Infra Sector Industries Reported Weak Performance - Jan 31, 2009

The key infrastructure sector industries reported weak performance by registering a dismal growth of 2.3 per cent during December. The economists feel the trend is likely to continue during the remaining part of the fiscal.

During the month, steel and crude oil showing negative growth. The six infrastructure industries in December reported the second-lowest growth during 2008-09, which was marginally up from 1.8 per cent in November. NCAER Director General Suman Bery said "Sectors, particularly electricity and coal, might be affected because of problems of supply in general... the numbers do suggest slowing of the economy." The core sectors in December last year, expanded by 3.2 per cent.

The steel, which is reeling under the demand recession reported a negative trend of 0.8 per cent. On the other hand, the petroleum-refining products increased at 3 per cent as compared to 1.9 per cent in a year-ago period. The core sector data showed that the production of crude oil showed a decline of 0.3 per cent in December.

For the April-December period, the growth of the infrastructure sector - crude oil, petroleum refinery products, coal, electricity, cement and finished steel - fell to 3.5 per cent from 5.9 per cent in the same period of 2007-08.

Indian Rupee Gains - Jan 31, 2009

The Indian rupee on Jan 30 settled up by 10 paise against the US dollar after making a recovery from its early losses. At the Interbank Foreign Exchange (Forex) market, the domestic unit resumed lower at 49.13/14 a dollar on the back of initial weakness in the domestic equity markets amid sustained capital outflows. The rupee touched a high of 48.84 before ending the day at 48.87/88.

In the early stages the firm dollar overseas also weakened the demand for rupee. Besides this, some month-end dollar demand from the importers also put pressure on the rupee in morning deals.

The benchmark six-month forward dollar premium payable in July closed at 56-58 paise while the far-forwards maturing in January closed at 93-95 paise from 91-93 paise previously. In cross-currency trade, the domestic currency grew against the pound sterling to close at Rs 69.90/92 per pound from previous close of Rs 70.06/08.

Inter-Bank Call Rate Closed Flat - Jan 31, 2009

The inter-bank call rate closed flat at 4.10-4.20 per cent. In the three-day repo auction under the first liquidity adjustment facility (LAF), there were no bids. However, the RBI received and accepted 12 bids for Rs 23,420 crore in the reverse repo auction. In line with this, in the repo auction under the second LAF, there was one bid for Rs 50 crore. While there were 36 bids for Rs 33,090 crore, in the three-day reverse repo auction. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids.

Pranab Sees GDP Growth - Jan 30, 2009

The growth of economy in the current year is likely to be seven per cent, Pranab Mukherjee, the External Affairs Minister, who is also holding the charge of the Finance Ministry, said in New Delhi.

"The two stimulus packages have started working...that has been reiterated by the Reserve Bank Governor while announcing the (third-quarterly review of the) credit policy", Mukherjee said after his first meeting with P K Bansal, Minister of State for Finance and senior officials of the ministry.

The senior officials of the finance ministry briefed Mukherjee on various issues regarding the preparation for interim budget, which is to be presented next month in Parliament. Mukherjee said, "though the economy will not grow at 8.9 or 8.8 per cent, it will grow around 7 per cent. There is no doubt about that ... Indian economy is sound and will bounce back". However, RBI has projected a growth of 7% for the current fiscal in its review of the credit policy, which was lower from 7.5 to 8 percent earlier.

Mukherjee took charge of the Finance Ministry as the Prime Minister Manmohan Singh, who was looking after the finance portfolio, has gone through a heart surgery at the All-Indian Institute of Medical Science.

WTO Deal Can Be Sealed Soon - Jan 30, 2009

At the World Economic Forum meeting in Davos, Kamal Nath, the Commerce and Industry Minister on Jan 29 enlivened the otherwise sombre mood by sounding optimistic that a global trade pact under the Doha Round can be sealed soon.

Nath said, "I am optimistic that in the next couple of months with more intensive negotiations we should be able to close this round... we are perhaps in the last lap".

However, the trade ministers of key WTO members will meet here at the weekend to narrow the differences between the developed as well as the developing countries.

The Doha Round of negotiations, which was launched seven years earlier have failed to bring a consensus among the 153-members on the level of breaking trade barriers. However, the last Ministerial Meeting held in July collapsed due to the wide differences between the developed and developing countries.

Gold Prices Fell Down - Jan 29, 2009

Gold prices fell by Rs 240 to Rs 13,900 per 10 gram on Wednesday on the back of heavy selling by stockists due to weakening overseas trend as well as the traders squaring up pending positions in futures markets. On the other hand, the silver also dropped by Rs 200 to Rs 19,000 per kg. The gold dropped in London ahead of the decision of the US Federal Reserve on interest rate. However, the sentiment turned more bearish as the gold in futures trading fell sharply on the eve of settlement as market participants indulged in unwinding their long pending positions.

The silver ready slipped by Rs 200 at Rs 19,000 per kg and weekly-based delivery by Rs 230 at Rs 19,240 per kg. The silver coins were Rs 27,500 for buying and Rs 27,600 for selling of 100 pieces. In line with this, the standard gold and ornaments fell by Rs 240 each at Rs 13,900 and Rs 13,750 per 10 gram, respectively.

