Bond prices plummet in intra-day trade on March 30 before rallying to recover some of its losses. The price of the benchmark security closed 40 paise lower after falling by more than Rs 1.50 in day trade. The prices dwindled after news reports quoted the Reserve Bank of India''s Deputy Governor, Dr Rakesh Mohan, saying that private placement of bonds with the RBI should be avoided. This sparked off supply concerns in the market, said a dealer with a private bank. Nevertheless, the markets recovered after expectation that the net supply of Government securities would be only around Rs 91,000 crore in the first half of the next fiscal and not as feared. After the redemptions and the open market operations, the net inflow would match the demand for the securities, the dealer added. Total traded volumes on the order matching system were higher at Rs 6,525 crore (Rs 4,190 crore). The 6.05 per cent-10-year-2019 paper opened at Rs 93.5 (6.97 per cent YTM) and fell to touch an intra-day low of Rs 92 (7.19 per cent YTM). It recouped its losses to close at Rs 92.8 (7.07 per cent YTM), against Thursday''s close of Rs 93.19 (7.01 per cent YTM). The second most highly traded paper, 7.46 per cent-2017 paper opened at Rs 101.75 (7.17 per cent) and closed at Rs 101.60 (7.20 per cent YTM).
Tuesday, March 31, 2009
Rupee Plunges 60 Paise To End Above 51 – March 31 , 2009
The rupee on March 30 dropped by 60 paise to close above 51 to the greenback at 51.18/19, following a sharp fall in equity markets amid month-end dollar demand. Besides this, a firm dollar overseas against its major rivals also put pressure on the rupee. The month-end dollar demand from oil refiners as well as other importers for their import payments also put some pressure on the rupee.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed weak at 50.90/92 a dollar against its previous close of 50.58/59 and moved in a range of 50.87 and 51.32 a dollar. It closed at 51.18/19, a steep fall of 1.19 per cent over its previous close.
The forex dealers said the rupee came under heavy selling pressure as equity markets displayed distinctly weak trends after last week''s strong rally.
At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed weak at 50.90/92 a dollar against its previous close of 50.58/59 and moved in a range of 50.87 and 51.32 a dollar. It closed at 51.18/19, a steep fall of 1.19 per cent over its previous close.
The forex dealers said the rupee came under heavy selling pressure as equity markets displayed distinctly weak trends after last week''s strong rally.
Gold Surges By Rs 140 As Equities Tumble – March 31 , 2009
The gold prices surged by Rs 140 to Rs 15,440 per 10 gram in the national capital on March 30. The Silver also followed the same trend and grew by Rs 80 to Rs 22,170 per kg. The buying in gold picked up after reports that the precious metal rose in overseas market, by adding $2.95 at $926.10 an ounce. The Standard gold and ornaments rose by Rs 140 each to Rs 15,440 and Rs 15,290 per 10 gram, respectively. However, the Sovereign remained flat at Rs 12,400 per piece of eight gram. On the other hand, the silver ready surged by Rs 80 to Rs 22,170 per kg and weekly-based delivery by Rs 100 to Rs 22,290 per kg.
Monday, March 30, 2009
India Inc Puts On Hold Fresh Recruitments – March 30 , 2009
In order to cut costs to deal with the global credit crunch, the new recruitments have been put on hold by Indian corporates, says a study by industry body Assocham. 90 per cent out of 150 Human Resource professionals interviewed, said that the fresh recruitments is put on a virtual halt in the private sector as attrition rate has almost subsided in all sectors of economy.
The study also put light on the HR front as the HR professionals are under severe pressure for working out innovative ways and means to cut the unnecessary organizational frills as well as reduce the fringe benefits such as bonus and other allowances, besides curtailment in administrative costs. In order to avoid layoffs, the HR professionals have advised wages cut to the management in the range of 10-15 per cent at middle and senior-middle levels while 25-35 per cent at senior levels.
The study also put light on the HR front as the HR professionals are under severe pressure for working out innovative ways and means to cut the unnecessary organizational frills as well as reduce the fringe benefits such as bonus and other allowances, besides curtailment in administrative costs. In order to avoid layoffs, the HR professionals have advised wages cut to the management in the range of 10-15 per cent at middle and senior-middle levels while 25-35 per cent at senior levels.
Prime Minister Said Interest Rates May Be Cuts In Future – March 30 , 2009
Prime Minister Manmohan Singh on March 28 said there is scope for further interest rates cuts. He assured the industry that the credit needs would be met to enable the economy to deal with the global economic crisis. "With ample liquidity and low inflation, there is scope perhaps for a further moderation in interest rates. Domestic credit flow for productive needs has to be definitely maintained at reasonable cost", Singh said in his meeting with industry leaders here.
The Prime Minister said, "There are signs of improvement in sectors like steel and cement...The rural demands for goods and services appears quite robust and the outlook in the agriculture sector gives room for optimism". He said the disbursing of credit by the public sector banks was more in the current fiscal than in 2007-08. While on the other hand, the lending by private sector and foreign banks was reduced to one-third to one-fourth of that a year ago. To tackle a regime of low inflation and demand uncertainties across some sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserve responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline.. are challenges that we confront, Singh said.
