Bullion Metals Lose Some Luster - June 30, 2009

Precious metal prices fell at USA on Monday, 29 June, 2009. Prices fell today as the dollar fluctuated throughout the course of the day. The dollar traded higher against its counterparts earlier during the day but then fell. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Monday, gold for August delivery ended at $940.7, lower by $0.30 (0.03%) an ounce on the New York Mercantile Exchange. Earlier during the day, it hit a high of $943.2.

Last week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 7%.

For the month of June, 2009, gold is still down by 4% on a m-t-d basis. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Monday, Comex silver futures for July delivery fell 18.1 cents (1.3%) at $13.847 an ounce. Last week, silver ended lower by 0.5%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 28.2% this year. For 2008, silver had lost 24%.

In the currency market on Monday, the euro strengthened against the dollar. Earlier, the dollar was slightly higher after China' central bank governor ruled out any "sudden" changes to its foreign-exchange reserves.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 34 (0.23%) at Rs 14,609 per 10 grams.

Prices rose to a high of Rs 14,649 per 10 grams and fell to a low of Rs 14,553 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 253 (1.11%) lower at Rs 22,351/Kg. Prices opened at Rs 22,530/kg and fell to a low of Rs 22,252/Kg during the day's trading.

Govt Mulls Easing Of FDI Norms - June 30, 2009

The board that approves overseas investments has decided to allow the issue of warrants without board''s approval, which means saving of 40 to 60 days on deals in India. This will help to fast track the mergers and ease red tape. The government is looking to easing the process of selling stake and raising funds through the issue of warrants and partly paid shares. The finance ministry has decided that issue of warrants and partly paid up shares can go through the automatic route without the FIPB approval, which will help the foreign firms to save time in concluding their equity deals.

Besides this, the finance ministry has also plugged a major inconsistency in the policy. The Companies Act permits raising FDI through partly paid shares while the Foreign Exchange Management Act does not allow it. However, with an amendment in FEMA, now the RBI will also address this glitch.

Rupee Remained Unchanged On June In Range-Bound Market - June 30, 2009

The rupee was remained unchanged on June 29 in a range-bound market. The rupee opened at 48.06 and touched an intra-day high of 47.95. Later it weakened to touch an intra-day low of 48.26, before closing at 48.10, unchanged from the previous close. However, the month-end dollar demand from importers exerted pressure on the domestic currency.

In the overseas markets, the dollar strengthened against the euro and the pound initially but weakened sharply against the euro in the second half of trade.

However, it was flat against the yen and swiss franc. In the forward premia market, the six-month premium closed marginally up at 2.75 per cent (2.7 per cent) while the one-year closed at 2.45 per cent (2.4 per cent).

Dollar Weak Pushes Up Bullion Metals - June 29, 2009

Precious metal prices rose at USA on Friday, 26 June, 2009. Prices rose on Friday as the dollar index slipped for the second straight day. Dollar dropped on Friday as traders mulled over all time low interest rates in the US. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, gold for August delivery ended at $941, higher by $1.5 (0.2%) an ounce on the New York Mercantile Exchange.

Earlier during the day, it hit a high of $949. For the week, gold ended higher by 1%. This was the first weekly gain for the yellow metal in four weeks. Year to date, gold prices are higher by 8.2%.

For the month of June, 2009, gold is still down by 4% on a m-t-d basis. Gold had ended the month of May higher by 9.8%.

It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8.9%) since then.

On Friday, Comex silver futures for July delivery rose 12.3 cents (0.9%) at $14.128 an ounce. For the week, silver ended lower by 0.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 29.5% this year. For 2008, silver had lost 24%.

In the currency market on Friday, the dollar was under renewed pressure after China's central bank reiterated a call to lessen the currency's role as the world's reserve currency.

The dollar also slipped on speculation about global central banks' efforts to stabilize the economy that will boost demand for higher-yielding assets.

The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell almost 0.6%. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 28 (0.2%) at Rs 14,651 per 10 grams.

Prices rose to a high of Rs 14,783 per 10 grams and fell to a low of Rs 14,612 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 79 (0.35%) higher at Rs 22,570/Kg. Prices opened at Rs 22,514/kg and rose to a high of Rs 22,793/Kg during the day's trading.

Growth In Treasury In Addition To Give Up - June 29, 2009

The foreign currency assets grew by $10 million to $252.8 billion. Forex reserves grew by $ 8 million to $ 263.652 billion for the week ended June 19, as per the RBI's latest weekly statistical supplement. The total reserve comprises of foreign currencies, gold and special drawing rights with IMF. The gold and SDR reserves unchanged at $ 9.604 billion and $1 million respectively. The annual growth rate in reserve money was a mere 2% as on 19 June 2009 compared with 29.3% growth recorded last year.

The reserve money fell 1.8% from their previous week level and stood at Rs 950308 crore as on 19 June 2009.Bankers deposit with RBI, one of the major component of reserve money fell 26.9% as on 19 June 2009 compared with 55.4% growth recorded a year ago.

It recorded a negative growth of 24.9% in so far current financial year as against 8.9% decline in same period a year ago.

The annual growth rate of currency in circulation also decelerated to 14.8% as compared to 20.5% growth in a year ago.

In so far current financial year it move up 4.3% as against 6.2% increase in same period a year ago.

Net foreign exchange assets of RBI, one of the major sources of reserve money, recorded 5.7% fall on 19 June 2009 compared with 55.2% surged a year ago.

It decline 1.3% in so far current financial year compared with 8.4% increase in same period a year ago.

The Reserve bank has accepted 6 bids during the week ended 19 June 2009 under liquidity adjustment facilities.

Under the reverse repo auction, RBI has absorbed amount worth Rs 648700 crore at the cut of rate 3.25%. The weighted average rate of call money was below 4% indicating sound liquidity position.

The annual growth rate of money supply as on 20.2% as on 5 June 2009 compared with 21.7% last year.

However headline inflation is in red for two consecutive weeks. Inflation and bond yield have positive relationship.

However yield on most traded paper remain on elevated level due to the higher government borrowing.

PSU Pledge Transaction Expected Toward Gather Together - June 29, 2009

As per the rough estimates, an amount to the extent of Rs 45,000 to Rs 53,000 crore could be raised through stake sale in select central PSUs over the next year, if the proposals go through. The cumulative proceeds raised till date from the divestment programme from 1991 are only Rs 53,400 crore.

Last year, the UPA Government has sought to revive plans for the divestment of stake in government-owned companies was put on hold.

BSNL, which is lined up for divestment and at Rs 300-400 a share, the company''s total worth was pegged in the range of Rs 1,50,000 crore and Rs 2,00,000 crore ($31-42 billion), in a valuation exercise cited by the Telecom Minister last year.

This is much below the original expectations of $100 billion that was quoted earlier but it is realistic given the prevailing market valuations for its nearest rival, Bharti Airtel, which has a current market capitalisation of around Rs 1,54,000 crore.

However, BSNL, with 84 million mobile subscribers'' base and landline users, reported profit of Rs 3,009 crore on revenues of Rs 38,052 crore for 2007-08.

On the other hand, Coal India could raise Rs 8,500-10,000 crore for a stake sale of 10-per cent, if it manages to command a price earnings multiple of 9-11 on current earnings, which is normal for the mining companies.

Similarly, NHPC, RITES, Oil India and United Bank may bring in the range of Rs 6,100 crore-Rs 6,850 crore.

Further stake sales as well as fresh offers by PSUs like BHEL as well as Power Grid Corporation and Rural Electrification Corporation are also likely to bring in Rs 16,000 crore, based on their current market prices.

Foreign Institutional Investors Permitted To Invest In Govt Debt - June 27, 2009

SEBI has given its nod for 14 foreign institutional investors (FIIs) including Barclays Bank as well as BNP Paribas and Citicorp Investment Bank, to make an investment of Rs 10,000 crore in government debt. These FIIs will have to invest this amount within 45 days, otherwise other FIIs would be allowed to invest the amount, SEBI said in a release.

However, out of the 14, as many as eight FIIs including Bank of America Singapore as well as Barclays Bank PLc and its sub-account, Blackrock Investment Management (UK), BNP Paribas and Citicorp Investment Bank (Singapore) have been asked to invest Rs 950 crore each in the government securities.

Moreover, four sub-accounts of Kotak Mahindra (UK) Ltd have been permitted to inject Rs 250 crore each in the government securities (G-sec).

Standard Chartered Bank (Mauritius) Ltd has been allowed to make an investment of Rs 750 crore in government bonds while Rs 650 crore for JP Morgan Chase.

Fed Says Downturn Easing Inflation Not A Risk - June 27, 2009

The Federal Reserve on June 24 said that there is easing of recession but that the economy likely will remain weak and keep a lid on inflation. The Fed Chairman Ben Bernanke and his colleagues said that despite easing of the recession, the economy remains frail enough to keep inflation at bay.

The Fed held a key bank lending rate at a record low of between zero and 0.25 percent, and pledged again to keep it there for "an extended period". The Fed said that the inflation will remain "subdued for some time."

The Federal Reserve defuses the Wall Street''s concerns that the aggressive actions by Fed to revive the economy will spur inflation at later stage.

Moreover, Fed also decided to stay the course on existing programs intended to drive down the rates on mortgages and other consumer debt.

Instead, the central bank again kept the option open to making changes if economic conditions warrant.

The Fed in March launched a $1.2 trillion effort to lower the interest rates to revive the lending. Meanwhile, it said it would spend up to $300 billion to buy long-term government bonds over six months and boost its purchases of mortgage securities.