Call Rate Closes Flat - Jan 29, 2009

The inter-bank call rate closed flat at 4.10-4.20 per cent. In the one-day repo auction under the first liquidity adjustment facility (LAF), there were no bids. However, in the reverse repo auction, the RBI received and accepted 14 bids for Rs 24,055 crore. On the other hand, there were no bids in the repo auction under the second LAF. Adding to this, in the one-day reverse repo auction, there were 25 bids for Rs 39,195 crore. In the 14-day special repo auction scheme for mutual funds and NB FCs under the LAF, there were no bids.

Gold Prices Hit A Record High - Jan 28, 2009

The gold prices surged Rs 40 to hit a record high of Rs 14,140 per 10 gram in the national capital on Tuesday backed by increased buying by stockists, which was driven by firming global trend after the US dollar weakened.

The standard gold and ornaments grew by Rs 40 each to close at a new high of Rs 14,140 and Rs 13,990 per 10 gram respectively. The sovereign held steady at Rs 11,000 per piece of 8 gram. However, the gold in Asian trading advanced by 0.3 per cent to $905.98 an ounce. On the other hand, Silver was up by Rs 200 to Rs 19,200 per kg, while the weekly-based delivery by Rs 220 to Rs 19,470 per kg. In line with this, the silver coins ruled flat at Rs 27,500 for buying and Rs 27,600 for selling of 100 pieces.

Bond Prices Fell - Jan 28, 2009

The bond prices fell by around Rs 2 after the statement by the RBI Governor- Dr Subbarao that the Government may not stick to the borrowing calendar and could raise additional money depending on its requirements, according to the source. The borrowing could depend on the money coming in through the auction of the 3G spectrum, said the RBI Governor.

However, the yields went up to around 6 per cent. On the order matching system, the total traded volumes were lower at Rs 7,190 crore. The benchmark security opened at Rs 117.85 (5.72 per cent YTM) and touched an intra-day low of Rs 115.70 (5.99 per cent YTM) and it closed at Rs 115.95 (5.96 per cent YTM) as compared to the previous close of Rs 117.85 (5.72 per cent YTM). On the other hand, the 7.56 per cent-2014 paper opened at Rs 108.20 (5.86 per cent YTM) and closed at Rs 107.40 (6.01 per cent YTM).

Inter-Bank Call Rate Closed Marginally Lower - Jan 28, 2009

The inter-bank call rate closed marginally lower at 4.10-4.20 per cent as compared to the earlier close of 4.15-4.25 per cent. In the one-day repo auction under the first liquidity adjustment facility (LAF), there were no bids. However, in the reverse repo auction, the RBI received and accepted 16 bids for Rs 27,250 crore. There were no bids in the repo auction, under the second LAF. In the one-day reverse repo auction, there were 21 bids for Rs 24,515 crore. In 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids.

Corp Tax Collection May Meet Estimate - Jan 27, 2009

The growth in corporate tax collection was likely to meet the budget estimate level of 26.1 per cent backed by a ''recovery'' in the last quarter of the current fiscal, an economic-think tank has said.

"Advance tax payment was down 22 per cent to Rs 42,000 crore in December 2008 over the year-ago level. However, corporate tax collection is likely to revive in the last quarter of the current fiscal", Centre for Monitoring India Economy (CMIE) has said in its report. However, the budget amount for corporate tax collection is Rs 2,26,361 crore for the financial year 2008-09.

CMIE said "In the year 2008-09, growth in corporate tax collection is expected to reach the budget growth of 21.6 per cent". According to CMIE, corporate tax collection registered an impressive growth, registering 38.2 per cent in the first half of the current fiscal. Despite a drop in revenue recorded in October and November 2008, the cumulative growth till November remained robust at the same level, the report said.

CMIE expects India Inc would enhance its profits, riding piggyback on the steep fall in crude oil prices in the international market and large payments to fertilizer companies towards fertiliser subsidies. In the last quarter of 2008-09, PAT is estimated to grow by an impressive 38 per cent, the report said.

Forecasts Peg Real GDP Growth In 6.3-8% Range - Jan 27, 2009

The Reserve Bank of India on Jan 26 said the forecasts by select agencies have pegged the growth of real GDP for 2008-09 in the range of 6.3 per cent to 8 per cent. On the other hand, the Prime Minister''s Economic Advisory Council sees the overall growth at 7.1 per cent. While the World Bank has pegged overall growth at 6.3 per cent and the Confederation of Indian Industries (CII) has pegged it above 8 per cent.

In line with this, the Asian Development Bank and Assocham have pegged it at 7 and 7.6 per cent, respectively and Crisil has put it between 6.5 and 7 per cent. The International Monetary Fund has put growth at 7.8 per cent for the calendar year 2008 while the Finance Ministry says it would be around 7 per cent

Merrill Lynch as well as the Citigroup have pegged the growth at 7.2 per cent while the Centre for Monitoring Indian Economy (CMIE) has pegged it at 7.4 per cent.

RBI Sees Slowdown In Economy - Jan 27, 2009

The Reserve Bank of India has indicated that further measures to stimulate growth could be in the offing, with the domestic economic activities slowing down in recent months. The Reserve Bank''s macroeconomic review for the third quarter said that the slowing down of economy and easing of inflation, which hinting at some more steps by the apex bank in its monetary policy today to stimulate demand and push growth.

