yuan,a threat to dollar’s supremacy

• In 1965 Valéry Giscard d’Estaing, then France’s finance minister, complained that America, as the issuer of the world’s reserve currency, enjoyed “an exorbitant privilege”. China’s president, Hu Jintao, does not have quite the same way with words. But on the eve of his visit to America this week he told two of the country’s newspapers that the international currency system was a “product of the past”. Something can be a product of the past without being a thing of the past. But his implication was clear: the dollar’s role reflects America’s historical clout, not its present stature.
• Mr Hu is right that America’s currency punches above its economy’s diminished weight in the world. America’s share of global output (20%), trade (only 11%) and even financial assets (about 30%) is shrinking, as emerging economies flourish. But many of those economies, such as South Korea, still sell their exports for dollars; many, including China, still peg their currencies to the greenback, however loosely; and about 60% of the world’s foreign-exchange reserves remain in dollars.
• This allows America to borrow cheaply from the rest of the world. Its government has been able to overspend, secure in the knowledge that its IOUs will be bought by foreign central banks, which are not too fussy about price. America would show more self-discipline, many Chinese believe, if the dollar had a little bit more competition.
• Could the yuan become a rival? China’s economy will probably surpass America’s in outright size within 20 years. It is already a bigger exporter. It is prodding firms to settle trade and even acquire foreign companies in its own currency. That is adding to a pool of “redbacks” outside its borders. These offshore yuan are, in turn, being tapped by borrowers, issuing “dim sum” bonds in Hong Kong.
• But as the dollar’s history shows, economic clout is not enough without financial sophistication. If foreigners are to store their wealth in yuan, they will need financial instruments that are safe, stable and easily sold. Dim sum makes for a tasty appetiser. But the main feast of China’s financial assets is onshore and off-limits, thanks to its strict capital controls. The government remains deeply reluctant to let foreigners hold, buy and sell these assets, except under tight limits. Indeed, it is barely ready to give its own people financial freedom: interest on bank deposits is capped; shares are largely owned by state entities; and bonds are chiefly held by the banks—which are, in turn, mostly owned by the state.
• Over time China will relax its financial grip. But even if it could usurp the dollar’s role as the world’s currency, it will not replicate the American set-up. The United States takes advantage of the dollar’s position to borrow cheaply from the rest of the world, selling its assets in return for goods. China is a mirror image of this. It runs a trade surplus, selling goods in return for financial claims on foreigners. Its firms, households and government save more than they can invest at home.
• Rather than seeking to borrow in its own currency, China may harbour the opposite ambition: to lend in its own currency. The exorbitant privilege it may covet is a lower foreign-exchange risk on its savings. On top of the trillions China has lent to America’s treasury, it also holds stakes in Australian mines, African farms and Swedish car companies. But because none of these assets is in yuan, China suffers a capital loss whenever its currency strengthens. It would no doubt like to share some of this risk with the rest of the world. The model is not America, but Germany, an international creditor which holds 70% of its foreign assets in euros.
• There is a catch, though. No one will want to borrow in a currency that is only ever going to strengthen, increasing the value of their debts. So if China wants to “yuanify” some of its claims on the rest of the world, it will need a currency that can go down as well as up. To make people believe the yuan can fall tomorrow, China will have to loosen its currency’s peg and let it rise faster today. China is different from America: it is a rising economic power and a thrifty one. But one rule still holds: China will have to open its financial system to the world if the yuan is to be the dominant currency.

 

what an ideal banking system should look like?