So far, the Fed has bought Treasury bonds of about $177.5 billion. However, the Fed is on track to purchase securities up to $1.25 trillion issued by Fannie Mae and Freddie Mac by the end of this year or early next year.

Govt Can Increase Remove Repair Tax Rates In Budget - June 27, 2009

According to the expectations of the Deloitte, the Indian government will increase excise duty and service tax in the upcoming Budget to harmonise them with the proposed Goods and Services tax, which is scheduled to be introduced from next fiscal. Deloitte is an international accounting and consulting firm.

The Government has slashed excise duty rates by six per cent and service tax by two per cent in three stimulus packages, which Deloitte expects to be partially rolled back.

"The Government may cut back indirect taxes reductions made as part of fiscal stimulus packages in December-February, as the Finance Minister is expected to discuss the roll out of GST and lay down a framework plan for the introduction of the tax in the country," Deloitte Touche Tohmatsu India Senior Director (Indirect Tax) M S Mani said.

He said the government is expected to give some directional clarity on the GST and service tax and excise duty rates could be increased to help transition to the proposed GST regime.

Precious Metals Add Further Shiny Surface - June 26, 2009

Precious metal prices rose at USA on Thursday, 25 June, 2009. Prices rose today as the dollar shed much of its earlier gains. Dollar gave up gains today after the initial jobless claims data in US checked in worse than expected. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $939.5, higher by $5.1 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 8%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Thursday, Comex silver futures for July delivery rose 9.5 cents (0.7%) at $14.005 an ounce. Last week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 28.6% this year. For 2008, silver had lost 24%.

The Labor Department reported on Thursday, 25 June, 2009 that first-time filings for state unemployment benefits rose unexpectedly in the week ended 20 June, 2009.

For the week ended 20 June, initial claims rose 15,000 to 627,000. This is the highest level since the week ended 16 May, 2009. The latest four-week moving average for initial claims fell 500 to stand at 617,250.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 66 (0.45%) at Rs 14,679 per 10 grams.

Prices rose to a high of Rs 14,705 per 10 grams and fell to a low of Rs 14,617 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 121 (0.54%) higher at Rs 22,491/Kg. Prices opened at Rs 22,372/kg and rose to a high of Rs 22,575/Kg during the day's trading.

Fiscal Deficit Target Would Be Present Around HDFC Bank Report - June 26, 2009

The Budget, which is to be unveiled in the first week of July may surprise with a fiscal deficit figure of around 5.5 per cent, HDFC Bank has said. We believe that the Budget will take a step towards fiscal consolidation and the fiscal deficit target will be in the neighborhood of 5.5 per cent against market expectations of 6-6.5 per cent, the bank said in its report.

The report also said that there are fears in the market of a high fiscal deficit on the back of opinion of continuing of the stimulus packages by the government to boost the growth.

The report said that the government''s net and gross borrowings was unlikely to be very different from the Rs 3,08,647 crore and Rs 3,61,782 crore figure announced earlier in the year.

Moreover, the bank predicted a roll-back (at least partially) of the indirect tax reductions announced in December 2008 and February 2009 as a part of the fiscal stimulus.

It also said that these along with the natural revenue buoyancy associated with economic recovery should keep the interim revenue target supported through FY''10.

CII Calls For Due Reforms For Promoting Industrial Growth - June 26, 2009

The Confederation of Indian Industry (CII) has called for tax reforms in order to reduce the complications and unproductive time spent by the industry in tax filing. CII has recommended for one rate of corporate tax rather than many cesses and surcharge. Moreover, it has also suggested the abolition of surcharge and cess levied on corporate tax.

"To reduce complications and unproductive time spent by industry in tax filing, it is more efficient to have one rate of corporate tax rather than many cesses and surcharge," CII said in a statement.

Moreover "A component of corporate tax can be set aside for supporting the education needs of the country, without having a separate levy.

In other words, the rates need to be collapsed into the single corporate tax rate," it added.

Besides this, CII also suggested that the rate of depreciation in case of plant and machinery be raised to 25% from 15% and allow full depreciation on assets that have limited life and small costs upto Rs25,000.

Moreover, CII has also recommended bringing ''Goodwill'' under the purview of intangible assets in order to be eligible for depreciation.

It has asked for the restoration of the depreciation rate applicable to hotel buildings to 20% from 10% currently.

Along with this, CII also called for ending the multiple taxation on dividend distribution by a corporate group and its subsidiary.

It recommended that dividends received from overseas entities in the form of convertible foreign exchange in India should be fully exempted.

Precious Metals Get Higher Additional - June 25, 2009

Precious metal prices rose at USA on Wednesday, 24 June, 2009 ahead of the Federal Reserve's afternoon monetary-policy statement. Traders mulled over the fact that Fed won't be able to move quickly enough to withdraw the trillions of dollars thrown at the financial system, which could lead to higher inflation. That would encourage more purchases of precious metals, an alternate source for investment. Prices rose today despite the strong dollar.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, gold for August delivery ended at $934.4, higher by $10.1 (1%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 7.5%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Wednesday, Comex silver futures for July delivery rose 7 cents (0.5%) at $13.91 an ounce. Last week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 27.2% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar rallied after the Federal Reserve left interest rates unchanged and said it will continue to buy Treasurys and other securities as previously announced.

The dollar index, which measures the strength of the dollar against a basket of six other currencies, rose as much as 0.8%.

Federal Reserve policy makers began a two-day meeting yesterday. The central bank has held its benchmark interest rate near zero since December. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 128 (0.88%) at Rs 14,613 per 10 grams. Prices rose to a high of Rs 14,823 per 10 grams and fell to a low of Rs 14,463 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 73 (0.32%) higher at Rs 22,631/Kg. Prices opened at Rs 22,304/kg and rose to a high of Rs 22,631/Kg during the day's trading.

Inflation Continue In Negative Zone For Second Week - June 25, 2009

The official Wholesale Price Index for all commodities for the week ended 13 June 2009 rose by 0.6% to 234.2 from 232.7 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at -1.14% for the week ended 13 June 2009 as compared to -1.61% for the previous week and 11.80% during the corresponding week of the previous year. All the major components of WPI recorded an increase from their previous week level.

The index of primary articles rose by 0.1% to 256.3 from 256.0 for the previous week. Index of food and non-food articles move up from their pervious week levels.

The index for food articles group rose by 0.2% to 251.2 from 250.8 for the previous week due to higher prices of tea and jowar (2% each) and arhar (1%).

However, the prices of bajra (4%) and eggs (2%) declined. While index for non-food articles group also rose marginally to 236.0 from 235.9 for the previous week due to higher prices of raw jute (2%) and raw silk and rape & mustard seed (1% each).

The index for fuel, power, light and lubricant rose by 0.4% to 327.5 from 326.2 for the previous week due to higher prices of aviation turbine fuel (12%), light diesel oil (10%), furnace oil (3%) and naphtha (1%).

The major driver of WPI index, manufactured product rose by 1.0% to 205.8 from 203.8 for the previous week.

The index for textiles, rubber and plastic products, chemicals and chemical products, transport equipment and parts rose from their previous week level.

The index for textiles group rose by 0.7 % to 142.7 from 141.7 for the previous week due to higher prices of other cotton yarn and cotton yarn-'hanks (2% each) and cotton yarn-cones and synthetic yarn (1% each).

The index for chemicals and chemical products group rose by 4.8 % to 228.2 from 217.7 for the previous week due to higher prices of capsules other than vitamin & antibiotics (58%) and liquid chlorine (1%).

However among manufactured product the index for food products, beverages tobacco and tobacco products, non-metallic mineral products, basic metals alloys and metal products, machinery and machine tools declined from their previous week levels.

Looking at the rise in all major indices of WPI, the plunge in WPI, only have a statistical significance.

The higher base has led to a fall in WPI. However in real terms the situation is quite different. The soaring food prices, have put pressure on the daily consumption basket, reflected in the rising CPI.

In addition to this the rise in CPI for May month is the highest in more in 13 years. It is the first time in more than a decade that consumer inflation in May has crossed the 10%-mark for the month.

Point to point rate of inflation based on the CPI-AL and CPI-RL increased from 9.09% in April 2009 to 10.21% during May 2009.

Surge in CPI neutralises the effect of lower WPI for end users and is adding stress on expansionary monetary policy as well.

The rise in CPI put ceiling on further softening of the key interest rate. In addition to this, lower monsoon forecast by India Meteorological Department (IMD) raised the concern for Kharif output.

IMD downgraded rainfall over the country as a whole in the month of July 2009 which is likely to be 93% compared with 96% of its Long period average (LPA) and that in the month of August is likely to be 101% of LPA both with a model error of ± 9 %.

The dismal expectation about the monsoon adversely affects the production of major crops like paddy, jawar, maize, groundnut, sugarcane, cotton, and soyabean.

The worsen output of all these factors led to increase in the price level of agri products, which will push WPI and CPI index on elevated level.

Fiscal Deficit For April Reaches 16 Per Cent Of Govt Estimate - June 25, 2009

The excise collections for April have been badly hit that resulting the fiscal deficit touching 16 per cent of target in the very first month itself. The fiscal deficit in April grew to Rs 54,100 crore or 16.3% of the projected deficit for the entire year on the back of accelerated public spending as well as a sharp fall in the revenue collection, data released by the Controller General of Accounts on Tuesday shows.

The net collections of excise turned negative at Rs 78 crore in April, according to figures released by the Controller General of Accounts. This means that refunds were more than collections.

However, only the income tax collections stood higher in April, 2009 at Rs 9,849 crore against Rs 7,905 crore a year ago.

While the service tax collections were also marginally down at Rs 2,270 crore as against Rs 2,271 crore.

