Mumbai, September 16
In their worst single-day drop in nearly 7 weeks, Sensex today plunged 324 points and Nifty tanked 109 points on across the board selling on caution ahead of the outcome US Federal Reserve’s monetary policy meeting.

An earlier-than-anticipated rate hike by Fed after the two-day meeting that starts later today could lead to outflows, hurting emerging markets as the incentive for investors to chase higher yields becomes smaller.

Major bourses in Asia ended down and Europe was weak in morning trades. Rupee also continued to remain above 61-mark against dollar as domestic indices ended at three-week lows.

Besides, BJP heading for a sharp setback in bypolls appears to have had a bearing on sentiment, say brokers.

All-round selling was seen as all 12 BSE sectoral indices closed in the red, with realty, power, capital goods, refinery, consumer durable, banking and auto segments taking the lead in the downslide.

The 30-share BSE Sensex resumed better but fell back and continued its fall on sustained heavy selling. It settled at three-week low of 26,492.51, a steep fall of 324.05 points or 1.21%. Previously, it had plunged by 414.13 points, or 1.60%, on August 1, 2014.

Tata Power, Tata Steel, Hindalco, NTPC, Tata Motors, ONGC, RIL, GAIL led the 23 laggards in Sensex.

The Nifty stumbled by 109.10 points, or 1.36%, to end below 8K-mark at a 3-week low of 7,932.90. This is its worst show since August 1 when it fell 118.70 points. Smallcap and midcap stocks, which in previous sessions had bucked a weak trend, saw a huge sell-off with their indices falling over 3% each.

“Market players will be looking for clues on the timing of the first US rate hike in more than eight years. Consensus is that the Fed will hike interest rates next year and it may declare the timelines today,” said HDFC Securities.

In Asia, barring KOSPI, all major markets ended in the red on Fed rate hike fears and weak China data. Europe saw major benchmarks trading 0.4-0.6% lower. — PTI 

Mumbai, September 16
Country’s largest lender State Bank of India today cut its interest rate offering for medium-term deposits by 0.25% to 8.75%, citing slower-than-expected pick up in advances.

However, it increased rates for shorter tenor deposits of 180-210 days by 0.25% to 7.25% per annum.

“In view of abundant liquidity coupled with slower-than- anticipated credit pick up, SBI has decided to cut the deposit rates by 0.25% to 8.75%,” the bank said.

The downward revision of rates is for deposits between one and three years and is applicable from September 18, it said.

The bank added that with the inflation trending down — consumer price inflation for August eased to 7.80% — the rate adjustment will continue to ensure that the depositors are compensated “adequately with a positive real rate on their deposits.” — PTI

New Delhi, September 16
India will decide on whether to end government control of diesel pricing after elections in two states next month, an Oil Ministry source said.

India currently controls prices with subsidies under a scheme originally intended to help the poor and rein in inflation, but local prices are now higher than global rates, making a case for a cut in retail prices.

“The diesel under-recovery (goal) has been wiped out and there is over-recovery of 0.35 rupees per litre (less than a cent) with effect from September 16,” a government statement said on Tuesday.

A rising subsidy bill and strained public finances in a sluggish economy forced India’s Cabinet in January 2013 to allow state retailers to marginally raise diesel prices each month.

“We tinker with diesel prices once a month...There is a case for a cut in diesel prices towards the end of the month but a decision is yet to be taken on that,” the source with direct knowledge of the matter said.

“Decision on diesel deregulation will be taken after state elections.”

RBI Governor Raghuram Rajan on Monday said India should use this opportunity of easing global oil prices to eliminate diesel subsidies at the earliest.

The states of Maharashtra and Haryana, with Chief Ministers from the Opposition Congress, will go to the polls on October 15, offering Prime Minister Narendra Modi the chance to chalk up gains after his General Election triumph in May.

Under India’s election rules, the government cannot make any major policy decisions during an election campaign which may directly impact voters.

The Oil Ministry will have to seek a Cabinet nod for deregulating diesel prices, two ministry sources said last month.

Government controls over pricing of liquefied petroleum gas, kerosene and diesel led to revenue losses at state fuel marketing companies — Indian Oil Corp, Bharat Petroleum Corp and Hindustan Petroleum. — Reuters

New Delhi, September 16
The Petroleum Ministry has asked Reliance Industries (RIL) to stop sale of crude oil from KG-D6 block to its affiliate Jamnagar refinery, saying it was not an arms- length sales.

