MISSION-2020 : DEVELOPED INDIA

Economy to grow at 8.5% despite inflation worries

2008-01-30T17:21:00.000+05:30

The Reserve Bank of India (RBI) expects the economy to grow at 8.5% this year despite expressing concerns on inflation. Next year too, the tempo is expected to be maintained, despite concerns over global slowdown.

In the quarterly review of the monetary policy released on Tuesday, the central bank said, “The projection of overall real GDP growth in 2007-08 is maintained at around 8.5% for policy purposes, assuming no further escalation in international crude prices and barring domestic or external shocks.” This could mean that if global crude prices rise further, then the 8.5% growth may slip.

Responding to a query at the media conference, post-release, RBI governor YV Reddy said, “In FY09, expectations are that we will continue to grow at the same magnitude as this year despite a global slowdown. This means we will be stronger and will be able to withstand the global slowdown.

The prospects of the economy for the rest of the year is in line with policy expectations, according to RBI. There has been a modest deceleration in output growth in the second and third quarters and the ongoing investment boom should improve supplies.

Corporate profits and business confidence have sustained by the underlying macro fundamentals, while banks have become stronger and sounder than before. Financial markets have been orderly and insulated so far from the turmoil in global markets on account of the subprime crisis though there has been unusual volatility in equity markets that is, to some extent, influenced by global developments.

In the external sector, the current account deficit remains well within sustainable limits, with net invisible surpluses offsetting the trade deficit to a considerable degree.

But the expansion of monetary and liquidity conditions as well as asset prices add to the risks of upward inflationary pressures, alongside international price pressures, particularly on account of oil and food prices.

The review has noted that agriculture GDP has recorded above-trend growth in the first half of 2007-08 with kharif foodgrains production placed higher than in the preceding year. On the other hand, industrial activity appears to be experiencing some transient and cyclical effects affecting manufacturing performance.

With the momentum of growth in the services sector expected to be sustained, drawing from leading indicators, the projection of overall real GDP growth in 2007-08 is maintained at around 8.5%, the central bank said.

From ET 30 Jan 2008

India not stealing western jobs

2008-01-30T17:18:00.000+05:30

Countering the rancour in the West against outsourcing of jobs, the chairman of IT major Wipro has said India was not stealing their jobs and its businesses were moving into developed countries which did not have enough skilled graduates to compete in the global economy.

"What is of concern is how serious a shortage of technical talent is building up in the western world. Global companies are going to where not enough young boys and girls are getting into math, science and engineering. That trend is not being reversed," Wipro chairman Azim Premji said.

Premji said that as Wipro expands into other countries, it often has to hire graduates from other disciplines and then send them to its campus in Bangalore to be trained in software engineering and other technical skills.

Premji said the talent shortage makes a mockery of the claim that India is stealing jobs from the West.

"Making rhetoric of jobs getting displaced in North America or Europe is not answering the question," he said. "Jobs are getting displaced because there's not enough talent there to fill those jobs."

Premji said that with the company's Canadian operations growing rapidly, it will need more and more skilled graduates here. He said he expected Wipro's Canadian business to grow by 50 per cent a year as it takes on new clients, while hiring more Canadian engineers, executives and technical staff.

"Canada is a focus market for us," Premji said over lunch at an Indian restaurant in Mississauga, just west of Toronto. "We believe we can grow this market quite aggressively."

Until now, Canada has been a small part of the Wipro Empire. Its 500 staff in Toronto, Windsor, Ottawa and Calgary help generate about $100-million of the global company's $5-billion in annual revenues.

The bulk of its staff works with Nortel Networks developing telecommunications switching equipment.

But the Canadian operation has gone from three clients to 20 in the past 18 months while adding 160 staff and setting up a dedicated sales team.

Moving beyond telecom, Wipro is also courting Canadian insurance firms and energy utilities.

From ET 30 Jan 2008

'Sir Sachin' if Brown has his way

2008-01-21T11:06:00.001+05:30

Can Sachin Tendulkar join the honoured ranks of Sir Don Bradman or Sir Gary Sobers? Well, British Prime Minister Gordon Brown certainly seems to think so. If he had his way, he would recommend the little master for a knighthood.

"I would like to see some of the great players of the modern era — like Sachin Tendulkar — proposed for honorary awards so the British nation can salute their achievements in these sports."

If Brown's remarks come true, we could be looking at the first Indian sports knight. In between courting trade and investment from India and China visiting British Prime Minister Gordon Brown showed where his heart really lay — at the WACA stadium in Perth.

Complimenting India on its test victory over Australia, Brown shed his normally grave countenance.

"I congratulate India on a famous victory - beating an Australian side who have won their last 16 games and doing so away from home."

England's long cricketing feud with Australia clearly fuelled Brown's enthusiasm for India's historic win. Cricket has long been one of the great binders of Indo-British ties. And until some time ago Commonwealth cricketers were honoured by the UK.

As Brown said, "I believe it was a good tradition to celebrate the achievements of the great Commonwealth cricketers. Obviously these are issues for the independent honours committee, but - hope they will consider it."
So we can hope to see a 'Sir Sachin'.

From TOI : 21 Jan 2008

Incredible win at Perth

2008-01-21T11:05:00.000+05:30

India recorded one of their most amazing Test triumphs overseas when they beat Australia by 72 runs in the thrilling third Test to snap the champion team's record 17-match winning streak on Saturday.

Set 413 to win a world record 17th Test in succession, the Australians were dismissed for 340 to allow the spirited visitors to reduce the margin to 2-1 in the four match series with one full day to spare.

Not many had given the Indians any hope at the WACA, regarded as the fastest pitch in the world, but Anil Kumble and his men came out firing on all cylinders to not only pull off a sensational victory but raise hopes of levelling the series.

The Indians celebrated wildly and hugged each other after RP Singh castled last man Shaun Tait, bringing an end to a dramatic Test which saw fortune fluctuating from one team to the other on the four days.

It was a remarkable show of character by the Indians who did not allow the acrimonious events of the Sydney Test to affect them as they went about plotting the demolition of the champion team.

From TOI : 21 Jan 2008

Pak greats hail India's victory in Perth

2008-01-21T10:59:00.004+05:30

Pakistani cricket greats on Saturday hailed the 'character' and 'courage' shown by the Indians, who upstaged Australia in the Perth Test to bounce back from their back-to-back defeats in Melbourne and Sydney.

Congratulating Anil Kumble and his boys for the historic Test win over Australia, former captains Inzamam-ul-Haq, Javed Miandad, Intikhab Alam, Rashid Latif and Moin Khan said the Indian victory was good for world cricket as it would make other teams work harder against the Australians.

