By Rakteem Katakey and Anto Antony - Jun 24, 2011
India raised diesel and cooking gas prices for the first time in a year to reduce losses at state- owned refiners and narrow its budget deficit to a four-year low.
A panel of Indian ministers, led by Finance Minister Pranab Mukherjee, allowed refiners including Indian Oil Corp., the nation’s biggest, to increase diesel prices by 3 rupees (7 cents) a liter, kerosene by 2 rupees a liter and cooking gas by 50 rupees for every 14.2 kilogram bottle, Oil Minister S. Jaipal Reddy said in New Delhi yesterday. The tariffs don’t take into account the taxes imposed by state governments, he said.
Higher fuel costs will accelerate inflation in Asia’s second-largest energy consumer, where diesel and cooking-fuel prices are capped to protect the livelihoods of 75 percent of the population the World Bank says survives on less than $2 a day. Inflation in India is already more than twice the rate in the U.S. and almost four times Germany’s.
“I am sandwiched between economists on one side and populists on the other,” Reddy said. “We have to watch crude prices, we have to look at other devices” to compensate the refiners for the remaining revenue loss, estimated to reach 1.2 trillion rupees in the current year ending March 31.
Reddy said the government also removed the 5 percent customs duty on crude oil, cut the levy on diesel and gasoline by 5 percentage points, and lowered the excise duty on diesel to 2 rupees a liter from 4.6 rupees a liter. The tax cuts will cost the government 490 billion rupees, he estimated.
Duty Cuts
“I have taken the risk of reducing the duties so that relief can be given to consumers,” Mukherjee told reporters in New Delhi yesterday.
Shares of state refiners rose in Mumbai trading yesterday. Indian Oil gained 2.5 percent to 336.90 rupees, compared with a 2.9 percent gain in the benchmark Sensitive Index. Bharat Petroleum Corp. increased 2.8 percent to 634.70 rupees, while Hindustan Petroleum Corp. advanced 6.1 percent to 392.60 rupees. State-run Oil & Natural Gas Corp., which bears part of the refiners’ subsidy burden, rose 3.1 percent to 272.80 rupees.
India last raised prices of diesel, kerosene and cooking gas on June 26 last year. High food prices and provincial elections prevented Prime Minister Manmohan Singh’s government from boosting prices of the fuel that is used to run everything from trucks and water pumps to electricity-generator sets.
Rising Prices
India’s inflation accelerated to 9.06 percent in May. An index measuring wholesale prices of agricultural products rose to a two-month high of 9.13 percent in the week ended June 11 from a year earlier, the commerce ministry said June 23.
Diesel has a 4.7 percent weighting in India’s benchmark wholesale-price index and gasoline 1.1 percent.
Oil for August delivery rose 14 cents to $91.16 a barrel on the New York Mercantile Exchange yesterday. The August contract is down 2.4 percent this week. Crude oil in New York trading increased 17 percent since June 28, 2010.
China, the world’s fastest-growing major economy, raised diesel prices by 400 yuan ($62) a metric ton, or 0.34 yuan a liter, on April 7, the fourth increase since Oct. 26 last year, according to data on the National Development and Reform Commission website.
On May 15, Indian Oil boosted the price of gasoline by 5 rupees a liter to 63.37 rupees, the biggest increase since June 2008.
State refiners were losing 4.6 billion rupees a day by selling diesel, kerosene and liquefied petroleum gas below cost, the petroleum ministry said before yesterday’s announcement. The government gives the refiners cash to compensate part of the losses.
Mukherjee, in his Feb. 28 budget, estimated a spending of 236.4 billion rupees on fuel subsidies in the year to March 31, less than the 383.8 billion rupees spent in the previous 12 months.
India aims to narrow the budget deficit to 4.6 percent of gross domestic product in the current fiscal year through March, from 4.7 percent of gross domestic product in the previous 12 months.
To contact the reporters on this story: Rakteem Katakey in New Delhi at rkatakey@bloomberg.net; Anto Antony in New Delhi at aantony1@bloomberg.net
To contact the editor responsible for this story: Amit Prakash at aprakash1@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Saturday, June 25, 2011
Friday, June 24, 2011
Indian groups double overseas investments
By James Lamont in New Delhi
Investments by Indian companies overseas have more than doubled in the past year, highlighting their widespread expansion outside of their fast-growing but corruption-stricken home market.
The Reserve Bank of India on Thursday released data showing that foreign direct investment by Indian multinationals surged to $43.9bn in the 2010-11 fiscal year, compared with $18bn in the previous year.
The latest figures represent a big shift in outward investment. In the 2007-08 fiscal year, outward investment totalled $21bn.
The central bank said that the rise reflected regulatory liberalisation – such as greater freedom to invest overseas – to allow leading Indian companies to globalise. It also reflected the drive by many Indian companies to raise capital more cheaply overseas at a time when rupee borrowing costs in India are rising.
“Indian overseas investment policies have been progressively liberalised and simplified to meet the changing needs of a growing economy in a globalised environment,” the RBI said in a statement.
“The policy which was evolved as one of the strategies for export promotion and strengthening economic linkages with other countries has been streamlined significantly in scope and size,” the RBI said.
The heightened outward investment comes as concern deepens that Indian companies are not investing sufficiently in their domestic market.
The RBI has highlighted the need for measures to increase output through investment to help reduce inflation, which at 9.1 per cent in May is the highest in any of the main emerging markets. By comparison, foreign direct investment into India has been falling. Gross FDI inflows in India declined by 32 per cent to $24.2bn in 2010 compared with the previous year. India is one of the few emerging markets where FDI declined last year.