The Ministry wants to deduct $115 million from sale proceeds of the crude oil to make up for the additional profit petroleum it believes is due after disallowance of $1.797 billion in cost for KG-D6 gas output falling short of target. It has asked RIL to sell oil to Chennai Petroleum Corp Ltd (CPCL) on an interim basis.

RIL transfers shipload of crude oil from the offshore MA oilfield in the predominately KG-D6 block off the Andhra coast, to user refinery once a month and the occasion for such a transfer hasn’t arisen since the Ministry order.

A company spokesperson, however, said RIL has not received any letter from the Ministry. “There is no restriction under the Production Sharing contract (PSC) for sale to affiliates or self and the sale is in accordance with PSC provision.”

Sources said the Ministry, which could not recover the $115 million of additional profit petroleum because CPCL was no longer a buyer and did not owe any money to RIL, said oil sales is to be done on arms length basis and cannot be done to an affiliate. — PTI 

New Delhi, September 16
Foreign Investment Promotion Board today cleared 21 proposals, including that of Bharti Shipyard, but turned down the Sistema Shyam’s request to raise foreign holding.

The FIPB, headed by Finance Secretary Arvind Mayaram, today considered 35 proposals.

The proposal of Bharti Shipyard — an Indian company in ship building sector which has existing FDI through FIIs and NRIs — to undertake defence activities was cleared, sources said.

The proposal of Verizon Communications India, which sought approval to increase foreign equity participation by its foreign parent from 74% to 100%, was also approved by the FIPB.

The Board also gave a go-ahead to IndusInd Bank’s proposal with regard to foreign investment, sources added.

The other proposals cleared by the FIPB include that of Kineco Kaman Composites India Ltd in the defence sector and ANZ Capital Ltd in the financial services sector. However, the proposal of Sistema Shyam Teleservices Ltd (SSTL) to raise foreign stake holding in the company beyond the current 74% was rejected by the FIPB. — PTI

BRIEFLY

Maruti’s Manesar plant crosses 25-lakh milestone
New Delhi: Maruti Suzuki India, the country’s largest car maker, on Tuesday said its second plant at Manesar in Haryana has crossed the 25 lakh cumulative production milestone this month. “The Manesar facility achieved the 25 lakh production milestone in 7 years and 8 months,” Maruti Suzuki India executive director (plants) Rajiv Gandhi said. The plant manufactures Swift, DZire and Celerio. — PTI

Croma, Snapdeal tie up to sell electronic items
New Delhi: Tata Group-promoted electronics retail chain Croma and Snapdeal.com on Tuesday entered into a strategic partnership to sell products online. As per the agreement, Snapdeal.com would create Croma’s flagship store on its e-commerce portal to sell electronic items including mobiles, tablets and laptops. — PTI

FDI more than doubles to $3.5 billion in July
New Delhi: Foreign direct investment (FDI) flows into India more than doubled to $3.5 billion in July, according to data released by the Department of Industrial Policy and Promotion on Tuesday. In July 2013, the country had received FDI worth $1.65 billion. — PTI

SAIL share sale to hit markets on Sept 24
New Delhi: The disinvestment of 5% stake in Steel Authority of India (SAIL) is likely to happen between September 24 and 26, a senior government official said on Tuesday. The sale of 5% stake, or about 20.65 crore shares, of the steel maker at the current market price of Rs 77.15 apiece would fetch the exchequer around Rs 1,600 crore. — TNS

JLR launches locally produced Jaguar at rs 93.24 lakh
New Delhi: Tata Motors-owned Jaguar Land Rover (JLR) on Tuesday launched locally manufactured Jaguar XJ 2.0L, priced at Rs 93.24 lakh (ex-showroom Mumbai). The petrol powered luxury saloon, which is being made at the company’ Pune plant, comes after the successful launch of locally produced diesel-powered Jaguar XJ 3.0L earlier this year. — PTI

Intex unveils KitKat smartphone at Rs 2,699
Chandigarh: Intex Technologies has launched lowest priced Android KitKat smartphone Aqua T2 priced at Rs 2,699. It comes with a 3.5-inch screen coupled with a 2G network. The phone is available exclusively on Flipkart. — TNS