"The global economic outlook has deteriorated sharply since September 2008... In India too, there is evidence of a slowing down of economic activity", the RBI said in its Macro Economic and Monetary Developments Third Quarter Review, 2008.

The central bank said that the expenditure is slated to increase on account of the fiscal stimulus measures taken by the government to tackle the economic slowdown. RBI since October has cut the cash reserve ratio to 5.5 per cent, repo rate to 4.5 and reverse repo rate to 4 per cent as part of coordinated efforts with the Finance Ministry to support the sagging growth.

However, the apex bank also said that the consumption demand is expected to rise in the period ahead on the back of a slew of fiscal measures taken by the Government and RBI to stimulate demand.

Gold Prices Fell - Jan 23, 2009

Gold prices fell by Rs 125 per ten grams to end at Rs 13,485 on the bullion market in Mumbai on Thursday following a fresh bout of selling from stockists on the back of a weak overseas trend. In the domestic market, the standard gold (99.5 purity) slipped by Rs 125 per ten grams to Rs 13,485 from previous close of Rs 13,610. In line with this, the Pure gold (99.9 purity) also dropped by Rs 120 per ten grams to Rs 13,550 from its overnight close of Rs 13,670. The Silver ready (.999 fineness) fell by Rs 130 per kilo to Rs 18,820 from Rs 18,950 previously.

In London, spot gold was quoted at $850.40/852.00 an ounce down from $854.05 an ounce late in New York. Silver also moved down to $11.23/11.29 an ounce from $11.31 an ounce.

The world''s largest gold-backed exchange-traded fund, the SPDR Gold Trust, said its holding rose to a record 805.96 tonnes of gold as on January 21, up 3.06 tonnes from 802.90 tonnes on January 20.

Indian Rupee Ended The Day Cheaper - Jan 23,2009

The Indian rupee ended the day cheaper by 3-4 paise at 49.14/16 against the greenback on Jan 22 on strong demand for dollar from foreign funds. The rupee resuming stronger at 48.88/90 a dollar from its earlier close of 49.11/12 a dollar at the Interbank Foreign Exchange (Forex) market but later fluctuated between 48.85 and 49.20 during the day.

The market was directionless amid indications of increased pressure for the short-term as the oil refiners are expected to begin purchases of dollar for their month-end import payments, dealers in foreign exchange said. The dealers also said that the domestic currency came under pressure on a dramatic buying spree from foreign investors. Meanwhile, the dollar turned weak against the Japanese yen and the euro in the overseas market.

Indian Rupee Gains Against Dollar - Jan 22, 2009

The Indian rupee on Wednesday ended up by nine paise at 49.11/12 against the greenback on dollar offloading by some banks amid the US currency''s gaining strength against its rivals in the overseas market. The domestic unit opened lower at 49.25/27 a dollar on Wednesday. It later touched a low of 49.40 on bearish equity markets and continued capital outflows. With dollar supply improving, the local unit touched a high of high of 49.03 before concluding the day at 49.11/12 against a dollar.

Call Rates Closed At Low - Jan 22, 2009

The call rates closed at 4.20-4.25 per cent as compared to the previous close of 4.20-4.30 per cent. In the one-day repo auction under the first and second liquidity adjustment facility (LAF), there were no bids. On the other hand, in the reverse repo auction, the RBI received and accepted 11 bids for Rs 19,835 crore. There were 26 bids for Rs 34,620 crore, in the one-day reverse repo auction. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids.

Bond Prices Declined - Jan 22, 2009

On Jan 21, bond prices declined by Rs 1.60, after banks sold securities due to indications that further rate cuts by RBI are improbable. Total traded volumes on the order matching system were lower at Rs 7,350 crore (Rs 10,050 crore). The benchmark security opened at Rs 118.5 (5.64 per cent YTM) and touched an intra-day high of Rs 118.69 (5.61 per cent YTM). It closed at Rs 116.60 (5.88 per cent YTM), against the previous close of Rs 118.2 (5.68 per cent YTM). The 7.56 per cent-2014 paper opened at Rs 108.8 (5.74 per cent YTM) and closed at Rs 107.65 (5.97 per cent YTM).

Gold Prices Fell - Jan 21, 2009

Gold prices on Jan 20 fell by Rs 50 to close at Rs 13,320 per ten gram in the bullion market here backed by sustained selling influenced by a weak global markets and an off marriage and festival season. The standard gold and ornaments dropped by Rs 50 each at Rs 13,320 and Rs 13,170 per ten gram respectively. The sovereign also lost Rs 25 at Rs 10,725 per piece of eight gram. Apart from this, the silver ready dropped by Rs 90 at Rs 18,260 per kg and weekly-based delivery at Rs 18,160 per kg. In line with this, the silver coins continued to be asked at previous level of Rs 26,900 for buying and Rs 27,000 for selling of 100 pieces.

Marketmen said that the weakening trend in international bullion markets, which normally set prices in domestic markets here, recorded a loss of 11.71 dollar to 824.19 dollar an ounce. On the top of this the trading sentiment also turned weak following the reports that the precious metal in London declined for a second day due to strengthening of the dollar along with extended declines of crude oil, eroding the metal''s appeal as an alternative investment to the US currency and inflation hedge.