Some Indian business leaders have complained that doing business in India has become more difficult in the wake of a series of high-profile corruption scandals. They are seeking greater opportunities in better regulated and more predictable markets.
Sahara India Pariwar’s £470m ($753m) purchase of the Grosvenor House hotel in central London was one of the highest-profile international acquisitions since the Tata Group snapped up Land Rover and Jaguar, the British car marques, three years ago.
Venkateshwara Hatcheries, a poultry company, bought Blackburn Rovers, an English premiership football club, and Reliance Industries, owned by Mukesh Ambani, has embarked on what is likely to be a sustained buying spree of shale gas assets to build its business in the US.
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Investments by Indian companies overseas have more than doubled in the past year, highlighting their widespread expansion outside of their fast-growing but corruption-stricken home market.
The Reserve Bank of India on Thursday released data showing that foreign direct investment by Indian multinationals surged to $43.9bn in the 2010-11 fiscal year, compared with $18bn in the previous year.
The latest figures represent a big shift in outward investment. In the 2007-08 fiscal year, outward investment totalled $21bn.
The central bank said that the rise reflected regulatory liberalisation – such as greater freedom to invest overseas – to allow leading Indian companies to globalise. It also reflected the drive by many Indian companies to raise capital more cheaply overseas at a time when rupee borrowing costs in India are rising.
“Indian overseas investment policies have been progressively liberalised and simplified to meet the changing needs of a growing economy in a globalised environment,” the RBI said in a statement.
“The policy which was evolved as one of the strategies for export promotion and strengthening economic linkages with other countries has been streamlined significantly in scope and size,” the RBI said.
The heightened outward investment comes as concern deepens that Indian companies are not investing sufficiently in their domestic market.
The RBI has highlighted the need for measures to increase output through investment to help reduce inflation, which at 9.1 per cent in May is the highest in any of the main emerging markets. By comparison, foreign direct investment into India has been falling. Gross FDI inflows in India declined by 32 per cent to $24.2bn in 2010 compared with the previous year. India is one of the few emerging markets where FDI declined last year.
Some Indian business leaders have complained that doing business in India has become more difficult in the wake of a series of high-profile corruption scandals. They are seeking greater opportunities in better regulated and more predictable markets.
Sahara India Pariwar’s £470m ($753m) purchase of the Grosvenor House hotel in central London was one of the highest-profile international acquisitions since the Tata Group snapped up Land Rover and Jaguar, the British car marques, three years ago.
Venkateshwara Hatcheries, a poultry company, bought Blackburn Rovers, an English premiership football club, and Reliance Industries, owned by Mukesh Ambani, has embarked on what is likely to be a sustained buying spree of shale gas assets to build its business in the US.
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Print a single copy of this article for personal use. Contact us if you wish to print more to distribute to others.
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Thursday, June 23, 2011
Sensex gains 172 points on firm Asian cues
The Bombay Stock Exchange benchmark Sensex gained over 170 points in the morning session today on continued buying by funds and retail investors in IT, PSU, bank and teck sector stocks amid a firming trend in the Asian markets.
At 9.35 a.m., the 30-share BSE index Sensex was up 172.26 points or 0.97 per cent at 17,899.75 and the 50-share NSE index Nifty up 58.6 points or 1.1 per cent at 5,378.60.
Volume toppers during the session were SBI, RIL, ICICI Bank, Tata Motors and Tata Steel. Major Sensex gainers were Infosys, ICICI Bank, SBI, ONGC, TCS, HDFC, HDFC Bank and L&T. ITC and RIL were the major losers.
Among the sectoral indices, IT was up 1.66 per cent, PSU 1.63 per cent, bankex 1.61 per cent and teck 1.49 per cent. Only consumer durables was down 0.48 per cent. Of the total 1,552 stocks traded, 1,088 advanced, 409 declined and 55 remained unchanged.
PTI reports:
During the opening session, the Sensex, which gained 176.86 points in yesterday’s trade, moved up further by 184.83 points to 17,912.32. Similarly, the broad-based National Stock Exchange Nifty index spurted by 55.95 points to 5,375.95.
Brokers attributed the rise in stock prices to increased buying by funds and retail investors, triggered by a firming trend in other Asian bourses.
In addition, covering-up of short positions in view of approaching monthly expiry in the derivatives segment on the NSE also influenced the market sentiment.
Meanwhile, Japan’s Nikkei index gained 0.36 per cent and Hong Kong’s Hang Seng index rose 1.48 per cent in the early trade.
At 9.35 a.m., the 30-share BSE index Sensex was up 172.26 points or 0.97 per cent at 17,899.75 and the 50-share NSE index Nifty up 58.6 points or 1.1 per cent at 5,378.60.
Volume toppers during the session were SBI, RIL, ICICI Bank, Tata Motors and Tata Steel. Major Sensex gainers were Infosys, ICICI Bank, SBI, ONGC, TCS, HDFC, HDFC Bank and L&T. ITC and RIL were the major losers.
Among the sectoral indices, IT was up 1.66 per cent, PSU 1.63 per cent, bankex 1.61 per cent and teck 1.49 per cent. Only consumer durables was down 0.48 per cent. Of the total 1,552 stocks traded, 1,088 advanced, 409 declined and 55 remained unchanged.
PTI reports:
During the opening session, the Sensex, which gained 176.86 points in yesterday’s trade, moved up further by 184.83 points to 17,912.32. Similarly, the broad-based National Stock Exchange Nifty index spurted by 55.95 points to 5,375.95.
Brokers attributed the rise in stock prices to increased buying by funds and retail investors, triggered by a firming trend in other Asian bourses.
In addition, covering-up of short positions in view of approaching monthly expiry in the derivatives segment on the NSE also influenced the market sentiment.