• Many countries have largely settled the question of what an ideal banking system should look like. Big diversified firms, tightly regulated, with a lot more capital and less borrowing than before, are, they reckon, the ticket. Britain’s financial intelligentsia, however, has been gripped by a riot of free-thinking. A thousand flowers have bloomed: banks should be broken into lots of bits, sliced in half, nationalised, removed from any state involvement, or even abolished altogether.
• A body set up by the British government to review(independent commission on banking) headed by Sir  John Vickers, in the wake of the financial crisis, how banking in Britain should be organised, including whether banks should be broken up. Active since last September, it has now largely finished gathering evidence and will produce a draft report to the government in April and final one in September.
• Sir John noted that both retail and investment banking were inherently risky. “The popular utility–casino distinction between types of banking activity seems more catchy than helpful,” he said.Those who hoped for a Jacobin tone will be disappointed.  Sir John also said that the cost for banks of raising capital was more expensive than raising debt. That may challenge some theoreticians at the Bank of England, who have argued that banks could carry much higher capital without having to make commensurately higher profits—a view regarded as bananas by Britain’s bank chiefs.
• The observations of  Sir John Vickers , more or less ruled out some of the more Utopian proposals that have done the rounds, including the idea of “narrow banking”, in which all deposits are invested only in government bonds—presumably leaving the job of lending to households and companies to someone other than banks (although who is never really specified). Sir John hinted strongly, although did not say explicitly, that the commission would not recommend that big banks be broken up into retail and investment-banking operations.
• Instead he focused on two priorities. First, the loss-bearing capacity of banks will have to increase above the level required by the new international “Basel 3” capital rules, either through making them have more capital or by creating mechanisms to impose losses on banks’ creditors. This is as close to a truism in international banking circles as it is possible to get, and a variety of proposals are in the works to this end.
• Second, banks will have to ringfence their retail-banking operations legally, to protect them from problems at their investment banks and to prevent the investment bank from benefiting from the implicit government guarantee that the retail bank would enjoy. It’s not clear, however, whether this would make it easier for banks to amputate bits of themselves during a crisis. Some American firms, such as Citigroup, had separate broker-dealer operations that were separately capitalised and regulated—but did not dare let them go bust in the crisis. Most banks do not legally guarantee their foreign subsidiaries, but many, including HSBC, have supported to them, often at the behest of regulators desperate to avert chaos.
• The banks will protest that ringfencing is insanely costly and impossible to implement. This is doubtful too, except perhaps for those banks with big subsidiaries in foreign countries. There, regulators may object to a big, British-owned, local operation being reorganised in a way they think is inappropriate for their locally owned firms. On the same day as Sir John’s speech, the Financial Times reported Peter Sands, the chief executive of Standard Chartered, a London-based but largely Asia-focused outfit, arguing that forced restructuring of the banks could be “very damaging“ for the British economy. Sir John hinted how he might persuade reluctant banks: the more they ringfence themselves, the less capital it may be necessary for them to carry.
• Most of Sir John’s ideas are pragmatic and in the mainstream of thinking in international banking and regulatory circles. Still, it may suit him and the politicians to pretend to the wider public that Britain is now edging towards a revolutionary solution to too-big-to-fail banks. That isn’t the case, but if the banks are smart they will breathe their sighs of relief in private, while crossing their fingers that over the next few months Sir John does not change his mind.