Call Rates Closed Lower - Jan 21, 2009

The call rates closed slightly lower at 4.20-4.30 per cent as compared to the previous close of 4.30-4.40 per cent. In the one-day repo auctions under the first and second liquidity adjustment facility (LAF), there were no bids. On the other hand, in the one-day reverse repo auction, the RBI received and accepted 12 bids for Rs 19,140 crore. In the one-day reverse repo auction, there were 22 bids for Rs 30,085 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids.

Bond Prices Closed Lower - Jan 21, 2009

The bond prices closed lower on expectations that there could be extra government borrowing, which could lead to higher fiscal deficit. In line with this, the prices also fell on talks that the RBI in its monetary policy next week, is not expected to cut rates. On the order matching system, the total traded volumes were Rs 10,050 crore as against Rs 12,295 crore. The benchmark security closed at Rs 118.2 (5.68 per cent YTM), lower from the previous close of Rs 118.85 (5.60 per cent YTM). Along with this, the 7.56 per cent five-year 2014 paper closed at Rs 108.76 (5.76 per cent YTM).

Rupee Gains Against Dollar - Jan 20, 2009

The Indian rupee on 19 Jan appreciated further by 15 paise against the US currency in early trade on weak dollar and hopes of firm opening on the Indian stock markets. The domestic currency at the Interbank Foreign Exchange (Forex) market traded higher at 48.64 against dollar, a rise of 15 paise over the earlier close of 48.79/80 a dollar.

Indian Economy Is Likely To Record A Growth Rate - Jan 20, 2009

The Indian economy is likely to record a growth rate of 7.4 per cent in the last quarter of the 2009 fiscal as well as in the entire fiscal, a report by CMIE, said.

"We expect the fourth-quarter to register a real GDP growth of 7.4 per cent. Fiscal 2008-09 will thus end with a growth of 7.4 per cent", the Centre for Monitoring Indian Economy (CMIE) said. It however, expects the GDP for the third quarter of FY''09 to stay at around 6.7 per cent, substantially lower than the 7.8 per cent reported during previous two quarters.

The Reserve Bank and Centre together over the past two months have partially repaired the damages caused by the break-down of the international financial markets, the report said. It also added that the "liquidity was pumped in and interest rates were reduced by the RBI". The report also said, global financial markets collapse in October dried up the international finance trade, leading to a fall in exports as well as the Index of Industrial Production (IIP) and cargo movement, the report said. The economy deterioration in the third quarter is almost entire and caused due to the global liquidity crisis, CMIE said.

Bond Prices Closed Flat - Jan 20, 2009

Bond prices closed flat since the markets are in a wait and watch mode ahead of the Credit Policy announcement by the RBI. According to a dealer with a private bank, markets are expecting a 50 basis points reduction in the repo and the reverse repo rates in the policy. Total traded volumes on the order matching system were at Rs 12,295 crore. The benchmark security opened at Rs 119 (5.58 per cent YTM) and touched an intra-day high of Rs 119.28 (5.54 per cent YTM). It closed at Rs 118.85 (5.60 per cent YTM), same as the previous day''s close. The 7.56 per cent-2014 paper opened at Rs 109.5 (5.61 per cent YTM) and closed at Rs 109.4 (5.63 per cent YTM).

Economic Woes To Persist In Next Fiscal - Jan 19, 2009

Prime Minister Manmohan Singh said the country through the next fiscal will have to live with economic woes because the policy measures of the government cannot fully insulate the domestic economy from the impact of the global downturn. "Growth in the current year will be lower than the last year and our problems will not be over in the current year. The difficult period will continue into 2009-10", Singh said at a function in Mumbai.

However, the Prime Minister said that the easing of inflation has given monetary flexibility to deal with the difficult economic environment. Fortunately the rate of inflation has eased considerably and is now 5.2 per cent and is expected to decline further. This gives ample flexibility for monetary policy. He said that next year as well the government would have to continue with the supporting the environment.

However, the Prime Minister said that in the wake of the growing fiscal deficit, the government has limited space for providing more tax cuts even though it (the government) has to "tolerate" it for the next year to accommodate the expenditure needed for stimulating the economy. The Prime Minister said estimates of GDP growth for the current fiscal vary between 6.5 and 7 per cent.

He also added "Our government has also taken a number of steps to counter the global downturn. We are encouraging the banks, especially the public sector banks, to lend more freely to help otherwise viable production units to cope with the temporary stress of the economic downturn,". The government and the Reserve Bank have announced measures including interest rate cuts and across-the-board reduction in excise duty to boost demand. Besides this, the exporters as well as the small-scale industries have been given packages - fiscal and monetary.

Gold Rose In The National Capital - Jan 19, 2009

Gold rose by Rs 240 at Rs 13,400 per 10 gram in the national capital backed by brisk buying by stockists influenced by a firming overseas trend. The silver surged Rs 550 at Rs 18,350 per kg. The standard gold and ornaments grew by Rs 240 at Rs 13,400 and Rs 13,250 per 10 gram respectively. The sovereign was up by Rs 25 at Rs 10,750 per piece of eight gram. In line with this, the silver ready spurted by Rs 550 at Rs 18,350 per kg and weekly-based delivery by Rs 700 at Rs 18,360 per kg. Also, the silver coins rose by Rs 200 at Rs 27,000 for buying and Rs 27,100 for selling of 100 pieces.

