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SEBI eases currency derivatives rules

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MUMBAI India’s stock market regulator Securities and Exchange Board of India relaxed currency derivatives rules on Wednesday, allowing participants to continue to hold on to their open position limits even if total open interest in a currency pair falls at a stock exchange.

Market participants will, however, have to gradually bring down their open positions to comply with applicable limits within a time period specified by the stock exchanges, the SEBI said.

Earlier, market participants had to reduce their open position limits in proportion to the drop in total open interest.

India allows market participants to have open position of upto 15 percent of the total open interest, or $100 million gross open limit for USD/INR pair, whichever is higher.

For banks, the position limit is 15 percent of total open interest or $1 billion, whichever is higher.

(Reporting by Suvashree Dey Choudhury and Abhirup Roy; Editing by Biju Dwarakanath)

Source: R-Business


Wall Street set to open flat as investors await Brexit vote

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<span class="focusParagraph articleLocation”>U.S. stocks looked set to open little changed on Wednesday as investors held off from making big bets, a day ahead of Britain’s referendum on its European Union membership.

Traders are guardedly optimistic about a “Remain” vote. While polls are extremely close, bookmakers have pointed to betting patterns in favor of the U.K. remaining in the EU.

Investors will also keep an eye on U.S. Federal Reserve Chair Janet Yellen’s second day of testimony to Congress on the health of the economy.

On Tuesday, Yellen was optimistic about the economy and played down the risk of a recession, but warned that the British vote on Thursday and a U.S. hiring slowdown posed risks to the economic outlook.

Yellen’s comments pointed to a cautious central bank, virtually ruling out a July rate hike. The Fed also warned U.S. stock market valuations are “well above” their median over the past 30 years, the strongest such assessment in years.

The S&P 500 is trading at about 16.5 times expected earnings, above the 30-year median of 14.6 times, according to Thomson Reuters Datastream.

S&P 500 e-minis were up 1.75 points, or 0.08 percent, with 136,778 contracts traded at 8:31 a.m. ET (1231 GMT). Nasdaq 100 e-minis were up 7.5 points, or 0.17 percent, on volume of 17,514 contracts. Dow e-minis were up 16 points, or 0.09 percent, with 18,374 contracts changing hands.

Trading is expected to be light with investors adopting a wait-and-watch approach.

“Most investors are in the mood to take some profits off the table and this could impact the volume in the market as we march towards the final hours of the referendum campaign,” said Naeem Aslam, chief market analyst at Think Forex UK, in a note.

Fed Governor Jerome Powell said the central bank was “ready for whatever happens” in Britain’s close-to-call vote.

Data on Wednesday includes U.S. home resales at 10 a.m. ET (1400 GMT). A Reuters survey of economists forecast a 1.1 percent rise in existing home sales to an annual rate of 5.54 million units last month, following a 1.7 percent gain in April.

Oil rose above $50 a barrel after an industry report showed a large drop in U.S. crude inventories, with analysts expecting volatile trading ahead of the British referendum.

Tesla Motors was down 11.3 percent at $194.80 in premarket trading after the Elon Musk-owned electric car maker made an offer to buy his solar installation firm SolarCity in a stock deal worth as much as $2.8 billion. SolarCity was up 14.7 percent at $24.30.

Adobe Systems was down 3.9 percent at $95.75 after its second-quarter revenue and full-year revenue forecast just about met analysts’ estimates.

(Reporting by Tanya Agrawal in Bangalore; Editing by Don Sebastian)

Source: R-Business


Raghuram Rajan urges clean-up of bad debt at domestic lenders

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BENGALURU, India Reserve Bank of India Governor Raghuram Rajan urged the country to clean up the bad debt held by its banks, calling it key to achieve stronger economic growth, in his second public appearance since saying he will step down in September.

In a speech, Rajan defended the actions taken by the central bank, including ordering state-run banks to conduct comprehensive asset quality reviews of their balance sheets.

Rajan urged state-run banks and company promoters to deal with the problem, while also calling on the government to infuse capital to the sector – steps he has previously advocated during his tenure.

“To the question of what comes first, clean up or growth, I think the answer is unambiguously “Clean up!,” Rajan said in a speech to industrialists in Bengaluru.

The speech is his second public appearance since Rajan unexpectedly said on Saturday he will step down after his tenure ends in September.

(Reporting by Aby Jose Koilparambil and Kanika Sikka; Writing by Suvashree Dey Choudhury; Editing by Rafael Nam)

Source: R-Business

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