Meanwhile, Japan’s Nikkei index gained 0.36 per cent and Hong Kong’s Hang Seng index rose 1.48 per cent in the early trade.
Markets open strong
The markets started the last trading session of the week on a strong note with the Sensex up 123 points at 17,743 while the Nifty gained 31 points to begin the day at 5351. The broader markets too had a fair opening. The smallcap and the midcap indices are up 0.6% each underperforming the Sensex which gained 0.7% in the opening trades.
Currently the BSE benchmark index has gained 239 points at 17,962 and the Nifty added 69 points at 5,389.
All the sectoral indices started in the positive. Consumer Durables, IT, PSU and Oil & Gas indices gaining 1% are leading the opening gains. Power index had a muted opening with a moderate 0.2% gain.
However in the US markets, stocks closed way off session lows on Thursday on news Greece agreed to a five-year austerity plan, but lingering economic uncertainty ultimately drove the S&P 500 lower, keeping a downward trend in place. The Dow Jones industrial average dropped 0.49% to end at 12,050. The Standard & Poor's 500 lost 0.28% to 1,283.50. But the Nasdaq Composite gained 0.66% to close at 2,686.75.
Meanwhile, the Asian markets largely opened positive with Hang Seng and Seoul Composite indices leading the gains up 1% each. The gains were mostly lead by the airlines stocks after a sharp drop in oil prices and exporters also gaining ground.The Nikkei marginally picked up 0.3% on reports that European Union leaders promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts an austerity plan finalised in fraught last-minute talks with international lenders.
The top Sensex gainers are ONGC and TCS up nearly 2% followed by SBI, Hero Honda,Maruti Suzuki,Infosys,HDFC,ICICI Bank and Reliance Communications gaining 1% each. The sugar stocks rallied as an empowered group of ministers (EGoM) gave a nod for 5 lakh tonnes of sweetener exports.
Market heavyweight, Reliance Industries is the only Sensex scrip which started in the negative, down 1% at Rs 861.
The market breadth is positive. Of the total 1455 stocks traded on the BSE, 995 stocks have advanced while 407 declined.
Currently the BSE benchmark index has gained 239 points at 17,962 and the Nifty added 69 points at 5,389.
All the sectoral indices started in the positive. Consumer Durables, IT, PSU and Oil & Gas indices gaining 1% are leading the opening gains. Power index had a muted opening with a moderate 0.2% gain.
However in the US markets, stocks closed way off session lows on Thursday on news Greece agreed to a five-year austerity plan, but lingering economic uncertainty ultimately drove the S&P 500 lower, keeping a downward trend in place. The Dow Jones industrial average dropped 0.49% to end at 12,050. The Standard & Poor's 500 lost 0.28% to 1,283.50. But the Nasdaq Composite gained 0.66% to close at 2,686.75.
Meanwhile, the Asian markets largely opened positive with Hang Seng and Seoul Composite indices leading the gains up 1% each. The gains were mostly lead by the airlines stocks after a sharp drop in oil prices and exporters also gaining ground.The Nikkei marginally picked up 0.3% on reports that European Union leaders promised more money to help Greece stave off looming bankruptcy, provided its parliament enacts an austerity plan finalised in fraught last-minute talks with international lenders.
The top Sensex gainers are ONGC and TCS up nearly 2% followed by SBI, Hero Honda,Maruti Suzuki,Infosys,HDFC,ICICI Bank and Reliance Communications gaining 1% each. The sugar stocks rallied as an empowered group of ministers (EGoM) gave a nod for 5 lakh tonnes of sweetener exports.
Market heavyweight, Reliance Industries is the only Sensex scrip which started in the negative, down 1% at Rs 861.
The market breadth is positive. Of the total 1455 stocks traded on the BSE, 995 stocks have advanced while 407 declined.
MFs use spare cash to hunt for mid-caps
Mutual funds are beginning to bargain-hunt, as smaller stocks are tumbling to new lows. A number of mid-cap and small-cap schemes of MFs, which were sitting on huge cash positions in November 2010, when the Sensex touched an all-time high of 21,000, have begun to deploy this cash in the market.
According to Value Research, a Delhi-based MF research agency, 19 of 21 schemes which took the right call at the peak of the market in November 2010, with 10 per cent or more cash in their portfolio, are now buying.
Reliance Small Cap Fund, which has a corpus of Rs 532 crore, had 55 per cent of this in cash at the end of November 2010. Being a new scheme, the fund remained cautious during the first two months this year. It has since reduced its cash position, to 18 per cent of its portfolio by the end of May. Some of its top positions are ABG Shipyard, FAG Bearings and Take Solutions.
Similarly, ICICI Prudential Dynamic Fund, which had cash of nearly 30 per cent in November, is down to 16 per cent. AIG Infrastructure saw its cash level drop from 25 to 15 per cent.
Other schemes which have seen a drop in cash positions in the past six months include Franklin India, DSP Blackrock Small and Midcap, Quantum Long Term Equity, Reliance Equity and JM Midcap. Axis Midcap Fund, which raised money in February, has also rapidly deployed funds, bringing down cash levels to 32 per cent at the end of May.
In the past six months, while the Sensex lost 15 per cent, the BSE Midcap and BSE Small Cap fell 24.5 per cent and 29.5 per cent, respectively. Some stocks have lost 50 per cent or more. This is creating a number of bargains for fund managers.
“It is very evident. Fund houses have increased exposure in quality mid-cap stocks which were beaten down, irrespective of their fundamentals,” said Gopal Agarwal, head of equities at Mirae Asset Global. “The valuations are good in the mid-cap space and during such a volatile market scenario, people will use the cash available with them to buy more.”