inconsistent trading day at dalal street , day started in red and ended in green

• The Sensex closed at 19534, up 337 points from its previous close, and Nifty shut shop at 5863, up 109 points.
• Indian shares provisionally closed 1.7 percent higher on Wednesday, recovering after six straight sessions of decline, with firm global markets helping the sentiment.
• The Indian rupee war trading slightly stronger on Wednesday afternoon, retreating from one-week highs, after data showed November industrial output grew at a much slower-than-expected pace.
• The euro edged up on Wednesday on speculation that euro zone finance ministers may raise the lending capacity of the region’s rescue fund, though gains were limited as investors braced for a Portuguese bond auction.
• Food inflation is fuelling tensions within India’s ruling coalition, highlighting how high prices of basic foodstuffs have become a major voter issue ahead of state elections.
• ONGC Videsh Ltd and its partners, Indian Oil Corp and Oil India, are in last lap of negotiations for developing the Farzad B gas field off the coast of Iran at an estimated investment of over $5 billion.
• The risk that parlous government finances will trigger sovereign debt defaults remains one of the biggest threats facing the world in 2011, according to the World Economic Forum.
• China would welcome assurances its financial assets in the United States are safe, a senior diplomat said on Wednesday, ahead of President Hu Jintao’s visit next week, but played down rifts between the two powers.
• India’s industrial output growth for the current fiscal year ending in March could be around 10 percent, Montek Singh Ahluwalia, deputy chairman of the Planning Commission said on Wednesday.
• Portugal is likely to pay record high premiums to place debt on Wednesday, but recent bond buying by the European Central Bank should avert a dramatic rise in yields to levels that prompt the country to seek a bailout.
• Central banks are pump-priming at the most aggressive pace in decades, governments are hiking sales taxes, food and energy costs are surging — and yet investors seem strangely casual about inflation risks.
• The Reserve Bank of India (RBI) is expected to raise key rates by at least 25 basis points by the end of this month to tackle rising inflationary pressures, while analysts expect a total of 75 basis points increase in rates in 2011.
• India’s top iron ore producing state is seeking a ban on exports of the steel making commodity, and is likely to send a proposal to the federal government in a month, raising prospects of tightening supplies and firm global prices.
• India’s wholesale price index in December probably rose 8.35 percent from a year earlier, accelerating from from November’s 12-month low of 7.48 percent, median forecasts in a Reuters poll showed.
• India’s industrial output in November rose a slower-than-expected 2.7 percent from a year earlier, well below the previous month’s revised annual growth of 11.3 percent, government data showed on Wednesday.
• Bangladesh began on Wednesday investigating allegations that Nobel Prize winning microlender Grameen bank had illegally diverted aid funds after a Norwegian television documentary cast doubts about its tax records.
• The government expects a dispute with Iran over payment for crude oil to be settled as early as next week, ending a deadlock that has threatened to stall supplies from the Middle Eastern nation.
• India’s top mobile operator Bharti Airtel  and State Bank of India  will together initially invest 1 billion rupees ($22 million) in a joint venture for mobile-based banking, O.P. Bhatt, chairman of the country’s top lender, said on Wednesday.
• The rise in food inflation was a shocker. Prices jumped 18.3 percent giving the government and the RBI an uneasy feeling and the stock market a big disappointment. In spite of promises, it looks like headline inflation will not drop below 6 percent by March.
• State Bank of India, the country’s top lender, on Wednesday denied a TV report the Central Bureau of Investigation (CBI) was searching its offices in a case related to allocation of mobile phone licences.

indian shares fell for the sixth session in a row on Tuesday

• The Sensex closed at 19196, down 28 points from its previous close, and Nifty shut shop at 5754, down 9 points.
• Tata Steel, the world’s No. 7 steelmaker, will raise up to $800 million by the end of January, sources told Reuters on Tuesday, after the company said it would launch a follow-on public offer.
• The rupee strengthened to its highest level in nearly a week on Tuesday as some custodian banks sold dollars, probably for investing in the increased foreign institutional debt limits, dealers said.
• Belgium’s caretaker government gave itself 24 hours on Tuesday to prepare budget cuts designed to calm financial markets unsettled by the country’s heavy debt and political crisis, after an unusual intervention by the king.
• The central bank should continue with bond purchases through open market operations (OMO) despite the current surging inflation and improved liquidity.
• The London Stock Exchange said human error rather than sabotage was to blame for the crash of its European trading platform last November, which it had partly blamed for a three-month delay in a key systems upgrade.
• Gold volumes in Exchange Traded Funds (ETF) in India, the world largest consumer, surged 74.3 percent in December, when the yellow metal struck its record high, data from funds showed.
• Portugal’s leaders attempted on Tuesday to quash persistent talk they would seek an international bailout, but one central bank official broke ranks to say the country would be better accepting outside help.
• More than a year after Europe’s debt crisis erupted, the region has a chance to halt the spread of the instability — but only if governments take more radical action to protect Spain.
• China overshot its bank loan target in 2010 and finished the year with money growth still running too fast, underscoring the need for more decisive policy tightening to keep inflation in check.
• Oil rose toward $90 per barrel on Tuesday as a key Alaskan pipeline remained shut, removing more than half a million barrels per day from the U.S. markets.
• Gold rose for a second day on Tuesday, driven by deepening worries about the spread and severity of the European debt crisis, and a pickup in demand from number two consumer China also provided support.
• The Indian rupee strengthened to its highest level in nearly a week on Tuesday as some custodian banks sold dollars, probably for investing in the increased foreign institutional debt limits, dealers said.

