remained positive as about 1717 shares advanced against 1036 declining shares on the BSE.
ONGC gained rallied more than 4 percent as the board of directors will consider a proposal for declaration of bonus issue, if any, in its meeting, scheduled on October 27.
ICICI Bank, Tata Motors, Lupin, SBI, Adani Ports and Coal India gained more than 2 percent whereas Wipro fell 3 percent on lower than expected guidance for Q3.
European stocks were higher with investors focused on fresh economic data and corporate earnings. The pan-European STOXX 600 was 0.44 percent higher as an important week for earnings begun in Europe.