In June, the MF houses were net buyers for Rs 748 crore, adding to the Rs 434 crore they bought in May. This is in sharp contrast to foreign institutional investors, which have been big sellers in the market through the year. “This way, I believe the cash level will deplete completely in these (mid-cap) funds,” Agarwal said.
According to Value Research, a Delhi-based MF research agency, 19 of 21 schemes which took the right call at the peak of the market in November 2010, with 10 per cent or more cash in their portfolio, are now buying.
Reliance Small Cap Fund, which has a corpus of Rs 532 crore, had 55 per cent of this in cash at the end of November 2010. Being a new scheme, the fund remained cautious during the first two months this year. It has since reduced its cash position, to 18 per cent of its portfolio by the end of May. Some of its top positions are ABG Shipyard, FAG Bearings and Take Solutions.
Similarly, ICICI Prudential Dynamic Fund, which had cash of nearly 30 per cent in November, is down to 16 per cent. AIG Infrastructure saw its cash level drop from 25 to 15 per cent.
Other schemes which have seen a drop in cash positions in the past six months include Franklin India, DSP Blackrock Small and Midcap, Quantum Long Term Equity, Reliance Equity and JM Midcap. Axis Midcap Fund, which raised money in February, has also rapidly deployed funds, bringing down cash levels to 32 per cent at the end of May.
In the past six months, while the Sensex lost 15 per cent, the BSE Midcap and BSE Small Cap fell 24.5 per cent and 29.5 per cent, respectively. Some stocks have lost 50 per cent or more. This is creating a number of bargains for fund managers.
“It is very evident. Fund houses have increased exposure in quality mid-cap stocks which were beaten down, irrespective of their fundamentals,” said Gopal Agarwal, head of equities at Mirae Asset Global. “The valuations are good in the mid-cap space and during such a volatile market scenario, people will use the cash available with them to buy more.”
In June, the MF houses were net buyers for Rs 748 crore, adding to the Rs 434 crore they bought in May. This is in sharp contrast to foreign institutional investors, which have been big sellers in the market through the year. “This way, I believe the cash level will deplete completely in these (mid-cap) funds,” Agarwal said.
Rupee depreciates by 6 paise against dollar
MUMBAI: Ignoring smart rise in local equities, the rupee depreciated by six paise to close at 44.95/96 against the US currency on the back of a firm dollar overseas and continued funds outflow.
Dealers said that the main reason behind the fall in the rupee was firm dollar overseas.
Moreover, persistent dollar demand from some banks and importers, mainly oil refiners, put pressure on the rupee, they said.
Some dollar sale by exporters, however, capped the fall in the rupee, they added.
FIIs remained net sellers for the ninth straight session and sold shares worth Rs 287.4 crore Wednesday as per provisional data.
The Bombay Stock Exchange benchmark Sensex shot up 177 points to 17,727 as investors ignored spurt in food inflation and a string of concerns over domestic as well as global economic growth, buying heavyweights like RIL and Infosys.
"Globally Dollar gained against the major currencies like EUR, GBP & JPY. It also traded strong against Rupee and touched a major resistance of 45.00. Local equities traded bullishly which helped rupee to end below 45 levels. Expect Rupee to trade above its resistance in coming days," Alpari Forex ( India) CEO Pramit Brahmbhatt said.
"The trading range for the USD/INR will be 44.70 to 45.20 tomorrow," he added.
At the Interbank Foreign Exchange (Forex) market, the local unit opened lower at 44.92/93 a dollar from previous close of 44.89/90 and moved in a range of 44.80 and 45.00 before concluding at 44.95/96.
Dealers said that the main reason behind the fall in the rupee was firm dollar overseas.
Moreover, persistent dollar demand from some banks and importers, mainly oil refiners, put pressure on the rupee, they said.
Some dollar sale by exporters, however, capped the fall in the rupee, they added.
FIIs remained net sellers for the ninth straight session and sold shares worth Rs 287.4 crore Wednesday as per provisional data.
The Bombay Stock Exchange benchmark Sensex shot up 177 points to 17,727 as investors ignored spurt in food inflation and a string of concerns over domestic as well as global economic growth, buying heavyweights like RIL and Infosys.
"Globally Dollar gained against the major currencies like EUR, GBP & JPY. It also traded strong against Rupee and touched a major resistance of 45.00. Local equities traded bullishly which helped rupee to end below 45 levels. Expect Rupee to trade above its resistance in coming days," Alpari Forex ( India) CEO Pramit Brahmbhatt said.
"The trading range for the USD/INR will be 44.70 to 45.20 tomorrow," he added.
At the Interbank Foreign Exchange (Forex) market, the local unit opened lower at 44.92/93 a dollar from previous close of 44.89/90 and moved in a range of 44.80 and 45.00 before concluding at 44.95/96.
Wednesday, June 22, 2011
Asia stocks slip on Fed remarks about US economy
Asian stock markets followed Wall Street down on Thursday after the Federal Reserve admitted to being caught off guard by recent signs of deterioration in the U.S. economy.
Oil prices fell to near $94 a barrel amid a stronger U.S. dollar.
Japan's Nikkei 225 dropped 0.4 percent to 9,594, with shares lower in heavy machinery and equipment makers _ companies likely to feel a slowdown in the global economy more sharply. Mitsubishi Heavy Industries Ltd. dropped 1.6 percent and Komatsu Ltd. lost 1.4 percent.
But Japanese export shares benefited from a weaker yen, which makes products sent overseas cheaper. Consumer electronics giant Sony Corp. rose 1.1 percent. Isuzu Motors Ltd., which on Wednesday forecast an increase in dividends for the fiscal year through March, rose 3.7 percent.