shares fell 2.4 pct

• The Sensex closed at 19224, down 467 points from its previous close, and Nifty shut shop at 5762, down 141 points.
• The Indian rupee fell to a three-week low on Monday tracking sharp losses in shares which raised concerns of foreign fund outflows, while some dollar demand from oil firms and importers also weighed.
• Indian shares provisionally closed 2.5 percent lower on rate hike fears and concerns the relative attractiveness of emerging markets may be wearing off.
• India’s industrial output growth probably slowed to 6.6 percent in November from a year earlier, a median forecast in a Reuters poll showed, as price rises began to bite in Asia’s third-largest economy, which is growing at almost 9 percent.
• China’s global trade surplus narrowed in 2010 for the second straight year, giving Beijing grounds to rebuff U.S. pressure for faster currency appreciation ahead of a visit to Washington next week by President Hu Jintao.
• Portugal faces the bond markets for the first time in 2011 on Wednesday, needing to convince investors that it can soldier on without seeking an EU bailout even if its borrowing costs soar at the auction.
• China was little touched by hot money inflows last year and will use its currency policy to counter speculative funds if they should pour in, its foreign exchange regulator said on Monday.
• There are no discussions currently under way on an European Union/International Monetary Fund bailout of Portugal, the European Commission said on Monday.
• The world’s biggest economies are working to find ways to bring down soaring food prices, a G20 official said on Friday, as top exporter Thailand vowed to keep rice supply steady and avert a repeat of the 2008 food crisis.
• The recent spurt in India’s food prices should cool by February but headline inflation may exceed government forecasts by end March, deputy chairman of India’s Planning Commission Montek Singh Ahluwalia said on Friday.
• India’s central bank said on Monday it would buy up to 120 billion rupees ($2.6 billion) of government bonds through open market operations (OMO) on Jan 12.
• India will sell 110 billion rupees ($2.42 billion) of bonds on January 14, the government said in a statement on Monday.
• Housing Development Finance Corp (HDFC.BO) is raising at least 1.5 billion rupee via 1-year bonds at 9.55 percent, two sources familiar with the development told Reuters on Monday.
• Indian shares ended lower on Monday as foreign institutions unwound their positions on a firm dollar, dealers said. Recent rise in the U.S. dollar jacking up the prices of crude and other commodities amid inflationary conditions are bad signs for the Indian markets, analysts said.

