Sensex ends 230 points up, shies away 10k level

Mumbai: Amid volatile trading, the Bombay Stock Exchange benchmark Sensex today closed higher by over 230 points - still below 10,000 points level - on emergence of buying by funds in heavyweight stocks led by Reliance Industries and select power segment stocks.
The Sensex, which commenced the day lower at 9,631.59, shot up in volatile trade to regain 10,065.37 in the mid-session, but ended at 9,964.29 with a gain of 230.07 points.
A firm opening for the European stock markets also helped the upsurge to some extent.
The National Stock Exchange’s 50-share benchmark index Nifty rose by 90.35 points at 2,973.00, after touching the day’s high of 3,010.00, as most of the heavyweight stocks recorded handsome gains.
Reliance Industries, the Sensex-heaviest, surged by Rs46.30 at Rs1,217.85. The scrip rose to Rs1,239 and a low of Rs1,152 during the day.
Oil and gas sector index gained the most by 196.63 at 6,013.57 followed by metal sector index by 158.89 points at 5,152.33.

Oil tumbles to 21-month low of $58 a barrel

LONDON: Oil prices on Thursday tumbled under 58 dollars a barrel, reaching the lowest level for nearly 21 months as recession fears gripped markets, said. On London's InterContinental Exchange (ICE), Brent North Sea crude for delivery in December dived more than four dollars to 57.46 dollars a barrel -- the lowest level since February 2007. At about 1555 GMT, the contract recovered slightly to stand at 58.08 dollars, down 3.79 dollars compared with Wednesday's close. On the New York Mercantile Exchange (NYMEX), light sweet crude for December fell dropped 3.80 dollars to 61.50 dollars a barrel.
Fears of a deep recession and hence weaker energy demand intensified on Thursday as European central banks slashed interest rates. The Bank of England's monetary policy committee cut British borrowing costs by a record 1.50 percentage points to 3.0 percent -- the lowest level in more than half a century. The European Central Bank reduced eurozone borrowing costs by 0.50 percentage points.
"Market participants may be taking the view that for the MPC to slash rates in such a dramatic manner, things must be really bad," said David Evans, an analyst at BetOnMarkets.com. Oil prices had already tumbled by more than five dollars Wednesday on NYMEX as US data showed demand falling in the world's biggest energy consuming nation, highlighting worries about a slowing global economy .

Demand slump: Tata Motors may shut Pune unit for 6 days

NEW DELHI: A day after it announced plans to briefly shut down its heavy commercial vehicles plant in Jamshedpur, Tata Motors appeared to be mulling similar closure of its passenger vehicle plant in Pune. "Production will match demand" is all that a Tata Motors spokesperson had to say when asked about reports that the Pune facility would be shut down from November 22-27. He however, neither confirmed nor denied the reports. Tata Motors, India's largest automobile company, had yesterday announced shutting down its Jamshedpur unit, the mother plant for its heavy commercial vehicles, for three days due to slump in demand.
"Tata Motors is taking a block closure at Jamshedpur from November 6 to November 8, 2008, to match production with demand of vehicles produced at the Jamshedpur plant to avoid build-up of inventory either in the company or with our dealers," the company spokesperson had said yesterday.

US financial crisis may hit India's exports in Q4: Deloitte

NEW DELHI: Country's exports, including BPO services, software and financial services
exports, are likely to be hit by the global meltdown in the fourth quarter of 2008, says a report by global research firm Deloitte. "The ongoing slowdown in the US economy will likely to affect the future growth in India's exports. Experts predict that US businesses would likely either reduce outsourcing or withhold expansion plans," the report Deloitte Global Economic Outlook for the fourth quarter of this year said. Consequently, as a result of the financial crisis, the BPOs, financial services and other software exports contributing to about 2 per cent of India's GDP are likely to be affected, the report said. Software industry body NASSCOM has also predicted that there would be a significant impact of the global crisis on the Indian BPO sector. The financial turmoil and recessionary tendencies in major economies have already impacted India's export growth, which slowed to 10.4 per cent in September even as the country increased its imports by 43.3 per cent over September 2007.

Read more at The Economic Times

Buffett, Soros continue to buy stake in companies

NEW YORK: In the midst of people selling their stocks as market values touch the nadir, legendary investors-- Warren Buffett and George Soros-- seem to be swimming against the tide and shopping for stakes in companies worldwide. With the economic crisis ravaging global markets, the two billionaires are making investments in firms from America to Australia, which are expected to yield long term benefits. As Buffett wrote recently in a newspaper column, a simple rule dictates his buying, "Be fearful when others are greedy, and be greedy when others are fearful." Recently, Buffett pumped in about eight billion dollars in two American corporates. The legendary investor had pumped in five billion dollars to battered Wall Street giant Goldman Sachs and another three billion dollars into diversified conglomerate General Electric. According to reports, Soros snapped up a five per cent stake in Australian firm Sphere Investments. The company is reportedly looking to develop a multi-billion dollar iron ore mine in Mauritania.

