Finance Ministry Official Says No Scope For Further Easing Of Norms - Dec 26, 2008

A finance ministry official today, 26 December 2008, said there is no scope for relaxing overseas borrowing rules as of now. Planning Commission's deputy chairman's advisor Gajendra Haldea had said on, 19 December 2008, that the norms for external commercial borrowing (ECB) would be liberalied further in about a week's time.

The RBI had relaxed ECB norms in October 2008 to ease the pressure on funds with the sources dwindling as a fall out of global financial meltdown. Now, the companies are allowed to bring in funds up to US $500 million for rupee or foreign currency expenditure under the automatic route.

Japan Retail Sales Slump On Deterioration In Economic Conditions - Dec 26, 2008

The retail sales in Japan have slumped sharply, in line with the overall deterioration in the economic conditions in the country. Japanese retail sales fell an annual 0.9% in November, above expectations for a 1.3% contraction and further than the 0.7% decline reported in October.Recently, the Bank Of Japan stated that the domestic exports have decreased.

Corporate profits have continued to decrease, and business sentiment has also deteriorated. In this situation, business fixed investment has declined. Private consumption has weakened, as the employment and income situation has become increasingly severe.

According to figures from the Ministry of Economy, Trade and Industry on Friday morning (Thursday night EDT), on a monthly, seasonally adjusted basis, sales fell 0.1% in November, despite forecasts for a 0.8% decrease and following October's 0.7% decline.The report also said sales by large retailers decreased 3.2% on the year, despite expectations for a 4.6% decrease and the previous month's 4.3% contraction.

Japan's economic conditions are likely to increase in severity for the immediate future. Exports are expected to decrease substantially due to the further slowdown in overseas economies and the appreciation of the yen. This should keep the retail sales stressed in the near term.

The BOJ has already noted “Domestic private demand is also likely to weaken further as corporate profits and firms' funding conditions deteriorate and the employment and income situation becomes increasingly severe”

Arvind Virmani The Chief Economic Adviser Said That India - Dec 26, 2008

New Delhi: Arvind Virmani, the Chief Economic Adviser said that India will miss its fiscal deficit target by a wide margin and the deficit will increase to at least 5 per cent of GDP this fiscal. This is due to the stimulus package announced by the government to spur demand in the economy.We already have a very substantial stimulus package this year.

Two per cent is the fiscal deficit expansion", Chief Economic Adviser Arvind Virmani told reporters after the Mid-Year Review of the economy was tabled in Parliament. He however also said the government had, in the Budget, targeted fiscal deficit to come down to 2.5 per cent of GDP this fiscal, although it was 3 per cent under the Fiscal Responsibility and Budget Management Act. For the entire fiscal till October, the Fiscal deficit has already touched 87.8 per cent of the target.

The government recently gave a nod towards Rs 42,480 crores additional expenditure during the current financial year. Apart from this, it also gave a 4 per cent excise duty cut across the board. The government however has already sought an additional Rs 1,47,000 crore from the Parliament, as the first and second batch of supplementary demands for grants, raising public spending to Rs 9,00,000 crore.

Another Stimulus Package Coming Soon Prices Have Fallen Globally - Dec 26, 2008

New Delhi: The government of India is bracing up to announce another stimulus package. The proposal is likely that measures could be announced by the end of the week. It also plans to go big on spending, never mind those fiscal deficit numbers.Meanwhile, RBI is likely to pitch in with a CRR and a repo rate cut. The next drop in inflation numbers could encourage the monetary authority to snip key rates again.

Interestingly, a cut in the reverse repo is not on the cards. But the government is expected to step on the gas, as far as spending is concerned. Although, Ministry officials have not quantified the additional spend, labour intensive sectors like gems and jewellery, leather, textiles and auto are likely to receive special attention simultaneously, suggesting public sector banks to go for targeted lending for these sectors. However, the special focus sectorally will also be on NBFC''s and they are expected to get a special line of credit.

Meanwhile, Kamal Nath, the commerce Minister has also indicated that liquidity will not be an issue. It shows that the government plans to keep pump priming the economy to stimulate demand and make credit available at cheaper rates. The minister has also indicated that further duty cuts are possible.

However, Finance Ministry officials say that there is nothing so far on the table. On the contrary, there is pressure from the domestic industry for a hike in the peak customs duty for more protection as commodity prices have fallen globally.

Second Stimulus Package Likely This Week In The Budget - Dec 24, 2008

New Delhi: The government is expected to announce the second stimulus package in the next two-three days in order to give a boost the economy, which is facing the heat global financial meltdown.We held discussions on Monday. We held discussions...we are looking at it hopefully. We should do it in next two-three days”, Commerce and Industry Minister Kamal Nath told reporters after a meeting of the Group of Ministers (GoM) on Dec 23.

The government on earlier this month came out with the first stimulus package that included an excise duty cut of four per cent across-the-board and along with this an additional public expenditure of Rs 20,000 crore. However, the second stimulus package assumes importance as the industrial growth dropped by 0.4 per cent in October to move into negative territory after 15 years. Apart from this, the exports during the month fell by 12.1 per cent.

Besides the fiscal stimulus package, the Reserve Bank on the other hand reduced the key ratios and policy rates, thereby releasing about Rs 3 lakh crore of liquidity into the system. The mid-year economic review that was tabled in Parliament on Monday projected a lower economic growth rate of seven per cent this fiscal, which was down from nine per cent in the previous fiscal. The review also mentioned that the fiscal stimulus package will increase the fiscal deficit to at least five per cent of the GDP, as compared to 2.5 per cent envisaged in the Budget.

The Inter-Bank Call Rate Closed Up Higher - Dec 24, 2008

The inter-bank call rate closed up at 6.15-6.30 per cent, as compared to the previous close of 6.05-6.20 per cent. In the one-day repo auction, there was 2 bids for Rs 2,000 crore under the first liquidity adjustment facility (LAF). On the other hand, in the one-day reverse repo auction, the RBI received and accepted one bid for Rs 125 crore. Apart from this, in the one-day repo auction under the second LAF, there was one bid for Rs 100 crore. While in the one-day reverse repo auction under second LAF, the RBI received and accepted 6 bids for Rs 7,460 crore. Besides this, in the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there was one bid for Rs 75 crore.

Grisly Economic News Sales Of U.S. Existing Picked Up Pace - Dec 24, 2008

Tuesday - Another day of grisly economic news where sales of U.S. existing homes fell by a record amount last month as the recession picked up pace. The U.S. recession began last December has groomed further as the data from the Commerce Department confirmed that output shrank at an annual rate of 0.5% in the third quarter as consumption and investment slumped. Looking ahead, the fourth quarter and first quarter of 2009 are likely to be the weakest in the current downturn.

The shutdown of production at Chrysler, GM, and Ford has increased the risk of a weaker-than-expected drop in GDP in the first quarter. Weak business conditions should translate into a further moderation of prices. The Richmond Federal Reserve Bank's manufacturing survey echoed the gloomy message in other data, falling to -55 in December from -38 the previous month. A services sector survey declined 8 points to -30.

Housing is at the heart of the problem. Existing home sales plunged a record 8.6% in November to a 4.49 million-unit annual rate, while a separate new home sales report showed they retreated at a slower 2.9% pace. The median existing home price fell 13.2% on an annual basis, down for a fifth straight month, to $181,300. It was the largest drop since the current data series began in 1968 and probably the largest since the Great Depression, said Lawrence Yun, the chief economist for the National Association of Realtors.

However, the alone good news came from the Reuters/University of Michigan Surveys of Consumers, which rose to 60.1 in December from November's reading of 55.3 due to lower energy and retail prices after stores made radical markdowns to tempt shoppers.

On the political front, U.S. President-elect Barack Obama is expected to unleash a massive government spending program when he takes office next month to reinforce the powerful policy boost from the Fed, which has also pumped over $1 trillion into credit markets. Vice President-elect Joe Biden said the incoming administration was "getting awfully close" to cementing a deal with congressional Democrats on the package, which aims to create 3 million new jobs and could cost $775 billion or more.

Stocks tumbled on Wall Street as the gloomy outlook weighed on pre-holiday spirits, with the Dow Jones Industrial Average shedding 100 points, or 1.2%, to 8,419. The Nasdaq closed lower by 11 points at 1,521.35 and the S&P 500 closed lower by 8.5 points at 863.

On the other side of the North Atlantic, stock markets closed almost unchanged in the last full trading session in a holiday-shortened week, with defensive food producers and utility firms putting in a strong performance. On a national level, the U.K. FTSE 100 index closed up 0.2% to 4,255.98, the German DAX 30 index fell 0.2% to 4,629.38 and the French CAC-40 index lost 0.7% to 3,128.41. On the economic front, Britain edged closer to recession in the third quarter of this year, with the economy contracting by more than previously thought and at its sharpest rate since the early 1990s. gross domestic product shrank by 0.6% in the three months to September.

Coming to Asian Markets, which dropped on Wednesday, with auto, and tire makers subjected to some harsh treatment after they cut their sales and earnings forecasts earlier in the week. The Nikkei 225 Average ended the morning trading session down 2.7% at 8,488.95, while Australia's S&P/ASX 200 index rose 0.7% to 3,555.30, and New Zealand's NZX 50 index added 0.4% to 2,672.91.

Indian Dollar Rupee Tumbles By 74 Paise Ends At 48.76 - Dec 24, 2008

New Delhi: The sustained demand for the dollar weakened the Indian rupee by 74 paise amid weak stock markets and lower crude oil prices. The rupee came under pressure and closed at 48.76/78 with oil refiners stepping up their dollar purchases for their monthly import bill.The rupee has lost 181 paise or 3.86 per cent during the three-day losing string.

The dealers in the foreign exchange market said the demand for dollar was also aided by weakness in local stocks markets amid fresh worries about the capital outflows at the year-end.The rupee premiums on the forward dollar improved further on sustained payments by corporates and banks.

The benchmark six-month forward dollar premium payable in May ended higher at 89-92 paise from 81-83 paise on Monday and the far-forwards maturing in November also finished up at 127-130 paise from 115-118 paise previously. In cross-currency trade, the rupee plunged against the pound sterling, the Japanese yen and the euro.

China Cuts Interest Rates For The Fifth Time Mid Since - Dec 23, 2008

To arrest the deceleration in growth, China has cut its one year lending rate by 27 basis points to 5.31%. Similarly, deposit rates too have been cut by similar 27 basis points to 2.25%. This was the fifth time rates have been cut in China since Mid September 2008. Further it has also reduced reserve requirement (proportion of deposits to be set aside as reserves) by 50 basis points to 13.5% for smaller banks and to 15.5% for big banks, effective from 25th December 2008.

Finance Ministry Says Considerable Scope For Monetary Easing - Dec 23, 2008

In its mid-year review of the economy, the finance ministry, today, 23 December 2008, said there is a considerable scope for monetary easing over the next six to 12 months and an aggressive monetary policy may be necessary if the global economic turmoil continues to adversely affect manufacturing. The finance ministry said formulating a right policy mix is a challenge.It said the economy is likely to grow between 7% and 8% in the fiscal year which ends in March 2009, down from 9% growth in the 2007/08 fiscal year.

