In an important global economic event, for the first time ever, ECB has taken the untested step of imposing a negative interest rate on money that banks deposit with it. The rate has been reduced from zero to minus 0.1%. This move will disincentivize banks which park money with ECB and force them to lend it. It also cut its main interest rate, the refinancing rate, from 0.25% to 0.15%. Global markets seem to be taking cues that low interest rates are here to stay.
The major Asian stock markets have opened on a mixed note with stock markets in Japan (up 2.2%) and Singapore (up 0.4%) leading the gains. However, stock markets in HongKong (down 0.3%) and Korea (down 0.7%) have opened in the red.
Software stocks have opened the day mainly in the red with Tata Consultancy Services Ltd and Infosys Ltd leading the losses. In a negative development for Infosys, Mr.Prasad Thrikutam, the company's global head for sales and marketing is the latest from senior management to quit, just one week after BG Srinivas resigned. This is the 12th senior-level exit after Infosys founder Narayana Murthy joined back as executive chairman last June. The exit comes at a time when company is running a evaluation process to appoint its first non-founder CEO. Thrikutam, who was also the head of Americas for Infosys, had earlier worked as the global head of energy, utilities and communications. As per the company's spokesperson, its President and board member UB Pravin Rao would now handle Thrikutam's responsibilities.
Indian Pharma stocks have opened the day in the green with Panacea Biotech Ltd and Ranbaxy Ltd leading the gains. As per a leading financial daily, Ranbaxy Laboratories Ltd's facility in Toansa, India, has been assessed for drug manufacturing violations by European regulators. While the latter have found some deficiencies, they have said that it does not pose any risk to public health. The European regulators are satisfied by corrective measures put in place by the company after U.S. regulators found deviations in January. Their assessment is in contrast to the view of U.S. regulator that had barred Ranbaxy from making and selling pharmaceutical ingredients from the Toansa facility to prevent substandard quality products from reaching U.S. consumers. The company is in the process of being acquired by Sun Pharmaceutical Industries Ltd for US$3.2 billion. In March, the FDA had also banned imports from Sun Pharma's plant at Karkhadi.