Read more at The Economic Times

World economies to decline in 2009: IMF

WASHINGTON: Barely 10 days ahead of the Summit of the Group-20 here called by President George Bush, IMF has revised its global economic outlook and forecast that advanced economies would slip into recession
next year, while the growth rate of Asian nations would come down. In its World Outlook Report published today, the International Monetary Fund (IMF) has predicted that the global growth would slow down by 0.2 per cent in 2008 and 0.9 per cent in 2009, thus leaving the revised growth figures at 3.7 per cent for this year and 2.2 per cent for the next. The outlook is not too different for India as well, since IMF sees the country's economic growth going down to 6.3 per cent, 0.6 per cent less than what it had projected last month, as the financial meltdown envelops the globe.

Read more at The Economic Times

UK interest rates slashed to 3%

The Bank of England has cut interest rates in the UK by one-and-a-half percentage points to 3%, its lowest since 1955, in a shock move.
Last month it cut rates from 5% to 4.5% in an emergency move co-ordinated with other central banks.
There had been widespread calls from industry for a major cut as the country begins to face up to the prospect of a deep recession.
It is the most dramatic cut since a two percentage point reduction in 1981.

Read more at BBC

Funds sell record Rs22,271 crore of debt in Oct

Mumbai: Indian mutual funds sold debt worth Rs22,271 crore in the first three weeks of October because investors are reluctant to infuse fresh money to replenish outflows caused by a surge of redemptions in a volatile market.

Analysts say the measures taken by the Reserve Bank of India (RBI) to ease a cash and credit crunch will take time to soothe the Rs5.29 trillion mutual fund industry, but inflows should return soon with the overnight inter-bank money market rate declining to around 6.5% from around 20% at the peak.
Higher call rates encourage investors in debt funds, particularly banks, to withdraw money from mutual funds and lend in the overnight call money market to earn more.
RBI has cut its policy rate by 100 basis points and banks’ cash reserve ratio (CRR), or the proportion of deposits that banks need to keep with the central bank, by 250 basis points to release Rs1 trillion into the banking system. One basis point is one-hundredth of a percentage point. Besides, it also created a Rs20,000 crore liquidity window for mutual funds.
So far, mutual funds have drawn only Rs8,800 crore from this window. On Friday, there was no taker.

Read more at Livemint

Norway fund to put $2 bn in India

New Delhi: In a move that will bring considerable relief to Indian equity markets roiled by the global credit crisis, the Norwegian sovereign wealth fund (SWF), plans to invest around $2 billion (about Rs9,772 crore) in India, primarily in equities, over the next two months because it has increased India’s weightage in its investment portfolio.
According to Thorvald Moe, deputy secretary general in the Norwegian finance ministry, India’s weightage was enhanced recently to 0.94% from the earlier 0.2%. The enhanced weightage will see an inflow into India of around $2 billion, which needs to be invested by the end of this year, Moe said.
This money will come into the country at a time when foreign institutional investors (FIIs), the main driver of Indian stock markets, have taken out close to $11.2 billion from the country since January.
In this period, Sensex, the benchmark index of the Bombay Stock Exchange has fallen by almost 50% to 10,683.39, the level it closed at on Tuesday.

Read more at Livemint

Markets offer early warning signals

India now has the distinction of being one of the rare countries to introduce new derivatives markets this year, at a time when most countries are clamping down with bans or more regulations.

Derivatives, especially the exotic kinds, have become a bad name across the world. India, too, has had its share of problems with over-the-counter (OTC) forex derivatives. One good outcome of all this is that the case for exchange-traded derivatives has only become stronger vis-a-vis OTC markets. It has become increasingly clearer to more policymakers and market participants that wherever standardization is possible, a derivatives contract must be listed on an exchange to avail of the benefits of transparency and the elimination of credit risk through centralized clearing and settlement.

Read more at Livemint

Global air traffic dips 2.9% in September: IATA

Early signs of global air travel slowing down are evident from a recent IATA (International Air Transport Association) report which says that air travel across the globe has dipped 2.9% for September 2008, as compared to previous month. However, IATA has taken up the issue with various governments on finding a solution to this grim scenario. Over 230 airlines from across the globe are members of the IATA, a trade body that deals with air traffic related issues.
Taking a peek at the traffic slowdown figures revealed by IATA, African carriers posted the largest decline in traffic at -7.8%, followed by Asia-Pacific carriers with a 6.8% drop in the month under preview (September) and European carriers saw a traffic drop of -0.5%.