Indian Railway Revenue Earnings Growth Decelerate Period - Dec 23, 2008

The total revenue earnings of the Indian Railways on originating basis stood at Rs 50931.98 crore in April-November 2008, recording a growth of 14.49% compared to 12.14% growth posted in the corresponding previous period. The total goods earnings rose 15.67% to Rs. 34393.78 crore, while passenger earnings increased 12.21% to Rs 14440.93 crore during April-November 2008. The total sundry earnings have gone up from Rs.665.38 crore during April-November 2007 to Rs. 799.56 crore during April-November 2008.

But there is significant slowdown in growth in the last couple of months. After 13.0% growth in September 2008, the Indian Railway's earnings growth eased to mere 5.3% in October 2008 and to 6.4% in November 2008. As a result, in the two months ended November 2008, Indian Railways total revenue earnings grew by mere 5.85%, which represents a sharp deceleration from the 15.3% growth clocked in the corresponding previous period.

Chinese Central Bank Failed To Bond Prices Skid By Rs 1.30 Per Cent - Dec 23, 2008

Bond prices slipped Rs 1.30 on Dec 22, due to profit booking by market participants. The cut in lending rates by the Chinese central bank failed to enthuse the markets, the dealer added. The market has already filtered in the rate cut, said the source. Total traded volumes on the order matching system were lower at Rs 9,095 crore (Rs 11,550 crore). The 8.24 per cent-10 year-2018 paper opened at Rs 119.40 (5.54 per cent YTM) and closed at 118.07 (5.71 per cent YTM), against the previous close of Rs 119.3 (5.56 per cent YTM). The 7.95 per cent-24 year-2032 paper opened at Rs 116.15 (6.59 per cent YTM) and closed at Rs 114.05 (6.75 per cent YTM).

German Export Prices See Record Monthly Fall In 40 Years - Dec 22, 2008

The index of export prices in Germany dropped 0.9 percent in November compared to October, a record month-on-month fall in 40 years for the world's biggest exporter, German Federal Statistical Office said on Monday. "A price decrease of this height compared to the previous month was last time observed in January 1968," said the Wiesbaden-based office in a press release.

On the year-on-year basis, the export prices for the biggest economy of Europe still rose in November, but in a smaller scale. The index of export prices increased by 1.0 percent in November compared with November 2007. In October and in September, however, the annual rates of change were 2.0 percent and 2.8 percent respectively.

The index of import prices in Germany decreased by 1.3 percent in November compared with November 2007, hitting a four-year low. "This was the lowest year-on-year rate since March 2004" which stood at minus 1.6 percent, said the office.

In October and in September, the year-on-year rate of change was 2.9 percent and 7.6 percent respectively. On the monthly basis, the office said from October to November 2008, the index of import prices fell by 3.4 percent.

Govt Tables Insurance Reform Bill In Parliament - Dec 22, 2008

The government on Monday, 22 December 2008, tabled the insurance reform bill in parliament. The bill seeks to lift the foreign direct investment (FDI) cap in insurance firms to 49% from 26%, and allow overseas reinsurers to enter the market through branches.The proposed legislation also aims to allow health insurers to start business with a minimum capital of Rs 50 crore, instead of the minimum Rs 100 crore required by life and general insurers.

India Has Lifted A Ban On Cement Exports As Price Pressures - Dec 22, 2008

According to trade ministry, India has lifted a ban on cement exports, as price pressures eased and domestic demand is depressed due to a slowdown in construction activity. The Director General of Foreign Trade under the Commerce Ministry has informed that he has allowed cement export with immediate effect.In order to increase local supplies and check rising prices, government had banned cement exports in May.

Activity has slowed down In the past few months as high interest rates trimmed demand for new homes while companies deferred expansion plans due to a credit crisis. In November, India''s cement output was 14.34 million tonnes, which was than 14.76 million tonnes produced in October, according to the Cement Manufacturers'' Association.

Similar Manner Gold Falls By Rs 100 On Weak Global Cues - Dec 22, 2008

Gold prices tumbled further by Rs 100 to Rs 12,900 per 10 gram in the national capital on weak global cues on Dec 21.Standard gold and ornaments remained under selling pressure and dropped further by Rs 100 each to Rs 12,900 and Rs 12,750 per 10 gram respectively. Sovereign followed suit and shed Rs 25 at Rs 10,550 per piece of eight gram.

In a similar manner, silver ready dropped further by Rs 40 to Rs 17,360 per kg and weekly-based delivery by Rs 75 at Rs 17,515 per kg. However, silver coins held steady at Rs 26,700 for buying and Rs 26,800 for selling of 100 pieces. Gold prices dropped here in domestic market on account of steep fall in its prices in the international market as the dollar strengthened against the euro, eroding the yellow metal''s demand as an alternate investment. Marketmen said increased selling by stockists, in line with steep fall in its prices, in overseas market last night mainly pulled down gold prices.

Repo Auction Scheme Against Previous Close Of 6.50-6.60 Per Cent - Dec 20, 2008

Call rates closed at 6.25-6.50 per cent, as against the previous close of 6.50-6.60 per cent per cent. There were 7 bids for Rs 6,500 crore in the three-day repo auction under the first liquidity adjustment facility (LAF). In the three-day reverse repo auction, the RBI received and accepted 5 bids for Rs 820 crore. In the three-day repo auction under the second LAF, there were 12 bids for Rs 7,890 crore.

In the three-day reverse repo auction under second LAF, the RBI received and accepted 22 bids for Rs 24,130 crore. There was one bid for Rs 785 crore in the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF. In the CBLO market, there were 468 trades amounting to Rs 28,789.15 crore in the rate range of 1.00- 5.49 per cent.

Barrel A Dollar Tumbles Rs 330 On Weak Global Cues - Dec 20, 2008

Gold prices plunged by Rs 330 to Rs 13,000 per 10 gram in the national capital today on heavy selling by stockists sparked by a falling trend in the international market. Silver also recorded a hefty fall of Rs 450 per kg to Rs 17,400.Selling pressure gathered momentum after reports of the precious metal falling in the overseas market on the back of declining crude and rising dollar that made the gold less lustrous for investors.

Gold in London fell to 843.20 dollar an ounce from 853.10 dollar in New York Merchantile Exchange last evening, after the crude oil dipped to four-year low level around 36 dollar a barrel.Marketmen said heavy selling by stockists in tandem with falling trend on the global markets mainly pulled down the precious metal prices here.Said retail customers also refrained from buying at existing higher levels that fuelled the downtrend.

Standard gold and ornaments crashed Rs 330 each at Rs 13,000 and Rs 12,850 per 10 gram respectively. Sovereign lost Rs 25 at Rs 10,575 per piece of eight gram. Silver suffered heavy losses after the investors shifted their funds to forex and equity markets for quick buck. Silver ready plunged by Rs 450 at Rs 17,400 per kg and weekly-based delivery by Rs 500 at Rs 17,590 per kg. Silver coins also slumped by Rs 200 at Rs 26,700 for buying and Rs 26,800 for selling of 100 pieces.

ECB Norms Likely To Relaxed Soon To The Tune Of $2.8 Billion - Dec 20, 2008

India Inc, particular infrastructure sector, waiting for the government to announce the second stimulus package, now can expect some good news regarding relaxation of norms for External Commercial Borrowings (ECBs) afterward this month. They may not have to wait for longer, the Finance ministry is reviewing the ECB norms so as to liberalize them and make borrowings from overseas much easier.

present, corporates can bring in up to $500 million through the ECB route. The industry biggies are quite upbeat about yet another easing of ECB norms. The proposed relaxation will be the second in a row within two months.

Norms were relaxed by RBI in October to allow companies in the mining, exploration and refineries sectors to bring in up to $500 million in external commercial borrowing for rupee expenditure. Several corporates like Reliance Industries, Essar Shipping and Jaiprakash Associates have already made the most of the higher borrowing limit since October. The total money borrowed in October this year is $1.12 billion, with Reliance Industries leading the pack with borrowings of $400 million. While Essar Shipping Ports & Logistics borrowed $148 million, Jaiprakash Associates raised $60 million.

However, given the global financial stress, corporates are somewhat concerned about the positive effect of the proposed move. A Subbarao, Group CFO of GMR Group, said, there is no money in the international markets so this will hardly help. Despite liberalisation of the ECB norms, Indian corporates were able to raise just about $1.12 billion from the overseas debt market in October, which is less than half of the amount mopped up in September which was to the tune of $2.8 billion.

Asian Trade After Down By 31 Paise Ends At 47.26 - Dec 20, 2008

The Indian rupee snapped its four-day winning streak on Dec 19 fell by 31 paise against the dollar to close at 47.25/26 on account of the expectations of cuts in interest rates as inflation has declined to a nine-month low.In a fairly active trade, the domestic currency fluctuated between 47.36 and 46.86 on alternate bouts of dollar buying and selling during the day.The rupee had closed at 46.95/96 a dollar on Dec 18.

According to dealers, concerns over a probable rate cut weighed on the rupee sentiment despite sliding oil prices and continued weakness in dollar in overseas markets. They said the rupee also came under pressure after a slowdown in capital inflows as foreign institutional investors pulled out from equity markets in the last two days. Initial recovery was led by low crude oil prices and weak dollar in global markets as dollar attempted a recovery in pre-afternoon trading in Asian trade after the Bank of Japan cut its key policy rate to 0.10 per cent but failed to hold its gains due the prevailing state of the U.S. economy. Global oil prices fell below $34 a barrel in Asian trade on Friday. In the meantime, Indian benchmark Sensex ended the day with a modest gain after moving inconsistently during the day.

World Bank To Lend Additional $3 Billion To India - Dec 19, 2008

The World Bank has agreed to help India with $3 billion of increased investment as the global financial crisis undermines private financing for the country's much-needed infrastructure agenda, the bank announced Thursday.Part of the additional financing include a line of credit to the India Infrastructure Finance Company Limited (IIFCL) to help finance private-public partnerships in infrastructure.

Funding for the Small Industries Development Bank of India (SIDBI) to provide credit to small and medium enterprises, and assistance to PowerGrid to expand its transmission network,” the World Bank said in a written statement.The development institution has provisioned this additional amount as part of the total financing envelope of $14 billion proposed in the India Country Strategy over 2009-2011.

India had requested an additional $5.6 billion over the next two years. Having provisioned the $3 billion, the World Bank said it would need to examine the balance $2.6 billion and work with the Indian government over the coming weeks to clarify details.

The strategy, which is geared to help India propel infrastructure development, support the country's seven poorest states, and respond to the financial crisis, was discussed by the World Bank board last week in Washington DC.

Other areas which could receive support from additional financing include the National Housing Bank and the recapitalisation of state banks, the details of which are yet to be discussed with the government of India,” the statement said.