The prices of the precious metals grew after the dollar-priced metals recorded handsome gains in the New York as the US currency fell sharply against the euro. The overseas trend witnessed that on the New York Exchange, the gold spurting nearly four per cent at $840.30 an ounce. Marketmen said an overnight surge in global bullion market attributed to the current rise in prices of gold while the physical buying was negligible.

Forex Reserves Fall $481 Million - Jan 17, 2009

For the week ended 9 January, the foreign exchange reserves slipped by $481 mn to $254.759 bn. However, the reserves have witnessed a fall after increasing for four consecutive weeks. For the week ended January 2, the reserves grew by $627 mn to touch $255.240 bn.

According to the figures released by the Reserve Bank of India in its Weekly Statistical Supplement, the foreign currency assets dropped by $458 mn to $245.417 bn. The fall in assets is due to revaluation of the reserves, with the dollar gaining against other currencies in the overseas markets, said a dealer with a private bank. However, the gold reserves and the SDRs remained unchanged at $8.485 bn and $3 mn while the reserve position in the IMF slipped by $23 mn to $854 mn.

Gold Recovers On Higher Global Cues - Jan 17, 2009

On Friday, gold prices bounced back on the bullion market on fresh stockists buying in view of positive global advices. Silver also firmed up in line with gold prices coupled with good demand from industrial users.

Gold prices rose in Tokyo, moving away from the previous day''s one-month low, as oil prices recovered and the euro rebounded against the dollar. Bullion''s safe-haven appeal was reinforced by mounting credit fears on news of further trouble at Bank of America and Citiroup, analysts said. Spot gold was quoted at $823.90/825.90 an ounce, up from $817.45 late in New York on Thursday.

U.S. gold futures were higher in Asia, with futures for February delivery at $823 per ounce, up $15.7 from Thursday''s settlement on the Comex division of the New York Mercantile Exchange. Spot silver also quoted higher at $10.73/10.81 an ounce from $10.58. Turning to the local market, standard gold (99.5 purity) rose by Rs 95 per ten grams to Rs 13,000 from Rs 12,905.Pure gold (99.9 purity) also firmed up to Rs 13,065 from Rs 12,970. Silver ready (.999 fineness) shot up by Rs 250 per kilo to Rs 18,170 from Rs 17,920.

Call Rates Remain Unchanged - Jan 17, 2009

Call rates closed same as the previous close at 4.20-4.30 per cent. There was one bid Rs 1,300 crore in the three-day repo auction under the first liquidity adjustment facility (LAF). In reverse repo auction, the RBI received and accepted 5 bids for Rs 6,105 crore. Under the second LAF, there were 5 bids for Rs 3,735 crore in the repo auction. In the three-day reverse repo auction, there were 31 bids for Rs 32,685 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 474 trades for Rs 33,444.10 crore in the range of 0.50-4.50 per cent.

Gold Is Likely To Become More Costly - Jan 16, 2009

This year, the gold is likely to become more costly and in the first half of 2009, may touch an all-time high due to expected surge in investments, a report says. The main motivation behind this expected surge in investment is risk aversion and a desire to preserve wealth, as illustrated in its focus being physical bullion or allocated metal accounts, GFMS said in a report.

The consultancy said there has already been demand particularly from high net worth and retail investors for several months, mainly in Europe and North America. But it was masked by heavy fund redemptions as cash has been sought to cover losses elsewhere and meet margin.

GFMS Ltd is a leading precious metals consultancy, which specializing in research into the global gold, silver, platinum and palladium markets. In August 2007, the gold was almost 650 dollars an ounce and in March 2008, it breached $1,000 level an ounce.

Inflation Drops Sharply - Jan 16, 2009

Inflation for the week ended January 3 fell to 5.24 per cent as against 5.91 per cent in the previous week. The inflation, as measured by the Wholesale Price Index, for all commodities dropped 0.2 per cent week-on-week to 229. Inflation for the week ended November 1 was revised to 8.71 per cent. However, the prices of primary articles, which include food items, slipped 0.5 per cent from its previous week.

Call Rates Close Steady - Jan 16, 2009

The call rates closed at 4.20-4.30 per cent, as compared to the previous close of 4.20-4.25 per cent. In the one-day repo auction under the first liquidity adjustment facility (LAF), There were no bids. However, in reverse repo auction, the RBI received and accepted 5 bids for Rs 5,625 crore. In lin with this, under the second LAF, there were 2 bids for Rs 1,950 crore in the repo auction. There were 16 bids for Rs 17,200 crore in the one-day reverse repo auction. There was one bid for Rs 280 crore in the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF.

PSU Majors Form Joint Venture To Acquire Global Coal Mines - Jan 15, 2009

Five Indian PSU companies on Wednesday inked an agreement to acquire coal mines across the globe through a joint venture.