"It is a very creditable victory because they were beaten badly in the first two Tests. Beating Australia in Perth is a big achievement and the Indian team deserves all praise. The Australians were just not able to click from day one in this Test. The Indians put the pressure on them well," Inzamam said.

He felt that while the controversies of the previous Test had increased the pressure on the Australians, it had united the Indians and made them lift their game to greater heights.

"The incidents that took place at Sydney united this Indian team and made them more determined to show the world that Australia can be beaten," Inzamam said.

Miandad, who has had a number of battles against the Australian bowlers, said beating the world champions in Perth was never easy.

"Perth has always been Australia's hunting ground and overseas teams rarely win there. In that sense, India did really well," he said.

Miandad also appreciated the cool captaincy of Anil Kumble and for inspiring his boys with his bowling and batting.

Former wicketkeepers Rashid Latif and Moin Khan felt the Indians had displayed far greater mental resilience than the Australians.

"I think the fact that the Indian board, media and former players backed them after the controversies in Sydney had an uplifting effect on Kumble and his men. In contrast, the Australians came in for a lot of criticism for their behaviour and this affected them," Latif said.

The former captain said India's win was good for cricket as it would inspire other teams that they could also beat Australia.

Moin said India's victory was not surprising given that they have the best and most experienced batting line-up in the world.

"I think any team with Sehwag, Rahul Dravid, Laxman, Tendulkar and Ganguly should do well even in Australia. But their bowlers deserve a lot of credit for bowling with a lot of fire and discipline," Moin said.

Another former captain Intikhab Alam, however, warned the Indians not to become complacent and advised to settle down quickly.

"The Australians are a great side and they missed Matthew Hayden and got their bowling combination wrong by not playing a spinner. But I know they will be back stronger and India will have to give a more improved show to win the final Test and draw the series," Intikhab said.

Former Test batsman Haroon Rasheed was of the opinion that while India deserved all kudos for their victory, the umpiring on the fourth day against Andrew Symonds and Mike Hussey also showed that neutral umpires were the best solution for international cricket.

From Indiatimes : 20 Jan 2008

Aussies knocked off their perth

2008-01-21T10:59:00.003+05:30

In a way, it all began at Sydney. Done in by atrocious umpiring, reeling from the three-Test ban handed out to Harbhajan Singh, Team India closed ranks.

Perth - reputedly the world's fastest pitch - was supposed to be Australia's impregnable bastion, the battleground where India would be humiliated. Instead, the entire squad combined to script one of the most romantic tales in a sport replete with instances of the improbable - and posted one of India's finest victories ever.

They say it's easier to steal gold from Fort Knox than to beat Australia in Perth. On Saturday, India not only stole a historic win under Aussie noses, but also rubbed them into the ground, beating the world champions by 72 runs in under four days at the WACA, the ‘home' of Australian cricket.

This wasn't a mere sporting triumph. The last fortnight had witnessed some of the most acrimonious moments in Test history. The controversial loss in the Sydney Test had led to national outrage in India and plenty of soul-searching among the Kangaroos. In this backdrop, with Australia chasing a record 17th straight win in its pocketborough, the

Perth stunner provides catharsis for both Team India and its billion plus fans.

Asked where he would place this win, Indian skipper Anil Kumble said: "Right at the top. Since I made my debut we have won quite a few Tests, both at home as well as overseas, but I can safely say our victory here rates among the very best. I am proud of the way my team has played and we can all go to Adelaide with our heads held high."

When Harbhajan Singh ran onto the ground holding the tricolour aloft, it signalled the beginning of a new era in Indian cricket, for it was fashioned by youth but tempered with experience.

Irfan Pathan deservedly won the Man of the Match award for his all-round display, but there were lots of other contributions. If Dravid and Tendulkar showed the way in the first innings, Laxman ensured that the final target would be beyond Australia's reach. A hostile spell from 19-year-old Ishant Sharma, who had Australian captain Ricky Ponting dancing to his tune before claiming his wicket, led India's charge.

The remaining obstacles were cleared by Kumble, R P Singh and Sehwag, whose part-time off-spin came in handy too. Now, it's over to Adelaide from Thursday. And the word is out: the all-conquering Aussies are all too beatable.

Turning Points

Sehwag's sage advice: Ricky Ponting was clueless about Ishant Sharma's in-cutters. But he grimly hung on. Sharma was about to be taken off when Sehwag, his Delhi skipper, advised Kumble, "Ponting's at the other end. Give him one more over." Sharma promptly had Ponting edging to Dravid at slip, giving India the first wicket of the day (117/3).

Rauf call for Hussey: The Australian left-hander with a Bradmanesque average seemed to be judging most balls pitched outside the off-stump to perfection. He also survived a close leg-before call. But the same umpire, Asad Rauf, raised the dreaded finger to an R P Singh delivery that could have gone well above the stumps (159/4). A big setback for Oz.

Symonds in fine nick: Andrew Symonds is among the luckiest batsmen in this series, having benefited hugely from umpiring errors and fielding lapses. On Saturday, it all "evened out", as he had said in a press conference earlier. Harbhajan's best friend was declared lbw off Kumble despite getting an inside edge (177/5).

Viru too good for Gilchrist: Adam Gilchrist was the dangerman India dreaded. But an inspired move by Kumble to introduce part-time off-break bowler Sehwag cut short his ambitions. Sehwag bowled him round the legs, with Australia still 186 runs away from the target (227/6).

Pathan all ears: When Michael Clarke was eighth out, Australia needed 160 runs to win. The match was as good as over. Or was it? The ninth-wicket pair of Mitchell Johnson and Stuart Clark hammered 73 runs. Finally, Irfan Pathan broke the stand, then cupped his ears to indicate he couldn't hear the applause (326/9).

From Indiatimes : 19 Jan 2008

Decline of golden era: Australian media

2008-01-21T10:59:00.001+05:30

Struggling to digest the defeat India rammed down the hosts' throat in the third Test, a section of the Australian media on Sunday reacted with dented pride and hurt ego as it sought to pick holes in the visitors' emphatic win. Another section came down hard on their side and praised India’s victory.

Stung after Anil Kumble and his comrades-in-arms halted the Australian juggernaut, denying them a record 17th straight Tests win, a section of the media here cried foul, blaming the defeat to India's financial clout and the game's "weak-kneed" governing body.

"India's stunning performance in the third Test at the WACA should be dedicated to a lot more than the 11 players out on the field," a whining report in the 'Courier Mail' said.

"They should share their pay cheques with their bullying officials back home, the weak-kneed administrators at the International Cricket Council and certain members of the media who have taken every opportunity to put the knife into the Aussies since this series began," Mike Colman wrote in the daily.

The barrage of criticism after the acrimonious Sydney Test had forced Ricky Ponting and his teammates to discard their ruthlessness and the rather civilised approach to the game never really worked for them, he said.