The statement said that India was the largest borrower from the World Bank's International Development Association (IDA) and second largest borrower from its International Bank for Reconstruction and Development (IBRD) in fiscal 2008.

Hong Kong Overall Economic Growth In The Third Quarter - Dec 19, 2008

Hong Kong's gross domestic product (GDP) increased by 1.7% in real terms in the third quarter (Q3) of 2008 over a year earlier, compared with the 4.2% growth in the second quarter. With the growth of the Hong Kong economy slowing notably further, the import and export trades remained as the main driving force in Hong Kong's overall economic growth in the third quarter of 2008.

Analyzed by constituent sector and on a year-on-year comparison, net output in all the service activities taken together rose by 2.3% in real terms in the third quarter of 2008 over a year earlier, compared with the growth of 4.2% in the second quarter.

Net output in the wholesale, retail and import and export trades, restaurants and hotels sector increased by 4.8% in real terms in the third quarter of 2008 over a year earlier, compared with the 7.0% increase in the second quarter. The moderation of growth from the second quarter was mainly attributable to the decelerated growth in external trade and slackened consumer spending towards the end of the quarter.

Net output in the transport, storage and communications sector increased by 1.8% in real terms in the third quarter of 2008 over a year earlier, compared with the increase of 4.3% in the second quarter. The modest growth of the merchandise trade amid the faltering global demand underpinned the further slowdown in growth of the transport and storage services.

Net output in the financing, insurance, real estate and business services sector increased marginally by 0.4% in real terms in the third quarter of 2008 over a year earlier, compared with the 4.2% increase in the second quarter. The strained growth was mainly caused by the continued shrinkage in trading in stocks as well as quieter fund raising activities in the third quarter.

Net output in the community, social and personal services sector increased by 1.4% in real terms in the third quarter of 2008 over a year earlier, following the 1.5% rise in the second quarter.
Net output in the local manufacturing sector decreased by 6.7% in real terms in the third quarter of 2008 from a year earlier, compared with the decrease of 4.1% in the second quarter.

Net output in the electricity, gas and water sector recorded a decrease of 1.5% in real terms in the third quarter of 2008 from a year earlier, compared with the drop of 3.5% in the second quarter. As for the construction sector, net output decreased by 1.4% in real terms in the third quarter of 2008 from a year earlier, compared with the decrease of 2.7% in the second quarter.

Primary Inflation Slips To 6.84% Rate Cut Hopes Brighten - Dec 19, 2008

Inflation plunged below 7 per cent to 6.84 per cent for the week ended December 6 2008, from 8 per cent of previous week. Huge drop in the fuel price index of 3.7 per cent led the fall. The market is expecting more cuts from the Reserve Bank of India as bond yields have dropped to the lowest since June 2004. Bond yields on Thursday (December 18) fell to 5.54 per cent as against 5.80 per cent on Dec 17. The decline in fuel prices was also supported by a drop in manufacturing and primary goods indices. The index for manufacturing was down 0.3 per cent on week-on-week basis while that of primary articles, which includes food prices, fell 0.4 per cent.

RBI Received And Accepted 15 Bids For Rs 19,430 Crore - Dec 19, 2008

The inter-bank call rates ended slightly higher at 6.50-6.60 per cent, as against the previous close of 6.40-6.50 per cent. There were two bids for Rs 3,000 crore in the one-day repo auction under the first liquidity adjustment facility (LAF). In the one-day reverse repo auction, the RBI received and accepted one bid for Rs 70 crore. There were three bids for Rs 2,470 crore in the one-day repo auction under the second LAF. In the one-day reverse repo auction under the second LAF, the RBI received and accepted 15 bids for Rs 19,430 crore.

In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there was one bid for Rs 250 crore. In the CBLO market, there were 533 trades amounting to Rs 41,609.35 crore in the rate range of 5.00-6.25 per cent.

Bahrain Slashes Key Rates By 75 Basis Points - Dec 18, 2008

Bahrain, which pegs its currency to the U.S. dollar, slashed all its key interest rates by 75 basis points on Thursday as it mirrored a move by the U.S. Federal Reserve, the central bank said. The Gulf Arab state lowered the overnight repurchase rate and overnight secured rate to 2.75 percent from 3.5 percent. It also reduced its one-week deposit rate to 0.75 percent from 1.5 percent and its overnight deposit rate to 0.75 percent from 1 percent. The U.S. Federal Reserve chopped its interbank federal funds rate to a range of zero to 0.25 percent, a record low.

China Set To Deficit Financing Economic Stimulus Program - Dec 18, 2008

China's budget deficit is set to go up to 500 billion yuan ($72.99 billion) in 2009 to aid the country's massive economic stimulus program, Chinese-language business press reported. If the deficit plan wins approval from the national legislation in March 2009, the size of China's deficit financing will see a major rise of close to 180 percent from its 2008 level of 180 billion yuan.

The gap is expected to be filled by increasing the issuance of treasury bonds, unnamed sources close to the central government were quoted as saying in the Economic Observer.

The sources also said that the new fiscal deficit, totaling 320 billion yuan, will include 200 billion yuan for investment in public infrastructure, and the other 120 billion yuan for the reconstruction of areas hit by the Sichuan earthquake last May.

Up till now, China has had a low fiscal deficit/GDP ratio, with the figure at 0.6 percent in 2008. If the deficit size expands to 500 billion in 2009, the ratio will be around 1.79 percent, still lower than the 3-percent alarm threshold held by banking specialists.

Rupee Appreciates Against Of 61 Paise Over The Previous - Dec 18, 2008

On Dec 17, the Indian rupee strengthened by 61 paise against the US dollar in opening trade backed by the increased capital inflows by foreign funds. At the Interbank Foreign Exchange (Forex) market, the domestic currency traded at 47.30 against the greenback, a smart rise of 61 paise over the previous close of 47.91/92.

Forex dealers said that the rupee gained due to selling of dollar by banks and exporters after an upward trend in Asian equity markets that raised hopes for strong opening on domestic bourses. The rupee, appreciated by 13 paise at 47.91/92, a one-month high in the last trading session.

Silver Also Rose Above 11.20 Dollar An Gold Further - Dec 18, 2008

New Delhi: In the bullion market here, the gold prices on Dec 17 rose by Rs 20 at Rs 13,110 per ten gram due to sustained buying influenced by firming overseas trend. Marketmen said the precious metal received a boost on firming overseas bullion markets.While, the demand for silver was up from jewelers and gift items manufacturers to meet demand for Christmas and New Year.

The buying activity also picked up backed by the reports of precious metal in global markets surging for the seventh straight day in the US last night to trade at 859.95 dollar an ounce, the most since Oct 13.The silver also rose above 11.20 dollar an ounce.

Standard gold and ornaments grew by Rs 20 each at Rs 13,110 and Rs 12,960 per ten gram respectively. The silver ready spurted by Rs 350 at Rs 17,600 per kg and weekly-based delivery by Rs 415 at Rs 17,815 per kg. The silver coins rose by Rs 100 at Rs 26,900 for buying and Rs 27,000 for selling of 100 pieces.

Economic Policy Framework Climate In The Host Country - Dec 17, 2008

The Foreign Direct Investment (FDI) in the country has turned down by 26 per cent in October this year as a result of the global economic slowdown. The FDI inflows during April-September 2008 showed an increasing trend each month in comparison to the same period in the previous year, Union Commerce Minister Kamal Nath informed the Lok Sabha in a written reply on Dec 16. However, the trend changed in October when it fell by 26 per cent, he said, adding that it would be difficult to assess whether the ongoing projects in India would be affected. Quoting various studies by international agencies and analysis, he cautioned that FDI flows to developing nations would generally decline.

Under the liberalized economic environment, investment decisions are based on the macro-economic policy framework, investment climate in the host country, investment policies of the trans-national corporation and other commercial considerations, he said. The Minister, however, said the government had put in place a liberal and investor-friendly policy on FDI under which investment up to 100 per cent was permitted on the automatic route in most sectors/activities. A slew of initiatives to encourage demand had been taken and this would enable India to continue as an attractive investment destination, Mr. Nath said.

European Currency As Rupee Ends Below 48 -Level For Month - Decd 17, 2008

The Indian rupee extended its gains for second successive day on December 16 to close below 48 level at 47.92 against the greenback for the first time in a month on demand for the local currency on hopes of fresh capital inflows. Traders in foreign exchange said expectations US Federal Reserve cutting the interest rates in the meeting late on Tuesday raised expectations of dollar flowing into the country''s share markets.

In a volatile trade at the Interbank Foreign Exchange (Forex) market, the local unit opened slightly better at 48.00/02. After moving erratically for most part of the day, the rupee touched a high of 47.79 per dollar in the concluding session, helped by a sudden rise in benchmark Sensex. Finally it settled the day at 47.92.

The Indian benchmark Sensex rose nearly 145 points boosting the rupee sentiment.
Weak dollar against basket of currencies also aided the rupee rise. It slipped against both the yen and the euro, striking a two-month low against the single European currency as traders continued to exit long dollar positions due to uncertainty over the fate of US automakers.

FDI Inflow Down 26% In During The Period Stood Billion - Dec 17, 2008

Commerce Minister Kamal Nath today, 16 December 2008, said foreign direct investment (FDI) into India declined by 26% in October 2008 from a year earlier. In a written reply to parliament, Nath said FDI inflows during the April-October 2008 period stood at $18.7 billion.FDI inflows during April-September 2008 showed an increasing trend each month in comparison to the same period in the previous year, Nath said.Nath said it was difficult to asses the impact of the global slowdown on specific sectors and projects.

Now States Demand Rs 20,000 Cr Economic Stimulus Package - Dec 17, 2008

The first economic stimulus package, which included duty cuts and other sectoral incentives still to take off and the government has started work on the second package expected next week as yet another booster dose to the slackening economy. States are demanding Rs 20,000 crore more funds from the Centre to lift their sectors impacted by global financial crises. In addition they want the Fiscal Responsibility and Budget Management (FRBM) targets to be relaxed to enable more market borrowing.

The state finance ministers have asked for aid from the Centre and for this the states planning to call on the PM soon. The states have also opposed the cut in the sales tax rate of ATF to 4 per cent. They are now facing a tedious task as they lose revenues thanks to a cut in sales tax on diesel and petrol. The committee of secretaries is meeting members of FICCI on December 17 to work out details of the second stimulus package that will focus on infrastructure, housing and auto sectors. The second stimulus package would aim at creating employment in sectors such as infrastructure, auto, housing and textile industry.

Orissa Will Get 2 New Ports By 2010 More Minor Ports Along - Dec 16, 2008

Apart from the number of steel plants, Orissa will get two more minor ports along its coastline by 2010, according to Jaynarayan Mishra, Commerce Minister. The two minor ports would be at Gopalpur in Ganjam district and at Dhamra in Bhadrak district. The first phase of construction of the Gopalpur port has already been completed, whereas work was going on at the Dhamra port, he told the assembly on December 12.