The companies are -National Thermal Power Corporation (NTPC) along with Coal India Limited (CIL), NMDC Ltd, Steel Authority of India Ltd and Rashtriya Ispat Nigam Ltd. They would pool in Rs 3,500 as equity capital and along with this raise another Rs 6,500 crore debt for the acquisitions, officials said here after signing the agreement.

They said that the joint venture partners have already identified a few mines in Canada, Mozambique and Australia and are at advanced stage in bidding, they said.

Indian Rupee Firmed Up - Jan 15, 2009

The Indian rupee On Wednesday firmed up on the back of hopes for fresh Capital inflows after the Indian stock market surged by breaking its past four day losing trend. The rupee closed at 48.85/86 per dollar stronger than its previous close of 49.11/12.

Gold Recovers - Jan 15, 2009

Gold on Wednesday recovered yesterday by rising Rs 50 at Rs 13,200 per 10 gram in the national capital backed by festival buying amid firming global trend. Gold rose on the back of fresh buying by retail customers for the ''Makarsankranti'' festival. However, the yellow metal in Singapore rose 0.6 per cent at 826.74 dollar an ounce while the silver added 0.5 per cent to 10.81 dollar an ounce.

On the other hand, the silver also grew by Rs 130 to Rs 18,050 per kg. The silver ready inched up by Rs 130 to Rs 18,050 per kg and the weekly-based delivery by Rs 100 at Rs 17,860 per kg. In line with this, the silver coins also grew by Rs 100 at Rs 26,900 for buying and Rs 27,000 for selling of 100 pieces. On the top of this, the standard gold and ornaments inched up by Rs 50 each at Rs 13,200 and Rs 13,050 per 10 gram respectively.

India, Canada Sign MoU - Jan 14, 2009

India and Canada have signed a memorandum of understanding here to extend the co-operation in agriculture that includes the sharing of knowledge on technology as well as the marketing of farm products and animal development.

The MoU was signed by Sharad Pawar, Food and Agriculture Minister and Canada''a Minister of Agriculture Gerry Ritz.

“The cooperation envisaged in the MoU is expected to lead to increase in bilateral trade by creating new marketing opportunities benefitting farmers of both the countries,” an official statement said. It also added that the MoU provides for the representation of all stakeholders, including the private sector.

Gold Prices Fell - Jan 14, 2009

The prices of gold fell Rs 350 to Rs 13,150 per 10 gram in the national capital yesterday backed by hectic selling by stockists due to weak global trend as well as drying up of retail buying. On the other hand, the silver also declined by Rs 570 to Rs 17,920 per kg. The metal suffered huge losses after its prices for the third straight day fell in London due to strengthening of dollar against euro along with the fall in oil prices.

The traders said that the restricted buying by retail customers added to the fall as buying for “Makarsakranti'''' is almost over amid off marriage season. In line with this, they said the metal in overseas markets recorded a hefty loss of 37.70 dollar an ounce at 815.20 dollar as euro fell against the dollar on speculation that the European Central Bank will cut interest rates.

Silver for ready delivery tumbled by Rs 570 at Rs 17,920 per kg and weekly-based delivery by Rs 600 at Rs 17,760 per kg. Along with this, the silver coins slipped by Rs 200 to Rs 26,300 for buying and Rs 26,900 for selling of 100 pieces. On the top of this, the standard gold and ornaments dropped by Rs 350 each at Rs 13,150 and Rs 13,000 per 10 gram, respectively.

Gold Futures Extends Losses - Jan 13, 2009

India''s gold futures on Monday extended losses in a row on global leads, but in the local market, buyers awaited further price falls, traders and dealers said.

The February contract on the Multi Commodity Exchange of India closed at Rs 13,265, down Rs 63 rupees from the previous close.

“Gold demand is very low as prices rose recently,” said Sanjeev Garg, director with Delhi-based LMJ International, a bullion trader.

The foreign gold that guides the local market, edged slightly lower on Monday as concerns over physical demand weighed, while U.S. crude oil slipped to under $40 a barrel in a thin market.

IIP Recorded Positive Growth In November - Jan 13, 2009

The Index of Industrial Production numbers for November 2008, stood at 2.4% as compared to negative 0.4% of previous month. It was 4.9% during the corresponding month of previous year. Mining output is higher 0.5% as against 6.3% of previous year and manufacturing output is up 2.4% against 4.7% (YoY). Capital goods output is down 2.3% vs 24.2% (YoY) and consumer goods output is up 4.4% vs negative 2.9% for the corresponding month of previous year. In line with this, the growth in the consumer segment was lower than the average 6.2% YoY increase in the April-October months. However, monthly momentum in capital goods rose 3.5% mom versus a 9.3% mom fall in October.

In November, the monthly momentum grew 1.7% month on month versus a 3% MoM fall in October. In line with this, for the April-November months, IIP rose 3.9% YoY versus 9.3% YoY in the same period previous year.

Fall In Indian Rupee - Jan 13, 2009

The Indian rupee on Monday weakened backed by the demand for dollars from some corporates and banks looking at arbitrage in the offshore markets weighed, with a fall in the local share market adding to the pressure.

The partially convertible rupee closed at 48.84/85 per dollar, 1.2 percent weaker than its previous close of 48.27/29.

RBI Has Asked The Banks To Furnish The Info To Satyam Computers - Jan 12, 2009

Reserve Bank of India has asked the banks to furnish the information to it on their fund as well non-fund based exposure to Satyam Computer Services Ltd and associate companies in the Satyam Group.

