a good day at dalal street with metals leading the race

• Foreign investors are likely to fund up to 30 percent of India’s $18 billion road projects in the current fiscal year, a top official at the National Highways Authority of India (NHAI) said on Monday.
• The Indian market closed the first day of the expiry week on a positive note though we closed off the highs of the day. It was a quiet session dotted by some volatility due to profit taking. Even the global markets were quiet, today. Sensex closed at 20099, up 54 points (provisional) and Nifty at 6030, up 12 points (provisional) from the previous close.
• Monsoon rains have finally started withdrawing from grain-producing regions of northwest India, the National Climate Centre’s director told Reuters on Monday, easing concerns prolonged rainfall would damage crops.
• The jarring noise reverberating across Asia is the sound of a region shifting gears, adjusting to the prospect of China growing bigger, bolder and possibly bossier as the United States looms less large.
• Indian wind turbine maker Suzlon Energy is in talks to buy the remaining nine percent stake in German unit REpower Systems AG, its chief financial officer said on Monday.
• India aims to halve its peak power deficit within two years but environmental clearances for power plants could significantly impact future capacity addition, the head of the Central Electricity Authority said on Monday.
• Personal care products maker Godrej Consumer Products Ltd, which has made four overseas acquisitions this year, is also interested in buying domestic firms to boost growth, the chairman of the $2.5 billion diversified group said on Monday.
• Indian builder Lanco Infratech will consider an initial public offering for its power business as it looks to fund expansion plans to meet rising demand in Asia’s third-largest economy, a senior official said.
• The Indian rupee breached the 45-per-dollar mark to reach a new four-and-half-month high on Monday, as large foreign investor interest in the domestic stock market amid a clutch of initial public offerings (IPOs) boosted sentiment.
• Indian shares climbed more than 1 percent powered by foreign fund inflows as positive data in the U.S. bolstered hopes the world’s largest economy was on firmer ground, fuelling a rally across Asian markets.
• Gold powered to a record high at $1,300 an ounce on Monday, with investors pouring more cash into the market on global economic health worries and the possibility of further quantitative easing to stimulate growth.
• China should keep the yuan stable and not give in to U.S. pressure because a rapid rise in the value of the currency would harm the economy, a prominent government economist said on Monday.
• The European Central Bank considered activating rescue funds for Ireland but in the end decided not to, a German newspaper said on Monday, citing government sources.
•  India will modernise its ports to accommodate larger vessels and make transporting iron ore and coal to roads and railways more efficient to keep up with its booming economy, its maritime minister said on Monday.
• Japan’s annual exports growth slowed in August for the sixth straight month, underlining government concerns about the yen’s strength that led authorities to sell the currency this month to ease pressure on the economy.
• Despite being home to the world’s biggest coal producing companies – Coal India and Shenhua – China and India’s surging demand for thermal coal has led to a boom in imports which is likely to continue for the next decade.
• European Union central bankers, lawmakers and ministers meet in Brussels this week for the annual Eurofi symposium to discuss the bloc’s financial reform plans.
• U.S. Treasury Secretary Timothy Geithner faces a lonely campaign to make China’s currency a major issue at the next Group of 20 summit as would-be allies shrink from confronting Beijing.
• India’s power sector is increasingly attractive to investors, but domestic firms with local knowledge and improving access to offshore funding will still dominate the industry for the foreseeable future, a senior government adviser said.
• India’s No. 2 cellular carrier reliance communications, which has tried at least four different and so far fruitless ways to raise capital over the past year or so, will on Tuesday seek permission from shareholders for the right to sell fresh equity.
• L&T Finance Holdings Ltd, a unit of Larsen & Toubro, plans to file for an initial public offer worth 15 billion rupees ($333 million), the top Indian engineering firm said in a notice to the stock exchange.
• Recent takeover bids by BHP Billiton and Vedanta show that a bounty of cash from high metals prices may entice miners to chase pricey takeovers and build unwieldy conglomerates.
• Emerging countries are improving the manufacturing quality of designer clothes and are looking to buy brands in mature markets, fashion executives said in Milan last week.