Read more at The Financial Express

HDFC-HDFC Bank merger possible: Parekh

Deepak Parekh, chairman, Housing Development Finance Corporation (HDFC) has indicated a possible merger of HDFC-HDFC Bank in near future. However, he did not elaborate his statement on such a proposed move, while responding to a question asked by industrialist Anand Piramal at an event held at Indian Merchants Chamber in Mumbai on Tuesday.
Parekh also said that inflation in India might settle down at 6-7% levels by March 2009. He expects the inflation to fall below the 10%-mark within a month and the country’s growth rate to remain at 7-7.5% in the current fiscal.
“We will wait-and-watch for some time before taking a final call on the interest rates. The deposit rates in the system have to come down first before cutting the lending rates. And, I do not rule out the possibility of more monetary measures being implemented by the Reserve Bank of India,”Parekh added.

Read more at The Financial Express

Centre sets aside 2 million tonne wheat to meet export requests

The government on Wednesday decided to set aside around 2.0 million tonne of wheat for export, to meet requests made through diplomatic channels. This is the first time in more than a year that the government has gone for a one-off exemption to the country’s export ban on wheat.
“We have kept aside two million tonne wheat for supplies to some countries,” agriculture minister Sharad Pawar told reporters on the sidelines of an international conference here.
The external affairs ministry will decide on quantities to be supplied to countries that have requested India for wheat, Pawar said. Requests will be considered on humanitarian grounds.

Read more at The Financial Express

Is Apple getting into the chip business?

SAN FRANCISCO (MarketWatch) -- A brewing battle between Apple Inc. and its frenemy, IBM Corp., over the role of an executive who at one time managed Big Blue's PowerPC chip business may be an early sign that the Silicon Valley wunderkind is considering designing some of its own semiconductors.
On Tuesday, Apple (AAPL:
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AAPL 103.30, -7.69, -6.9%) said it was hiring Mark Papermaster from IBM as a senior vice president of devices hardware engineering. Apple made the hire despite a lawsuit last week by Big Blue against Papermaster. IBM wants to keep him from working at Apple for a year, because of the sensitive information Papermaster is believed to have on its chip business, especially the PowerPC processor, which the companies developed together nearly 20 years ago.

Read more at Market Watch

Yahoo's Yang: 'Open minded' about Microsoft deal

SAN FRANCISCO (MarketWatch) - Yahoo Inc. Chief Executive Jerry Yang said late Wednesday that he remains "very open minded" about a full or partial merger with former suitor Microsoft Corp.
"The best thing for Microsoft to do is to buy Yahoo," Yang said during an appearance at a technology conference in San Francisco, "At the right price, whatever that price is."
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MSFT 22.08, -1.45, -6.2%) had offered as much as $33 a share for Yahoo (YHOO:
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YHOO 13.92, +0.57, +4.3%) , before pulling its bid in May.
Since then, Yahoo's share price has crumbled, and investors and analysts have been pressing for the company to reconsider some sort of deal with the software giant -- including selling its online search business, a prize that Microsoft covets.
Yang said Wednesday that such a transaction remains possible.
"As far as a search deal goes, we're very open minded about that," he said.
"They walked away from a public offer, and we were ready to negotiate," Yang said of Microsoft. "Had we been able to do that, we would have been very happy."

Read more at Market Watch

Fed Offers Banks Loans Amid Crisis

The Federal Reserve took highly unusual steps Friday to open up the supply of cash to the nation's banks and signaled a willingness to cut interest rates if necessary, at a time when some of the safest financial markets are seizing up and threatening the broader economic outlook.

Specifically, the central bank lowered the discount rate, charged on direct Fed loans to banks, to 5.75% from 6.25%, and took steps to encourage banks to borrow from what is known as its discount window, such as lengthening the term of such loans to as long as 30 days from the current one day. Fed officials also joined a conference call with leading financial executives, aiming to ensure the Fed's moves have maximum impact by making clear that officials are actively inviting more borrowing from the Fed.

The central bank has now used most of the tools at its disposal for restoring normalcy to the markets. If these steps fail, its only major weapon left is a cut in the federal-funds rate target -- perhaps even on or before its next meeting on Sept. 18. The futures market indicated traders expect the Fed to cut rates at least a quarter point at its September and October meetings, and down a full point from the current 5.25% to 4.25% by the end of the year.