a free-fall at dalal street

• The Sensex closed at 19691, down 492 points from its previous close, and Nifty shut shop at 5904, down 143 points.
• Gold imports in India, the world’s largest consumer, are likely to jump 64 percent to 500-550 tonnes in 2011, driven by investment purchases that are likely to affect world prices, the head of a trade body told on friday.
• The rupee retraced from three-week lows but ended weak on Friday as oil importers’ dollar demand, losses in local shares and global dollar strength outweighed support from dollar inflows towards debt.
• French intelligence services are looking into the role China may have played in an industrial espionage scandal at carmaker Renault that a senior minister has said involved “economic warfare”, a government source told on friday.
• The recent spurt in food inflation is due to supply constraints, but prices should cool by February, deputy chairman of India’s Planning Commission Montek Singh Ahluwalia said on Friday.
• There could have been irregularities in the grant of telecoms licences and spectrum in India in 2008, the telecoms minister said on Friday, a scandal that has forced the government on the backfoot and virtually stalled policymaking.
• China is likely to raise interest rates two to three times in 2011, as policymakers strive to keep a lid on rising prices, a senior economist from a top government think-tank said on Friday.
• The Group of 20 leading economies will discuss ways to tackle soaring food prices that are stoking fears of a repeat of the 2008 food crisis, as some Asian countries sought to reassure nervous consumers on Friday.
• South Korea’s LG Electronics Inc aims to more than double smartphone shipments this year and will focus on expanding premium products to catch up with bigger rivals, an executive said on Thursday.
• India’s foreign exchange reserves rose to $297.334 billion as on Dec 31 from $295.031 billion in the previous week, the Reserve Bank said in its weekly statistical supplement on Friday.
• India hopes to resolve an oil payments dispute with Iran before February, the foreign secretary said on Friday, as the South Asian giant strives to satisfy energy needs without upsetting the United States.
• European Central Bank President Jean-Claude Trichet said on Friday he saw no danger of inflation taking off in the euro zone, dismissing any concerns about rising price pressures in the currency area.
• The government is trying to persuade Pakistan to resume full exports of onions, the foreign minister said on Friday, as food inflation weighs on Asia’s third-largest economy and fuels anger against the ruling coalition.
• Euro zone economic growth slowed more than expected in the third quarter against the previous three months, revised data from the European Union’s statistics office Eurostat showed on Friday.
• China will lead an economic slowdown in Asia this year — but that’s good news for investors, as it should avoid bigger inflation problems in the region, fund managing company Amundi said on Thursday.
• The United States may hit the legal limit on its ability to borrow by March 31 and faces serious consequences unless Congress acts by then to raise it, Treasury Secretary Timothy Geithner said on Thursday.

sensex dips further for the third consecutive day,inflation worries prevail

• The Sensex closed at 20184, down 116 points from its previous close, and Nifty shut shop at 6048, down 31 points.
• Profitability at two of India’s top state-run oil firms is being hurt at a time of high global crude costs, as the government delays increasing state-set fuel prices due to political pressure from high inflation.
• Finance Minister Pranab Mukherjee on Thursday asked the state governments to remove supply chain bottlenecks at the earliest in the food sector to bring prices down quickly, even as food inflation accelerated to a one year high.
• Sensex fell for the third day on Thursday, shedding 0.6 percent after a sharp rise in food prices heightened concerns the Reserve Bank of India (RBI) may tighten monetary policy more harshly than expected.
• Record high food prices are moving to the top of the agenda for many Asian policymakers as the prospect of higher inflation in 2011 poses a major threat to the region’s strong revival from the global financial crisis.
• Developed market stocks climbed on Thursday on hopes for renewed U.S. economic growth, although the dollar and emerging markets steadied, unwilling to push a rally further ahead of more data on Friday.
• The U.S. services sector grew last month at its quickest pace since mid-2006 and private-sector hiring was triple economists’ forecasts, though recovery across Europe remained mixed.
• India’s food price index rose 18.32 percent and the fuel price index climbed 11.63 percent in the year to Dec. 25, government data on Thursday showed.
• A surprise surge in U.S. private-sector employment last month to its highest level on record provided the most bullish signal in months that the U.S. economy is on the mend.
• John Boehner, the incoming speaker of the U.S. House of Representatives, warned on Wednesday that Congress will have to make “tough decisions” on the U.S. economy and mounting federal debt.
• Worried about inflation? Neither Federal Reserve Chairman Ben Bernanke nor all those traders currently dumping gold seem to be, but that may be the best time to make sure you’re covered if prices go haywire.
• President Barack Obama will announce on Friday whom he has picked to replace Larry Summers as his top economic adviser, with Gene Sperling seen as the front runner to take this influential White House role.
• The International Monetary Fund could take a bigger role in developing “rules of the road” for international capital flows to ensure hot money doesn’t spread financial crises, IMF staff said on Wednesday.
• China’s central bank governor Zhou Xiaochuan warned that inflation was mounting and that more could be done to guide the growth of money, an indication that price pressures still top the list of official concerns.