"Remember that scene in one of the Rocky movies where Rocky's trainer tells him he's no longer feared by his opponents?

'Kid,' he says, 'the worst thing that could happen to a fighter happened to you. You got civilised.'"

"In the space of a week the Australians got civilised...So instead of a confident, arrogant, winning team, we get a nice, civilised one. Maybe a losing one," it rued.

"The way the ICC backed down to financial clout of the Indian heavies, the way the Australian authorities panicked over the effect of bad publicity on sponsorship dollars and success of the anti-Ponting campaign stirred up by a former England B captain who now calls Australia home, all combined to back the team into a corner," the Courier Mail said.

'The Daily Telegraph' , however, struck a more balanced note as it doffed its hat at the Indians, while ruing the end of Australia's golden run. It said the Perth defeat was a hint that Australia couldn't take its pole position for granted.

"Welcome to the future, Australian cricket fans. Welcome to a world where your team will remain among the best sides in the world but will have to work like drover's dogs to subdue their closest rivals, particularly away from home," it said.

"We have seen the end of a golden era and will have to get used to the occasional silver and bronze medal against teams ready to answer our best sledges.

"The fortress was attacked in Sydney and the barricades finally fell in Perth," the report read.

"The most challenging era of Ricky Ponting's captaincy starts this morning," it said, adding the team was yet to fill the void created by the retirement of a bunch of star players.

"The post Warne-McGrath adjustment that had to happen has finally kicked in. We have learned that Phil Jaques is not Justin Langer, that Shaun Tait is not yet Jason Gillespie, that Shane Warne is irreplaceable and that if you take Matthew Hayden out of the team it hurts everywhere."

The daily was gracious enough to heap praise on Kumble and his team. "Even as Australia despairs, world cricket is rejoicing at the discovery of a team who not only do not fear Australia but actually fancy their chances against them.

"No praise is high enough for an India side whose entire pace attack is younger than Tait," it said.

"Australia is being threatened by a new breed of Indian, whose confidence was embodied by a gesture from young quick Irfan Pathan yesterday, when he held his hand up to his ear to the crowd after taking the ninth wicket," the report added.

'The Age' shared the sentiment and sensed a hint of decline for the hosts in the defeat.

"Australia's winning streak has been stopped, and its invincibility - and that of its skipper - a bit shaken," it said.

"Suddenly, Ricky Ponting's Midas touch has become a thick outside edge. Suddenly, he has become a little susceptible in all his cricketing endeavours. Suddenly, the game has become to him as Ishant Sharma was yesterday, unexpectedly vexatious and in the end, too much," it said.

"Somehow, three Indian quicks who are all younger than Australia's youngest and had never set foot in Perth previously, exploited the local conditions better than the Australians. This as much as the result will exercise Australian minds; it hints at decline," the report said.

A nostalgic 'Sydney Morning Herald' recalled how at the same WACA ground, he hosts had reclaimed the Ashes last summer.

"A golden run has ended," it rued. "For the second time, India halted an Australian Test winning sequence at 16 games. While superior batting proved the key in Kolkata in 2001, it was the Indians' mastery of swing bowling that proved the major difference in Perth..." it noted.

From Indiatimes : 20 Jan 2008

Incredible,India! Departed brand campaign

2008-01-21T10:58:00.001+05:30

The disconnect between promise and actual delivery has been the death of many brand campaigns, long before they attain maturity. The graveyard of departed brand campaigns is full of tombstones recalling how some of them started off by promising the sun, the moon and far beyond, but actually ended up being huge disappointments. The tourism ministry is trying its hand with a campaign that might end up with a similar outcome.

The tourism ministry is splurging a lot of cash on marketing India as a tourism destination under the “Incredible India” campaign. The ad is running on French TV channels, being printed in Spanish newspapers, pushed under the door in Sweden as direct mailers. The ad shows an elderly and well-to-do couple, with the gentleman seemingly into his initial years of retirement. He and his wife enjoy the kaleidoscopic nature of a typical Indian holiday, coloured by the multiplicity of cultures and the multitude of pleasurable opportunities.

Why chose an elderly couple? After all, it is has almost become mandatory in advertising today to show a kid or, at least, a young couple. Arguably, given the demographic profile of the country, where 50% of the population is below 35 years of age, it might make sense to go after the young and moneyed. So, why does “Incredible India” want to do it differently?

The immediate answer is obvious. It’s job is to attract tourists to India from the western world. Europe’s, as well as USA’s, demographic profile is in complete contrast to that of India. The bulk of the population there is ageing, on the verge of retirement or has already retired. The spending power, by and large, is with these guys. So, get the target audience into the ad. Simple solutions to simple problems.

Guess again guys. There’s more at play here. The campaign also tries to reconfigure the thick stream of tourists coming into India. The attempt seems to be to shift the country into a higher spending destination, compared to its historical, low-budget trap - hippie haven, spiritual shangri-la or plain backpacking bohemia. Many Goa citizens keep complaining that their state has got positioned as a “cheap” destination and that needs to change. The “Incredible India” campaign attempts to achieve some of that.

But where does it fall short? Execution. Sure, the campaign might be able to attract newer tourists and may have been able to even convince part of its target audience to buy into an Indian holiday. But, wait till you know their side of the story. There are two problems confronting the tourism strategists.

One, of an immediate nature, is the depreciation of the dollar against the major global currencies, making world travel expensive for the average American tourists. But, given that those with money don’t care about currency fluctuations, and that Europeans do not have a similar problem, makes it not such an insurmountable problem for our target tourist.

What is, though, is the last mile connection. True, it’s all available for somebody like Madonna, but the routine tourist usually goes back feeling gypped. And, that’s because touts have been given a free hand. Walk into any major airport or railway station in the country and the first thing that hits you with gale-force is the overwhelming presence of middlemen, offering everything from currency conversion to taxis, sordid hotel rooms to “promising” holidays.

But, the one thing you find missing is a proper tourism office. Even if you do find one, there’s usually no one manning it. And if, by some weird stroke of luck, you do find some hapless soul sitting there, he will turn out to be of no help.

Most places don’t have an organised car hire infrastructure. Again, in many places you will find that private operators virtually rule the system. For instance, if you’re travelling to Sikkim and are looking to hire a car from the tourism office in Siliguri, the mafia hanging outside will make sure - without exerting too much effort, of course - that you hire cars only from them, at their prices.

The staff at the tourism office can only shrug and look away. This is a story repeated in most tourism offices across the country. Another issue: all historical monuments charge differential pricing to foreign tourists. Do Indians travelling overseas have to pay different rates to visit the Louvre or to the climb the Eiffel? Non, nyet, nein. Discrimination seems to begins at home.

