Morning News Call - India, October 13

Last Updated: Thu, Oct 13, 2016 09:20 hrs

To access the newsletter, click on the link: If you would like to receive this newsletter via email, please register at: FACTORS TO WATCH 10:00 am: Finance minister Arun Jaitley to speak at real estate event in Mumbai. 10:30 am: Federal cabinet to meet in New Delhi. Agenda not known. 12:00 pm: Finance minister Arun Jaitley and RBI officials to attend BRICS event in Mumbai. 12:00 pm: Council of Ministers likely to meet in New Delhi. 5:30 pm: Government to release September consumer price inflation data in New Delhi. 4:00 pm: Trade minister Niramala Sitharaman to speak at BRICS business forum in New Delhi. LIVECHAT - ASIA FOCUS with Gareth Leather, Senior Economist, Capital Economics With markets pricing in 70 percent odds and a 5 percent drop in gold prices over the last week, we stand at the cusp of a probable Fed rate hike. While November seems improbable, is December pretty much a certainity? Would a suprise in the U.S. Presidential elections change the course of the Fed? And are EM currencies, which have had a much better than expected run in the H1 2016, destined to fall? Gareth will break it down for us at 1200 IST. To join the conversation, click on the link: INDIA TOP NEWS  EXCLUSIVE-India bad loans mountain grows, risks delaying bank clean-up Stressed loans in India's banking sector crossed $138 billion in June, central bank data reviewed by Reuters shows, an increase of nearly 15 percent in just six months that suggests a state clean-up effort will take longer and cost more than expected.  India eyes merger of two big state-run banks after debt cleanup India may merge two large state banks in the coming fiscal year once a cleanup of bad assets has run its course, the official overseeing a turnaround of the sector told Reuters, days before a new process to resolve stressed assets goes live.  PREVIEW-Indian inflation seen cooling to one-year low in September Inflation in India is expected to have cooled to a one-year low in September as good monsoon rains kept a lid on food prices, a Reuters poll showed, possibly giving more room to the central bank to cut rates again by the end of this year.  India cenbank to be firm but pragmatic in tackling banks' non-performing loans India's central bank will be firm yet pragmatic in tackling the bad loans of commercial lenders, Reserve Bank of India Governor Urjit Patel said on Tuesday, adding that more work was needed to resolve the issue of stressed assets.  India's industrial output shrinks for second straight month in August India's industrial output contracted for a second straight month in August, falling by 0.7 percent from a year earlier, led by declines in mining and manufacturing production, government data showed on Monday.  India gets first Iranian oil parcel for emergency reserves India has received the first parcel of Iranian oil to partly fill its strategic storage in southern India, Mangalore Refinery and Petrochemicals Ltd, which imported the very large crude carrier, said on its website.  Vedanta expects higher second-half production at Indian zinc unit Diversified miner Vedanta Resources Plc said it expects production at its Indian zinc unit to be significantly higher in the second half of the financial year ending March 31, 2017 compared with the first half. GLOBAL TOP NEWS  Samsung's woes highlight explosive limits of lithium batteries Lithium-based batteries have been powering our portable devices for 25 years. But consumer demand for smaller, longer lasting devices is forcing manufacturers to push the technology, battery experts say, testing the limits of how much energy they can safely pack into smaller spaces.  Wells Fargo CEO John Stumpf quits, replaced by Tim Sloan Wells Fargo & Co's veteran chairman and chief executive officer, John Stumpf, abruptly departed on Wednesday bowing to pressure over its sales tactics that has damaged the bank's reputation and put Wall Street under renewed scrutiny.  China September exports fall more than expected, imports back in contraction China's September exports fell 10 percent from a year earlier, far worse than expected, while imports unexpectedly shrank 1.9 percent after picking up in August, suggesting signs of steadying in the world's second-largest economy may be short-lived. LOCAL MARKETS OUTLOOK (As reported by NewsRise) The SGX Nifty Futures were trading at 8,658.50, down 0.5 pct from its previous close. The Indian rupee will likely open lower against the dollar, as the U.S. Federal Reserve's September policy meeting minutes reinforced expectations of a rate increase in December. Indian government bonds are likely to fall in early session tracking gains in U.S. yields, even as investors expect retail inflation to have further eased in September. The yield on the benchmark 6.97 pct bond maturing in 2026 is likely to trade in a 6.69 pct - 6.74 pct band. GLOBAL MARKETS  The S&P 500 and the Dow Jones industrial average indexes ended Wednesday's session with small gains as expectations for timing on a rate hike were largely unchanged after U.S. Federal Reserve minutes and investors waited on earnings reports.  Asian stocks stumbled to three-week lows and U.S. stock futures and Treasury yields fell after China's September trade data showed a sharp decline in exports, raising fresh concerns about the health of the world's second biggest economy.  The dollar hovered near a seven-month high early on Thursday on reinforced prospects for a near-term U.S. interest rate hike, while the euro struggled near 2-1/2-month lows versus the greenback.  U.S. Treasury yields rose on Wednesday, with bonds pressured by incoming supply and growing expectations that the Federal Reserve will raise interest rates later this year.  Oil prices fell on Thursday after OPEC said that its production had risen to its highest level in at least eight years and following reports of an increase in U.S. crude stockpiles.  Gold prices edged down on Thursday as the dollar rose on expectations that the U.S. Federal Reserve might raise interest rates in December. CLOSE FII INVESTMENTS EQUITIES DEBT PNDF spot 66.48/66.51 October 10 -$82.10 mln $0.60 mln 10-yr bond yield 6.88 pct Month-to-date $254.36 mln -$635.34 mln Year-to-date $7.76 bln -$600.72 mln For additional data: India govt bond market volumes Stock market reports Non-deliverable forwards data Corporate debt stories [IN CORPD] Local market closing/intraday levels [IN SNAPSHOT] Monthly inflows [INFLOWS RTRS TABLE IN] ($1 = 66.53 Indian rupees)

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