RBI governor D Subbarao, who was also present in the meeting on Thursday stated that further stimulus package would have a cost in the form of more borrowing requirements of the government.
The Prime Minister also sought views of the corporate honchos on India''s stand at the G-20 Summit on April 2. The Prime Minister said the world looks at India "with respect and hope: respect for our calibrated reforms which has resulted in growth with justice and hope that India would be an engine of growth for the world economy".
The Prime Minister said, "There are signs of improvement in sectors like steel and cement...The rural demands for goods and services appears quite robust and the outlook in the agriculture sector gives room for optimism". He said the disbursing of credit by the public sector banks was more in the current fiscal than in 2007-08. While on the other hand, the lending by private sector and foreign banks was reduced to one-third to one-fourth of that a year ago. To tackle a regime of low inflation and demand uncertainties across some sectors of the real economy, to ensure that the financial sector remains healthy and supportive, to husband foreign exchange reserve responsibly, to sustain a high level of expenditure bearing in mind the need for fiscal discipline.. are challenges that we confront, Singh said.
RBI governor D Subbarao, who was also present in the meeting on Thursday stated that further stimulus package would have a cost in the form of more borrowing requirements of the government.
The Prime Minister also sought views of the corporate honchos on India''s stand at the G-20 Summit on April 2. The Prime Minister said the world looks at India "with respect and hope: respect for our calibrated reforms which has resulted in growth with justice and hope that India would be an engine of growth for the world economy".
Saturday, March 28, 2009
Core Infra Growth Improves In Feb – March 28 , 2009
Six core infrastructure industries showed early signs of recovery. They expanded by 2.2 per cent in February from 1.4 per cent in the previous month. On the other hand, the growth was poor compared to the year-ago level of 7 per cent.
The core infrastructure industries, which comprise crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel had registered negative growth for the first time in 15 years in October 2008 and then again contracted in December. The core sector accounts for 26.7 per cent of the Index of Industrial Production and the numbers signal where the economy is headed. Growth for the April-February period fell to three per cent from 5.8 per cent a year ago.
The core infrastructure industries, which comprise crude oil, petroleum refinery products, coal, electricity, cement and finished carbon steel had registered negative growth for the first time in 15 years in October 2008 and then again contracted in December. The core sector accounts for 26.7 per cent of the Index of Industrial Production and the numbers signal where the economy is headed. Growth for the April-February period fell to three per cent from 5.8 per cent a year ago.
Friday, March 27, 2009
Call Rate Closes Higher At 4.60 Per Cent - March 27 , 2009
The inter-bank call rate closed higher at 4.40-4.60 per cent, against the previous close of 4-4.10 per cent. There was one bid for Rs 1,700 crore in the four-day repo auction in the first liquidity adjustment facility (LAF). While there were 3 bids for Rs 1,530 crore in the reverse repo auction. In line with this, there were 4 bids for Rs 900 crore in the four-day repo auction under the second LAF. In the reverse repo auction, there were 17 bids for Rs 12,220 crore. In the 14-day special repo auction scheme for mutual funds and NBFCs under the LAF, there were 5 bids for Rs 4,000 crore.
Gold Bounces Back After 4-Day Losing Streak- March 27, 2009
After four-day losing streak, the gold prices recovered by Rs 120 per ten grams on the bullion market on Thursday on renewed enquiries from stockists in view of seasonal buying coupled with higher New York advices. The silver also followed the same trend and firmed up on the back of good industrial demand. The gold futures shot up in New York after four session on the back of weaker dollar and rising demand from gold Exchange-traded funds. On the comex division of the New York Mercantile Exchange, the gold for April delivery closed up by $12 an ounce to $935.80. Silver for May delivery also rose to $13.437 an ounce.In the domestic market, the standard gold (99.5 purity) recovered by Rs 120 per ten grams to Rs 15,175 from its previous close of Rs Rs 15,055. Moreover, the pure gold (99.9 purity) also firmed up by a similar margin to Rs 15,245 from Rs 15,125 previously. The silver ready (.999 fineness) grew by Rs 185 per kilo to Rs 22,510 from Rs 22,325.
Economy Won''t Slip Into Deflation: Montek - March 27, 2009
The Indian economy is not heading towards deflation despite of inflation heading towards zero level, said Montek Singh Ahluwalia, Planning Commission Deputy Chairman The inflation rate dropped to 0.27 per cent for the week ended March 14 from 0.44 per cent for the week ended March 7.I don''t think we are heading towards deflation. It is true that inflation rate has come down...this is because at this time last year, there was a sharp increase in prices, Ahluwalia told. He also said that inflation can go to zero or may even be negative for a week or two. It has happened in the past...during 1970s the inflation rate became negative for a brief period. But I don''t expect that there would be deflation at all now.
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