The mass of tourism operators and administrators likes to call itself an industry. The problem lies there. Unlike an industry, which has systems, processes and regulators, the tourism industry in India depends mostly on some formal and lots of informal connections. There are no standards.

Any hole-in-the-wall can begin a tourism shop tomorrow. No minimum benchmarks, no minimum capital. One is not suggesting that the government reinstate a licence regime. But, without all the trappings of a proper industry gold standard, “Incredible India” is probably letting some of the potential earnings slip through its fingers.

From ET : 20 Jan 2008

Rupee eases on concerns about equity

2008-01-21T10:57:00.002+05:30

The rupee slipped in early deals on Monday on concerns that losses in Asian markets should prompt overseas investors to pare holdings in local assets, amid fears of a recession in the United States, dealers said.

At 9:15 am the partially convertible rupee was at 39.345/355 per dollar, slipping from the previous finish of 39.29/31. It struck a decade-high of 39.16 in November.

Shares fell for a fifth successive day as global gloom prevailed with Friday's drop of 3.5 per cent taking the market's losses for the week to 8.7 per cent, its biggest weekly slide since May 2006.

In 2007, foreign fund buying of a record $17.4 billion of stocks was a key driver for the rupee's rise of more than 12 percent. Foreigners sold about $1.1 billion worth of shares on Wednesday and Thursday, weighing on the local unit.

From ET : 20 Jan 2008

Asian stocks dogged by US recession fears, JGBs rise

2008-01-21T10:57:00.001+05:30

Stocks in Asia resumed their decline on Monday, led by banks like Japan's Mizuho, while the dollar hovered near a 3-year low against the yen after a proposed US stimulus package did little to soothe fears the world's top economy will tip into a recession.

Stock markets in Japan, South Korea and Australia nursed losses of between 1.3 and 3 per cent, dragged lower by banks and financial companies as the sector continues to suffer the worst fallout of the US subprime mortgage crisis.

Demand for government bonds kept Japan's bonds firm as investors sought a safe haven in the face of deteriorating economies and slumping stocks. March 10-year futures hit a 2-year high with a 0.29 point to 138.41. The five-year yield fell 2 basis points to 0.835 per cent, the lowest since January 2006.

Last week President George W Bush called for package of tax cuts and other measures of around $140 billion to $150 billion to shore up the US economy, battered by the subprime mortgage crisis and subsequent credit crunch.

But the move did little to shore up sentiment in stock markets.

"It's clear that investors are still very cautious," said Craig James, chief equities economist with Commsec in Australia. "We'd have to see some strength in Asia on Monday to turn this situationaround. Tokyo's benchmark Nikkei was down 3 per cent by 0133 GMT.

The index has shed a quarter of its value since July, when concerns that the US subprime mortgage crisis would permeate global financial markets first reared their head. Banks extended recent losses on fears they will reveal more credit-realted losses, with Mizuho Financial Group down around 2 per cent.

In Seoul worries over the health of the United States a top export market hit stocks like flat screen maker LG Philips LCD Co Ltd. The benchmark Korea Composite Stock Price Index was down 1.3 per cent.

Australia's S&P/ASX 200 index fell 2 per cent. MSCI's broadest index of shares outside of Japan was down 0.9 per cent by 0113 GMT. The index has shed only around 3 per cent since July as some investors reckoned emerging markets would emerge from the credit crisis relatively unscathed.

MSCI's All Country index has lost 12 per cent in the same period. On Wall Street on Friday the Dow Jones industrial average and the Standard & Poor's 500 Index fell around 0.5 per cent each.
DOWNWARD DOLLAR

Japan's yen held gains against the dollar, supported by an unwinding of risky positions as continuing losses in Japanese stocks kepts investors alert to the possibility of a US recession and its potential effect on other economies.

"There's no change in the momentum to sell the dollar," said Hideki Amikura, a forex manager at Nomura Trust and Banking. "More Nikkei losses are likely to push the dollar/yen lower." By 0128 GMT the dollar traded at 106.83 yen , little changed from late last week, when it fell as low as 105.92 yen, its lowest since May 2005.

Oil inched towards $91 a barrel, with prices supported by the closure of Mexico's oil export terminals due to bad weather, as well as OPEC's dismissal of calls to raise output. US light crude for February delivery rose 33 cents to $90.90 a barrel in Asian trade.

Among metals, gold edged lower as Bush's tax cut plan failed to inspire buying. Spot gold was trading at around $879.00 an ounce, down from $881.90/882.60 in New York on Friday.

From ET : 20 Jan 2008

Gold falls as US measures fail to spark buying

2008-01-21T10:56:00.002+05:30

Gold edged lower on Monday after President George W. Bush's plan to give the U.S. economy temporary tax cuts and other measures totalling about $150 billion failed to inspire buying. Gold prices may have entered a corrective phase after surging to a record high of $914 an ounce last week, but the precious metal could be supported due to weakness in the dollar and uncertainty in financial markets as stock prices slump.

As of 0257 GMT, spot gold was at $878.25/879.25 an ounce, down from $881.90/882.60 in New York on Friday. "Gold has surged to a record high in a very short period of time and now the market could be in a corrective phase," said Tatsuo Kageyama, an analyst at Kanetsu Asset Management in Tokyo. "Uncertainties are still there in the financial markets even after the U.S. economic stimulus plan. A further slump in stock prices could trigger profit-taking in gold." Gold hit the record high of $914 on Jan. 14. Gold's drop from the record high was partly driven by selling from investors and funds to cover margin calls from losses in stock markets amid fears of a recession in the United States.

Spot gold was capped at the five-day moving average of $882 and the 10-day average of $886. Kageyama said important support would be around $850, which is close to the 25-day average of $851, but gold could be supported as physical buyers from China, India and the Middle East are expected to emerge.

Traders said the market's focus will be on a U.S. Federal Reserve meeting on Jan. 29-30. Spot gold was pressured as the key distant Japanese gold futures were weighted down. The benchmark December contract on the Tokyo Commodity Exchange closed the morning trade at 3,050 yen a gram, down 1 yen from Friday's close. COMEX gold futures fell in Asia after closing slightly higher in New York on Friday. The most active February contract was trading down $1.9 or 0.2 percent at $879.8 from its New York settlement. Platinum edged down to $1,553.50/1,558.50 an ounce from $1,556/$1,561 on Friday.

TOCOM platinum advanced, but technical trend stayed weak after losing 4 percent last week. The key TOCOM platinum contract closed the morning session down 14 yen or 0.3 percent at 5,225 yen a gram. Palladium edged up to 369/373 an ounce from Friday's U.S.

From ET : 20 Jan 2008

Asian economies seen weathering possible US recession

2008-01-21T10:56:00.001+05:30

Asia would be able to weather any recession in the United States, analysts say, because rising trade and investment within the region make it less dependent on the U.S. economy than in the past.