Dhamra Port Company Limited, a joint venture of L&T and TISCO, had already started working on its project. An agreement was signed with Gopalpur port limited for the purpose. Both the ports were being developed on the build-operate-transfer basis which will come under the state''s ownership after the lease period. The estimated project cost of Dhamra port is Rs 2,464 crore while Gopalpur port has been developed at an investment of Rs 2,000 crore.

Mishra said, adding another port at Kirtania in the mouth of Subernarekha river was in the pipeline. Both Dhamra and Gopalpur ports would share their income with the state government. While Dhamara port would share five per cent of its income with the state government for the first five years, the Gopalpur port would follow suit from the second year of its execution.

State Run Banks Cheaper Housing Loans Insurance Cover - Dec 16, 2008

State-run banks today, 15 December 2008, announced lower interest rates on small home loans. Banks will charge interest at 8.5% per annum on home loans up to Rs five lakh and 9.25% per annum on loans between Rs 5 lakh to Rs 20 lakh. Besides, the banks would not charge any processing fees and pre-payment charges for loans up to Rs 20 lakh, and would also provide free insurance cover.

The new home loan rates, part of a move to stimulate demand in the affordable housing segment, will be effective until 30 June, 2009. The banks will take a 10% margin on home loans up to Rs 5 lakh and 15% margin on home loans up to Rs 20 lakh.

Rupee Strengthens, Ends At 48.05 - Dec 16, 2008

Rupee retreated from one month highs but still closed stronger on Monday ( December 15) as gains in the domestic equity market lifted expectations of fresh inflows and offset dollar demand from oil refiners. Rupee closed at 48.05/06 per dollar, off its high of 47.92, its strongest since November 11, but gained 0.8 percent from its previous close of 48.43/45.

Prices Gold Rules Flat On Lack Of Buying Support - Dec 16, 2008

Gold prices ruled flat at Rs 13,000 per 10 gram on Monday (December 15) on lack of buying at existing higher levels, while silver rose on better demand from industrial units. According to marketmen, gold prices remained unchanged owing to less buying activity as stockists and jewellers refrained from enlarging their positions at existing higher levels along with end of the marriage season.

However, silver prices went up mainly due to increased industrial offtake and report of a rising trend in global market. Silver in Asian market rose 1.2 per cent at 10.42 dollar an ounce.

Silver ready remained in rapid buying and strengthened further by Rs 100 to Rs 17,100 per kg, while silver weekly-based delivery was up by Rs 110 to Rs 17,230 per kg. Silver coins, though, held stable at Rs 26,600 for buying and Rs 26,700 for selling of 100 pieces. On the other hand, standard gold and ornaments held steady at Rs 13,000 and Rs 12,850 per 10 grams respectively. Sovereign followed suit and traded around previous level of Rs 10,500 per piece of eight gram.

Industrial Output Shrinks For First Time In 15 Years - Dec 15, 2008

India''s industrial output slipped into the negative territory for the first time since 1993. The industrial production growth in October fell into the negative territory, indicating a sharper slowdown in the economy. The Index of Industrial Production in October posted a negative growth of 0.4 per cent, from positive growth of 5.45 per cent in September and 12.2 per cent in October 2007. The manufacturing output, which accounts for 80 per cent of the index, in October is down 1.2 per cent in the negative as against 13.8 per cent positive growth a year earlier.

Earlier this month, the government sought to rescue manufacturers by announcing an across-the-board (barring petroleum goods) 4 per cent cut in excise duty. Electricity sector grew by 4.4 per cent during the month, bettering 4.2 per cent output of the year-ago period, while mining sector grew by a slower 2.8 per cent against 5.1 per cent in the previous year''s comparable period.

RBI Governor To Take Swift And Effective Action - Dec 15, 2008

The Reserve Bank of India (RBI) governor D Subbarao today said the RBI will continue to closely monitor the developments in the global and domestic financial markets and will take swift and effective action as and when needed. He said the central bank would endeavour to minimise the stress on various sectors of the economy which have been hurt by the global economic crisis.

The RBI governor said the outlook for the Indian economy in the coming months remains uncertain.Earlier in the day, State Bank of India Chairman O.P. Bhatt said the economy would require further stimulus beyond large interest rate cuts and extra government spending announced last weekend.

Growth 3.4% In Six Core-Infrastructure Industries - Dec 15, 2008

The Index of Six core-infrastructure industries having a combined weight of 26.7 per cent in the Index of Industrial Production (IIP) with base 1993-94 stood at 247.1 in October 2008 and registered a growth of 3.4% compared to a growth of 4.6% in October 2007. During April-October 2008-09, six core-infrastructure industries registered a growth of 3.9% as against 6.6% during the corresponding period of the previous year.

Crude Oil production (weight of 4.17% in the IIP) registered a negative growth of 0.3% in October 2008 compared to a growth rate of (-) 0.1% in October 2007. The Crude Oil production registered a growth of (-) 0.7% during April-October 2008-09 compared to 0.6% during the same period of 2007-08.

Petroleum refinery production (weight of 2.00% in the IIP) registered a growth of 5.0% in October 2008 compared to growth of 2.7% in October 2007. The Petroleum refinery production registered a growth of 4.5% during April-October 2008-09 compared to 8.8% during the same period of 2007-08.

Coal production (weight of 3.2% in the IIP) registered a growth of 10.9% in October 2008 compared to growth rate of 8.9% in October 2007. Coal production grew by 8.4% during April-October 2008-09 compared to an increase of 3.7% during the same period of 2007-08.

Electricity generation (weight of 10.17% in the IIP) registered a growth of 4.4% in October 2008 compared to a growth rate of 4.2% in October 2007. Electricity generation grew by 2.8% during April-October 2008-09 compared to 7.1% during the same period of 2007-08.

Cement production (weight of 1.99% in the IIP) registered a growth of 6.2% in October 2008 compared to 7.5% in October 2007. Cement Production grew by 6.0% during April-October 2008-09 compared to an increase of 8.5% during the same period of 2007-08.

Finished (carbon) Steel production (weight of 5.13% in the IIP) registered a growth of (-) 0.5% in October 2008 compared to 5.2% (estimated) in October 2007. Finished (carbon) Steel production grew by 4.2% during April-October 2008-09 compared to an increase of 7.3% during the same period of 2007-08.

Outlook- The Index of Six core-infrastructure decelerated in October 2008. The negative growth rate in index like crude oil and finished steel resulted in a lower growth in six infrastructures. The hard interest rate scenario, higher funding cost and financial instability on global and domestic front resulted slowdown in industrial activites in October 2008. To arrest the slowdown in industrial output the government and RBI has come up with various fiscal and monetary measures.

However all the measures taken by the government will take some time to be reflected in production numbers. At this background, we are expecting lower growth rate in IIP (index of industrial production) data, which will release tomorrow. Six infra industries hold 27% weight in IIP.

Dollar Fell To Gold Surges On Firming Overseas Trend - Dec 15, 2008

Gold prices increased by Rs 100 to Rs 13,000 per 10 gram on the bullion market in New Delhi on December 13 on stockists buying led by a firming trend in the international market. Silver also rose by Rs 50 at Rs 17,000 per kg. Buying activity picked up following reports that the precious metal in overseas market rose as weakening dollar against the euro raised demand for the gold as an alternate investment.The dollar fell to seven-week low level against the euro.

The rising price of crude oil also supported the yellow metal. Gold generally moves in opposite direction to the US currency, traders said, adding that surging crude oil raised concerns of inflation and boost demand for precious metal as a safe hedge .Along with the general firm trend, silver ready rose by Rs 50 at Rs 17,000 per kg and weekly-based delivery by Rs 40 at Rs 17,120 per kg. Silver coins spurted by Rs 200 at Rs 26,600 for buying and Rs 26,700 for selling of 100 pieces. Standard gold and ornaments gained Rs 100 each at Rs 13,000 and Rs 12,850 per 10 gram respectively. Sovereign was unchanged at Rs 10,500 per piece of eight gram.

Gold Prices Rose On Efficient Buying - Dec 13, 2008

Gold prices jumped by Rs 360 to 12,980 per ten gram in the bullion market, as stockists began brisk buying on account of strong global cues. Standard gold and ornaments jumped up by Rs 360 each at Rs 12,980 and Rs 12,830 per ten gram respectively. Sovereign increased by Rs 25 at Rs 10,500 per piece of eight gram.

Silver ready also went up by Rs 400 at Rs 17,150 per kg and weekly based delivery by Rs 380 at Rs 17,280 per kg. Silver coins rose by Rs 200 at rs 25,500 for buying and Rs 26,600 for selling of 100 pieces.

Reserve Bank Of India Cut Repo And Reverse Repo Rates - Dec 13, 2008

Bond prices increased by Rs 1.21 on Dec 11, on account of lower inflation figures. The prices have been on a rallying spree after the Reserve Bank of India cut repo and reverse repo rates. Inflation was at 8 per cent for the week ended November 29. The statements by the RBI Governor about a possible downward revision in growth targets fuelled expectations of another cut in repo and reverse repo rates. Total traded volumes on the order matching system were higher at Rs 16,580 crore (Rs 15,880 crore).

The 8.24 per cent-10 year-2018 paper opened at Rs 111.25 (6.60 per cent YTM) and touched an intra-day high of Rs 112.47 (6.44 per cent YTM). It closed at Rs 112.33 (6.46 per cent YTM), as against the previous close of Rs 111.12 (6.62 per cent YTM). The 7.95 per cent-24 year-2032 paper opened at Rs 108.4 (7.20 per cent YTM) and closed at Rs 108.99 (7.15 per cent YTM).

Inflation Cools Off To 8% For Food Articles Is Down - Dec 13, 2008

New Delhi:Inflation for the week ended 29th November 2008, stood at 8% as compared to 8.4% of the previous week. It was 3.89% during the corresponding week last year. Inflation rate for primary articles, which has a weight of 22% in the index number, fell to 11.66% in the reported week as compared to 11.98% in the previous week.

The closely tracked Wholesale Price Index fell 0.04 per cent to 233.6 vs 233.7 a week earlier. In inflation break-up, prices of fuel, power, light and lubricants remained unchanged. However, they are likely to see a big fall in the next inflation numbers after the recent cut in fuel prices. The price of primary articles is down 0.2 per cent, while that of food articles is down 0.4 per cent.

RBI Received Call Rates Marginally Higher - Dec 12, 2008

The inter-bank call rate ended marginally up at 5.15-5.25 per cent, as against the previous close of 5-5.10 per cent. There were no bids in the one-day repo auction under the first liquidity adjustment facility (LAF. In the reverse repo auction, the RBI received and accepted 13 bids for Rs 17,835 crore. In the one-day repo auction under the second LAF, there were no bids. In the one day reverse repo auction under second LAF, the RBI received and accepted 11 bids for Rs 13,830 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 482 trades for Rs 35,742 crore in the rate range of 4.50-6.55 per cent.