All of these along with higher expenditure results in fiscal deficit of Rs 54,100 crore in April, which is 16.3 per cent of the targeted Rs 3,32,835 crore for the entire fiscal.

In the interim budget for 2009-10, the fiscal deficit is projected to be 5.5 per cent of GDP. The Fiscal deficit in April 2008 was 24.7 per cent of the projected figure for the entire 2008-09.

However, at a later stage, the deficit figure was revised to much higher six per cent when the stimulus packages were announced.

At last, the fiscal deficit turned out to be 6.2 per cent of GDP last fiscal. In absolute terms, fiscal deficit was over Rs 20,000 crore more than April last year.

Moreover, the Centre''s revenue deficit touched Rs 50,359 crore in April about 21 per cent of what is pegged by the government for the entire fiscal.

Precious Metals Position Exposed - June 24, 2009

Precious metals registered modest gains at USA on Tuesday, 23 June, 2009. The weak dollar increased the appeal of precious metals as a hedge against inflation thereby pulling their prices up. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, gold for August delivery ended at $924.3, higher by $3.3 (0.3%) an ounce on the New York Mercantile Exchange.

During intra day trading, it earlier rose as high as $927.30 and dropped to a low of $913.20. Last week, gold ended lower by 0.5%. Year to date, gold prices are higher by 6.5%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Tuesday, Comex silver futures for July delivery rose 14 cents (1%) at $13.85 an ounce. Last week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 26.7% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which measures the strength of the dollar against a basket of six other currencies, fell as much as 1.3%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 23 (0.15%) at Rs 14,485 per 10 grams. Prices rose to a high of Rs 14,510 per 10 grams and fell to a low of Rs 14,410 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 35 (0.15%) higher at Rs 22,297/Kg. Prices opened at Rs 22,215/kg and fell to a low of Rs 22,074/Kg during the day's trading.

Gold Declines Additional On Weak Global Advices - June 24, 2009

The gold prices fell further by Rs 45 per 10 grams to Rs 14,485 on the bullion market here on Tuesday. The silver also followed the same trend and dropped due to lack of demand from the industrial users following weak global cues. The gold futures retreated in New York to the lowest level in near six weeks, as falling oil prices and a stronger dollar reduced the appeal of gold as a hedge against inflation.

On the Comex Division of the New York Mercantile Exchange, the gold August delivery slipped by $15.20 to close at $921 an ounce.

The July silver also sank 49.7 cents to $13.703 an ounce. In the domestic market, the standard gold (99.5 purity) fell by Rs 45 per ten grams to Rs 14,485.

The pure gold (99.9 purity) also fell with a similar margin of Rs 45 per 10 grams to Rs 14,550 as against Rs 14,595 previously.

The silver ready (.999 fineness) dipped by Rs 100 per kilo to Rs 22,550 as against Rs 22,650 yesterday.

Rupee Ends 4 Paise Up And About At 48.56 - June 24, 2009

The rupee bounced back from its early lows and closed dearer by four paise at 48.56/57 against the US dollar on Tuesday. After touching a five-week low of 48.94/95 against the dollar in the early trade, the rupee later traded in line with the equity market, rebounding to 48.50 level during afternoon trade. The rupee resumed weak at 48.85/86 a dollar against its previous close of 48.60/61 a dollar.

According to the provisional figures, the FIIs also were net sellers in equity on June 22. The forex dealers said that the rupee drew support as the dollar turned weak against the major world currencies during the day.

The Reserve Bank of India fixed the reference rate for the US dollar at Rs 48.91 and for the euro at Rs 67.75. The rupee premiums on the forward dollar eased on sustained receiving by exporters.

The benchmark six-month forward dollar premium payable in November closed at 58-60 paise, down from 59-61 paise on Monday and the far-forwards maturing in May also ended lower at 109-111 paise from 110-112 paise previously.

India Inc Overseas Borrowing Increases 65 Per Cent In May - June 23, 2009

The overseas borrowings by India Inc grew by 65 per cent to $494 million in May compared to the previous month. The total overseas loans raised by 35 companies through external commercial borrowings (ECBs) as well as foreign currency convertible bonds (FCCB) shot up to $494 million in May from $298 million in April, an RBI release here today said.

Out of the total overseas borrowings, $326 million was raised through automatic route while $167 million was raised through approval route.

As per the ECB data for May most of the companies raised overseas funds for capital goods'' import as well as modernisation and overseas acquisition among other things.

Bhushan Steel raised $20 million for rupee expenditure while Bajaj Hindustan raised the similar amount for buyback of foreign currency convertible bonds.

Moreover, Suzlon Energy raised over $61 million under the approval route for buy back of its FCCB while Bharat Petroleum Corp raised $25 million in the month.

Rupee Split Ends By The Side Of One-Month Low - June 23, 2009

The rupee closed at more than a one month low at 48.60/61 against the dollar due to persistent capital outflows on the back of weak equity markets coupled with a stronger US currency in overseas markets. At the Interbank Foreign Exchange (Forex) market, the rupee resumed lower at Rs 48.13/14 per dollar and dropped further to close at Rs 48.60/61 as against last weekend''s level of Rs 48.08/09, showing a net loss of 52 paise.

The rupee during the day hovered in a range of 48.66 per dollar and 48.13 per dollar. The Reserve Bank of India fixed the reference rate for the US dollar at Rs 48.39 while for the euro at Rs 67.09.

The rupee premiums on the forward dollar closed lower. The benchmark six-month forward dollar premium payable in November closed at 59-61 paise, down from 60-1/2-62-1/2 paise on last Friday and the far-forwards maturing in May also finished lower at 110-112 paise as against 111-1/2-113-1/2 paise previously.

In cross-currency trade, the rupee continued to fall against the pound sterling to close at Rs 79.84/86 as against last weekend''s level of 79.00/02 and it reacted downwards against the euro to Rs 67.27/29 from its previous closing level of Rs 66.98/67.00 per euro.

Moreover, it also fell against the Japanese yen to Rs 50.67/69 per 100 yen from the last week''s level of Rs 49.66/68 per 100 yen.

India Pays Penalty For Not Using Loans From Agencies - June 23, 2009

According to an internal assessment of the finance ministry, many of its past projects are running far behind schedule to the extent that the government has been paying commitment charges of several hundred crores every year. At the same time India is negotiating more loans from the World Bank to fund infrastructure development and to upgrade urban transport.

India paid Rs 240 crore as commitment charges for the nondisbursed portion of sanctioned loans to World Bank and other multilateral agencies such as Asian Development Bank (ADB) and some bilateral donors in 2007-08 and 2008-09 alone.

In the five years between 2004-05 and 2008-09, the government paid around Rs 700 crore as commitment charges.

An approximation of such expenditure since 1991 puts the figure above Rs 1,400 crore.

According to the finance ministry sources, till last year, there were 231 externally aided projects of which more than 40% were paying commitment charges.

In addition, review of the ADB portfolio showed undisbursed loan amount increased from $850 million in 1999 to $3.5 billion at the end of 2006.

Fiscal Shortage Force Not Exist In Two Times Digits - June 22, 2009

The Planning Commission said the fiscal deficit will be high but not in "double digits". The Planning Commission stated in order to pacify the fears of banks that high government borrowing would not allow interest rates to come down. "Bankers are always concerned about the size of the government''s borrowing. Because it is very large, many of them think that the interest rate on government debt will rise and they would rather retain liquidity now in order to invest in high-yielding government bonds," Planning Commission Deputy Chairman Montek Singh Ahluwalia said.

However, he directed bankers to wait, as it is not known that what the government borrowing would be till the Budget and added that "I feel it will be possible to accommodate a reasonable fiscal deficit".

Monsoon Revives Past Two-Week: India Meteorological Department - June 22, 2009

The weather department said today, 22 June 2009 the south-west monsoon, which had been stalled since 7 June 2009, revived on 21 June 2009 and is likely to cover more parts of Maharashtra, Karnataka and Andhra Pradesh, The revived monsoon may cover Maharashtra and Madhya Pradesh by the first week of July 2009.

The India Meteorological Department (IMD) said on its website that conditions are favourable for further advance of the monsoon over some parts of the Maharashtra including Mumbai, remaining parts of Karnataka and some more parts of Andhra Pradesh during next few days.

Earlier on 18 June 2009 India Meteorological Department IMD said that monsoon rainfall during the first two weeks of June 2009 was 45% below the normal at 39.5 milimetres.

Precious Metals Closing Stages Mixed - June 22, 2009

Precious metal, gold, ended little higher on Friday, 19 June, 2009. The relatively weak dollar pushed its price up. But despite the marginal gain, bullion metals incurred weekly loses. But silver fell for the day. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, gold for August delivery ended at $936.2, higher by $1.6 (0.2%) an ounce on the New York Mercantile Exchange. For the week, gold ended lower by 0.5%. Year to date, gold prices are higher by 7.8%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Friday, Comex silver futures for July delivery fell 4 cents (0.3%) at $14.20 an ounce. For the week, silver ended lower by 4.5%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 29.2% this year. For 2008, silver had lost 24%.

In the currency market on Friday, the dollar lost ground as gaining global equity markets pointed to a rise in investors' risk appetite.

The greenback has tended to lose ground as investors shift away from perceived safe-haven assets.

The dollar index, which measures the strength of the dollar against a basket of six other currencies, fell by more than 0.4%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Inflation In Negative Zone At 1.61 Per Cent - June 20, 2009

Inflation has been week on week hovering around sub zero level and finally it has entered into negative zone. Inflation has dipped to negative for the first time since 1976-77, thanks to the higher base effect. The WPI based inflation recorded a fall of 1.1% in 1975-76 (base year being 1970-71=100). The substantial fall in inflation which continuing from August 2008 has become powerless to cheer up the end users due to the growth in food inflation. Rising cost of food articles has become the worrisome for the end users.