While a severe downturn in the United States would drag on Asian growth by eroding demand for exports, a rapidly growing middle class is fueling orders for automobiles, electronics and housing _ much of which will be supplied from Asia itself.

Voracious demand for oil, iron ore and other commodities to build roads, sewage systems, and office buildings _ especially in the booming economies of China and India _ will also help sustain the region through any US slowdown.

"The US economy is not that important anymore,'' Hans Timmer, a World Bank economist, said in Singapore earlier this month.

Excluding Japan, 43 percent of Asia's exports go to other nations in the region, Lehman Brothers calculates _ up from 37 per cent in 1995.

"China and India represent a bigger presence on the world stage than just a half dozen years ago,'' said David Cohen, director of Asian forecasting at Action Economics in Singapore. China, in particular, has ``more it can bring to buffer whatever happens in the U.S.''

A drop of 1 percentage point in U.S. economic growth would shave 1.3 percentage points from China's growth rate due to lower exports, Citigroup estimates.

Since China is growing so fast, that isn't likely to make much of a dent. China's economy will still expand 11 percent this year, slightly slower than in 2007, Citigroup projects. Lehman Brothers forecasts 2008 growth will drop to 9.8 percent, still remarkably strong.

But Rajeev Malik, an economist with JPMorgan Chase in Singapore, cautioned that growth in China and India could not make up all the slack of a U.S. downturn.

"Demand in industrial countries is still pretty important for the rest of Asia,'' Malik said. ``While China, and to some extent India, offer some offsetting demand, there will still be some downshifting in activity if the U.S. goes into recession.''

If the US enters a recession, India's growth will likely slow to 7 percent from the current rate of about 9 percent, he predicted.

Asian stock markets _ many of which had stellar runs last year _ have tumbled in recent weeks amid worries that a slowdown in the U.S. will hurt exporters' profits. Since the start of the year, Japan's Nikkei 225 index has declined more than 12 percent, while Hong Kong's Hang Seng index is down more than 11 percent.

Markets fell again Monday in Asia as investors appeared unimpressed with the stimulus plan U.S. President George W. Bush announced Friday.

Still, some analysts say some stocks appear oversold and the drop may present a buying opportunity.

Japan, the world's second-largest economy, may suffer the most from a U.S. contraction.

Ryutaro Kono, chief economist at BNP Paribas in Tokyo, predicts that the nation's economic growth will drop this year to about half of the 2 percent it has marked in recent years.

"The damage from the overseas economic problems hasn't really surfaced yet,'' Kono said. ``But it will be coming.''

Lower demand for exports could even have a silver lining for China by restraining inflation, which has soared to the highest level in more than a decade.

"If China's exports slow down significantly, you definitely will see lower prices rather than inflation,'' said Minggao Shen, an economist with Citigroup in Beijing.

But he did warn that weaker export demand could leave Chinese manufacturers with overcapacity problems.

From ET : 20 Jan 2008

'Exports to halve in FY 2009'

2008-01-21T10:55:00.000+05:30

Merchandise, software and other services export growth will halve in fiscal 2009 due to the global slowdown led by a US recession with negative implications for employment growth, according to Goldman Sachs. While the Indian economy has sufficient internal ballast to withstand the impact of a US recession, which is being increasingly predicted, it could still lose some momentum.

However, the structural growth story remains intact and opportunities to invest in one of the more dynamic economies will remain plentiful. Goldman Sachs has revised down GDP growth forecast to 7.8% from 8% for FY09 due to a larger slowdown in external demand. Export growth will halve in FY09 to 9.8% from 18.6% due to rupee appreciation and global slowdown.

The key export sectors of software, textiles and apparel, gems and jewellery will be most affected. The IT sector revenue growth could go down to 22% from 39% in 2008, since most of the revenues are concentrated in the US and a recession would reduce discretionary IT spending.

Similarly, textile and apparel exports are already showing a decline due to rupee appreciation and losses could go up with slowing US demand. During the last US recession in 2001, India’s exports fell by 1.6% after growing by 21% in the previous year, with the largest impact in the software, textiles, precious stones and vehicles parts sectors.

Exports are showing a slowdown already due to rupee apreciation. In rupee terms, exports have grown by only 8.5% in the year to November compared to 31% in the same period in the previous year, even though in US dollar terms they have grown by 19%.

Although it will lose some momentum, the Indian economy remains largely on course and there are several positives. Structural factors driving growth, namely higher savings and investment, favourable demographics, rapid urbanisation and productivity catch up, remain in place. The economy has relatively weaker global linkages than the rest of Asia.

India’s exports are about 17% of GDP compared to the non-Japan Asia average of over 40%, with domestic demand playing a correspondingly larger role. Urgent infrastructure, construction and retail needs will continue to spur investment and growth.

The booming stock market, which has increased more than 45% in 2007, and has increased five-fold since 2003, will continue to support demand through its beneficial impact on investment by lowering the cost of capital and increasing consumption through wealth effects.

From ET : 20 Jan 2008

Gordon Brown pushes UN, IMF, World Bank reform in India

2008-01-21T10:54:00.000+05:30

British Prime Minister Gordon Brown on Monday was to outline his views on institutional reform in world bodies like the United Nations as he wraps up a two-day visit to India.

The speech to business leaders in New Delhi has been billed by his office as an outline of one of Brown's main foreign policy priorities, and an attempt to secure Indian backing for his plan due to its growing clout on the world stage.

Britain already supports moves to make India a permanent member of the UN Security Council -- a reflection of its status as an emerging economic powerhouse increasingly courted by world leaders.

Excerpts of Brown's keynote speech released in advance by his office showed that he believes institutions set up after World War II like the UN, the World Bank and the International Monetary Fund no longer reflect the status quo.

Reform could help boost both "the new world order" and "the new global society", he was to say.

"The task ahead is to agree for our time the rules that can make globalisation a force for hope and progress for people.

"I believe that only in this way can globalisation become what it should be: a force for justice on a global scale."

Brown arrived in India from China on Sunday. Both countries are among the world's fastest growing economies and like many European countries, Britain is keen to court them in order to boost lucrative trade ties and other links.

According to Britain's Foreign Office, relations between the two countries are at their healthiest ever. Brown indicated Sunday that Britain -- the former colonial power here until 1947 -- was no longer the dominant partner.

Instead he said the relationship was now "a partnership of equals" striving for common goals.

Details of Brown's dinner talks with Prime Minister Manmohan Singh on Sunday were kept under wraps, but Brown has said he wanted to raise a number of issues including climate change and the need to boost counter-terrorism links.

On climate change, Brown has said he would look to secure both India and China's backing for a new global deal to cut greenhouse gas emissions when the Kyoto Protocol expires in 2012.