Govt To Unveil Second Stimulus Package For Exporters - Dec 12, 2008

Export growth has been shrinking with the November figures suggesting a declining trend again but this time the government is working on a second stimulus package that promises to be packed with drastic measures to bring exports back on track. Commerce and Industry Minister Kamal Nath on December 11 said the government is ready with a second stimulus package to help revive economic growth.

The commerce minister is left with little option given the present state of exports which is going gradually downward. The export growth rate has turned negative 17.59 per cent for the period of April-November 2008 over the same period last year. There has been a slowdown in some of the sectors because of the slump in the global economy both in credit terms and demand. The ability of consumers to buy and the lack of financing available is creating problems, he said after a function organised by Spanish Institute of Foreign Trade and industry chamber Ficci in New Delhi.

The government also said that the second stimulus package would primarily focus on creating employment and drastic measures at bringing back liquidity into the exporters hands that will give more flexibility to exporters to invest their capital in required areas like new market access. In fact, with positive growth sectors such as petroleum, engineering, gems and jewellery also slipping into the red, the government now really needs to come up with a package that will do more than just clearing out the bad debts for exporters and will focus on solving the credit crisis.

Eurozone Exports Decline For Second Month In Row - Dec 12, 2008

India''s exports turned down by around 10 per cent in November, showing a negative trend for the second month in a row this year, on account of a recession in the US and several other European markets. Although the government is yet to officially release the November figures, exports showed almost a double digit decline on lack of demand in most of the buying markets, sources said.

Following the global financial meltdown, the country''s exports dipped by over 12 per cent in October, for the first time after a gap of seven years. India has been facing the ripple effects of the global financial turmoil, which has resulted in slowdown of country''s exports. Several developed markets including the US, the UK, Japan and other countries in the Eurozone, which are India''s major export destinations, are officially in recession. The government and the RBI have taken several steps including making available cheap credit to exporters, to boost the sector.

Infrastructure Growth Drops In Oct To 3.4% - Dec 12, 2008

Growth of key infrastructure industries slowed down in October to 3.4 per cent from 4.6 per cent a year ago mainly on account of drop in production of steel and crude oil. The growth in the six core industries crude oil, petroleum and refinery products, coal, electricity, cement and finished steel contracted for the April-October period to 3.9 per cent from 6.6 per cent in the same period last year.

A day before the Index for Industrial Production data would be released, government released the core sector data, having a weight of 26.7 per cent on the overall industrial production. After dipping to 2.3 per cent in August, the growth in these industries improved to 5.1 per cent in September, raising hopes of a revival in the industrial growth. However, performance in October belied hopes as the rate of expansion dropped to 3.4 per cent.

The crude oil production remained in the negative territory showing a decline of 0.3 per cent in October. Reeling under the demand recession, steel took the hit and registered a negative trend of 0.5 per cent. However, petroleum refinery products followed the reverse trend by expanding by five per cent against 2.7 per cent. Cement production dropped to 6.2 per cent against 7.5 per cent in the period. However, coal showed an improvement at 10.9 per cent against 8.9 per cent. Electricity also put up an improved performance of 4.4 per cent as compared to 4.2 per cent.

Govt To Miss Tax Targets Lose Over Rs 40K Cr - Dec 11, 2008

At a time when the government is busy pump priming the economy to try and retrieve some amount of growth, its own balance sheet is going for a toss. The indirect tax collections, which account for almost 35 per cent of the total government revenue, are being hurt the most. The government is losing money to help the economy and the taxmen are having a nightmarish year. Now its almost certain that the government will miss the indirect tax collection target.

PC Jha, Chairman, CBEC said that after the post budget duty rate cut, the total impact is Rs 40, 475 crore. That''s a lot of money over 12.5 per cent of the government''s estimate of Rs 3,20,000 crore for the financial year about Rs 22,000 crore is already lost on account of abolishing import duty on crude. This means that collections from excise customs and service tax will almost slide below last year''s level of about Rs 2,80,700 crore.

The growth for excise collections has been a dismal 0.6 per cent against the target of 9.6 per cent, with the only relief coming from service tax collections, which have grown at 32 per cent against a target of 26 per cent. The headline excise rates have already been slashed by six per cent in the last seven months and NDTV also learnt that there is equal pressure to hike headline customs duty, which was cut, to 7.5 per cent in this year''s budget.

Most Asian Indices Sensex Surges On Positive Asian Cues - Dec 11, 2008

The markets were firm in early trade despite overnight plunge on Wall Street. Most Asian indices were trading higher on December 10. The markets witnessed a strong bear market rally and the Nifty may cross 3000 this week. Next week, a couple of economic numbers are expected and if these numbers are below expectations, then the markets may slide again, Seshadri Bharathan, Director - Stock Broking, Dawnay Day AV Financial Services. All sectoral indices ended in positive turf with IT, banking and realty counters leading the gains.

The BSE Sensex closed higher by 492.28 points at 9,654.90 and NSE Nifty ended up by 144.25 points at 2,928.25.The markets are likely to re-test the October lows. Macroeconomic conditions and earnings de-growth are key concerns for the markets. Moreover, there are certain asset quality issues with a few banks, said Amar Ambani, VP (Research), India Infoline.Among the Sensex stocks, Sterlite Industries leads gainers. RCom, Infosys and ICICI Bank are the other main gainers in the group.

Wall Street turned cautious on Tuesday after a two-day rally as disturbing corporate news reminded investors of the magnitude of the economy''s troubles. The Dow Jones industrial average fell 242.85, or 2.72 percent, to 8,691.33 after logging a gain 560 points over Friday and Monday. Broader stock indicators also declined. The Standard & Poor''s 500 index fell 21.03, or 2.31 percent, to 888.67. The Nasdaq composite index fell 24.40, or 1.55 percent, to 1,547.34.

Mss Bonds Will Infuse Sufficient Liquidity Into The System - Dec 11, 2008

Bond prices improved around 54 paise on hopes of further cuts in repo and reverse repo rates by the RBI in January. The buyback of MSS bonds will infuse sufficient liquidity into the system. Total traded volumes on the order matching system were at Rs 15,880 crore. The 8.24 per cent-10 year-2018 paper opened at Rs 110.7 (6.68 per cent YTM) and touched an intra-day high of Rs 111.37 (6.59 per cent YTM). It closed at Rs 111.12 (6.62 per cent YTM), as against the previous close of Rs 110.68 (6.69 per cent YTM). The 7.94 per cent-13 year-2021 paper opened at Rs 109.10 (6.84 per cent YTM) and closed at Rs 110 (6.74 per cent YTM).

Rupee Strengthens As Banks Sell Dollars - Dec 11, 2008

The Indian rupee appreciated by 48 paise on Dec 10 against the US currency in early trade due to the dollar selling by banks amid surging Asian equity markets. At the Interbank Foreign Exchange (Forex) market, the domestic currency traded at 49.11 against the greenback, a gain of 48 paise over the previous close of 49.58/59.

According to dealers, the rupee gained on dollar selling by banks and exporters after a firm trend in Asian equity markets raised hopes of a rally in domestic stocks. The rupee had closed two paise lower against the dollar, in choppy trade in last trading session on Dec 8.

India Is Not In Recession James Barth The Lowder - Dec 10, 2008

The government has gone on an overdrive announcing a Rs 32,000 crore stimulus package. Also, the RBI has further slashed the repo rate and reverse repo rate to motivate the growth rate and maintain the growth momentum in the face of a global financial meltdown. However, James Barth, the Lowder Eminent Scholar in Finance at Auburn University and a Senior Finance Fellow at the Milken Institute in the US, feels that more needs to be done both by the US and India to overcome the financial crisis.

He is still upbeat about the country''s growth projection. According to Professor Barth, India''s growth rate has definitely slowed down but is still faring well and can clock a growth of anywhere between six to seven per cent, at a time when the rest of the world is edging towards recession. It is but sure that the global slowdown will have its impact on India''s otherwise robust growth story as part of the coupling effect. While economic superpowers like the US have declared recession, there is good news for India. The several initiatives taken by the government up to now, including the debt waiver scheme for farmers and thrust on infrastructure seems to have helped.

Economists Seek Stimulus For Nation Working Poor - Dec 10, 2008

To tide over the slowdown a stimulus package for the country''s labour force should be top priority, as it would boost demand among the nation''s largest consumers, leading economists say. Highlighting a steep inequality in the pay hikes of executives and the labour force during the economic boom, Raymond Torres, director at the ILO''s International Institute of Labour Studies in Geneva, pointed out that worldwide the average hike in executive pay was 10 per cent as compared to a mere 0.7 per cent for workers. Predicting a global slowdown in the Indian economy in coming years, Torres said the government''s efforts to stimulate the economy would be of no use if low-income groups and ongoing infrastructure projects in the country do not receive a timely booster.

In India the taxation system is progressive. Keeping more reliance on income tax levels rather than on indirect tax will also boosts demand in the economy to tide over a recessionary trend, he added. Rajya Sabha MP and National Commission for Enterprise in the Unorganized Sector (NCEUS) Chairman Arjun Sengupta told, we have already submitted a report to the Prime Minister for taking measures for protection of the unorganized sector amidst this global slowdown. A suggestion is to provide a Rs 10,000 crore loan package to this segment under the priority sector policy of all scheduled banks to avoid job cuts in the unorganised sector, which employs more than 92 per cent of the workforce and contributes 50 per cent to the nation''s GDP.

Pm Calls Meet On Textile Industry Bailout - Dec 10, 2008

Prime Minister Manmohan Singh has arranged a meeting on Dec 10 on bailing out the textile industry due to rise in input costs led by sharp increase in the minimum support price (MSP) of cotton in September.The Centre has increased the MSP of standard cotton (long staple) to Rs 3,000 per quintal for 2008-09 from Rs 2,030 during the previous year. The MSP of medium staple cotton has been raised to Rs 2,500 from Rs 1,800 per quintal.

The industry has protested strongly against the MSP hike, saying domestic rates will skyrocket at a time when prices in global markets are declining. The Confederation of Indian Textile Industry has cautioned that the hike in MSP will prompt domestic traders and millers to import cheaper cotton and exports may plunge by a half to about 50 lakh bales (one bale is equal to 170 kg) in 2008-09 from 100 lakh bales last year .India is projected to produce at least 320 lakh bales of cotton in the 2008-09 season.

Gold Consolidates Further On Global Cues - Dec 10, 2008

On Dec 9, Gold prices gained further ground in the national capital on sustained buying by stockists in line with a better trend in the international markets, apart from a moderate support from retailers. Trading sentiments firmed up on reports that the yellow metal in overseas markets surged last evening for the first time in four days, as weaker dollar and higher oil prices increased its demand as an alternative to investment in the US currency, to hedge against inflation.

Gold scaled $21, or 2.8 per cent, to $777.45 an ounce in London on Dec 8. A close at that price would have marked the biggest daily gain in two weeks. However, the dollar fell against euro and pound, while global stock markets rallied, as US President-elect Barack Obama pledged the biggest public works programme in about 50 years.

