Easy central bank policy risks new crises: Raghuram Rajan, RBI governor
READ MORE ON » University of Chicago | RBI | Raghuram Rajan | monetary policy | INTERNATIONAL MONETARY FUND | interest rates | interest rate
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FRANKFURT: Central banks risk sparking new crises by keeping their loose policy in place for too long, Reserve Bank of India ( RBI) head said on Thursday.
Central bankers were "heroes" for restoring financial stability during the financial crisis, but it was not clear they could be called the same for restoring economic growth, Raghuram Rajan, the governor of the Reserve Bank of India, said.
There is a danger of bubbles forming around the globe, due to easy monetary policy implemented to steer the world back into a more robust growth path.
"We seem to be in a situation where we are doomed to inflate bubbles elsewhere," Rajan said, adding he was not sure how effective a tool low interest rates would be.
"We should wonder whether lower and lower interest rates are in fact part of the problem, I say I don't know."
Rajan, a University of Chicago professor before becoming the governor of the Reserve Bank of India, where he took office earlier this month, was attending an event to receive the Deutsche Bank Prize in financial economics.
In general, central bank stimulus risks letting governments off the hook, he said, warning against central bankers seeing themselves as the ones who can solve all economic problems.
"When they (central banks) say they are the only game in town, they become the only game in town," Rajan said, in a speech at the award ceremony.
"We need to think of the dangers of over stimulation. We need to think of the sustainability of growth created by stimulus measures."
While admitting that he did not have the answer, Rajan pushed for more thinking on whether fiscal policy might work better than interest rates to get growth back to a sustainable path.
"It (interest rate tool) is very, very blunt ... targeted fiscal policy may be better," he said, but added that getting right fiscal policies in place could be difficult.
Turning to cross-border capital flows, he said that especially emerging markets were often the losers as flows turned around very quickly.
"We need to solve this problem (of capital flows) and we need to take a more practical view of this," Rajan said, without going into details.
Rajan, who has also worked for the International Monetary Fund, surprised markets in his maiden policy review last week by raising interest rates to ward off rising inflation, while scaling back some of the emergency measures recently put in place to support the ailing rupee.
Last date for e-filing of tax audit extended
READ MORE ON » Finance minister | finance | Direct Taxes | Chartered Accountant | Central Board of Direct Taxes
However, the last date for regular manual filing of tax audit report remains the same - September 30. A spokesperson for the Income-tax department said: "We have extended the time for e-filing of Tax Audit Report in response to complaints from taxpayers of the difficulty in uploading the data online. However, they have to file the report manually before September 30."
Senior chartered accountant TP Ostwal said: "This is an indirect way of asking the taxpayers to do the data feeding for the department. It would have been better if the date for manual filing of return and tax audit report are also extended" .
The office bearers of the Institute of Chartered Accounts of India have sought an appointment with the finance minister to convey the difficulties faced by the taxpayers and tax professionals by its insistence that they file the tax audit report physically on the due date on September 30, 2013.
Sensex reverses gains: Top eleven stocks in focus
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Tata Teleservices (Maharashtra) Ltd.
BSE
7.33
1.09(17.47%)
Vol: 3078790 shares traded
NSE
7.35
1.10(17.60%)
Vol: 11032522 shares traded
NEW DELHI: After opening on a positive note, the S&P BSE Sensex quickly reversed gains in mid-morning trade on Friday and slipped in red, led by losses in HDFC Bank, ICICI BankBSE -2.66 %, HDFC and ITC.
However, the rupee opened on a stronger note on general risk-on sentiment and hopes of a positive stock opening. The rupee was at 61.86 to the dollar versus Thursday's close at 62.07/08.
At 10:35 a.m.; the 50-share index was at 5,874.90, down 7.35 points or 0.12 per cent. It touched a high of 5,909.20 and a low of 5,854.95 in early trade today.
The S&P BSE Sensex was trading at 19,841.48, down 52.37 points or 0.26 per cent. It touched a high of 19,981.57 and a low of 19,796.39 in trade today.
"The Nifty is expected to find support near 5,830 levels and resistance will be at 5,917," said Somil Mehta, Senior Tech Analyst (Equity) at Sharekhan.
"The Nifty has completed a five-wave pattern from 5118 to 6142 and is now expected to retrace the entire rally till the 40-weekly moving average (WMA), i.e. 5755," he added.
Mehta is of the view that the short term bias for the Nifty remains negative for a target of 5755 with reversal around 6150.