The official Wholesale Price Index for all commodities for the week ended 6 June 2009 rose by 0.04 % to 232.7 from 232.6 for the previous week.

The annual rate of inflation, calculated on point to point basis, stood at -1.61 % for the week ended 6 June 2009 as compared to 0.13 % for the previous week and 11.66 % during the corresponding week of the previous year.

The index for primary articles declined 0.7% on fall in food article index. The index for food articles group declined by 1.2 % to 250.8 from 253.9 for the previous week due to lower prices of fruits and vegetables (7%), fish-marine (2%) and urad and gram (1% each).

However, the prices of arhar (7%), jowar and eggs (3% each), masur and maize (2% each) and moong, mutton, ragi, condiments & spices and bajra (1% each) moved up.

However on year on year basis the index of primary articles moved up 6% while food articles also grew up by 9%. The yearly growth in these index has been reflected in higher CPI numbers.

The index of fuel, power, light and lubricants rose by 0.7 %to 326.2 from 324.0 for the previous week due to higher prices of furnace oil and naphtha (7% each) and light diesel oil (4%). However, the prices of bitumen (3%) declined.

One of the major index in India's WPI basket, that is manufactured product rose by 0.1 % to 203.8 from 203.5 for the previous week.

The all-major contributors like food product, textile group, rubber and plastic product, basic metals and alloys index move up from their previous week level.

The index for textiles group rose by 0.2 % to 141.7 from 141.4 for the previous week due to higher prices of polyester staple fibre (3%) and hessian cloth (1%).

The index for basic metals alloys and metal products group rose marginally to 255.4 from 255.3 for the previous week due to higher prices of lead ingots (4%) and foundry pig iron and basic pig iron (1% each).

The hike in minimum support price, growing demand for oilseed, decline in food credit by commercial bank led to increase in a food prices.

In addition to this delay of monsoon craft an anxiety about the kharip agricultural food production.

If the output fails to achieve the predictable level of production then fear of price rise will escalate.

The constant fall in inflation give additional room for expansionary monetary policy action. However decline in WPI is not the only sole factor for softening key interest rate.

The other factors like liquidity condition, revival in consumer demand, elevated level of CPI also needs to be considered while commenting on general economy outlook.

In addition to this recovery in global commodity prices especially in crude oil create fear of price rise. The negative inflation is short lived looking at the strong domestic consumption demand which can drive growth and thus inflation remaining below sub zero levels is unsustainable for a longer period.

Negative inflation numbers are adding stress on interest rate to move southwards. Recent inflation numbers will change the direction of interest rate in India.

Dull Trades In Gold After A Choppy Week - June 20, 2009

The Friday dullness trapped the commodity markets today with the equities also having a thin trading activity. Today the MCX benchmark contract traded in the range of Rs 14560 – 14507 per 10 grams. A move above Rs 14565 mark take it towards 14611 levels and the traders may take a long position.

COMEX Gold futures also surged in the mid London trades today, up $ 2.7 at $ 937.3 per ounce. There are no data releases from US tonight and the movement may continue to be sluggish in the floor session.

Weekly Roundup: This week gold futures got consolidated in a thin range, and it may end on a flat note. Over the week so far gold has fallen nearly $ 7 to $934 an ounce levels.

The US dollar appreciated by 0.5% versus the single currency, however it slipped against the Japanese Yen by more than 1.5% to 96.78.

Yen got additional boost this week on positive assessment of economy. Oil futures remained net loses and fell nearly 2% to $71.5 levels so far in this week.

Over all the week was quite choppy with yen rallying, equities in a mixed mood, moderate gains in US dollar, range bound activity in the oil futures

MCX August Gold futures may end this week on positive note knowing the losses the Indian Rupee this week.

So far the week the counter has gained more than Rs 60 to nearly Rs 14550 levels. The INR weakened by 1.5% to 48.13 against the US dollar this week, thereby increasing demand for the Rupee denominated assets.

Correction Expected: Next week we expect some more correction in gold if the COMEX Gold August contract is unable to break the $950 mark with the supports around $925 and $ 900 levels.

On the same lines the MCX August contract fails to break the Rs 14790-820 levels it may fall to Rs 14450 and 14300 levels.

There is barrage of economic data releases next week, week starts with German import prices and Ifo business climate index on Monday, Tuesday gets Euro Zone consumer spending, manufacturing and services PMI, existing home sales from US, on Wednesday there are US durable goods order, new home sales, UK's inflation report hearing, and FOMC statement and the rate decision, Thursday brings industrial orders from Europe, final GDP number from US, and the week ends with German CPI numbers, US PCE price index, personal spending, consumer sentiments and inflation expectations.

Rupee Snaps One-Week Losing Strip - June 20, 2009

Snapping its one-week losing streak, the Indian rupee gained by 11 paise to 48.08/09 against the dollar on expectations of fresh capital inflow from foreign funds in equity markets and a slight weakness in the US currency overseas. Rupee closed at Rs 48.08/09 against yesterday's close of Rs 48.19/20 per dollar, showing a net gain of eleven paise.

The rupee hovered in a range of Rs 48.27 per dollar and Rs 48.07 per dollar during the day. It had dropped by 95 paise or 2.01% in the last seven days.

Worthless Metals Closing Stages Small Junior - June 19, 2009

Precious metal ended little lower on Thursday, 18 June, 2009. Encouraging batch of economic reports hinting at a possible recovery of the US economy in the near term decreased the appeal of precious metals as a hedge against inflation. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, gold for August delivery ended at $934.5, lower by $1.4 (0.1%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 2.3%. Year to date, gold prices are higher by 8%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months.

Before this, gold had suffered losses in prior two months. For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Thursday, Comex silver futures for July delivery fell 4 cents (0.3%) at $14.24 an ounce. Last week, silver ended lower by 3.3%.

For the month of May, silver gained 26.6%. It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 29.5% this year. For 2008, silver had lost 24%.

The Labor Department reported on Thursday, 18 June, 2009 that continuing U.S. jobless claims took a big drop in the latest week that ended on 6 June, 2009, in a sign that fewer people are having trouble finding employment.

Continuing claims fell by 148,000 to 6.68 million during the week ended 6 June, the lowest level in about a month. The four-week average of continuing claims rose, however, by 2,250 to 6.75 million.

Separately, the Conference Board said on Thursday that the recession is "losing steam" and a slow U.S. recovery should begin by the end of the year.

The Board announced that the index of leading economic indicators rose 1.2% in May, the second straight increase.

The leading index is up 1.2% in the past six months, the first increase since April 2007. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 24 (0.16%) at Rs 14,534 per 10 grams.

Prices rose to a high of Rs 14,640 per 10 grams and fell to a low of Rs 14,515 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 19 (0.08%) lower at Rs 22,713/Kg. Prices opened at Rs 22,755/kg and fell to a low of Rs 22,617/Kg during the day's trading.

Bonds Rise Taking Place G-Secs Purchase - June 19, 2009

The bond prices shot up on June 18 after the announcement of auction cut-offs by the Reserve Bank of India (RBI) for the buyback, which were more than market expectations. The RBI bought back government securities of around Rs 4,600 crore at prices that exceeded the market expectations, said a dealer with a private bank.

The total traded volumes on the order matching system were lower at Rs 9,005 crore (Rs 10,585 crore).

The 6.07 per cent-5 year-2014 paper opened at Rs 97.65 (6.64 per cent YTM) and shot up to touch an intra-day high of Rs 97.87(6.58 per cent YTM).

It closed at Rs 97.83 (6.59 per cent YTM), against the previous close of Rs 97.75 (6.61 per cent YTM).

Moreover, the 7.59 per cent-9 year-2016 paper opened at Rs 103.73 (6.89 per cent YTM) and closed at Rs 104.05 (6.83 per cent YTM).

FDI Inflows Bound At Home April - June 19, 2009

The FDI witnessed a surge in April this year, just a little less than April last year, after a huge fall in March and February. The FDI shot up by 19.3 per cent to $2.34 billion in April 09 as against $1.96 billion in March 09, while at $3.74 billion in April 08 with the manufacturing sector leading from the front.

According to Ajay Shankar, secretary of DIPP, all kinds of manufacturing sectors including the real estate is seeing a return of investment from the foreign countries.

Infact after some months of a slowdown, India has again emerged as a very attractive destination for foreign investors.

However, the experts feels that this boom may last for a few months translating into growth for the manufacturing industries and bring much needed relief for the cash strapped companies, which automatically results better industrial growth.

Meanwhile, the government expects that the inflows of FDI will be slightly better as compared to the last year.

Gold Firms Up Going On Higher Global Cues - June 18, 2009

The gold prices strengthened on the bullion market on June 17 on the back of persistent local demand amidst higher global advices. While on the other hand, the silver dipped further in the absence of demand from industrial users. The Gold futures in New York firmed up for the first session due to the weakening of dollar following U.S. economic data, increasing gold''s investment appeal.

On the Comex division of the New York Mercantile Exchange, August gold gained by $4.70 to close at $932.20 an ounce. The June also gained by $4.00 to $931.60 an ounce.

Moreover, in the domestic market, the standard gold (99.5 purity) shot up by Rs 20 per ten grams to Rs 14,490 from previous closing level of Rs 14,470.

The pure gold (99.9 purity) also grew by Rs 40 per ten grams to Rs 14,555 as against Rs 14,515 yesterday.

While, the silver ready (.999 fineness) dipped further by Rs 55 per kilo to Rs 22,675 from previous Rs 22,730.