A similar strength was extended to silver after its prices in London rose 2.5 per cent to $9.77 an ounce. The twin precious metals normally move in tandem with the global trend. Standard gold and ornaments rose by Rs 90 at Rs 12,520 and Rs 12,380 per 10 gram, respectively. Sovereign rose by Rs 50 at Rs 10,450 per piece of eight gram. The gold had gained Rs 80 in previous day''s trading.

Silver ready shot up by Rs 250 at Rs 16,900 per kg and weekly-based delivery by Rs 300 at Rs 17,050 per kg. Silver coins rose by Rs 100 at Rs 26,500 for buying and Rs 26,600 for selling of 100 pieces.

Govt Unveils Rs 20,000 Cr Plan To Boost Economy - Dec 09, 2008

In a virtual mini-budget, the government on December 07 cut Cenvat by 4 per cent across the board to boost demand. Government also announced Rs 20,000 crore additional non plan expenditure as a part of the package to stimulate the economy. The much anticipated package, set rolling by Prime Minister Manmohan Singh who is also the Finance Minister, targets to power exports, housing, auto, small and medium industries and infrastructure sectors through additional funding and guarantees that a total amount of about Rs 35,000 crore.

The 10-point package contains substantial incentives for the sectors that have been hit by the global slowdown and recession in the west, besides allowing India Infrastructure Finance Company Ltd to raise Rs 10,000 crore through tax free bonds by March as part of efforts to support Rs 1,00,000 crore programme in the high-way sector.

Gold Continues To Lose Shine Lack Of Industrial Demand - Dec 09, 2008

Constant stockists offerings on account of negative global advices, pulled down gold prices for the third successive day by another Rs 270 per ten grams to Rs 12,190 on the bullion market in Mumbai on Dec 6. Silver prices also dropped further on lack of industrial demand.Gold prices fell sharply as a bleak U.S. jobs report led to a higher dollar, triggering wholesale liquidation across the board from stocks to oil and commodities.

A US government report showed that employers reduced payrolls by 533,000 jobs in November, the most in 34 years and far more than expected Spot gold ended at $755.25 an ounce from Thursday''s close of $765.70 an ounce. Gold for February delivery dropped by $13.30 to settle at $752.20 an ounce on the New York Mercentile Exchange.March silver lost nine cents to $9.43 an ounce. In the local market, standard gold (99.5 purity) dropped by Rs 270 per ten grams to Rs 12,190 from Rs 12,460 previously.Pure gold (99.9 purity) also fell to Rs 12,250 from Rs 12,520.Silver ready (.999 fineness) moved down by Rs 110 per per kilo to Rs 16,525 from Rs 16,635.

Call Rates End Lower Down At 5.00-5.25 Per Cent Against - Dec 09, 2008

Call rates ended down at 5.00-5.25 per cent, against the previous close of 6.10-6.15 per cent. There were no bids in the two-day repo auction under the first and the second liquidity adjustment facility (LAF). The RBI received and accepted 8 bids for Rs 1,070 crore in the reverse repo auction. In the two-day reverse repo auction under second LAF, the RBI received and accepted 18 bids for Rs 26,330 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids. In the CBLO market, there were 485 trades amounting to Rs 34,347.70 crore in the rate range of 4.15-5.07 per cent.

Infra Gets Rs 10K Crore Stimulus For These Bonds - Dec 09, 2008

The India Infrastructure Finance Company Limited (IIFCL) is to issue bonds worth Rs 10,000 crore as part of the fiscal stimulus to infrastructure, for which the government is expected to fast track approval for these bonds. S S Kohli IIFCL Chairman is expecting large retail participation from individual investors as these are tax-free.

The national highways and other big road projects may get big financing push as the Finance Ministry is busy working out the finer details of the Rs 10,000 crore bonds to be issued by IIFCL. However, the Finance ministry has not finalized the interest rate for the bonds, but NDTV find out from sources that the bonds will carry interest rate between seven to eight per cent and will be tax-free. Most infrastructure companies believe that more fund is needed although the government feels that this Rs 10,000 crore will be enough to refinance projects worth Rs 1 lakh crore.

A Subbarao, CFO, GMR Infrastructure, said, it is definitely a step in the right direction. May be Rs 10,000 crore is a beginning, but this is what we have been asking for and are expecting to create a dedicated refinance scheme so that the infra sector gets adequate funds. The quantam may have to be increased but this beginning is good. Meanwhile, the government has gone ahead and cleared infrastructure projects worth Rs 28,000 crore, hoping that its increased spending on infrastructure will provide the much needed stimulus to the economy.

RBI Extends Time For Concessional Interest Rates - Dec 08, 2008

The Reserve Bank has extended the period, during which exporters are allowed concession on their overdue credit, to 180 days against current 90-day time. The prescribed interest rate as applicable to post- shipment rupee export credit may also be extended to overdue bills up to 180 days from the date of advance, the central bank said.

Exporters are extended rupee credit at an interest rate 2.5 per cent below benchmark prime lending rates. They are also allowed to enjoy this concession for 90 days beyond the time the credit becomes overdue. With the RBI''s decision, exporters can now continue to enjoy credit at lower interest rate for 180 days. The overall export growth in October this fiscal slipped to about 12 per cent along with several sectors such as carpets, tea and handicraft putting up a dismal show. Exports in October 2008-09 declined by 12.1 percent to 12.8 billion dollar from 14.58 billion dollar a year ago, resulting job losses in the sector. Commerce and Industry Minister Kamal Nath had said that the government would review the export target of 200 billion dollar for the current fiscal as the global economic slowdown is impacting it.

India Inc Cheers Economic Stimulus Package - Dec 08, 2008

India Inc on Dec 7 cheered the mega stimulus package announced by the government, saying the duty cuts and other sectoral incentives would help generate demand through lowering of prices for consumers and overseas markets. Major auto companies including the market leader Maruti announced to cut prices by four per cent to pass on the tax benefits to the customers, as an immediate reaction to the package considered by Prime Minister Manmohan Singh, who is also holding Finance portfolio.

The apex chambers of commerce and industry, however, felt that incentives for the infrastructure projects as also the auto sector, should have been more. FICCI''s Secretary General Amit Mitra said, the package has enough punch to restart the overall economic activity through its massive Rs 3,00,000 crore in balance four months of the fiscal. It also seeks to create additional demand through a cut in Cenvat. It has taken a number of steps to support exports in the face of sagging global demand. Unsatisfied by ''Rs 20,000 crore emergent package'', Assocham President Sajjan Jindal said, the industry was anticipating the demand booster package of Rs 70,000 crore and hoped that the government would take more radical measures to create the demand and ensure that the economy bounces back to its previous growth speed.

India''s Fiscal Deficit Will Be Higher: Montek - Dec 08, 2008

Montek Singh Ahluwalia, Planning Commission Deputy Chairman on December 07 said India''s fiscal deficit for the current fiscal will be higher than budgeted for but this will not be an unfavorable development in the perspective of the global meltdown.

Higher fiscal deficit will be a desirable development, Ahluwalia said at a press conference here, soon after unveiling a growth stimulus package that includes a four percent cut in central value added tax (VAT).According to Finance Secretary Arun Ramanathan, the impact of the four percent cut in central VAT would be Rs 8,700 crore (Rs.87 billion/$1.75 billion).

A slowdown in tax receipts and the measures unveiled on December 07 are also expected to impact on the fiscal deficit, which was budgeted at 2.5 percent of gross domestic product for 2008-09 - 30 basis points lower than the 2.8 percent in the previous year. Aditionally, the government will also seek parliament''s approval for plan expenditure of another Rs.20,000 crore (Rs 200 billion/$4 billion) in the remaining four months of the fiscal.

Tax Concession Notified, Goods To Get Cheaper - Dec 08, 2008

Government announced 4 per cent across-the-board cut in excise duty on Dec 7, which would make cars, consumer products, steel and cement cheaper while the exchequer would forgo Rs 8,700 crore as revenue during the remaining part of the current fiscal.

The three slabs of excise duty - 14 per cent, 12 per cent and 8 per cent, applicable to non-petroleum products have been reduced by 4 percentage points each. The revised rates will be 10 per cent, 8 per cent and 4 per cent respectively.

Besides, the government also announced other tax breaks for exports and iron and steel sectors. Giving details of the tax concession, the statement said that the ad-valorem component of the excise duty on cars of 1,500 cc and above will be reduced from 24 per cent to 20 per cent. Maruti Suzuki Ltd, the country''s largest car manufacturer has decided to cut down car prices by up to four per cent on account of the decision.

In the case of cement, which attracts 12 per cent, the specific rates have also been reduced to 8 per cent. Further, the concessional rates for cement produced by mini-cement plants have also been reduced proportionately.

Gold Falls Further On Easing Crude - Dec 06, 2008

Gold prices dropped by Rs 65 at Rs 12,575 per 10 gram in the national capital on December 05 on back of buying support on easing concerns of inflation. Silver followed the same trend and fell by Rs 100 at 16,500 per kg.Falling demand on ending marriage season on the domestic front helped in pulling down the bullion prices. Also, eased inflation at 8.40 eroded the demand for gold as a safer haven. Traders said the trend in global markets was weak after crude fell to $43.67 a barrel, the lowest settlement price since Jan 5, 2005. The gold in the US market fell to $760.90 an ounce last evening.

Market men said the precious metals also declined after the European Central Bank cut its benchmark interest rate by the most in its 10-year to stem the collapse. The Bank of England and Sweden''s central bank followed with reductions. Standard gold and ornaments fell by Rs 65 each at Rs 12,575 and Rs 12,425 per 10 gram, respectively. Sovereign fell by Rs 50 at Rs 10,450 per piece of eight gram.Silver ready fell by Rs 100 at 16,500 per kg and weekly-based delivery by Rs 60 at Rs 16,600 per kg. Silver coins also lost Rs 100 at Rs 26,300 for buying and Rs 26,400 for selling of 100 pieces.

More Stimulus Plans On The Anvil Nath - Dec 06, 2008

A stimulus package for the economy to be announced on Saturday by the government and Reserve Bank will not be single assistance, but would be the first in a series of measures to help sectors hit by the global slowdown.Along with this on Saturday, RBI is expected to announce a cut in the short-term rates in indicating banks to reduce interest rates on a host of interest-sensitive sectors like automobile, real estate and infrastructure. The government is also set to cut excise on commercial vehicles, whose manufacturers have reported a sharp decline in sales in November.

Exports too declined by over 12 per cent in October and the target for the fiscal is being revised downwards to $175 billion from $200 billion. A government survey of 121 export-oriented manufacturing units indicated 65,000 job cuts in the last three months with worsening of the global economic situation. Prime Minister Manmohan Singh, who has taken charge of the finance portfolio, chaired a meeting of the apex committee on December 2 to discuss the package.