sensex struggling to find pace

• It is subdued trade in the Indian market with the benchmark indices virtually at the low point of the day on the back of profit taking. Sensex is trading at 20394, down 104 points from its previous close, and Nifty is at 6106, down 39 points. (11:38 am, india).
• Growth in India’s service sector eased in December from a four-month high the previous month, reflecting a slightly slower expansion in new business, a survey showed on Wednesday.
• Iran has offered a stop-gap plan for oil supplies to India for January, an Indian government source said on Tuesday, but a lasting solution to the row over how to pay for supplies may take weeks.
• The rupee has gone through a rollercoaster ride in the past year, being pushed up by foreign investment and down by trade deficit.On balance, the rupee appreciated, reaching its lowest value in terms of dollars in July and the highest in October.Trade and FII investment are not independent of the rate of exchange. The rate of return for foreign investors is the expected increase in stock prices plus the expected appreciation of the rupee.
• Most of diversified equity funds underperformed the benchmark 30-share BSE Sensex in December as high exposure to mid- and small-sized firms and sectors like financials hurt unit values.
• Britain’s factory activity grew at its fastest pace in 16 years at the end of 2010 and mortgage approvals rose, data showed on Tuesday, but tax rises and public spending cuts will provide stiff headwinds in 2011.

At this moment (11:49 am ,india, at dalal street),

• Shares of Hindustan Copper fell more than 10 percent after television channel CNBC TV 18 reported the company’s follow-on public offer could be significantly lower to the current market price. The channel, citing unnamed government sources, said the price band for the issue could be 120-140 rupees per share, a 58 percent discount to its Tuesday’s close.  Shares of the company were down 8.26 percent at 308.40 rupees.
• India’s central bank may sell 91-day t-bills at 7.07 percent and 182-day bills at 7.26 percent, according to the median estimate of 10 respondents in a Reuters poll. For the 91-day bills, the highest yield forecast was 7.15 percent and the lowest was 7.00 percent, while for the 182-day bills they were at 7.35 percent and 7.20 percent, respectively. The central bank is auctioning 40 billion rupees of 91-day treasury bills and 15 billion rupees.
• Shares of Hindustan Oil Exploration rose more than 4 percent after the company said it found more gas in one of its oil wells. The company has 40.32 percent participating interest in the block, while Indian Oil Corp. and Oil India have 43.55 and 16.13 percent interest, respectively, it said in a statement to the exchanges.
• Bank of America Merrill Lynch has raised the price target for Grasim Industries to 2,510 rupees from 2,330 rupees while maintaining a ‘neutral’ rating on the stock. The brokerage said the target was being raised after reports of the company hiking the price of viscose staple fibre by 7 rupees starting January.
• The Indian government is trying for no further increase in the domestic price of diesel, Oil Minister Murli Deora told reporters on Wednesday.
• The controlling shareholder of Indian wind turbine maker Suzlon Energy said there is “no question” of exiting the company, after media reports on Tuesday said a rival was looking to buy a controlling stake.
• Shares of DQ Entertainment International rose nearly 10 percent after the company said it entered into an agreement with UK’s Mookie Toys Ltd and is expected to get substantial amount in upfront payment from pact.
• Shares of Jindal Saw rose nearly 5 percent in early trades after the company after on Tuesday trading hours said it has executed a mining lease agreement for 30 years with Rajasthan for iron ore mines, three dealers said.
• HSBC has initiated coverage of pipe manufacturers on expectations trends in oil and gas industry, water infrastructure and power will push new pipeline projects and in turn accelerate and swell order books of pipeline manufacturers. Pipe manufacturers geared for export markets will be early beneficiaries, HSBC added in a note.