Hong Kong's Hang Seng lost 0.8 percent to 21,696.79, with banking shares slumping a day after the China acknowledged that surging inflation will rise again this month _ raising the possibility of more action by China's central bank to tighten monetary policy.
China Construction Bank Ltd., the country's third-biggest commercial lender, slid 2.3 percent. Industrial and Commercial Bank of China, the world's biggest bank by market value, was down 1.6 percent.
South Korea's Kospi was 0.2 percent lower at 2,058.88 and Australia's S&P/ASX 200 lost 0.5 percent to 4,511.40. Benchmarks in Singapore, Taiwan and Indonesia were also lower, while those in New Zealand and Malaysia were higher.
Investor sentiment slid Wednesday, after Fed Chairman Ben Bernanke said at a news conference in Washington that some of the problems plaguing the U.S. economy such as weakness in the financial industry and the housing market and ``may be stronger and more persistent than we thought.''
Earlier, the Fed released a slightly lower forecast for U.S. economic growth this year. The Fed said it now expects the economy to grow between 2.7 percent and 2.9 percent this year, down from its previous estimate of 3.1 percent to 3.3 percent after its last meeting in April.
The Dow Jones industrial average and the Standard & Poor's 500 index slumped after Bernanke's cautious remarks about the economy.
The Dow closed down 0.7 percent at 12,109.67. The S&P 500 index fell 0.7 percent to close at 1,287.14. The Nasdaq fell 0.7 percent to 2,669.19.
Even with the dimmer outlook, the Fed pledged no new help to boost the economy. The central bank's $600 billion bond-buying program draws to a close at the end of this month.
Benchmark oil for August delivery was down $1.19 to $94.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.24 to settle at $95.41 on Wednesday.
In currencies, the euro dropped to $1.4312 from $1.4376 late Wednesday in New York. The dollar strengthened to 80.48 yen from 80.32 yen.
Oil prices fell to near $94 a barrel amid a stronger U.S. dollar.
Japan's Nikkei 225 dropped 0.4 percent to 9,594, with shares lower in heavy machinery and equipment makers _ companies likely to feel a slowdown in the global economy more sharply. Mitsubishi Heavy Industries Ltd. dropped 1.6 percent and Komatsu Ltd. lost 1.4 percent.
But Japanese export shares benefited from a weaker yen, which makes products sent overseas cheaper. Consumer electronics giant Sony Corp. rose 1.1 percent. Isuzu Motors Ltd., which on Wednesday forecast an increase in dividends for the fiscal year through March, rose 3.7 percent.
Hong Kong's Hang Seng lost 0.8 percent to 21,696.79, with banking shares slumping a day after the China acknowledged that surging inflation will rise again this month _ raising the possibility of more action by China's central bank to tighten monetary policy.
China Construction Bank Ltd., the country's third-biggest commercial lender, slid 2.3 percent. Industrial and Commercial Bank of China, the world's biggest bank by market value, was down 1.6 percent.
South Korea's Kospi was 0.2 percent lower at 2,058.88 and Australia's S&P/ASX 200 lost 0.5 percent to 4,511.40. Benchmarks in Singapore, Taiwan and Indonesia were also lower, while those in New Zealand and Malaysia were higher.
Investor sentiment slid Wednesday, after Fed Chairman Ben Bernanke said at a news conference in Washington that some of the problems plaguing the U.S. economy such as weakness in the financial industry and the housing market and ``may be stronger and more persistent than we thought.''
Earlier, the Fed released a slightly lower forecast for U.S. economic growth this year. The Fed said it now expects the economy to grow between 2.7 percent and 2.9 percent this year, down from its previous estimate of 3.1 percent to 3.3 percent after its last meeting in April.
The Dow Jones industrial average and the Standard & Poor's 500 index slumped after Bernanke's cautious remarks about the economy.
The Dow closed down 0.7 percent at 12,109.67. The S&P 500 index fell 0.7 percent to close at 1,287.14. The Nasdaq fell 0.7 percent to 2,669.19.
Even with the dimmer outlook, the Fed pledged no new help to boost the economy. The central bank's $600 billion bond-buying program draws to a close at the end of this month.
Benchmark oil for August delivery was down $1.19 to $94.22 a barrel in electronic trading on the New York Mercantile Exchange. The contract gained $1.24 to settle at $95.41 on Wednesday.
In currencies, the euro dropped to $1.4312 from $1.4376 late Wednesday in New York. The dollar strengthened to 80.48 yen from 80.32 yen.
Markets open weak
The Indian markets opened in the negative with the Sensex down 23 points at 17,527 and the Nifty started lower by 12 points at 5,266, in line with the negative global markets. The broader markets, on the other hand opened mixed with the midcap index down 0.2% underperforming the Sensex which is down 0.1% and the smallcap index started flat with a positive bias at 7,808.
Among the sectoral indices, Oil & Gas and IT indices are the only indices that started in the positive while Consumer Durables and Realty down 1% each are leading the losses. Rate sensitives, Auto and Bankex have started in the negative down 0.4% each.
Overnight, in the US markets, stocks dropped as investors hoping for positive comments from Fed Chairman Ben Bernanke were disappointed, and that gave them a reason to sell after a four-day rally that had lifted stocks from three-month lows.The Dow Jones industrial average slid 0.6%, to end at 12,109. The Standard & Poor's 500 Index fell 0.6% to 1,287. The Nasdaq Composite Index lost 0.6% to close at 2,669.
In the light of these developments, the Asian markets too started in the negative. The top losers among the Indian indices are Hang Seng down nearly 0.7% followed by Seoul Composite, Taiwan Weighted losing 0.5% each.