India -- which with China classes itself as a developing nation -- is opposed to binding targets. Brown said he was not dismayed by India's stance and said New Delhi could play a positive role in securing a new agreement.

On counter-terrorism he said earlier there was a need for all countries to work more closely to help win "the battle of hearts and minds" and isolate "the extremist ideologues who try to poison young people and the views they have".

The situation in military-ruled Myanmar was also to be raised. Brown -- who wrote about the imprisoned pro-democracy leader Aung San Suu Kyi in his 2007 book "Courage" -- urged India to use its influence to help moves to democracy.

Brown and Singh were to hold further talks on Monday. The British prime minister was also to launch closer sporting and educational ties between the two countries and pay his respects to Mohatma Gandhi, revered here as the father of the Indian nation.

Talks with senior government officials and a drop-in with Indian President Prathiba Patil were also planned before Brown heads home late Monday.

From ET : 20 Jan 2008

Software to monitor productivity

2008-01-18T15:05:00.003+05:30

Microsoft is developing software that may help employers to monitor the productivity, competence and physical well-being of employees while sitting at a distance.

The software will even reveal when an employee is stressed or frustrated by reading his/her heartbeat and facial expressions.

A patent application filed by the company reveals that the whole process will be based on a computer system that links workers to their computers through wireless sensors that measures their metabolism.

The system will be able to measure workers' heart rate, body temperature, brain signals, movement, facial expression and blood pressure.

However, civil liberties groups and privacy lawyers are criticising this project, voicing concerns that it may lead to employees’ dismissal on the basis of a computers assessment of their physiological state.

"Imposing this level of intrusion on employees could only be justified in exceptional circumstances," the Sydney Morning Herald quoted Britain's Information Commissioners Office as telling The Times .

Microsoft, which does not generally comment on the progress of its projects, has said in a statement that the use of hear beat data is only an example of the type of monitoring that their software may facilitate.

"This particular patent application, in general, describes an innovation aimed at improving activity-monitoring systems and uses the monitoring of user heart rate as an example of the kind of physical state that could be monitored to detect when users need assistance with their activities, and to offer assistance by putting them in touch with other users who may be able to help," said Horacio Gutierrez, Microsoft's vice president of intellectual property and licensing.

"It is important to keep in mind that with most organisations in the business of innovation, some of our patent applications reflect inventions that are currently present in our products, and other applications represent innovations being developed for potential future use," Gutierrez added.

The US Patent Office had confirmed that the application was published last month, 18 months after being filed. Patent lawyers say that it could be granted within a year.

From TOI 18 Jan 2008

2007 second warmest yr in a century

2008-01-18T15:05:00.001+05:30

Researchers have found that 2007 was the second warmest year in a century, with greatest warming occurring in the Arctic and the neighboring high latitude regions.

Climatologists at the NASA Goddard Institute for Space Studies (GISS) in New York City found that 2007 tied with 1998 for Earth's second warmest year in a century.

The eight warmest years in the GISS record have all occurred since 1998, and the 14 warmest years in the record have all occurred since 1990.

"As we predicted last year, 2007 was warmer than 2006, continuing the strong warming trend of the past 30 years that has been confidently attributed to the effect of increasing human-made greenhouse gases," said James Hansen, director of GISS. "It is unlikely that 2008 will be a year with truly exceptional global mean temperature," he said.

"Barring a large volcanic eruption, a record global temperature clearly exceeding that of 2005 can be expected within the next few years, at the time of the next El Nino, because of the background warming trend attributable to continuing increases of greenhouse gases," he was quoted as saying by the ScienceDaily online .

The researchers used temperature data from weather stations on land, satellite measurements of sea ice temperature since 1982 and data from ships for earlier years. The greatest warming in 2007 occurred in the Arctic, and neighboring high latitude regions.

Global warming has a larger affect in polar areas, as the loss of snow and ice leads to more open water, which absorbs more sunlight and warmth. Snow and ice reflect sunlight; when they disappear, so too does their ability to deflect warming rays.

The large Arctic warm anomaly of 2007 is consistent with observations of record low geographic extent of Arctic sea ice in September 2007.

From TOI 18 Jan 2008

Growth will slow down to 8.5% in 2008-09, says PM's panel

2008-01-18T15:04:00.003+05:30

While there may be signs of growth moderation during the current and the next fiscal, the Indian economy has for the first time logged an average 8% growth during a five-year period.

The latest estimates released by the Prime Minister’s Economic Advisory Council on Thursday has estimated that the economy would grow 8.9% this year — compared to 9.4% during 2006-07 — and is projected to see output rise 8.5% next fiscal.

While there is clearly more optimism in the farm sector, thanks to abundant rains, interest rate hike and appreciation of the rupee seem to have impacted the double-digit manufacturing growth story, which the panel headed by C Rangarajan predicting 8.9% growth during the current fiscal. In fact the impact of RBI’s twin measures seem to have been much higher than was expected earlier with the EAC lowering the forecast from 11.3% in the July outlook.

With the panel suggesting that oil prices need to be hiked to factor in the rise in global crude rates, inflation could immediately cross the 4% level, from the 3-3.5% range.

Despite the gloomy picture on manufacturing, the per capita income is projected to grow above 7% for the third successive year and for the first time, close the year above the $1,000 mark, while the Indian economy would be nearly $1.2 trillion.

In 2008-09, growth rate is expected to dip further as the demand for consumer goods is expected to see a moderate rise, while the farm sector is assumed to be growing at around 2.5%. Even the usually buoyant service sector is likely to see slower growth in trade, hotels, transport and communication.

While Rangarajan was quick to point out that this was the baseline scenario the actual level of rise in economic activity would depend on how the subprime and credit woes play out in the coming months. If it is mild then the impact on India — which the report said was less dependent on the rest of world than China — might be moderate. But in case the problem was deep then it could impact Indian trade and capital flows, Rangarajan said.

With warning of pressure on rupee to appreciate in the immediate future, EAC said government should send "clear signals" to the industry to adjust through productivity improvements and tapping the domestic market instead of focusing on exports.

From TOI 18 Jan 2008

ADB admits lending to poorest Asian countries lacked focus

2008-01-18T15:04:00.001+05:30

The Asian Development Bank admitted in an in-house report released on Friday that many of its loans made over the past seven years have failed to deliver their desired results.

The report assessed the outcome of funds contributed by the Manila-based bank's wealthy Western members to the operation of its Asian Development Fund.

The fund provides concessional loans to its poorest member countries at minimum or no interest.

The report said the administration of some $5.4 billion worth of concessional loans approved between 2001 and 2004 was "less than efficient" and added that there was a "decline in effectiveness in the period."