Government Cut Petrol Price By Rs 5 And Diesel By Rs 2 - Dec 06, 2008

The government on Friday cut prices of petrol as well as diesel by Rs 5 and Rs 2 a litre, respectively. The cut is effective from tonight. The Oil Ministry has said prices of all other fuels would remain the same. As an interim measure, the government has decided to cut the prices with effect from midnight tonight, Petroleum Minister Murli Deora said. The government in June had raised the prices of petrol and diesel by Rs 5 and Rs 3 a litre respectively and LPG by Rs 50 a cylinder.

Rupee Appreciates Cues From Overnight Rally Against Dollar - Dec 06, 2008

The Indian rupee appreciated by 11 paise against the US dollar on Dec 4 in early trade due to the increased dollar selling by exporters and banks on firm Asian equity markets. At the Interbank Foreign Exchange (forex) market, the domestic currency rose against the greenback by 11 paise to 49.89 from previous close of 50.00/02. Dealers attributed the rupee''s gain to increased dollar selling by banks and exporters after a surging trend in global equity markets and hopes of firm opening in domestic bourses. Asian markets opened on a positive note with Hong Kong''s Hang Seng moving up 1.98 per cent while Japan''s Nikkei rising 0.62 per cent in early trade, taking cues from overnight rally in the US stocks.

Total Traded Volumes On The Bond Prices Slip By 47 Paise - Dec 05, 2008

On Dec 4, bond prices slip by 47 paise. Total traded volumes on the order matching system were down at Rs 11,355 crore (Rs 15,450 crore). The market players were seen shuffling their portfolios, with some moving from short-term papers to long-term papers and vice versa. The fall in inflation figures to 8.4 per cent also brought cheer to the markets. Dealers expect the yield of the benchmark security to touch 6.75 per cent in intra day trade on Dec 5.

The 8.24 per cent-10 year-2018 paper opened at Rs 110.15 (6.75 per cent YTM) and touched an intra-day high of Rs 110.50 (6.71 per cent YTM). It closed at Rs 109.54 (6.84 per cent YTM), as against the previous close of Rs 110.01 (6.77 per cent YTM). The 7.95 per cent-24 year-2032 paper opened at Rs 107.18 (7.30 per cent YTM) and closed at Rs 106.2 (7.39 per cent YTM).

India Annual Rate Of Inflation Slides Further To 8.4% - Dec 05, 2008

India''s annual rate of inflation eased further to 8.4 per cent for the week ended Nov 22 from 8.84 percent the week before due to a fall in prices of petroleum fuels. The annual inflation rate was 3.11 per cent during the corresponding week the previous year. The official wholesale price index (WPI) for all commodities during the week dropped by 0.6 per cent to 233.7 from 235.1 of the previous week. Data on wholesale prices released by the commerce and industry ministry showed that the index for primary articles, which includes food products, however, rose by 0.1 percent during the week under review. The index for fuels declined 2.3 per cent due to a 23 per cent decline in the prices of furnace oil, 14 per cent for aviation fuel and 11 per cent for light diesel oil.

Government May Reduce Fuel Prices Next Week - Dec 05, 2008

The government is expected to cut petrol price next week by Rs 10 a litre, diesel by Rs 3 per litre and domestic LPG by Rs 20 per cylinder in line with fall in global oil prices as the assembly polls in major states is going to end. Polling in Jammu & Kashmir one of the six states that went to elections would end on December 24. State-run oil firms have seen margins turning into positive zone from November 1 but the government, did not want to revise prices as the Model Code ,of Conduct for elections was in place that bars it from making any announcement that could be seen as appeasing voters.

State-run Indian Oil, Bharat Petroleum and Hindustan Petroleum are selling petrol at a profit of Rs 14.89 a litre and diesel at Rs 3.03 per litre for the first time in three years. But they continue to lose Rs 17.26 on sale of every litre of kerosene through public distribution system (PDS) and Rs 148.32 per 14.2-kg domestic LPG cylinder. As oil firms continue to make losses on LPG, some of the margins on petrol may be used to bring down the cooking fuel price.

Sensex Soars Past 9K On Softening Inflation - Dec 05, 2008

The Indian benchmark index breached the 9K level after a further fall in inflation numbers. Inflation fell for the fourth successive week, raising strong hopes of a rate cut. Inflation rate slipped for the fourth week in a row to 8.40 per cent for the week ended November 22 against 8.84 per cent in the previous week. Realty, capital goods and banking stocks contributed to the gains. BSE Sensex closed higher by 482.32 points at 9,229.75 and NSE Nifty ended up by 131.55 points at 2,788.

The money markets have already factored in a rate cut, with yields on 10-year bond yields already falling below 7 per cent. The rate cut expectations have buoyed the rate-sensitive stocks like realty and banking. The realty index on the BSE ended with increase of more than 12 per cent while capital goods index has jumped over 6 per cent on the forthcoming stimulus plan announcement. All these sectoral indices on the BSE ended in the green.

Among the Sensex stocks, JP Asso has jumped over 13 per cent on the impending stimulus plan announcement. DLF and Tata Motors were also up over 13 per cent while RIL has advanced over 8 per cent. Asian markets were mixed on December 04 as investors waited for key interest rate decisions in Europe later in the day and braced for more bad news from Friday''s U.S. jobs report. Oil prices fell to fresh three-year lows.

Agency Sees No Negative Impact Of Terror - Dec 04, 2008

The global rating agency Standard & Poor's (S&P) today said the terror attacks in Mumbai were an isolated case and that it does not expect any negative implications on India's macro economic activities or the government's fiscal position from the attacks.S&P expects a short-term negative impact on the currency and stock markets, as well as a slowdown in tourist arrivals, but that such effects would recede with time if there were no further attacks.

Terrorists armed with grenades and rifles stormed into Mumbai city, India's financial capital, late on Wednesday, 26 November 2008. The battle between the police and terrorists was still going on at Nariman House and at Oberoi Trident in Nariman Point more than 36 hours after the attacks.

Capital Rupee Gains 15 Paise Ends At 50 Dollar - Dec 04, 2008

The Indian rupee extended its gains for the second day in a row and closed at 50.00/02 against the US dollar due to anticipation of capital inflows on account of surge in Asian stock markets. A leading trader in foreign exchange said banks were selling dollars either on RBI''s instructions or on their own as they feel there is ample liquidity in the system, helping the rupee to gain.On hopes of some foreign inflows into the local share markets, the rupee strengthened past 50 per dollar in early trade.

Foreign fund flows have been the key factor determining the rupee''s direction in the last two years. In active trade, the domestic currency resumed higher at 49.91/95 a dollar a dollar and later moved in a range between 49.78 and 50.10. Finally, it ended at 50.00/02, with a gain of 15 paise. The rupee premiums on forward dollar ended lower on sustained receiving by exporters.

Remain Static Rates Range Of 4.50-6.04 Per Cent - Dec 04, 2008

Call rate remained unchanged as ended at 6.10-6.20 per cent, the same as the previous close. There were no bids in the one-day repo auctions under the first and the second liquidity adjustment facility (LAF). The RBI received and accepted 17 bids for Rs 28,020 crore in the reverse repo auction. In the one-day reverse repo auction under second LAF, the RBI received and accepted 28 bids for Rs 28,590 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were two bids for Rs 1,950 crore. In the CBLO market, there were 472 trades amounting to Rs 36,585.65 crore in the rate range of 4.50-6.04 per cent.

Infra Sops Likely For Realty Auto 15K Crore - Dec 04, 2008

The government on December 07 is expected to reveal a motivation package for housing, auto and export sectors and announce Rs 15,000 crore as budgetary support for infrastructure sector. The package may include a Rs 2,000 crore package for exporters, cut in excise duty on commercial vehicles and line of credit for housing and auto.Along with this, reduction in short-term rates by the RBI is expected that could in turn ease interest rates for home, personal and other loans.

The fine print of the stimulus package was finalized at a meeting chaired by Cabinet Secretary K M Chandrasekhar, a day after the decision on the package was taken by the apex committee chaired by Prime Minister Manmohan Singh. According to a highly placed source, norms for raising funds from the overseas market may also me relaxed further due to the tight liquidity position of the Indian industry. In view of the severe impact of the recession in the US and some European economies on exporters, the target of 200 billion dollar has been reduced to 175 billion dollar for the current fiscal.

Rupee Recovers To End Higher At 50.15 - Dec 03, 2008

The Indian rupee on December 2 bounced back and closed 13 paise stronger at 50.15/16 after touching a fresh record low in intra-day, against the greenback on supposed central bank intervention in support of the local currency. A leading dealer in foreign exchange said the rupee could have marched towards the new important level of 51.00 against a dollar but for the timely intervention the RBI. The rupee had weakened to 50.60 during the day.

He further added that a smart recovery in local stocks from early lows too had had a soothing impact on rupee sentiment. Traders said a sharp fall in global crude oil prices also favored of the domestic currency. Global oil prices fell below $49 a barrel level in Asian trade on December 2 after a hefty fall of 5.15 dollars to $49.28 a barrel at close at the New York Mercantile Exchange on December 1. In active trade at Inter-bank Foreign Exchange, the local unit resumed weak at 50.52 a dollar and later moved in a range between 50.09 and 50.60 during the day. On Dec 1, the rupee had closed at of 50.28/29 a dollar.

India Inc Raising Funds Via Fds - Dec 03, 2008

Due to the reduction in credit lines and non-availability of easy working capital, cash-strapped companies are looking borrow money from the public in form of fixed deposits. Given the recent economic downturn in markets across the world, more and more companies are flocking to issue deposits to the public in a bid to raise funds.Balaji G K, Head of Investing Business at Way2Wealth, said, FDs are attractive for companies in a market such as this.

Tata Motors, which acquired British brands Jaguar and Land Rover earlier this year for $2.4 billion, offers10% on a one-year deposit, 10.5% for a two-year tenure and 11% for a three-year deposit.Mahindra & Mahindra and Godrej Industries, too, have fixed deposit schemes but did not give details of how much they have raised. An investor Vijay Mishra said that he would rather invest in FDs of banks.

Gold Prices Nosedived By Rs 410 Per Ten Grams - Dec 03, 2008

Gold prices nosedived by Rs 410 per ten grams to close at Rs 12,600 on the bullion market here on December 2 on constant offerings by stockists due to fall in global markets. Silver prices also dropped on lack of industrial demand. Gold prices slipped in Europe extending the previous session losses, as the dollar firmed up against the euro and oil prices sank to a 3-1/2 year low, denting interest in the precious metal as an inflation hedge.

Spot gold was quoted at $766.40/768.40 an ounce down from $770.60 an ounce late in New York on Dec 1. In Singapore, the yellow metal slipped to its weakest in almost two weeks as oil extended losses and equities tumbled after a report confirmed the US economy was in third-longest recession since the Great Depression. Gold was trading at $768.10 an ounce, down $2.50 from New York''s notional close. Turning to the local market, standard gold (99.5 purity) by Rs 410 per ten grams to Rs 12,600 from Rs 13,010 yesterday. Pure gold (99.9 purity) also slipped by a similar margin to Rs 12,660 from Rs 13,070. Silver ready (.999 fineness) finished lower by Rs 650 per kilo to Rs 16,610 from Rs 17,260 yesterday.