The indications are that the banks would be required to spell out the kind of collaterals that they had obtained from Satyam Group for any loans or overdraft provided to them. The RBI is keen to assess the exposure of the banking system to Satyam Computer Services.

In line with this, the sources said that the RBI will be weighing the information provided by banks on their fund and non-fund based exposure to Satyam Group, as also the collaterals provided by these companies to assess the possible systemic impact of the fraud.

"In view of the revelations regarding Satyam Computer Services, RBI has sought details of banks'' exposure to the Satyam Group as a whole and rightly so. Notwithstanding the fact that we have lent against adequate security, we are obviously concerned as public money has been channelled into projects. We cannot allow them to go waste," said a top SBI official.

"We have a working capital exposure to only Maytas Infra. This exposure is covered by adequate collateral. So far, the company has serviced the loan on time. However, we will assess the company''s position in the light of new developments. We will update the RBI about our exposure," said a top IDBI Bank official.

On the other hand, in a statement, ICICI Bank had said that it did not have any fund-based exposure to Satyam other than of about Rs 3-crore a marginal exposure on account of a forward contract. However, in its current account Satyam is also maintaining a deposit with the Bank. The balance in this account is not material, the bank said.

Growth Of Loan Has Slowed Down - Jan 12, 2009

In the third quarter of 2009, the growth of loan has slowed down as compared to both previous year''s levels and the preceding Q2. Meanwhile, the foreign exchange reserves grew $627 million on account of the appreciation of gold in reserves.

According to the figures released by the Reserve Bank of India (RBI) in its weekly statistical supplement, total bank credit in December, including food and non-food credit, rose Rs 1,572 crore to Rs 26,45,415 crore. On the other hand, during the month the food credit rose by Rs 2,730 crore while the non-food credit dipped Rs 1,157 crore. Apart from this, the deposits increased by Rs 21,412 crore to touch Rs 35,69,352 crore as on 26 December.

For the quarter as whole, between September 26 and December 27, the total bank credit rose by Rs 102,947 crore as against a growth of Rs 1,11,806 crore in the same period a year ago and Rs 1,29,397 crore in the previous quarter ended September 2008.

The non-food credit between September and December 2008 grew by Rs 95,000 crore as compared with a growth of Rs 1,07,803 crore in the same period a year ago. Though in December the deposit growth slowed down, the quarter ended with a higher growth of RS 1,27,215 crore as against Rs 79,928 crore in the same period a year ago.

During the week ended January 2, the foreign exchange reserve including gold and SDR fell $627m to $ 255.2bn. While foreign currency assets grew 5$m largely on account of the revaluation of non-dollar assets in the reserves. The value of gold in reserves went up $624m.

Apart from this, the government availed of the ways and means advances. The outstanding WMA as on 2 January amounted to Rs 33,232 crore, way above the revised limit of Rs 20,000 crore.

Auto Fuels And Cooking Gas Prices Could Be Reduced - Jan 12, 2009

The auto fuels and cooking gas prices could be reduced by the Government in a fortnight. The government is considering reducing the prices of petrol by Rs 5 a litre in line with diesel by Rs 3 a litre and Rs 25 on the domestic LPG cylinder.

The Government earlier had cut prices. The retail selling price of petrol was slashed by Rs 5 a litre and diesel by Rs 2 a litre.

Mr Murli Deora, the Union Petroleum Minister while addressing a press conference on Saturday said that he has spoken to the Prime Minister about the issue. "We want to further decrease the prices, give us 10-15 days.

The National oil companies can now afford to reduce the prices as the crude oil price.
Mr Deora said that from the current quarter, the oil marketing companies could start making the profits provided the crude price remains below $40 per barrel, If the crude oil price increases beyond $40, then the profits will not happen, he said.

Inflation Rate Has Been Dropped - Jan 10, 2009

The Inflation for the week ended 27th December 2008, declines to ten months low of 5.91%. Inflation rate has been dropped for ninth consecutive weeks and stood at 6.38% in the previous week and 3.74% in the corresponding week of 2007. The primary articles group in the WPI declined by 50 basis points from the previous week while manufactured products group declined by 30 basis points.

However, the previous low was reported at 5.69% for the week ended 23 February 2008. The index of food articles group declined by 0.7% as prices of jowar fell by 5%, fruits and vegetables by 3%, eggs and bajra by 1% each.

In case of manufactured goods, imported edible oil became cheaper by 1% along with the polyester fibre by 2% and newsprint by 1%. During the week, the index of fuel remained unchanged and also there was no movement in the prices of cement and iron and steel.

IT And Automobile Sectors Found Difficult To Raise Funds - Jan 9, 2009

The sectors such as construction, IT and automobile, during the April-November period this fiscal found it difficult to raise funds from overseas on account of financial meltdown, says a study.