The medium-term outlook remains positive because the Nifty has retraced 61.8% of the previous rally from 4770 to 6229 and is trading above the 20-WMA and the 40-WMA, ie 5822 and 5755.
Here is a list of eleven stocks which are in focus in trade today:-
ABG Shipyard Ltd: ICICI Prudential Life Insurance Company today sold 5.82 lakh shares of private shipbuilder ABG Shipyard for Rs 15.79 crore, through open market transactions.
At 10:15 a.m.; the stock was trading at 11.4 per cent higher at Rs 333.40.
Mangalore Chemicals and Fertilizers Ltd: Zuari Fertilizers promoter Saroj Poddar today said he will sell his 16 per cent stake in the MCFL if a joint venture with the firm's promoter UB Group does not materialise.
At 10:15 a.m.; the stock was trading at 2.3 per cent higher at Rs 53.50.
IndusInd Bank: The fourth biggest private sector lender, may raise as much as $300 million from overseas investors, exploiting the Reserve Bank of India's window of attractive swap options.
At 10:15 a.m.; the stock was trading at 0.1 per cent lower at Rs 383.05.
JSPL: The CBI finally questioned Congress MP and industrialist Naveen Jindal in connection with the Coalgate scam on Thursday. According to sources, Jindal was questioned at a CBI guesthouse in an undisclosed location for several hours and he was asked about his role in the allocation of coal block to his company.
At 10:15 a.m.; the stock was trading at 0.13 per cent higher at Rs 236.20.
Omaxe Ltd: The realty firm said its promoters would sell tomorrow over 1.52 crore shares at Rs 135 per shares through stock exchanges to dilute their stake in order to meet market regulator SEBI's norms on minimum public shareholding.
At 10:15 a.m.; the stock was trading at 2.8 per cent lower at Rs 137.80.
However, the rupee opened on a stronger note on general risk-on sentiment and hopes of a positive stock opening. The rupee was at 61.86 to the dollar versus Thursday's close at 62.07/08.
At 10:35 a.m.; the 50-share index was at 5,874.90, down 7.35 points or 0.12 per cent. It touched a high of 5,909.20 and a low of 5,854.95 in early trade today.
The S&P BSE Sensex was trading at 19,841.48, down 52.37 points or 0.26 per cent. It touched a high of 19,981.57 and a low of 19,796.39 in trade today.
"The Nifty is expected to find support near 5,830 levels and resistance will be at 5,917," said Somil Mehta, Senior Tech Analyst (Equity) at Sharekhan.
"The Nifty has completed a five-wave pattern from 5118 to 6142 and is now expected to retrace the entire rally till the 40-weekly moving average (WMA), i.e. 5755," he added.
Mehta is of the view that the short term bias for the Nifty remains negative for a target of 5755 with reversal around 6150.
The medium-term outlook remains positive because the Nifty has retraced 61.8% of the previous rally from 4770 to 6229 and is trading above the 20-WMA and the 40-WMA, ie 5822 and 5755.
Here is a list of eleven stocks which are in focus in trade today:-
ABG Shipyard Ltd: ICICI Prudential Life Insurance Company today sold 5.82 lakh shares of private shipbuilder ABG Shipyard for Rs 15.79 crore, through open market transactions.
At 10:15 a.m.; the stock was trading at 11.4 per cent higher at Rs 333.40.
Mangalore Chemicals and Fertilizers Ltd: Zuari Fertilizers promoter Saroj Poddar today said he will sell his 16 per cent stake in the MCFL if a joint venture with the firm's promoter UB Group does not materialise.
At 10:15 a.m.; the stock was trading at 2.3 per cent higher at Rs 53.50.
IndusInd Bank: The fourth biggest private sector lender, may raise as much as $300 million from overseas investors, exploiting the Reserve Bank of India's window of attractive swap options.
At 10:15 a.m.; the stock was trading at 0.1 per cent lower at Rs 383.05.
JSPL: The CBI finally questioned Congress MP and industrialist Naveen Jindal in connection with the Coalgate scam on Thursday. According to sources, Jindal was questioned at a CBI guesthouse in an undisclosed location for several hours and he was asked about his role in the allocation of coal block to his company.
At 10:15 a.m.; the stock was trading at 0.13 per cent higher at Rs 236.20.
Omaxe Ltd: The realty firm said its promoters would sell tomorrow over 1.52 crore shares at Rs 135 per shares through stock exchanges to dilute their stake in order to meet market regulator SEBI's norms on minimum public shareholding.
At 10:15 a.m.; the stock was trading at 2.8 per cent lower at Rs 137.80.
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