Package To Boost Economy Expected By Weekend - Dec 03, 2008

The Prime Minister-chaired committee on 2nd December cleared a proposal of a fiscal and monetary package for cash-starved housing, export and financial sectors, to enable them to tackle the impact of the global economic crisis.Simultaneous packages for finance, export and housing sectors will be announced by the government and the RBI probably by the end of week. Prime Minister Manmohan Singh, who took additional charge of the Finance portfolio, discussed sectoral issues with Home Minister P Chidambaram, RBI Governor D Subbarao and Planning Commission Deputy Chairman Montek Singh Ahluwalia.

The apex committee met in the backdrop of exports reporting a decline of 12 per cent in October, while several other sectors including automobile also seemed to be showing the downward trend. The US economy has been officially declared as recession-hit with adverse implications for Indian exporters and capital inflows.

Sensex Slips Below 9K After Good Start - Dec 02, 2008

The Sensex ended in red, below 9K at 8,839, reversing it early gains after Asian markets pared its gains and European markets opened in the red. Weak manufacturing data also added to the selling pressure. The Sensex shed 252 points while Nifty shed 72 points to end at 2,682.

In the early trade, Asian markets helped to push the markets higher but did not last till the end due to squaring off of positions. The selling pressure on the BSE was led by the realty, auto, consumer durables, and banking stocks. The indices of these sectors on the BSE were down between 3.8 per cent and 5.3 per cent. In fact, all the sectoral indices on the BSE ended in the red.

Among the realty stocks, DLF lost around 10 per cent while Akruti City fell over 5 per cent. Among the Sensex stocks, DLF, Maruti, ICICI Bank led the losers. The biggest carmaker of the country lost 9.4 per cent while ICICI Bank shed over 7 per cent. Grasim, Tata Steel and TCS were among the gainers on the Sensex, up over 1 per cent each.

PM Panel To Discuss Booster Dose For Economy - Dec 02, 2008

Within days of taking extra charge of the Finance portfolio, Prime Minister Manmohan Singh will preside over a meeting of an apex committee to consider big-time expenditure on infrastructure for giving a booster dose to the economy impacted by the global downturn. The committee, comprising Planning Commission Deputy Chairman Montek Singh Ahluwalia and Reserve Bank Governor D Subbarao, is also likely to consider sops for the exporters, distressed by a sharp decline in overseas trade.

Proposals like interest rate cuts for the small and medium enterprises, and exporters were cleared by the Committee of Secretaries last week. Exports, which account for 18 per cent of the country''s GDP, plunged in October by over 12 per cent for the first time in seven years due to a severe demand slowdown in the US and Europe. GDP grew by 7.8 per cent in the first half of the current fiscal as compared to 9.3 per cent in H1 of the previous year.

Nomura Cuts Growth Projection To 6.8% - Dec 02, 2008

Nomura Financial Advisory & Securities on Monday revised India''s GDP growth downward to 6.8 per cent from earlier projection of 7.2 per cent amidst recessionary pressure being faced by many nations. It also expects growth to start falling sharply from the third quarter of the current fiscal.The erstwhile investment bank Lehman Brothers India said in a report that the main reasons for slowdown are slumps in exports and capex and expected second-round effects.

For 2009-10, GDP growth projection has been slashed sharply to 5.3 per cent against the previous forecast of 6.9 per cent. The expectation of economic expansion to return towards the trend growth rate of 8.0 per cent is only by early 2011.

It said that the global financial crunch took a distinct turn for the worse in September and there are increasing signs of non-linear economic effects vicious negative spirals from falling asset prices, sagging confidence, rising job losses, tightening lending standards and weakening demand, as well as increasing multiplier effects on domestic demand from the slump in exports. In the worst case the report expects the GDP growth rate to come down as low as 4.5 per cent in the first quarter of the next fiscal.

Rupee Slashed To A Low Of 50.28 - Dec 02, 2008

The Indian rupee slashed by another 21 paise to end at its new record low of 50.28/29 against the American currency. This was due to the fall in local stocks amid fresh dollar demand from importers. Resuming weaker at Rs 50.18/20 a dollar, the domestic currency bounced back to 49.94 level immediately in sync with an early rally in equity markets.It had closed at 50.07/10 a dollar on Nov 28.The rupee, however, again turned.

Weak in the latter part of the day and hit a low of 50.36 as oil refiners stepped up their dollar purchases in the light of lower oil prices. Foreign Exchange (forex) dealers said a sudden bout of dollar demand after global crude oil prices fell below $54 a barrel level in Asian trade this morning, weighed on the rupee sentiment. They said dollar demand picked in the late afternoon trade amid tight supplies, exerting pressure on the rupee.

Indian benchmark Sensex on Monday fell by 253 points or 2.78 per cent after a positive start in the morning. The rupee was continuously under pressure due to exodus of foreign funds from equity markets in the current calendar year, traders said. Foreign Institutional Investors have pulled out massive funds from Indian markets to meet their fund requirements abroad largely caused by the global financial crisis.

Shut Handicraft Units Leave 5 Lakh Jobless - Dec 01, 2008

India''s handicraft exports have been hit hard resulting in job losses for over five lakh workers, as the US and European markets facing severe slowdown, industry officials said. The initial industrial estimates of handicraft exports show a decline of 30 per cent in the April-October period this fiscal, an Export Promotional Council for Handicraft (EPCH) official said.

Over one million people are employed in the most affected handicraft clusters of Moradabad, Jaipur, Saharanpur, Jodhpur and Narsapur (Andhra Pradesh).Forty per cent exporters have closed down their factories and 50 per cent people in the four most affected clusters have lost their jobs, All India Handicraft Board vice chairman Sudhir Tyagi said. Art metal wares, laces, wooden and wrought iron handicrafts, embroidered and crocheted goods had huge buyers in the US, the UK, Germany, Japan and Middle Eastern nations. According to EPCH data, handicraft export in April-September this year declined by 22.10 per cent to $1.04 billion, against 1.34 billion in the same period last year. Export orders have almost frozen," Tyagi said adding, "December, especially the Christmas season, is very crucial for buyers abroad, the sale during the festival will decide on further export orders.

Last week, Commerce Secretary G K Pillai had said, five lakh people would lose jobs in the textile sector in the next five months .Moradabad (Uttar Pradesh) is a major exporting hub of art metal wares and imitation jewellery, while Saharanpur and Jodhpur are known for wooden, wrought iron and sea shell handicrafts. These products command big markets in the US, Germany, the UK, Italy and Saudi Arabia. Lace and lace goods, which go to the US, the UK, Germany and Canada, are crafted in the Narsapur cluster in Andhra Pradesh.

India Inc Welcomes PM Taking Fin Min Charge - Dec 01, 2008

On Nov 30, industry greeted Prime Minister Manmohan Singh taking charge of the Finance Ministry after P Chidambaram was appointed as Home Minister, saying Singh as Finance Minister is known as architect of reforms that transformed the Indian economy. Prime Minister directly involved himself in tackling the impact of the global credit crisis on the Indian economy. Amidst pressure on the exchange rate and crash in the stock market, in the wake of the developments in Wall Street, Singh had appointed a committee under his charge to find a way out of the economic challenges.

At the recent HT Leadership Summit, the Prime Minister had listed several initiatives under consideration of the government. These include fiscal measures like expenditure on infrastructure and monetary steps such as interest rates. All these relate to the Finance Ministry, which has come under his charge directly, Federation of Indian Chambers of Commerce and Industry Secretary General Amit Mitra said. Mitra said Singh is the only one in the government who has served as Finance Minister, RBI Governor and Chief Economic Adviser.Singh was also Secretary (Economic Affairs) and Deputy Chairman of the Planning Commission.

Assocham Secretary General D S Rawat said the "industrial confidence would get a boost" with the Prime Minister retaining the charge of the Finance Ministry. Singh had gone to Washington to attend the G-20 meeting called by US President George W Bush, where he sought increased role of the developing countries in the new financial architecture after the global downturn. Bajaj Auto Chairman Rahul Bajaj said he was not worried over the Prime Minister getting burden on account of the extra charge of the Finance Ministry. Godrej Group Chairman and Managing Director Adi Godrej said there are right kind of bureaucrats who can assist the Prime Minister, who need not feel the extra burden.

Top 10 Firms Gain Rs 14k Cr In A Week - Dec 01, 2008

Terror attacks that shook the Mumbai may be a concern for the tourism industry, but the country''s ten most valued firms have weathered the tremor, adding over Rs 14,400 crore to their market valuation in a week.In the meantime, past week witnessed a shuffling in the elite club with state-run MMTC and NMDC losing their position to private sector new entrants in the coveted club - TCS and HUL. MMTC and NMDC together lost nearly Rs 14,000 crore.

Besides, SBI dropped to the sixth place losing out its position to IT major Infosys, while state-run BHEL managed to regain the seventh position. The combined market capitalisation of the country''s top 10 firms, comprising six private sector and four public sector entities, saw an addition of Rs 14,424 crore last week, rising to Rs 96,46,77.48 crore from the previous week''s Rs 95,02,53.4 crore. Tata Consultancy Services, which made it to the ninth place, at the end of trade on 28th November, saw its market capitalisation at Rs 54,611 crore, while FMCG major Hindustan Unilever''s valuation stood at Rs 52,186 crore.

MMTC which lost Rs 7,282 crore last week saw its market value dropping to Rs 50,029 crore, while mining giant NMDC witnessed a value erosion of Rs 6,621 crore to Rs 49,896 crore.Leading cellular operator Bharti Airtel maintained its fourth position after peaking to Rs 9,861 crore in the last week, taking its valuation to Rs 1,27,379 crore. However, country''s largest lender State Bank of India lost a massive Rs 6,114 crore in its valuation, thereby dropping below the Rs 70,000 crore mark.

Manmohan New Role May Boost Markets - Dec 01, 2008

P Chidambaram’s finance portfolio going to Prime Minister Manmohan Singh and he will work as Home Minister, will boost investors'' confidence and stock markets will take it positively, bankers, analysts, investors said on Nov 30. A cross-section of bankers and market experts feel that Chidambaram taking charge of the critical ministry, should boost the investors'' confidence and they hoped that financial markets should bounce back.

Some others felt that shuffling would not make much difference and the markets will essentially follow the global market, which closed the week on a high. The market should bounce back. Prime Minister (who according to reports is expected to keep the Finance) has a proven track record of being a good Finance Minister and with the UPA top guy Chidambaram taking over the Home Ministry, the investors'' confidence will improve, Taurus Mutual Fund Managing Director R K Gupta said.

UCO Bank''s CMD S K Goel said, "Today the priority is internal security and Chidambaram being a competent person would restore the confidence of the common man in the government will boost investors'' confidence and stock markets will take it positively, bankers, analysts, investors said on Nov 30. A cross-section of bankers and market experts feel that Chidambaram taking charge of the critical ministry, should boost the investors'' confidence and they hoped that financial markets should bounce back.