Govt May Announce More Fiscal Measures In Budget - June 18, 2009

In the forthcoming union budget which is scheduled to be announced on July 6, 2009, it is expected that the government may announce more fiscal stimulus measures as the sustained recovery in the economy would require improvement in manufacturing sector as well as the revival in domestic demand, research firm Dun & Bradstreet said.

Regarding the interest rate, the research firm said that the RBI policy rates are already at low level and given some potential inflationary threats, RBI is unlikely to lower the policy interest rates in the near term.

Hence, it said that the government and RBI are likely to use the moral suasion as a tool to induce the banks to slash BPLR.

In order to give a boost to the slowing economy, the government came out with three stimulus packages in December as well as January and in the interim Budget by reducing tax and providing incentives to various sectors.

Meanwhile, RBI also took monetary easing measures since October by infusing more than Rs 4 lakh crore into the system. Further D&B said that the resilient growth rate during fourth quarter of the last fiscal as well as rebound in the industrial production provide a ray of hope for recovery in second of current fiscal.

The Indian economy advanced by 5.8 per cent in the last quarter of 2008-09 while on the other hand, the industrial growth turned positive for April at 1.4 per cent.

Moreover, it said that the inflow of foreign fund are expected to resume, providing some support to the domestic investment as well as industrial activity going forward.

SBI Financial Sector Bucks Downturn Pays More Tax - June 18, 2009

The banks have clearly bucked the downturn and paid more advance tax in the June 15 installment. State Bank of India (SBI) has displaced ONGC to become the leading advance taxpayer in the country for the June 15 instalment, which is the first for fiscal 2009-10. SBI paid Rs 1,068 crore of advance tax that representing a growth of 61.09 per cent over the Rs 663 crore paid for the same instalment last year.

Moreover on a sectoral basis, the advance tax payout of the auto sector for the June 15 instalment has been flat. Maruti Udyog paid Rs 92 crore as advance tax as aginat Rs 95 crore last year followed by Tata Motors paid Rs 30 crore (Rs 30 crore), and Bajaj Auto Rs 50 crore (Rs 50 crore).

However, from the FMCG sector-Hindustan Unilever (Rs 75 crore as against Rs 60 crore) and ITC (Rs 220 crore as against Rs 179 crore). From the telecom sector, BSNL paid Rs 135 crore as advance tax which was much lower than the Rs 312 crore paid last June while Bharti Airtel forked out Rs 100 crore (Rs 72 crore).

From the petroleum sector, Indian Oil Corporation (IOC) and HPCL have this time round paid advance tax of Rs 130 crore and Rs 15 crore respectively. Last year, these two companies did not make any payment for the June 15 instalment.

From the steel sectors SAIL and Tata Steel paid lower advance tax for the June 15 instalment on a year-on-year basis.

Bank Credit Up 15 Per Cent On Year On June 2009 - RBI - June 17, 2009

Reserve Bank of India (RBI) loans grew about 15.1 per cent to Rs 28,39,203 crore in the week to 5 June 2009, from Rs 24,66,762 crore a year earlier, according to provisional data released by the Reserve Bank of India (RBI) on Wednesday, 17 June 2009. Food credit rose 20 per cent in the week to 5 June 2009, to Rs 59,108 crore from Rs 49,237 crore last year, central bank data showed.

The Reserve Bank of India (RBI) will release the final loan figures on Friday, 19 June 2009. Indian bank loans rose 15.9 per cent on year as on 22 May 2009, the Reserve Bank of India (RBI) said on 5 June 2009.

Precious Metals Make Progress Starting Three Week Lows - June 17, 2009

Precious metal prices rose from their three week low levels on Tuesday, 16 June, 2009. They rose as the dollar weakened in the wake of producer price index report in the US. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, gold for August delivery ended at $932.2, higher by $4.7 (0.5%) an ounce on the New York Mercantile Exchange. Last week, gold ended higher by 2.3%. Year to date, gold prices are higher by 7.6%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (10%) since then.

On Tuesday, Comex silver futures for July delivery rose 10 cents (0.7%) at $14.13 an ounce. Last week, silver ended lower by 3.3%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 28.7% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar index, which weighs the strength of dollar against the basket of six other currencies, slipped today.

The dollar fell against the euro and the Japanese yen after the Labor Department reported the producer price index, tracking inflation at the wholesale level, rose less in May than had been expected.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 37 (0.25%) at Rs 14,440 per 10 grams.

Prices rose to a high of Rs 14,498 per 10 grams and fell to a low of Rs 14,406 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 45 (0.2%) higher at Rs 22,569/Kg. Prices opened at Rs 22,579/kg and rose to a high of Rs 22,837/Kg during the day's trading.

Rupee Split Ends Lower By The Side Of 47.74 - June 17, 2009

The Indian rupee recovered part of its early losses but still closed weaker by four paise at 47.74/75 against the US dollar on Tuesday amid a bounce-back in local stocks and the dollar''s retreat overseas. The rupee touched the intra-day low of 47.96 on the back of fall in the equity markets sharply in early trade, inducing fears of capital outflows.

At the Interbank Foreign Exchange (forex) market, the rupee moved in a range of 47.71 and 47.96 in the day after resuming lower at 47.95/96 a dollar against its previous close of 47.70/72 a dollar.

The Reserve Bank of India fixed the reference rate for the US dollar at Rs 47.76 while for euro at Rs 66.13.

Moreover, the benchmark six-month forward dollar premium payable in November shot up to 63-65 paise from 61-1/2-63-1/2 paise on Monday and the far-forwards maturing in May also closed higher at 112-1/2-114-1/2 paise from 109-111 paise previously.

CII Demands Removal Of Tax Barriers For Financial Sector - June 16, 2009

New Delhi: Keeping in mind the investment focused budget for 2009-10, which is to be presented by the Finance Minister on July 6, 2009, the industry body CII has asked the government to do away with various tax barriers for the financial sector. CII has also sought to bring in private sector banks at par with their peers in the public sector in terms of tax benefits provided during their merger.

Moreover, CII has asked the government to allow tax deduction for provisions made for NPAs of the banks and NBFCs.

It further said that the derivative trading activities undertaken by banks as well as financial institutions should be treated at par with other business activities for the purpose of Income Tax Act.

Besides this, CII has recommended that the investor’s income, who engages a professional discretionary portfolio manager registered with SEBI should be booked as capital gains and not the income from business.

Along with this, it recommends that the banks be granted TDS exemption in order to reduce the voluminous forms processing by the IT department and ensuring that the tax benefit is received by banks inspite of non receipt of TDS certificates from its borrowers/customers.

India Inc Calls For Investment-Oriented Budget - June 16, 2009

New Delhi: In the forth coming Union Budget, which is scheduled on July 6, 2009, India Inc has asked for an investment-oriented Budget, besides demanding a cut in the direct tax rates for boosting the economy. In the pre budget consultations with the Finance Minister Pranab Mukherjee, the industry leaders also sought fringe benefit tax removal and also demanded the raising of fund through disinvestment.

"We talked about reducing corporate tax rates a bit... we also talked about bringing down personal income tax rates, if possible. We suggested that income tax exemption limit be raised from Rs 1.5 lakh to Rs 2.5 lakh or Rs 3 lakhs," FICCI President Harshpati Singhania said.

On the other hand, CII President Venu Srinivasan asked the government to print more currency notes to finance the fiscal deficit.

He also said current borrowings, pegged at Rs 3.6 lakh crore should be monetised, so that private investment is not crowded out, and interest rates do not keep increasing.

What we need is significant investment in infrastructure. Money should be raised through disinvestment.

Rupee Cheaper By 9 Paise Ends At 47.70 - June 16, 2009

The rupee ended at 47.70/72 against the dollar after paring its early losses, cheaper by nine paise from its previous close due to fears of capital outflows as well as stronger US currency overseas. In active trade, the rupee resumed lower at 47.68/70 a dollar as against its last close of 47.61/62 a dollar. However, it later moved irregularly in a range of 47.68 and 48.00.

The US dollar surged ahead against major world currencies in Tokyo as the group of eight finance ministers met to discuss strategies to unwind policy measures taken in response to the economic crisis.

The Reserve Bank of India fixed the reference rate for the US dollar at Rs 47.94 and for the euro at Rs 66.60.

The benchmark six-month forward dollar premium payable in November eased further to 61-1/2-63-1/2 paise as against 63-65 paise on last Friday while the far-forwards maturing in May closed unchanged at 109-111 paise.

In cross-currency trade, the Indian rupee shot up against the pound sterling and the euro while declined against the Japanese yen.

Moreover, the rupee was up against the pound sterling to close at Rs 78.01/03 as against last close of Rs 78.10/12.

Also it firmed against the euro to Rs 66.09/11 from its previous close of Rs 66.63/65. However, the rupee eased against the Japanese yen to Rs 48.52/54 per 100 yen from its last close of Rs 48.48/50 per 100 yen.

Gold Continues To Decline On Lower Global Cues - June 15, 2009

The gold prices continued to losing trend for the third consecutive day on the bullion market in Mumbai on Saturday backed by the lack of local demand coupled with persistent stockists offerings in view of further fall in global markets. The silver also followed the same trend as it moved down further due to poor industrial buying enquiries on the back of lower overseas advices.

The Gold futures fell in New York to its lowest levels in more than three weeks as the US Dollar rose ahead of a meeting of Group of Eight finance ministers.

The Gold for August delivery dropped by $21.30 or 2.2 per cent to $940.70 an ounce on the Comex Division of the New York Mercantile Exchange.