foreign funds to drive sensex further

• The Indian rupee posted its best weekly gain in three months on Friday and rose to a four-month peak, boosted by robust foreign capital inflows into Asia’s third-largest economy on the back of strong growth prospects.
• With enviably strong growth rates, the largest economies in Latin America and Asia have come to represent the shift in global clout from developed to developing economies. And as they’ve grown, the two countries have become more intertwined than ever.High prices and rising mortgage rates are hurting demand in India’s once-booming housing market, jeopardising a pipeline of about $6 billion in initial public offerings (IPOs) from Indian property companies.
• Buoyed by the busiest August in more than a decade, global mergers and acquisitions have risen 21 percent so far this year, with stable activity in the United States and growth in emerging markets offsetting a drop in European dealmaking.
• A dramatic upheaval among HSBC’s top management after a boardroom row has left the bank scrambling to limit damage to its reputation but unlikely to alter its increasing focus on Asia.
• President Luiz Inacio Lula da Silva hailed a “new chapter in Brazil’s development” on Friday after state oil company Petrobras sold $70 billion in shares at a higher-than-expected price, a record deal that could make the country one of the top global energy exporters.
• The U.S. economy is not at risk of deflation despite relatively subdued price growth, Richmond Federal Reserve Bank President Jeffrey Lacker said on Friday.
• New orders for a wide range of long-lasting U.S. manufactured goods rose in August and business spending plans rebounded strongly, the latest sign a sharp summer slowdown in the economy was abating.
• Infrastructure in India is key to realising the country’s potential but bureaucracy, tough financing and hesitant overseas investment have slowed development in the sector, calling into question the future of India as a powerhouse.
• Crop failures and speculation – not market fundamentals – were the main causes of recent price volatility in grain markets and there is no sign of an impending food crisis, the U.N. Food and Agriculture Organisation (FAO) said on Friday.
• U.S. Treasury Secretary Timothy Geithner said on Friday that America’s economy remained “very tough” and that key sectors such as construction were still struggling.
• Japan’s efforts to weaken the yen may cause China some pain as it seeks to diversify its foriegn exchange reserves into Japanese debt but Beijing has little option but to press on with the investment.
• Ireland pledged to help defend the euro currency from a concerted market attack on Friday but the government’s room to manoeuvre was further restrained when an independent MP turned his back on the shaky coalition.
• Stock investors will head into next week wondering if September will end as strongly as it began for the market, with manufacturing and personal income data among the top indicators on tap.
• Further gains in the yen should be stopped and Japan will maintain close coordination with the United States and European Union if it intervenes in the foreign exchange market to curb its currency’s rise, Japan’s foreign minister was quoted as saying.
• Gold futures rose on Friday, hitting all-time highs above $1,300 an ounce as investors fretted over economic uncertainty after the Federal Reserve raised expectations to take new measures to spur growth.
• Oil rose on Friday, marking the strongest weekly gains in two months as data showing a rise in business spending lifted markets.
• The dollar fell against a basket of currencies on Friday to its lowest level since February as stronger-than-expected data in Europe and a drop in U.S. durable goods orders hurt demand for the greenback.

mixed reactions at dalal street with RBI’s aggresive interest rate hike

• The BSE Sensex will show a small rise between now and the end of the year but is set to surpass record highs in the first half of 2011 thanks to a booming economy, a Reuters poll showed.
• The Reserve Bank of India (RBI) raised interest rates more aggressively than expected on Thursday, keeping up its fight against inflation, but signalled that it may be nearing a pause in its current tightening cycle.
• The RBI lifted the repo rate, at which it lends to banks, by 25 basis points to 6 percent and raised the reverse repo rate, used to absorb excess cash, by 50 basis points to 5 percent.
• The Reserve Bank’s move to hike policy rates is a step in the right direction, Finance Minister Pranab Mukherjee said on Thursday, after the central bank raised its key rates in its first mid-quarter policy review.
• The BSE Sensex  snapped a seven-day winning streak and shed 0.4 percent in a choppy Thursday session, as traders locked gains after the recent sharp run, but a fall in outsourcers was offset by a rise in financials pack, which brushed off key rates hike.
• The government increased the interest rate offered in the employees’ provident fund by 1 percentage point to 9.5 percent for the fiscal year that ends in March 2011, Harish Rawat, Minister of State for Labour, told reporters on Wednesday.
• Business sentiment at Asia’s top companies fell in the third quarter, marking the first decline in six quarters, as growing concerns about the global economic outlook dented optimism.
• Big Japanese manufacturers expect conditions to worsen in the final three months of 2010 as they feel the pinch from slowing overseas growth and a strong yen, a government survey showed, despite a pick-up in optimism in the business environment in the July-September quarter.
• ArcelorMittal says revises India strategy, plans smaller steps with modular sites in India (old strategy had 2 mega-projects).
• “We might consider passing on this hike, but we have to work it out. We don’t see any immediate impact on banks. But certainly, the expectations from depositors will go up, so they would expect us to raise deposit rates by at least 25 basis points.”  B A PRABHAKAR, EXECUTIVE DIRECTOR, BANK OF INDIA.
• Billionaire financier George Soros said on Wednesday that Japan was right to intervene in foreign exchange markets to bring down the value of the yen.
• Another Lehman will come — and should fail too  :  The blind self-belief of financiers can’t be abolished. Neither can cycles in the industry. But two years after the disastrous failure of Lehman Brothers, regulatory shifts have the potential to reduce the impact of a repeat. The challenge for politicians and watchdogs is not to go soft.