Read more in the Wall Street Journal

Subprime not lone cause for swings: Damodaran

M Damodaran, chairman, Securities and Exchange Board of India (Sebi) today ruled out the US subprime crisis as the single cause for the swing in markets, and also ruled out any separate regulation for hedge funds.

Damodaran said the regulator would prefer hedge funds coming to the Indian markets directly than through offshore derivatives. He said registration of hedge funds with Sebi, as in the case of foreign institutional investors, would be enough.

He pointed out that Sebi was not worried about the large number of players coming to India because their entry pre-supposes the constant returns being offered by the Indian markets besides a sound market regulatory mechanism.

He said Sebi would soon issue guidelines for setting up a self-regulatory organisation (SRO) for investment advisors including brokers and the print and the electronic media.

"A single organisation covering all sets of investment advisors is going to be effective," he said while ruling out multiplicity of self-regulatory organisations.

The purpose of self-regulation is to see that the advises on investments are given professionally and in a transparent way, Damodaran added.

DLF pays Rs 1,675cr for DCM Silk Mills land

In the country’s most expensive land deal, DLF has paid a whopping Rs 1,675 crore for acquiring 38 acres of land in west Delhi from DCM Shriram Consolidated (DSCL) and the Lohia Group. The deal surpassed arch rival Unitech's Rs 1,582 crore purchase of 300 acres in Noida last year.

DLF shelled out Rs 44 crore per acre for the land parcel, located around 5 km away from New Delhi's central business district of Connaught Place. The property - better known as Swatantra Bharat Mills and DCM Silk Mills - was owned by SBM Land Redevelopment Project. DSCL and the Lohia's held an equal 50% right each to the land.

While DSCL said that it has received its share of Rs 837.50 crore on signing the agreement with DLF today, the Lohias did not offer any official comment. A family source said S P Lohia of Indonesia-based P T Indo Rama was the owner of the land.

DLF, the country's largest real estate developer, is looking to realise around Rs 12,000 crore from its future development at this site. A senior executive from DLF chose to describe the sale as "not a land deal, but a project deal on perpetual lease basis". The company said it funded the deal through internal accruals.

Read more in Business Standard

Sensex ends down 643pts; Tata Steel drops 10%

The Sensex opened with a huge negative gap of 416 points at 14,585 on the back of a sell-off in the global markets triggered by the subprime crisis in the US.

The Sensex, after languishing over 500pts lower for most of the trading session, slipped again towards the close to a low of 14,345. The index finally ended with a hefty loss of 643 points at 14,358 - the second biggest loss in absolute terms in history.

HEFTY LOSSES...
Date	Close	Prv Cls	Chg	% Chg
18-May-06	11391.43	12217.81	-826.38	-6.76
16-Aug-07	14358.21	15000.91	-642.70	-4.28
02-Apr-06	12455.37	13072.10	-616.73	-4.72
01-Aug-07	14935.77	15550.99	-615.22	-3.96
17-May-04	4505.16	5069.87	-564.71	-11.14
27-Jul-07	15776.31	15234.57	-541.74	-3.43
28-Feb-07	12938.09	13478.83	-540.74	-4.01
05-Mar-07	12415.04	12886.13	-471.09	-3.66
15-May-06	11822.20	12285.11	-462.91	-3.77
08-Jun-06	9295.81	9756.76	-460.95	-4.72

The BSE Metal index slumped 6.5% to 10,300. The Bankex and Realty index plunged 5.5% each to 7421 and 6980, respectively. The Oil & Gas index hsed 4.5% at 7505. The Auto and FMCG indices dropped over 3% each to 4662 and 1855, respectively.

Read more in Business Standard

Reliance Capital Trustee picks up shares in ETC Networks

MUMBAI: Anil Ambani group firm Reliance Capital Trustee Company Ltd has picked up 1.2 per cent stake in Zee group-promoted ETC Networks for Rs 1.60 crore in open market transactions on the bourses. Reliance Capital Trustee Company bought one lakh equity shares of ETC Networks at a price of Rs 93.50 per share in a bulk deal at the Bombay Stock Exchange. It had bought 71.44 lakh shares on the National Stock Exchange at Rs 94.19 per share aggregating to Rs 67.28 crore on Thursday. Reliance Mutual Fund today also purchased one lakh shares in ETC Networks at a price of Rs 98 per share on the NSE. As on June 30, Zee Telefilms holds 55 per cent stake in ETC Networks. The scrip of ETC Networks closed at Rs 102.45, up 9.57 per cent at the Bombay Stock Exchange after touching a 52-week high of Rs 102.85.