The June contract also slipped to $940.10 an ounce. The silver for July lost by 61.8 cents or four per cent to $14.875 an ounce.

In the domestic market, the standard gold (99.5 purity) fell further by Rs 125 per ten grams to Rs 14,490 from Rs 14,615 on June 5.

The pure gold (99.9 purity) also dropped by Rs 130 per ten grams to Rs 14,555 from Rs 14,685 previously. The Silver ready (.999 fineness) fell by Rs 60 per kilo to Rs 23,190 from Rs 23,250.

Finmin Comes Out With Mandatory Delisting Norms - June 15, 2009

The government on Friday gave a green signal to the bourses to deregister any firm that has incurred losses for the three consecutive years and has negative networth, subject to certain conditions. The finance ministry said in a notification that any recognised stock exchange can delist the securities if the securities trading remained suspended for more than six months.

However, the ministry also said that for delisting the securities, the company must have been listed for three years and the deregistering has to be approved by two-third public shareholders.

Moreover, the statement also added that if any companies’ scrips have remained infrequently traded during the preceding three years, then too the stock exchange can delist it.

Meanwhile SEBI on Thursday issued guidelines for voluntary delisting and made it tougher for the companies to delist their shares until they get the non-promoters’ approval at least two times the number of votes cast against it.

Strong Dollar Push Precious Metals Lower - June 15, 2009

Precious metal prices went down on Friday, 12 June, 2009. They fell as the dollar strengthened against the euro mainly ahead of the meeting of the Finance ministers from the Group of Eight industrial nations thereby decreasing their appeal as a hedge against inflation. Nevertheless, gold registered weekly gains but silver incurred loss.

Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Friday, Comex Gold for August delivery ended at $940.7, lower by $21.3 (2.2%) an ounce on the New York Mercantile Exchange. For the week, gold ended higher by 2.3%. Year to date, gold prices are higher by 8.6%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (9%) since then.

On Friday, Comex silver futures for July delivery fell 61.8 cents (4%) at $14.875 an ounce. For the week, silver ended lower by 3.3%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 33.7% this year. For 2008, silver had lost 24%.

In the currency market on Friday, the dollar index, which weighs the strength of dollar against the basket of six other currencies, went up by 0.9%.

Finance ministers from the Group of Eight industrial nations convened on Friday and Saturday in Italy as they attempted to lay groundwork for the meeting of G8 heads of state at their summit scheduled for next month.

The dollar was higher against most of its rivals, with the euro down 0.5%. In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

Gold Drops Additional On Stockists Donations - June 13, 2009

Gold prices eased further for the second consecutive day on the bullion market on Friday on persistent stockists offerings on the back of fall in the global markets.Silver also eased further on poor industrial buying. Gold prices declined for a third day in London as a stronger dollar reduced demand for the metal as an alternative investment. Gold for immediate delivery lost $4.39 an ounce to $949.56 in the early trade.

August gold futures slipped to USD950.30 an ounce in the comex division of the New York Mercantile Exchange. Silver for immediate delivery in London lost to $15.14 an ounce.

In the local market, standard gold (99.5 purity) declined further by Rs 30 per ten grams to Rs 14,615 from Rs 14,645 previously.

Pure gold (99.9 purity) also moved down by Rs 25 per ten grams to Rs 14,685 from Rs 14,710 yesterday. Silver ready (.999 fineness) softened by Rs 25 per kilo to Rs 23,250 from Rs 23,275 previously.

Bond Prices Increase - June 13, 2009

Bond prices went up on expectations that the upcoming auctions of government securities would be for Rs 12,000 crore instead of Rs 15,000 crore. In the last few auctions, the amounts were higher than previously announced. Easing of US treasury yields also helped the domestic bond market. The total traded volumes on the order matching system were higher at Rs 9,885 crore (Rs 5,055 crore).

The most highly traded paper was 6.07 per cent-5-year-2014, which was auctioned on Thursday. It opened at Rs 99.67 (6.15 per cent YTM) and closed at Rs 97.55 (6.66 per cent YTM).

The second most actively traded 7.59 per cent-7 year-2016 paper opened at Rs 103.3 (6.97 per cent YTM) and closed at Rs 103.61 (6.91 per cent YTM), against the previous close of Rs 103.09 (7.01 per cent YTM).

Rupee Falls A Undersized Small Piece - June 13, 2009

On 12th June, the rupee slipped a tad against the dollar as the greenback rallied against other major international currencies and the domestic equity indices closed in the red, said dealers. Dollar demand from oil companies also exerted pressure on the rupee, said a dealer with a public sector bank. The domestic currency opened at 47.41 and weakened to touch an intra-day low of 47.62.

It closed at 47.61, as against the previous close of 47.58/60. In the forward premia marke t, the six-month premium closed lower at 2.79 per cent (2.9 per cent) and the one-year closed at 2.4 per cent (2.45 per cent).

Worthless Metals Closing Stages Higher - June 12, 2009

Precious metal prices shot up on Thursday, 11 June, 2009. They gave up earlier losses as the dollar lost sheen and dropped increasing their appeal as a hedge against inflation. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Thursday, Comex Gold for June delivery ended at $962, higher by $7.3 (0.8%) an ounce on the New York Mercantile Exchange. Last week, gold ended lower by 1.8%. Year to date, gold prices are higher by 10.8%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.

On Thursday, Comex silver futures for July delivery rose 26 cents (1.7%) at $15.49 an ounce. Last week, silver ended lower by 1.4%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 37.7% this year. For 2008, silver had lost 24%.

In the currency market on Thursday, the dollar reversed its earlier gains. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down 1.2%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 70 (0.5%) at Rs 14,665 per 10 grams.

Prices rose to a high of Rs 14,694 per 10 grams and fell to a low of Rs 14,525 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 373 (1.6%) higher at Rs 23,948/Kg. Prices opened at Rs 23,650/kg and rose to a high of Rs 24,018/Kg during the day's trading.

Assocham GDP Growth Of India At 7.2 Per Cent This Fiscal - June 12, 2009

The economy of India may grow at 7.2 per cent this fiscal due to the improvement in consumer sentiment as well as policy reforms and projected growth in agriculture and industrial sector, Assocham survey said. This survey, which covers 300 businessmen, out of that about 42 per cent of the respondents said that the policy reforms would cast large impact on the GDP growth.

The majority of the respondents said that the significant reforms would be brought by the government this year and around 91% believed that in the coming months there is good scope of improvement in consumer sentiments.

However, about 40 per cent respondents felt that the isolation of rural India has a huge impact on the GDP growth, it said.

"The agriculture sector is expected to record the growth rate of 3.5 per cent as good monsoons, better crop prices and upward revision of the crop forecast has ensured a healthy growth rate for the agriculture sector," it said.

Moreover, the industry sector is expected to register a growth rate close to 4.6 per cent in the fiscal. Assocham also said that the services sector is estimated to chart a growth of 9.7 per cent in 2009-10 due to the consumer sentiment''s improvement along with the increased in government spending and anticipated reforms.

On the top of this, it said that about 75 per cent of the respondents believed that in order to stimulate the economy, the government would use further fiscal incentives.

RBI Board In The Direction Of Review BPLR Structures - June 12, 2009

On Thursday, the Reserve Bank of India (RBI) said that it had set up a working group on redrafting the benchmark prime lending rate (BPLR) method in order to make sure more transparent pricing of loans by banks. The group is headed by the RBI Executive Director Deepak Mohanty and would look at the best international practices and advise a suitable loan pricing system.

Additionally, it would also evaluate the administered lending rates for loans up to Rs 2 lakh given to exporters.

The committee would also imply apposite benchmark for floating rate loans in the retail segment, which are usually extended at a discount of 2.5-3 percentage points to the BPLR.

The RBI said in a public statement that the review was announced in the Annual Policy Statement in April this year.

The concept of BPLR was introduced in November 2003, to improve clearness in pricing of loans by commercial banks.

Inflation At 0.13 Per Cent Border Of Negative Period - June 11, 2009

The week on week falling inflation touch a new record low. The official Wholesale Price Index for all commodities for the week ended 30 May 2009 rose by 0.1 % to 232.6 from 232.3 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at 0.13% for the week ended 30 May 2009 as compared to 0.48% for the previous week and 9.32% during the corresponding week of the previous year.

Primary articles the major group index rose by 0.4% to 257.7 from 256.6 for previous week, on rising food articles index. The index for food articles group rose by 0.6% to 253.9 from 252.3 for the previous week due to higher prices of eggs (11%), mutton (3%), fruits and vegetables and condiments and spices (2% each) and barley, moong and urad (1% each).

However, the index for non-food articles group declined by 0.1% to 234.3 (from 234.5 for the previous week due to lower prices of raw wool (4%), raw silk (3%) and raw cotton and gingelly seed (1% each).

Another two major index, manufactured product and fuel power, light and lubricants group remained unchanged at its previous weeks level. Among manufactured product the index for food product, paper and paper product, non-metallic mineral products rose from their previous week levels.

The index for food products group rose by 0.1% to 232.8 from 232.6 for the previous week due to higher prices of ghee (4%) and khandsari (2%). On a flip side the index of textile, rubber and plastic products, basic metals alloys and metal products, machinery and machine tools group registered a declined from the previous week levels.

Slowdown in the demand from the advance countries led to fall in the index for textiles group by 0.1 % to 141.4 from 141.5 for the previous week due to lower prices of texturised yarn (2%).

The index for basic metals alloys and metal products group also declined by 0.1 % to 255.3 from 255.6 for the previous week due to lower prices of pipes and tubes (3 %), zinc (2%) and lead ingots and zinc ingots (1%each).