sensex closed with moderate loses

• Sectors that came under pressure today were metals, banks, autos, capital goods and telecom. Sensex shut shop at 20498, down 62 points and Nifty at 6146, down 11 points from the previous close.
• The Indian rupee bounced off a one-and-half month high on Tuesday and slipped to a one-week low, tracking weak shares, with large demand for dollars towards corporate outflows and some defence-related demand weighing.
•  Indian shares turned negative on Tuesday morning, with financials leading the decline, as investors booked profits after four sessions of rise.
•  India has no immediate plans to impose import tax on edible oils, a government source said on Tuesday, as any such move would be inflationary.
• India has further extended a ban on imports of milk and milk products from China by one year until Dec. 23, a government statement said on Tuesday.
•  Maruti Suzuki, India’s largest car maker, joined peers in reporting strong December vehicle sales, underlining robust growth momentum in one of the fastest growing auto markets.
• U.S. manufacturing grew at its fastest pace in seven months in December, extending a recent run of encouraging economic data and suggesting that expansion of the world’s biggest economy will accelerate in 2011.
• Factory output growth eased only slightly in Asia in December and offered an upbeat end to a fraught 2010 for the euro zone, with signs that growth in export orders was filtering through to the region’s periphery.
• Gold tumbled nearly 2 percent to a one-week low at $1,385 an ounce on Tuesday as investors opted instead for assets seen as higher risk, like stocks, the euro and some industrial commodities.
• Oil held near its highest prices in more than two years in volatile trade on Tuesday, due to accelerating manufacturing activity in developed economies and expectations that U.S. crude inventories will keep falling.
• Shares in oil major BP hit a six-month high on Tuesday after reports rival Royal Dutch Shell considered a takeover bid, and that economic damages from its oil spill will be lower than forecast.
• The euro slid from three-week highs against the dollar on Tuesday, weighed down by unexpectedly strong U.S. factory numbers, with further pressure likely given doubts over the euro area’s bond issuance.
•  Optimism about the state of the world economy lifted stocks on Tuesday and kept oil prices at a near 27-month peak.

sensex up by 51 points

• The Sensex closed at 20561, up 51 points from its previous close, and Nifty shut shop at 6157, up 23 points.
• The first day of the new year was moderate for Indian markets as both the benchmark indices gained only around one-fourth of a percent. Buying was seen in metal stocks and the sector gained more than 2% in a single day. Other gainers were banking and pharma sectors.
• India’s manufacturing sector expanded at a slower pace in December than in the previous month, weighed down by a weakening growth in factory output and new orders, a survey showed on Monday.
• India’s exports in November rose an annual 26.5 percent to $18.9 billion, while imports for the month grew 11.2 percent on the year to $27.8 billion, government data released on Monday showed.
• Nearly three years to the day after oil prices first pierced $100 a barrel, they are again threatening to break triple digits on a wave of fund-led optimism, but similarities between 2008 and 2011 end there.
• The Reserve Bank of India has allowed 7 more banks to import gold and silver, bankers and trade officials said on Monday, a move that will smoothen supply in the world’s largest consumer of the metals.
• India’s current account deficit in the September quarter widened to a record high of $15.8 billion as booming domestic consumer demand sucked in imports and service sector exports suffered from weak global demand.
• The government faces the prospect of accelerating inflation from higher food prices, even as it considers lifting diesel prices, and it will walk a thin line as it balances political and economic objectives.
• China’s factory inflation cooled in December as manufacturers expanded more slowly after a strong run in growth, lessening the need for the country’s central bank to tighten monetary policy too far.
• India’s total external debt rose to $295.8 billion at the end of September, up 8.31 percent from the estimated debt of $273.1 billion in the June quarter, the government said in a statement on Friday.
• India’s fiscal deficit from April to November was 1.86 trillion rupees ($41.6 billion), or 48.9 percent of the full-year target, the government said in a statement on Friday.
• The euro currency area has only a one-in-five chance of surviving in its current form over the next 10 years because of competitive imbalances between its members, a leading British think tank said on Friday.
• The government will slap a 60 percent import tax on sugar from Jan. 1, a government source said on Friday, reflecting good output prospects from the world’s top consumer of the sweetener.
• Prime Minister Manmohan Singh on Friday said his government would try to effectively fight inflation and improve governance in the new year.
• India, the world’s top sugar consumer, has asked sugar mills to register for unrestricted sugar exports from Monday, a government statement said.