The External Commercial Borrowings (ECB) by the industry during April-November 2008 fell steeply by 35.74 per cent to USD 13.78 bn as compared to USD 21.45 bn in the same period of 200, the study by industry body Assocham said. The Construction, IT, steel, aviation and automobile sectors, which were among the top ECB raisers in the first eight months of 2007, have registered the steepest fall in the same period of 2008 as global liquidity pressure along with the recession in the developed countries and domestic demand slowdown took toll on the fund raising capacity of the Indian industry, it said. The study said, among the sectors that recorded maximum dip in ECBs in 2008 include construction (97.34), IT (95.5 per cent), steel (91.63 per cent), aviation (86 per cent), automobile and automobile components (78 per cent).

However, 36 sectors have recorded decline in ECBs out of the 51 sectors tracked by the study. The number of companies going for the offshore borrowing route has slipped by 19.5 per cent to 345 for the eight-month period as against 429 in the same period last fiscal.

Bond Prices Declined - Jan 8, 2009

Bond prices declined sharply after the announcement of the government''s additional borrowing programme of Rs 50,000 crore. The drop of more than Rs 5 in prices was more of an immediate reaction as the amount announced was more than expected, said the source. The RBI on Jan 6 announced the auction calendar for the period between January 5 and February 20.

This is over and above the original scheduled borrowing programme of the government. The bond market opened lower following this announcement. Later selling by banks to cut losses pulled down prices even more, during the day, said the dealer. Total traded volumes on the order matching system were lower at Rs 10,705 crore (Rs 15,860 crore). The 2018 benchmark security opened at Rs 119 (5.59 per cent YTM) and closed at Rs 116.75 (5.87 per cent YTM), against the previous close of Rs 121.3 (5.30 per cent YTM. It touched a low of Rs 115.15 (6.09 per cent YTM) during the day.

The 7.95 per cent 23-year 2032 paper opened at Rs 116 (6.60 per cent YTM) and closed at Rs 110.5 (7.03 per cent YTM) against the previous close of Rs 118.4 (6.42 per cent YTM. It touched a low of Rs 109.17 (7.14 per cent YTM) during the day.

Gold Rates Grew In American Market - Jan 8, 2009

The gold prices on Wednesday recovered by Rs 155 to Rs 13,465 per 10 gram in the bullion market here by snapping a four-day losing streak, as the traders and investors shifted their funds to bullion from the melting stock markets.

Gold, which had lost Rs 340 per 10 gram in the last four sessions, bounced back on revival of buying in line with a firm trend in the US markets last night. The gold in American markets grew to 865 dollar an ounce from 844 dollar.

The Sensex on Wednesday lost 749 points on panic selling after Satyam Computer said profit had been inflated for years, raising the concerns of dim third-quarter earnings by blue-chip companies.

The Standard gold and ornaments grew by Rs 155 each to Rs 13,465 and Rs 13,315 per 10 gram, respectively. On the other hand, the sovereign gained Rs 25 to Rs 10,750 per piece of eight gram. Similarly, the silver recorded a gain of Rs 210 at Rs 18,400 per kg and weekly-based delivery by Rs 260 to Rs 18,410 per kg. In line with this, the silver coins also traded higher by Rs 100 to Rs 27,000 for buying and Rs 27,100 for selling of 100 pieces.

Fall In Bond Prices - Jan 7, 2009

The bond prices on Jan 6 fell inthe volatile market as banks sold to take advantage of low yields, said dealers. The prices opened lower and moved downwards during the day. However, the total traded volumes were lower at Rs 15,860 crore (Rs 13,680 crore) on the order matching system. However, the 2018 benchmark security opened at Rs 122 (5.22 per cent YTM) and closed at Rs 121.3 (5.30 per cent YTM), as compared to the previous close of Rs 123.25 (5.07 per cent YTM). Apart from this, the 7.95 per cent 23-year 2032 paper opened at Rs 121.4 (6.21 per cent YTM) and closed at Rs 118.4 (6.42 per cent YTM).

Call Rates Closed At Lower - Jan 7, 2009

The call rates closed a tad lower at 4.15-4.30 per cent as compared to the close of 4.25-4.35 per cent. Despite the RBI slashing reverse repo rates by 100 basis points, the banks continued to park their funds in the reverse repo window. Under the first and second liquidity adjustment facility, there were no bids in the one-day repo auctions. However in the one-day reverse repo auction, RBI received and accepted 9 bids for Rs 5,375 crore. Under the second LAF, the RBI received and accepted 20 bids for Rs 53,985 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were no bids.

10 Million People Losses Job In The Export Sector - Jan 7, 2009

Less buyers for Indian goods in the international market which is struggling the worst crisis since 1929, will led job losses for ten million people in the export sector by March this year. There will be 10 million job losses by March, A Sakthivel, Federation of Indian Export Organisations (FIEO) President said in New Delhi on Jan 6.

Indian exports, which account for just about 20 per cent of the country''s Gross Domestic Product, employing 150 million people, are a highly labour-intensive activity. The country''s exports, which reported a healthy 30.9 per cent growth rate in the first half of fiscal, contracted by 12.1 per cent in October, for the first time in the last five years. The negative trend continued in November, when exports dropped to $11.5 billion from $12.7 billion. The data for December are yet to be released. FIEO yesterday said there was no serious consideration for exporters in the measures announced by the government last week. The target for the current fiscal is $200 billion while exports totaled about $160 billion in 2007-08. Europe and North America are suffering with recession and slowdown, which account for 37 per cent of India''s merchandise exports.