Back home, among the top Sensex gainers in the opening trades are Reliance Communications up 1% followed by RIL, ITC and NTPC adding in the range of 0.2-0.7%
Maruti Suzuki, Cipla, Hero Honda, Hindalco, Sterlite Industries and Reliance Infrastructure down 1% each are the top losers among the Sensex scrips.
The market breadth is negative. Of the total 1451 stocks traded on the BSE, 952 stocks declined while 434 advanced.
Among the sectoral indices, Oil & Gas and IT indices are the only indices that started in the positive while Consumer Durables and Realty down 1% each are leading the losses. Rate sensitives, Auto and Bankex have started in the negative down 0.4% each.
Overnight, in the US markets, stocks dropped as investors hoping for positive comments from Fed Chairman Ben Bernanke were disappointed, and that gave them a reason to sell after a four-day rally that had lifted stocks from three-month lows.The Dow Jones industrial average slid 0.6%, to end at 12,109. The Standard & Poor's 500 Index fell 0.6% to 1,287. The Nasdaq Composite Index lost 0.6% to close at 2,669.
In the light of these developments, the Asian markets too started in the negative. The top losers among the Indian indices are Hang Seng down nearly 0.7% followed by Seoul Composite, Taiwan Weighted losing 0.5% each.
Back home, among the top Sensex gainers in the opening trades are Reliance Communications up 1% followed by RIL, ITC and NTPC adding in the range of 0.2-0.7%
Maruti Suzuki, Cipla, Hero Honda, Hindalco, Sterlite Industries and Reliance Infrastructure down 1% each are the top losers among the Sensex scrips.
The market breadth is negative. Of the total 1451 stocks traded on the BSE, 952 stocks declined while 434 advanced.
CaratLane bags $6-mn funding
CHENNAI: Diamond jewellery portal CaratLane received an investment of $6 million from Tiger Global, a New York-based investment management firm. The stone retailer earned revenues of Rs 50 crore in the last financial year with solitaires accounting for 80% of its business.
"Solitaires is one of our fast-moving categories. This is because the inventory cost of holding such stones is 10-25 % lower than in retail stores and we are able to pass on the benefits to customers," says CEO Mithun Sacheti.
The fund proceeds would be utilised for strengthening the company's backend operations and also augmenting its customer base. CaratLane has units in Chennai and Mumbai, which are able to execute 100 orders a day. "We are looking to increase this to 500 orders a day," says Sacheti. CaratLane would also be utilising the money to introduce a gold jewellery line in six months.
"Solitaires is one of our fast-moving categories. This is because the inventory cost of holding such stones is 10-25 % lower than in retail stores and we are able to pass on the benefits to customers," says CEO Mithun Sacheti.
The fund proceeds would be utilised for strengthening the company's backend operations and also augmenting its customer base. CaratLane has units in Chennai and Mumbai, which are able to execute 100 orders a day. "We are looking to increase this to 500 orders a day," says Sacheti. CaratLane would also be utilising the money to introduce a gold jewellery line in six months.
Tuesday, June 21, 2011
India’s Nifty Stock Futures Climb on Optimism Greece to Avert Debt Default
By Santanu Chakraborty - Jun 21, 2011
India’s stock-index futures gained, signaling an advance in benchmark indexes, after Greek Prime Minister George Papandreou won a parliamentary confidence vote, moving the nation closer to avoiding a default on its debt.
SGX S&P CNX Nifty Index futures for June delivery climbed 40.5 points, or 0.8 percent, to 5,316 at 9:43 a.m. in Singapore. The futures are derived from the 50 stocks on the underlying S&P CNX Nifty Index on the National Stock Exchange of India, which rose 0.3 percent to 5,275.85 yesterday. The benchmark Bombay Stock Exchange Sensitive Index rose 0.3 percent to 17,560.30.
A total of 155 lawmakers supported the motion in the 300- seat parliament in Athens, bolstering Papandreou’s chances of pushing through austerity measures to secure international financial aid for Greece. The International Monetary Fund, contributor of a third of the bailout money for the nation, has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers.”
“The Greek prime minister winning his confidence vote has removed an uncertainty for markets, including India,” said Gavin Parry, managing director of Parry International Trading Ltd. in Hong Kong.
India’s benchmark stock index rebounded yesterday from the lowest close in four months amid speculation the recent decline was excessive and as investor concern over a possible Greek debt default eased. The MSCI Asia Pacific Index advanced for a second day today, rallying from the longest series of weekly losses in seven years.
‘Dead-Cat Bounce’
“Markets will see a dead-cat bounce on good news from Greece but it will not sustain in the long term,” Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services Ltd. (GBNP), said yesterday.
The Sensex has lost 14 percent this year, the most among Asian benchmark indexes tracked by Bloomberg, on concern rising borrowing costs will hurt corporate profits. Sensex stocks are valued at 14.2 times estimated earnings, compared with 10.9 for the MSCI Emerging Markets Index.
Monsoon rain in India will be below normal for the second time in three years, the weather office said yesterday, potentially lowering farm output and accelerating inflation that is the fastest among Asia’s major economies, prompting the Reserve Bank of India to raise rates 10 times since March 2010.
“A weak monsoon will lead to a further spike in inflation, which is being driven by rising commodity and crude oil prices,” Shah said yesterday. “Policy reforms are not coming through, inflation refuses to come down.”
Rural Incomes
Prime Minister Manmohan Singh is relying on adequate rainfall to harvest record quantities of food grains and oilseeds for a second year and cool inflation. Agriculture makes up almost 14 percent of the economy and reduced farm production can also lower rural incomes, hurting sales of tractors and cars.