The study was released amid reports that major donor nations to the ADB are demanding that the bank overhaul its operations amid growing disillusionment with the bank's slow pace of reform.

Concerns about the ADB have prompted the UK to withdraw a commitment to provide more funds, citing a "lack of significant progress on the reform agenda", a reputed international newspaper reported on Thursday.

The in-house report said sometimes conflicting demands by donors as well as recipient governments meant less of the money went to projects meant to advance the United Nations' Millennium Development Goals of reducing global poverty, "such as health and agriculture, and to microfinance."

It said "efficiency has been improving" since 2005, and the adjustments made should ensure some seven billion dollars of soft loans alloted for 2005-2008 are "likely sustainable in terms of effective poverty reduction."

The report urged the bank to "avoid goal congestion in operations and in ADB as a whole" because supervision and resources were spread too thin.

From ET 18 jan 2008

NRI remittances touch new high at $10 bn

2008-01-18T15:03:00.002+05:30

The Indian diaspora seems to be taking a long-term view on India. They are shunning NRI deposit schemes and are sending higher amounts instead to relatives back home.

In the July-September 2007 quarter, remittances touched a new high of $10 billion. While NRIs parked only about $346 million in various bank deposit schemes.

For the fiscal year so far (April-September ’07), while there has been a net outflow of $76 million from NRI deposits, remittances, as reflected in ‘private transfers’, amounted to $18 billion, an amount that the diaspora sent back home until 3-4 years ago.

Remittances, which comprise a portion of the current account on the balance of payments and are permanent in nature, have always been substantially higher than NRI deposits, which form part of capital account and are repatriable, at any point of time in the past. But what is discerning now is the pace at which the two are growing.

Interestingly, the non-resident external (rupee account) (NRE(RA)) is an attractive proposal, when the rupee is appreciating as the foreign currency gets converted into rupees at the time of deposit. It again gets reconverted into dollar at the time of redemption. In a scenario of an appreciating rupee, one tends to get more dollars on maturity of a deposits.

According to Punjab National Bank chairman and managing director KC Chakravarty, rupee deposits fetch a higher returns than in any NRI scheme. Besides, there is a provision to convert rupee funds back to dollars up to $100,000.

Indian Overseas Bank executive director G Narayanan said at a time when stock and real estate markets are booming, it is natural that interest in NRI deposits is flat. Moreover, returns are also regulated.

NRI deposits were marketed by banks initially to shore up the country’s foreign exchange reserves. But in the past few years, with the reserves pile-up getting stronger and forex inflows adding to the liquidity management problems, the central bank is, in fact, trying to discourage such flows through caps on the returns that one can earn on such deposits, especially since the rupee started appreciating against the dollar from mid-2002 onwards.

Besides, in the present scenario, with Indian markets offering better returns on most assets, there is no incentive to convert rupee funds to dollars since returns are higher here, pointed out a banker. Data on NRI investment in other assets such as stock, real estate and other physical assets is not readily available in the public domain (unlike bank deposits).

But a recent RBI study on the use of remittances by the relatives back home shows that about 46% of the proceeds are invested in stocks, properties, bank deposits and deployed in other avenues. Only 54% of the money is used for family maintenance.

Moreover, with the US economy, which has the highest NRI population and a major source of remittances, showing signs of a slowdown, and at the same time, brightening of prospects for the Indian economy, many NRIs are coming back which is also adding to the remittances figure.

From 18 Jan 2008

Annual inflation at 3.79 pc on Jan 5

2008-01-18T15:03:00.001+05:30

Wholesale price index rose 3.79 per cent in the 12 months to Jan 5, higher from the previous week's rise of 3.50 per cent, government data showed on Friday.

The rate was above a median forecast of 3.55 per cent in a poll of analysts. The annual inflation rate was 6.37 per cent during the corresponding week of the previous year.

The wholesale price index is more closely watched than the consumer price index, which is published monthly, because it covers a higher number of products and is published weekly.

from ET 18 jan 2008

Are politicians trivialising the Bharat Ratna?

2008-01-18T15:01:00.000+05:30

The highest civilian award of the country, the Bharat Ratna, has been trivialised with politicians throwing their weight around and demanding the honour be bestowed on their party leaders. After the leader of the opposition and BJP leader L K Advani wrote to Prime Minister Manmohan Singh asking him to give the Bharat Ratna to Atal Bihari Vajpayee, the CPM and BSP entered the fray by demanding the award for Jyoti Basu and Kanshi Ram respectively. Later, it was the turn of Ajit Singh's Lok Dal and the Naveen Patnaik-led BJD to throw their hats into the Bharat Ratna ring. Singh demanded the Bharat Ratna for his late father and former Prime Minister Charan Singh while the BJD wanted the award for the late Orissa Chief Minister Biju Patnaik. The politics over the nation's highest civilian honour has put the Centre in a fix and it is thought that the award may be withheld for the seventh year in a row. The question that arises is: Can't we keep the Bharat Ratna above politics? Or is it necessary that the highest civilian honour must be awarded every year? And most of all, do you think the highest civilian award can be demanded?

From TOI

Why Power IPOs are exciting investors?

2008-01-18T15:00:00.000+05:30

Investor response has been at lightning speed to the initial public offering (IPO) of Reliance Power Ltd—the Rs 11,700 crore issue, the largest thus far in the annals of the Indian capital market, was oversubscribed in a matter of seconds. Several other corporates with a presence in power, including Vedanta, Ispat and Essar, have reportedly lined up IPOs too.

In fact, the monies to be raised via power IPOs in the offing, add up to more than the entire amount tapped in the primary market last year. Does the seeming investor frenzy point at welcome changes on the ground in the vexed, state-dominated power sector which remains mired in runaway losses and routine revenue leakage?

The truth is that the investment norms in power have, at long last, changed for the better, albeit quite recently. Also, there’s much scope for efficiency gains and productivity improvement now that power tariffs as a rule need to be determined by way of competitive bids. So there seems genuine cause for greater investor comfort in power, although “irrational exuberance” cannot really be ruled out.

That said, things appear not all hunky-dory on the regulatory front. For instance, when it comes to power tariffs determined on the basis of capital costs, as say for central generating stations, electricity regulator CERC has come up with some onerous conditions. The markedly different norms laid down for different power producers are avoidable; it may well dampen investor interest. The rigorous cap on tariffs selectively clamped by CERC may actually disincentivise supply and artificially prop up returns for other producers.

The legal basis for investment in power has indeed changed. Now the Electricity Act, 2003 calls for sound market design, transparency and competitive tariffs. It mandates “optimum scheduling and despatch” in supply, and “open access,” so that efficient power producers can competitively seek custom.

Yet, the fact remains that the Act was notified only recently, on June 15 last year. Anyway, the various provisions of the Act, which call for “competition, efficiency, economical use of the resources, good performance and optimum investments” currently have firm legal basis.