metals, banks will boost sensex further

• Japan’s government kept its assessment of the economy unchanged in a monthly report on Friday but warned of increasing downside risks to growth such as the strong yen and slowing overseas growth.
• China’s imports leapt in August, boding well for a strengthening of domestic demand in an economy that has become a major driver of global growth.
• Stocks rose and bonds fell on Thursday after stronger-than-expected U.S. data on jobless benefits and trade, raising hopes the tepid economic recovery would accelerate.
• The Basel Committee of central bank and regulatory officials is likely to complete talks on new Basel III capital standards by Sunday or Monday, German Finance Minister Wolfgang Schaeuble said on Thursday.
• There are no signs of a slowdown in India’s industrial output growth, senior finance ministry adviser Kaushik Basu said on Thursday.
• India, the world’s top consumer of sugar, has asked millers to apply for exports of the sweetener against imports of raws in the past, trade and government officials said on Thursday.
• Japan and India agreed on a free trade deal on Thursday which Tokyo said would lead to a 10-fold jump in trade flows as it eyes the fast-growing economy as a low-cost production centre and a market for exports.
• High inflation in India is expected to ease in coming months, reducing pressure on the Reserve Bank of India (RBI) to raise interest rates further.
• India’s wholesale price index in August probably rose 9.6 percent from a year earlier, easing from a rise of 9.97 percent in July. Forecasts from 15 economists ranged from 9.36 percent to 9.84 percent.
• Equity funds posted the biggest weekly inflows in more than a month in early September, reflecting some comfort with the global economic outlook, though fresh cash allocations showed the limits of risk taking, EPFR Global data showed on Friday.
• Asian stocks rose to a four-month high on Friday as some investors were inspired by positive U.S. and Japanese economic data to pick out bargains, with the shift to riskier assets weighing on the yen.
• World stocks kicked off September on a stronger note on Wednesday as data showed a manufacturing rebound in China and stronger-than-expected growth in Australia, while the yen held near recent 15-year peaks against the dollar.
•  India’s tax department has jurisdiction over tax bills in cross-border mergers, a court ruled, dismissing a petition by Vodafone(VOD.L) and setting a precedent for foreign firms looking to buy into Indian companies.
• U.S. President Barack Obama stood firm on Thursday in opposition to a Republican push to extend Bush-era tax cuts for the rich but stopped short of threatening to veto such a measure if passed by Congress.
• Advice may be nice, but backing it up with balance sheet can be key to winning M&A business for investment banks in India.
• Switzerland remains the world’s most competitive economy, while India dropped two places to 51, according to the World Economic Forum’s annual rankings issued on Thursday.

a sluggish open at sensex today

• The rupee rose to a near two-week high on Friday morning trade, boosted by gains in Asian peers, the dollar’s loss versus major currencies and gains in domestic shares.
• Sensex up by  31 points , trading at 18,274 points. (10:11 am , india).
• China on Friday offered a rare glimpse into its foreign exchange reserves, confirming that they are overwhelmingly allocated in dollars, while a central banker said the mountain of cash could face depreciation risks.
• Waiting for dips seems to be the strategy for Indian money managers as they plan to raise equity exposure in the next three months while anticipating a correction, a Reuters poll showed.
• India’s trade deficit swelled in July to its biggest level in almost two years, putting further pressure on the current account and on the need for India to attract capital inflows to avoid pressure on its currency.
• The government expects the current account deficit to reach $41.8 billion, or 2.7 percent of projected GDP, in the fiscal year to next March. It doesn’t see problems unless the current account exceeds 3 percent of GDP.
• Shares of companies from the world’s biggest developing economies are increasingly featuring in global fund portfolios, a possible reason why BRIC markets are underperforming in 2010 compared to emerging market peers.
• Gold rose on Thursday, settling slightly higher as investors set positions ahead of the key U.S. employment report, forecast to show a worsening labor market, which could boost demand for safe-haven assets.
• When it comes to investing your money, have the following thoughts ever come to your mind: “I want high returns but at low risk” or “I want to get 30% annualized returns, but must keep my principal safe”. If so, then you are setting yourself up for disappointment. Don’t blame the financial markets or your luck or your investment advisor. Rather take some time to understand that earning a high return at low risk is incompatible. If you want to create wealth for yourself and your family, you need to take some calculated risks and can’t be totally risk averse.
• The DTC will replace the Income Tax Act and rings in many changes in personal and corporate taxation. It will come into effect starting April 1, 2012. Here we demystify what the impact of the DTC will be towards personal taxation for salaried individuals.
• Sensex  now trading 9 points up, at 18,247 . (10:55 am , india).
• Pending sales of previously owned U.S. homes rebounded unexpectedly in July and new claims for jobless benefits fell last week, helping quell fears the economy could face a double-dip recession.