The government ruled out scrapping curbs on exports of wheat and rice as the world’s second-biggest producer preserves grains to supply food to consumers at below market prices and combat rising prices. A government report on June 14 showed that the wholesale-price index rose 9.06 percent in May from a year earlier, after an 8.66 percent jump in April. Food inflation data for the week ended June 11 is released tomorrow.
“We have seen food inflation cooling down all the way from 20 percent to 8 percent year-on-year and if rains disappoint then obviously that trend can reverse very quickly,” Anubhuti Sahay, a Mumbai-based economist at Standard Chartered Plc., said yesterday. Inadequate rainfall “is likely to damp rural demand, which in our view was extremely important in the overall economic activity” in the last fiscal year, she said.
Indian Oil Corp., the nation’s biggest refiner, may be active after Finance Director P.K. Goyal said the company plans to raise $500 million by selling dollar bonds next month.
The government plans to allow state-run refiners like Indian Oil to increase diesel tariffs. A panel of ministers will meet “shortly” to consider raising fuel costs, Oil Minister S. Jaipal Reddy said June 13. The refiners had a revenue loss of 450 billion rupees ($10 billion) in the first quarter from selling fuel below cost, Reddy said.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net
To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
India’s stock-index futures gained, signaling an advance in benchmark indexes, after Greek Prime Minister George Papandreou won a parliamentary confidence vote, moving the nation closer to avoiding a default on its debt.
SGX S&P CNX Nifty Index futures for June delivery climbed 40.5 points, or 0.8 percent, to 5,316 at 9:43 a.m. in Singapore. The futures are derived from the 50 stocks on the underlying S&P CNX Nifty Index on the National Stock Exchange of India, which rose 0.3 percent to 5,275.85 yesterday. The benchmark Bombay Stock Exchange Sensitive Index rose 0.3 percent to 17,560.30.
A total of 155 lawmakers supported the motion in the 300- seat parliament in Athens, bolstering Papandreou’s chances of pushing through austerity measures to secure international financial aid for Greece. The International Monetary Fund, contributor of a third of the bailout money for the nation, has warned EU leaders that a failure to take decisive action on the debt crisis risks triggering “large global spillovers.”
“The Greek prime minister winning his confidence vote has removed an uncertainty for markets, including India,” said Gavin Parry, managing director of Parry International Trading Ltd. in Hong Kong.
India’s benchmark stock index rebounded yesterday from the lowest close in four months amid speculation the recent decline was excessive and as investor concern over a possible Greek debt default eased. The MSCI Asia Pacific Index advanced for a second day today, rallying from the longest series of weekly losses in seven years.
‘Dead-Cat Bounce’
“Markets will see a dead-cat bounce on good news from Greece but it will not sustain in the long term,” Gaurang Shah, assistant vice president at Geojit BNP Paribas Financial Services Ltd. (GBNP), said yesterday.
The Sensex has lost 14 percent this year, the most among Asian benchmark indexes tracked by Bloomberg, on concern rising borrowing costs will hurt corporate profits. Sensex stocks are valued at 14.2 times estimated earnings, compared with 10.9 for the MSCI Emerging Markets Index.
Monsoon rain in India will be below normal for the second time in three years, the weather office said yesterday, potentially lowering farm output and accelerating inflation that is the fastest among Asia’s major economies, prompting the Reserve Bank of India to raise rates 10 times since March 2010.
“A weak monsoon will lead to a further spike in inflation, which is being driven by rising commodity and crude oil prices,” Shah said yesterday. “Policy reforms are not coming through, inflation refuses to come down.”
Rural Incomes
Prime Minister Manmohan Singh is relying on adequate rainfall to harvest record quantities of food grains and oilseeds for a second year and cool inflation. Agriculture makes up almost 14 percent of the economy and reduced farm production can also lower rural incomes, hurting sales of tractors and cars.
The government ruled out scrapping curbs on exports of wheat and rice as the world’s second-biggest producer preserves grains to supply food to consumers at below market prices and combat rising prices. A government report on June 14 showed that the wholesale-price index rose 9.06 percent in May from a year earlier, after an 8.66 percent jump in April. Food inflation data for the week ended June 11 is released tomorrow.
“We have seen food inflation cooling down all the way from 20 percent to 8 percent year-on-year and if rains disappoint then obviously that trend can reverse very quickly,” Anubhuti Sahay, a Mumbai-based economist at Standard Chartered Plc., said yesterday. Inadequate rainfall “is likely to damp rural demand, which in our view was extremely important in the overall economic activity” in the last fiscal year, she said.
Indian Oil Corp., the nation’s biggest refiner, may be active after Finance Director P.K. Goyal said the company plans to raise $500 million by selling dollar bonds next month.
The government plans to allow state-run refiners like Indian Oil to increase diesel tariffs. A panel of ministers will meet “shortly” to consider raising fuel costs, Oil Minister S. Jaipal Reddy said June 13. The refiners had a revenue loss of 450 billion rupees ($10 billion) in the first quarter from selling fuel below cost, Reddy said.
To contact the reporter on this story: Santanu Chakraborty in Mumbai at schakrabor11@bloomberg.net
To contact the editors responsible for this story: Darren Boey at dboey@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Sunday, June 19, 2011
Oil Declines for Second Day on Concerns Over European Debt, Global Economy
By Ben Sharples - Jun 19, 2011
Oil declined for a second day in New York on speculation a weakening global economy and Greece’s debt crisis will lead to lower fuel demand.
Futures fell as much as 1 percent today after the biggest weekly decline in six weeks. European governments failed to agree on releasing a loan payout to spare Greece from default while Japan’s exports fell more than economists forecast in May. A report tomorrow may show U.S. home sales last month slid to the lowest this year.