Concurrently, competitive tariff bidding implies much scope for attractive returns on the basis of efficiency improvement and cost economies. Note that with power tariffs decided on the basis of competitive bids and meritorder despatch followed in the grid, there is no formal cap on return on equity.

As the tariff notification of the ministry of power of January, 2006 says, “return should attract investments at par with, if not in preference to, other sectors so that the electricity sector is able to create adequate capacity.”

So by aiming for economies of scale, read large generation capacity, setting up thermal plants at coal pit head and competitively sourcing equipment, it ought to be possible to garner handsome returns, of perhaps 25% or more. Note also that with the pan-India demand for power expected to grow at a steady clip, the very real possibility of sustained returns would more likely than not rev up valuations.

Also, with super-critical boilers (more efficient combustion systems) required to be procured for the upcoming ultra mega power plants–each of 4,000 MW capacity–it should mean further productivity improvement in generation.

And a disproportionate share of such projects in one’s portfolio, would surely mean added scope for higher investor returns.

There remain real credit risks in power generation , no doubt, and serious concerns of non-payment by state utilities. But supplying to multiple utilities and large consumers may significantly reduce such risks and make them far more manageable. Meanwhile, the CERC’s tariff order of January 7, 2008, capping tariffs at Rs 4.06 per unit for infirm power read shortterm sales from certain producers, seems more likely to short-circuit supply.

For those with returns liked to capital costs, such as NTPC, the extra offtake is to have mandatory ceiling tariffs. Since similar sales by producers with tariffs not linked to capital costs does not quite invite rigorous caps, the norms do seem unwarranted. The order does underline the fact that there is “a severe shortage of power.”

Additionally, sec 66 of the EA, 2003 is clear-cut on the need for a proper “market (including trading) in power.” With merit-order despatch now the law of the land, what’s surely required is uniform norms across the board in power.

From : ET 18 Jan 2008

Bihar to develop 'oldest' temple

2008-01-18T14:23:00.000+05:30

After initiating efforts to resurrect the ancient Nalanda university, Bihar government now wants to develop the country's "oldest functional" temple, the Mundeshwari shrine in Kaimur district on the lines of Vaishno Devi.

The temple situated atop a 608 ft hill is the "oldest functional temple" in the country where regular prayers have been performed from the past 1900 years, claimed the Administrator of Bihar Religious Trust Board Acharya Kishore Kunal.

Referring to the inscriptions found around the temple and different official records, Kunal, who enjoys the rank of a minister of state, said the "temple was constructed in 108 AD and the practice of worship and sacrifice was continuing ever since".

Kunal said archaeological experts and historians who deciphered the inscriptions found around the temple claimed that the shrine was built during the Shaka era, which predated even the advent of Gupta dynasty in 320 AD.

He said a stone slab, sawed into two with inscriptions in Brahmi script suggested that the temple predated the Gupta period when, because of the influence of grammarian Panini, the script in use was chaste Sanskrit.

The temple, he claimed could be even older as prior to the structure coming up there existed a four-face "mukhlingam" of Shiva, which was worshipped even at that time.

From ET 18 Jan 2008

Sensex touches 21000-mark

2008-01-11T14:09:00.001+05:30

MUMBAI: In a volatile trading, the benchmark BSE Sensex on Thursday crossed the 21000-mark for the first time in intra-day (early trades) but closed below that mark with a gain of 60.68 points. However, mid-cap and small-cap stocks closed in the red after performing well in the last few weeks.

Though metal stocks plunged, oil and gas and frontline fast moving consumer goods (FMCG) stocks performed well. While the index heavy weight Reliance Industries led the rally, ICICI Bank and ITC too contributed to the gain in the benchmark index.

The Sensex touched the 21000-mark in the opening trade and it took 49 days to cover the 1000-point journey from 20000 to 21000. Interestingly, in the current 1000-point journey, the BSE mid-cap index gained 28 per cent and the small-cap index 41 per cent.

The Sensex closed up 60.68 points at 20873.33 and the 50-share Nifty 8.75 points at 6287.85. The mid-cap index closed down by 285.16 points or 2.82 per cent at 9817.07 and the small-cap index by 459.06 points or 3.28 per cent at 13516.13.
Rupee edges up

The rupee on Tuesday closed at 39.27/28 against the greenback, two paise stronger over the Monday’s close of 39.29/30, in anticipation of heavy capital inflows and encouraging trend in equity markets.

In active trading at the interbank foreign exchange market, the Indian unit moved between 39.22 and 39.30 during the day after resuming strong at 39.24/25. — PTI

(From The Hindu Dated: 9 Jan 2008)

Sensex touches 20000-mark

2008-01-11T14:08:00.002+05:30

MUMBAI: The Sensex touched the psychological barrier of 20000-mark on Monday and closed just below that mark at 19977.67, a gain of 734.50 points or up by 3.82 per cent. It was the third biggest single day gain for the BSE 30-share index. The rally of 1-3 per cent in other Asian Markets also supported the Indian bourses to surge and broader markets also participated in the rally. The 50-share Nifty moved up by 203.60 points or 3.57 per cent at 5905.90. The BSE madcap index closed at 8082.54, up by two per cent and the BSE small cap is up by 1.6 per cent at 9705.20.

As the Reserve Bank of India (RBI) to meet the bankers on Tuesday for its mid-term review of annual policy, the markets are expecting a cut in rates. Further, for foreign institutional investors (FIIs), the enthusiasm comes from the expectation that U.S. Federal Reserve is likely to cut rates on Wednesday. With the regulations on Participatory Notes (PNs) have being tightened, the markets are expecting that the RBI would not be harsh with rates.

The Sensex crossed the 19000 mark once again on last Friday and the Sensex ended last week at 19243.17, with a gain of 9.6 per cent compared to the previous week’s close. However, the journey from the 19000-mark to 20000-mark was too surprising.

After the issue of proposed ban on PNs were clarified, the Sensex surged by 879 points on last Tuesday to end at 18492.84.

The broad sectors of the markets also made strong weekly gains.

Capital goods index surged by 20.2 per cent; banking sector index moved up by 16.3 per cent over the previous weeks close. FIIs were net sellers in equities to the tune of Rs. 1,575 crore as on October 25.

However mutual funds bought to the extent of Rs 10.2 billion till that date.

On Monday, the BSE oil and gas index was up by 5 per cent and the BSE metal index was up by three per cent.

The BSE capital goods index gained 7 per cent. The BSE Bankex was up by four per cent. The BSE FMCG index closed with gain of two per cent.

The BSE auto Index gained by one per cent and the BSE IT index gained 0.8 per cent.

(From The Hindu Dated: 30 Oct 2007)