The week on week sharp declined in WPI is now around zero level mark. Nominal 0.13% inflation crate space for rate cut. However the double –digit prime lending rates of commercial banks is adding stress on interest rate.

Prime Lending Rates of the banks have come down to the range of 11.00-12.25% as against 13.00-13.50% six months back. But they remain on elevated level Further higher interest rate adding stress on funding cost for India Inc.

The finance minister shri Pranab Mukherjee at the meeting of Chief Executives of Public Sector Banks/Financial Institutions also raised the concern for higher cost of borrowing.

It is said that the reduction in key rates by RBI is not getting adequately reflected in the reduction of BPLR of banks. The banks need to address these concerns expeditiously and in adequate measure. Fall in headline inflation offer lower interest rate regime for India.

State-Run Banks Told To Cut Interest Rates - June 11, 2009

Union Finance Minister Pranab Mukherjee, on Wednesday, 10 June 2009, told the public sector banks (PSBs) to pare their lending rates further and provide cheaper credit to industry and consumers to spur economic growth. At his first meeting with chief executives of the PSBs after assuming office, Mr Mukherjee voiced serious concern over non-availability of bank credit at affordable rates, especially as they were not in sync with the signals emanating from the Reserve Bank of India (RBI).

Between September 2008 and April 2009, the RBI has cut key policy rates over 400 basis points. However, industry and the government have constantly complained that these rate cuts have not led to a equal decrease in lending rates by banks.

While stressing PSBs to prune prime lending rates, Mr Mukherjee said affordable credit was necessary in the interest of overall development of the country and to ensure that the growth process benefits all people.

He further argued that the financial position of commercial banks, especially those owned by the government, remained robust with a 26% growth in their overall business and 27% jump in profits.

The finance minister also assured state-run commercial banks that the government would infuse more funds to ensure their capital base remained strong and credit flow did not suffer in this regard.

He also made a pitch for consolidation among commercial banks to improve their competitiveness globally and reduce the risk of financial stability, but said such proposals had to come from bank managements themselves.

Precious Metals Stay Just About Untouched - June 11, 2009

Gold prices remained almost unchanged on Wednesday, 10 June, 2009. On one hand, prices were pulled up by rising crude price increasing their appeal as a hedge against inflation but at the same time strong dollar also pushed the prices down. But silver ended higher. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Wednesday, Comex Gold for June delivery ended at $954.7 an ounce on the New York Mercantile Exchange.

Earlier during the day, it rose to a high of $966.7 and also fell to a low of $947.5. Last week, gold ended lower by 1.8%. Year to date, gold prices are higher by 10%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.

On Wednesday, Comex silver futures for July delivery rose 8.5 cents (0.5%) at $15.225 an ounce. Last week, silver ended lower by 1.4%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 36% this year. For 2008, silver had lost 24%.

In the currency market on Wednesday, the dollar reversed its earlier losses. The dollar index, which weighs the strength of dollar against the basket of six other currencies, went up 1.3% at 80.541.

July crude rose $1.32, or 1.9%, to end at $71.33 a barrel on the New York Mercantile Exchange, closing at the highest level for a front-month contract in almost eight months.

EIA reported today that crude inventories fell by 4.4 million barrels in the week ended 5 June, 2009. On average, a build of 100,000 barrels was expected.

Crude imports fell 676,000 barrels a day from the previous week, while gasoline demand over the past four weeks rose 0.4% from the same period last year, the report showed.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed lower by Rs 12 (0.08%) at Rs 14,595 per 10 grams. Prices rose to a high of Rs 14,720 per 10 grams and fell to a low of Rs 14,525 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 18 (0.07%) higher at Rs 23,575/Kg. Prices opened at Rs 23,650/kg and roe to a high of Rs 23,945/Kg during the day's trading.

Gold Swing Support At Home Sensation - June 10, 2009

Gold managed to rebound successfully today, recovering sharply from the day's lows as the commodity market participants considered the waning strength in the US dollar and wondered whether the sharp array of losses in Gold was a little overdone in the last two sessions. The market participants were selling the metal mercilessly since a surprisingly positive non-farm payrolls data firmed up the sentiments in favor of the dollar.

However, the metal The Euro rallied today after Euro-zone finance ministers e agreed to rein in their ballooning budget deficits if the economy begins recovering as expected next year.

The European Commission also said that it would formally warn eight euro-zone nations-including Germany-against breaking EU rules by overspending on economic stimulus packages. Germany's budget deficit is expected to reach 3.9 percent of GDP in 2009.

The European Union expects it to rise to 5.9 percent in 2010-almost double the 3 percent limit imposed by the EU Stability and Growth Pact that safeguards the stability of the euro.

Euro is quoting 1.3996 against the dollar right now. The Euro bounced from 1.3850 support and advanced to a high of 1.4024.

The COMEX Gold futures for August are trading at $960.60, up $8.10 per ounce from the previous close.

The counter managed to hit an intraday high of $964.50 per ounce, confirming that $950 levels are a very good support.

MCX Gold futures for August are trading at Rs 14601 after hitting a high of Rs 14700 in intraday moves. The counter added 5.30% in the open interest so far today, indicating some fresh buying.

Precious Metals Get Higher - June 10, 2009

Bullion metals rose for the first time in three sessions on Tuesday, 09 June, 2009. Prices rose today after quite some time as the dollar lost some of its sheen. Generally, a stronger dollar pressures demand for dollar-denominated commodities, such as crude oil and gold, which become more expensive for holders of other currencies and also vice versa.

On Tuesday, Comex Gold for June delivery rose $2.2 (0.2%) to close at $954.7 an ounce on the New York Mercantile Exchange.

Earlier during the day, it rose to a high of $964.5. Last week, gold ended lower by 1.8%. Year to date, gold prices are higher by 10%.

Gold had ended the month of May higher by 9.8%. It was the highest monthly gain registered by gold in six months. Before this, gold had suffered losses in prior two months.

For the month of April and March, 2009, gold had lost 3.7% and 2.1% respectively. But the metal gained 4.3% in the first quarter of this year.

On 17 March, 2008 prices had skyrocketed to a high of $1,034/ounce. But prices have dropped somewhat (8%) since then.

On Tuesday, Comex silver futures for July delivery rose 18.5 cents (1.2%) at $15.14 an ounce. Last week, silver ended lower by 1.4%. For the month of May, silver gained 26.6%.

It was the biggest monthly gain for silver in more than two decades. Year to date, silver has climbed 35.4% this year. For 2008, silver had lost 24%.

In the currency market on Tuesday, the dollar paused from its steep increase over the past few trading sessions, as investors gauged the long-term staying power of the greenback's recent resurgence.

The dollar index, which weighs the strength of dollar against the basket of six other currencies, went down by almost 0.9%.

In 2008, gold prices ended higher by 5.5%. The dollar index had gained 12% that year.

At the MCX, gold prices for August delivery closed higher by Rs 6 (0.04%) at Rs 14,607 per 10 grams. Prices rose to a high of Rs 14,700 per 10 grams and fell to a low of Rs 14,572 per 10 grams during the day's trading.

At the MCX, silver prices for July delivery closed Rs 196 (0.83%) higher at Rs 23,557/Kg. Prices opened at Rs 23,293/kg and roe to a high of Rs 23,768/Kg during the day's trading.

Pranab Mukherjee Asks Banks To Cut Interest Rates - June 10, 2009

Finance Minister Pranab Mukherjee today, 10 June 2009 asked banks to cut interest rates and provide affordable credit to industry to spur economic activity. Addressing chief executives of public sector banks in New Delhi, Pranab Mukherjee urged the banks to provide credit at reasonable rates.

The reduction in key rates by the Reserve Bank of India (RBI) is not adequately reflected in the reduction of Benchmark Prime Lending Rates (BPLR) of banks, he added.

The finance minister added India's economy was looking with a lot of hope, as a result of the various measures announced by the government and RBI.

Less Opportunity Used For Tax Cuts In Budget: Official - June 09, 2009

The Finance Ministry has signaled the industry not to expect any major fiscal sops in the Union Budget to be presented on July 3 by the Finance Minister and has limited headroom for giveaways due to the economic downturn.

In pre-Budget consultations, senior officials of the Finance Ministry conveyed the disappointment of the government to industry for not passing the benefits excise and service tax cuts to the consumers, which was announced in December and January, a chamber official said.

However, earlier this month, the Revenue Secretary P V Bhide had convened separate meetings with industry bodies that include CII as well as FICCI and Assocham.

While, the three chambers presented the wish lists to the Finance Ministry, they were told that the new Finance Minister would not have much headroom for any more fiscal incentives. The fiscal deficit for 2009-10 is pegged at Rs 3,32,835 crore, 5.5 per cent of the GDP.

The direct tax kitty dipped to Rs 3.38 lakh crore in 2008-09 as against the truncated target of Rs 3.45 lakh crore.

The government had slashed excise duty of four per cent and service tax of two per cent across-the-board in the two stimulus packages to limit the impact of global downturn on the economy.

Foreign Institutional Investors Pump In A Week - June 09, 2009

The net investment made by the Foreign institutional investors (FIIs) on Friday stood at Rs 831.95 crore in the domestic stock market that took their total inflow to over Rs 2,000 crore during the week. The FIIs were the gross purchasers of shares worth Rs 4,022.61 crore, while the gross sales by them valued at Rs 3,190.66 crore, resulting in a net buy of Rs 831.95 crore, as per the provisional data available with the BSE.

During the week, the value of shares bought by the overseas investors was worth Rs 20,895.30 crore, while they sold equities worth Rs 18,879.50 crore, which resulted in a net inflow of Rs 2,015.80 crore in the Indian stock market, as per the latest data available with SEBI.