“The major influence continues to be the European situation,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 a barrel in the third quarter. “There is this tone of a global slowing in the economy. The data continues to be a bit soft out of the U.S.”
Crude for July delivery fell as much as 90 cents to $92.11 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.14 at 1:31 p.m. Sydney time. The contract expires tomorrow. The August future dropped 92 cents, or 1 percent, to $92.48.
Oil slipped $1.94, or 2 percent, to $93.01 on June 17, the lowest settlement since Feb. 18. Prices slid 6.3 percent last week, the biggest decline since the week ended May 6. Crude is 18 percent higher the past year.
Brent oil for August delivery dropped 94 cents, or 0.8 percent, to $112.27 a barrel on the London-based ICE Futures Europe exchange today. Prices are up 42 percent the past year.
Greek Debt
Euro-area finance ministers pushed Greece to pass laws to cut its deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of a bailout package agreed last year, according to Luxembourg Prime Minister Jean-Claude Juncker, after chairing a crisis meeting in his country. Decisions on the next payout and a three-year follow-up package were put off until early next month.
Japan’s exports decreased 10.3 percent from a year earlier after April’s 12.4 percent drop, the Finance Ministry said today. The median estimate of 25 economists surveyed by Bloomberg News was for an 8.4 percent decline. The nation posted a trade deficit of 853.7 billion yen ($10.7 billion) in May.
The National Association of Realtors may say in a report tomorrow that sales of existing homes in the U.S. fell 5 percent to a 4.8 million annual pace, according to the median forecast of 55 economists surveyed by Bloomberg. That would be the weakest since November.
Growth Forecast
The International Monetary Fund cut its forecast for U.S. growth in 2011, warning of further setbacks to the economic recovery, along with potential contagion from the European debt crisis. The economy will grow 2.5 percent this year and 2.7 percent in 2012, down from the 2.8 percent and 2.9 percent projected in April, the IMF said June 17.
The Washington-based fund sees the world economy expanding 4.3 percent this year, down from 4.4 percent in April.
Oil may decrease this week on signals that economic growth in the U.S. and China will slow, curbing fuel use in the world’s biggest crude-consuming countries, a Bloomberg News survey showed. Eighteen of 38 analysts, or 47 percent, forecast prices will decline through June 24.
Thirteen respondents, or 34 percent, predicted prices will increase and seven estimated there will be little change. Last week, 54 percent of respondents said futures would drop.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
Oil declined for a second day in New York on speculation a weakening global economy and Greece’s debt crisis will lead to lower fuel demand.
Futures fell as much as 1 percent today after the biggest weekly decline in six weeks. European governments failed to agree on releasing a loan payout to spare Greece from default while Japan’s exports fell more than economists forecast in May. A report tomorrow may show U.S. home sales last month slid to the lowest this year.
“The major influence continues to be the European situation,” said Ben Westmore, a minerals and energy economist at National Australia Bank Ltd. in Melbourne, who predicted oil will average $113 a barrel in the third quarter. “There is this tone of a global slowing in the economy. The data continues to be a bit soft out of the U.S.”
Crude for July delivery fell as much as 90 cents to $92.11 a barrel in electronic trading on the New York Mercantile Exchange and was at $92.14 at 1:31 p.m. Sydney time. The contract expires tomorrow. The August future dropped 92 cents, or 1 percent, to $92.48.
Oil slipped $1.94, or 2 percent, to $93.01 on June 17, the lowest settlement since Feb. 18. Prices slid 6.3 percent last week, the biggest decline since the week ended May 6. Crude is 18 percent higher the past year.
Brent oil for August delivery dropped 94 cents, or 0.8 percent, to $112.27 a barrel on the London-based ICE Futures Europe exchange today. Prices are up 42 percent the past year.
Greek Debt
Euro-area finance ministers pushed Greece to pass laws to cut its deficit and sell state assets. They left open whether the country will get the full 12 billion euros ($17.1 billion) promised for July as part of a bailout package agreed last year, according to Luxembourg Prime Minister Jean-Claude Juncker, after chairing a crisis meeting in his country. Decisions on the next payout and a three-year follow-up package were put off until early next month.
Japan’s exports decreased 10.3 percent from a year earlier after April’s 12.4 percent drop, the Finance Ministry said today. The median estimate of 25 economists surveyed by Bloomberg News was for an 8.4 percent decline. The nation posted a trade deficit of 853.7 billion yen ($10.7 billion) in May.
The National Association of Realtors may say in a report tomorrow that sales of existing homes in the U.S. fell 5 percent to a 4.8 million annual pace, according to the median forecast of 55 economists surveyed by Bloomberg. That would be the weakest since November.
Growth Forecast
The International Monetary Fund cut its forecast for U.S. growth in 2011, warning of further setbacks to the economic recovery, along with potential contagion from the European debt crisis. The economy will grow 2.5 percent this year and 2.7 percent in 2012, down from the 2.8 percent and 2.9 percent projected in April, the IMF said June 17.
The Washington-based fund sees the world economy expanding 4.3 percent this year, down from 4.4 percent in April.
Oil may decrease this week on signals that economic growth in the U.S. and China will slow, curbing fuel use in the world’s biggest crude-consuming countries, a Bloomberg News survey showed. Eighteen of 38 analysts, or 47 percent, forecast prices will decline through June 24.
Thirteen respondents, or 34 percent, predicted prices will increase and seven estimated there will be little change. Last week, 54 percent of respondents said futures would drop.
To contact the reporter on this story: Ben Sharples in Melbourne at bsharples@bloomberg.net
To contact the editor responsible for this story: Alexander Kwiatkowski in Singapore at akwiatkowsk2@bloomberg.net
®2011 BLOOMBERG L.P. ALL RIGHTS RESERVED.
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