However, the domestic institutional investors, during the trade, booked profit and sold shares worth Rs 480.13 crore.

However, a similar trend was witnessed among proprietors as well as non- resident Indians (NRIs) and they sold stocks in total worth Rs 98.56 crore.

Gold Cataract As A Result Of 120 On Weak Global Cues - June 09, 2009

The gold prices on June 8 declined by Rs 120 to Rs 14,760 per 10 gram in the bullion market in New Delhi due to sustained selling by stockists. The marketmen said that the trading sentiment remained bearish as the gold dropped to the lowest in more than a week in the global markets. Moreover, the silver also followed the same trend and lost Rs 50 to Rs 22,950 per kg.

In the global markets, the gold lost 6.63 dollar to $948.63 an ounce while the silver by two per cent to $14.985 an ounce.

The standard gold and ornaments remained under selling pressure and tumbled by Rs 120 each to Rs 14,760 and Rs 14,610 per 10 gram, respectively. The Sovereign also lost Rs 50 to Rs 12,350 per piece of eight gram.

Meanwhile, the silver ready slipped by Rs 50 to Rs 22,950 per kg while the weekly-based delivery by Rs 550 to Rs 23,150 per kg, respectively. Silver coins fell Rs 100 at Rs 29,500 for buying while Rs 29,600 for selling of 100 pieces.

Ahluwalia Says Scope For Divestment, Higher Outlays - June 08, 2009

The government has the scope to raise funds by selling shares in state-run firms even as subsidies need to be recast to benefit the needy, Montek Singh Ahluwalia said today, 8 June 2009 taking over as deputy chairman of the Planning Commission for a second successive term.

The government has started some discussion with the finance ministry on what should be the appropriate size of the plan expenditure in the current fiscal year, Ahluwalia said.

Ahluwalia expects the country's growth to exceed last year's 6.7% added that subsidies needed to be recast, taking a cue from President Pratibha Patil's address to a joint session of parliament.

Car Sales Rise 2.5 Per Cent In May 2009 - June 08, 2009

May 2009 car sales increased 2.5% to 113,490 units in May 2009 over May 2008, data released by the Society of Indian Automobile Manufacturers (Siam) today, 8 June 2009 showed. Improved financing following of aggressive interest rate cuts and stimulus packages were attributed as the reasons for rise in car sales. However sales of trucks and buses fell 14.8% to 30,800 units in May 2009 over May 2008

Automobile sales are considered a key indicator of the health of India's economy.

Sebi Looking At Phased Redution Of Securities Transaction Tax - June 08, 2009

In order to develop the capital markets, the members of the Securities and Exchange Board of India (Sebi) have suggested a phased reduction of the securities transaction tax (STT). The STT removal is considered necessary to improve the retail participation in the capital markets by reducing the transaction costs, sources close to the development said.

In line with this, they also said that the regulator had proposed that the losses incurred in currency derivatives be treated as business losses and not speculative losses.

Moreover, Sebi has also suggested that the investments in real estate mutual funds by the retail as well as institutional investors should be given tax benefits for the development of the sector and the fund. Similarly, it was suggested that provident funds as well as pension funds be given tax benefits to invest in mutual fund units.

STT is a tax imposed on the sale and purchase of securities, which can be shares, derivatives or units of mutual funds traded on a recognised stock exchange.

Price Increases By The Side Of 0.48 Per Cent - June 06, 2009

The official Wholesale Price Index for all commodities for the week ended 23 May 2009 rose by 0.04% to 232.3 from 232.2 for the previous week. The annual rate of inflation, calculated on point-to-point basis, stood at 0.48% for the week ended 23 May 2009 as compared to 0.61% for the previous week and 8.90% during the corresponding week of the previous year.

The index for primary articles group rose by 0.2 % to 256.6 from 256.1 for the previous week on rising food articles index. The index for food articles group rose by 0.4 % to 252.3 from 251.4 for the previous week due to higher prices of tea (5%), jowar (2%) and eggs, maize, arhar, condiments & spices, fruits & vegetables and gram (1% each).

However index for non-food articles group declined by 0.1 % to 234.5 from 234.7 for the previous week due to lower prices of gingelly seed (1%).

Another two major index that is fuel; power light and Manufactured products remained unchanged at its previous week's level.

Among manufactured products the for textile, paper and paper product and non metallic mineral group registered an increased for the week ended 23 May 2009 compared to their previous week level.

The index for textiles group rose by 0.4% to 141.5 from 141.0 for the previous week due to higher prices of texturised yarn (9%) and nylon filament yarn, hessian cloth and hessian and sacking bags (1% each).

On the other hand index for leather and leather product group declined by 0.7 % to 166.2 from 167.4 for the previous week due to lower prices of footwear western type (1%).

The index for basic metals alloys and metal products group also declined marginally by 0.04 % to 255.6 from 255.7 for the previous week due to lower prices of zinc (5%) and zinc ingots and lead ingots (1% each).

In addition to this index for machinery and machine tools, transport equipment and parts group registered a decline for the week ended 23 May 2009 compared with a week ago.

The week on week fall in inflation level is unable to cheer the end users due to growing prices of food articles, which has increased the burden on daily consumption basket.

Also the double digit prime lending rate (PLRs) and near zero level inflation has resulted in higher real interest rate, which has restricted the end consumers to take ultimate benefit of lower inflation. Going forward the recent rise in oil prices may play a spoil sport.

However good monsoon expectations projection craft a glimmer of hope for easing primary article prices. Also Consumer Price Index (CPI) for all the groups (agriculture and rural labourers, urban non manual employees and for industrial workers as well) is showing signs of slowdown and is starting to fill the gap with the WPI rate.

The CPI for all groups has shown a single digit growth since last two months. The fall in consumer price index is adding more space for the rate cut which will assist the growth in long term.

Gold Continues To Loose As Dollar Recovers - June 06, 2009

Gold futures continued to loose today, as dollar gained little ahead of the non farm pay rolls. The firm trend in the crude oil futures was hardly of any help for the bullion, which is known as a hedge against oil led inflation. The May U.S. employment report is scheduled for release.

EDT (1230 GMT). Expectations are for a loss of 525,000 non-farm jobs and for the unemployment rate to rise to 9.2% from 8.9% in April.

An ounce of Gold on Comex division of the New York Mercantile Exchange is trading at $ 978.8 down $ 5.6 per ounce. In the New York trades yesterday, gold futures recouped most of the previous session's losses on inflation-hedge buying after quarter-end profit-taking and a much stronger dollar had pulled the metal off sharply the day before.

August gold rose $16.70 to settle at $982.30 an ounce, while July silver gained 58.5 cents to settle at $15.895 an ounce.

Comex gold warehouse stocks were down 4,005 ounces at 8,721,752 ounces Thursday, while silver stocks were down 1,003,931 ounces at 119,875,304 ounces.

In other markets that have the potential to impact metals in the short term, the euro is up slightly to $1.4198 from $1.4180 late Thursday afternoon.

In screen trading ahead of the pit open, the June S&P 500 futures are up 5 points to 945.50. July crude oil is up 38 cents to $69.19 a barrel.

MCX June Gold recouped some of it its days losses today and was right now trading at Rs 14860 down Rs 2 per 10 grams. A break above 14950 may take it near 15000 levels.

Direct Tax Receipts Grew By 5.8 Per Cent During Apr-May - June 05, 2009

The direct tax receipts of India between April-May grew by 5.77 per cent to Rs 241.58 billion, the Central Board of Direct Taxes said in a statement on Friday. In the first two months of 2009/10, the corporate tax receipts shot up 5.56 per cent to Rs 85.78 billion and income tax collections grew by 5.92 per cent to Rs 155.59 billion, it said. It also added “Growth during the month of May 2009 was 16.88 per cent at Rs 11,919 crore (119.19 billion) against Rs 10,198 crore, as against a negative growth of 3.19 per cent for the month of April 2009.

Union Financial Statement To Be To Be Had Taking Place - June 05, 2009

New Delhi: The Union Budget of India will be presented on July 3 by Pranab Mukherjee while the Railway Budget will be presented on July 1. Meanwhile the Economic Survey is said to be held on July 2. Earlier Finance Minister Pranab Mukherjee has said that this year''s budget will spell out policies as well as priorities of the new UPA government.

The minister further said that this budget would address the issues and the concerns about the economy raised by him in the interim budget, especially with regard to the sectors which are hit badly by the global financial crisis.

Noting that signs of economic recovery in Europe are not promising, the minister said, the problems of crisis-hit sectors like textiles, leather and gems and jewellery will be addressed in the budget.

The government seems to get the budget passed by July 31, the date when the vote on account approved by Parliament allowing government to withdraw money from the Consolidated Fund of India expires.

In case the budget is not approved before July 31, the government will have to seek another vote on account. The focus of the government policies and reforms, Mukherjee said, will be ''Aam Admi'' as has been mentioned in the Congress manifesto.

He said that the manifesto proposed to increase the minimum wages under the NREGA scheme to Rs 100 per day. Similarly, he also added that the issue of providing food security would get top priority.

Pound Falls Starting Seven-Month High - June 05, 2009

The pound hit its highest level against the dollar in the seven months before falling back as the greenback gained ground against various currencies. In the morning trade, one pound was worth $1.6664 but it had fallen to $1.6375 by mid-afternoon.

The dollar recovered after Asian monetary officials said that they would keep purchasing US Treasuries even if there were cut in US credit rating. The pound earlier had gained on hopes of easing of the UK recession. Moreover, Sterling was also stronger against the euro and touched a seven-month high against the Japanese yen of 160.47 before falling back.