Sensex slips into negative zone

The Sensex has pared most of its gains and has touched a low of 16,135, down 225 points from the day's high. The index is now at 16,161, up 108 points. The NSE Nifty is at 4,799, up 49 points. Sterlite has advanced 6% to Rs 791 and Tata Steel has added 4% to Rs 487, respectively. Grasim Industries, Hindalco and SBI are up over 3% each at Rs 2,215, Rs 124 and Rs 2,263, respectively. Mahindra & Mahindra, ACC, HDFC Bank, Maruti and Tata Motors are up 2% each. Bharti Airtel has slumped around 6% to Rs 294 and Reliance Communications has slipped 5% to Rs 180, respectively. The market breadth is extremely positive, out of 2,561 shares traded, 1,828 have advanced and 673 have declined so far on the BSE. The BSE realty and the metal indices have advanced 4% each to Rs 3,979 and 14,440, respectively.

Raja takes on BJP over spectrum distribution

Facing allegations of irregularities in spectrum allotment, Telecom Minister A Raja today hit out at the BJP saying free distribution of radio frequency among operators during the NDA regime may have cost the country over Rs 1.6 lakh crore.Alleging that the BJP-led National Democratic Alliance regime had distributed for free, 250 Mega Hertz of spectrum among the telecom operators, he told reporters that "the scam during the NDA regime could be worth much more than Rs 1.6 lakh crore."Asked about demands for his resignation, he replied, "I will not step down."Raja debunked charges of Rs 60,000 crore spectrum scam levelled by BJP against him and said, "Ours is a government that has followed all rules to the letter and spirit by following the recommendations of TRAI (Telecom Regulatory Authority of India)." Pooh-poohing BJP leader Arun Jaitely's allegation, he said, "The BJP leader himself had defended a major operator in court...During the NDA regime, 250 MHz of spectrum was distributed among the operators without any charge. 900 bands of spectrum, which was not to have been allocated, was given as additional spectrum... This is the biggest scam."Raja charged the NDA regime with reducing licence fees several times and accused it of ignoring rules in allotment of spectrum. "Whereas there was no provision for giving spectrum beyond 4.4 MHz to any single operator, the then government distributed this frequency much beyond this limit and it did not get any revenue share when the spectrum was given beyond 8-10 MHz," the minister said.At the HT Leadership Summit today, Finance Minister Pranab Mukherjee came to Raja's defence, saying allegations of corruption was not proof of corruption.The opposition parties have been calling for Raja's resignation ever since CBI searched offices of the Telecom Ministry and some private mobile operators last week over allegations that spectrum was allocated to new operators at dirt-cheap prices, causing a loss of over Rs 20,000 crore to the exchequer."The NDA government is responsible for its irrational decision. The availability of spectrum was first put on the coffers without any disclosure. And ultimately, very cleverly and conveniently existing spectrum of 500 MHz was shared with the operators by the then NDA ministry," Raja said. The NDA government had decided that spectrum from 8.0 mhz to 10 mhz may be alloted without any further increase in revenue share."... Is this to say that the spectrum that was available were its ancestral property," the minister said."Some of the operators are benefitting from it without observing the law," he said, adding that "they are accusing a minister who is following TRAI recommendation after consulting PM."The DoT paper alleged that Pramod Mahajan, the then Telecom Minister under the NDA regime, in 2001 had taken a decision to allot spectrum to operators beyond 6.2 mhz without any upfront charge and subscriber base against the recommendations of the Telecom Commission. Accordingly, about 90 mhz has been allotted to these operators beyond 6.2 mhz without any upfront charges.To benefit operators, DoT has allotted spectrum in 900 mhz band during 2002-03 beyond 6.2 mhz contrary to its own order of February 2002 that additional spectrum beyond 6.2 mhz would be alloted in 1800 mhz band.Moreover, in 2004 , the then minister Arun Shourie had reduced the licence fee by 2 per cent in terms of AGR for all the operators and by further 2 per cent for the first and second operators, resulting in conservatively estimated loss of Rs 900 crore by Arun Shourie himself.

RBI to issue rules on provisioning soon

The Reserve Bank of India will soon issue guidelines on meeting provisioning rules and some banks have sought time to meet them, its deputy governor Shyamala Gopinath said on Friday."Banks have made certain submissions to us in the policy, in terms of little more time. We are going to come up with guidelines soon," Gopinath said. The Reserve Bank in its policy review on Tuesday proposed to advise banks to augment their provisioning cushions consisting of specific provisions against non-performing assets as well as floating provisions, and ensure that their total provisioning coverage ratio, including floating provisions, is not less than 70 percent. "Banks should achieve this norm not later than end-September 2010," the policy document said. She also said RBI was working out details regarding margin payments and risk management with regards to the introduction of trade in cross-currencies in the currency futures market. "The issue is really working out the risk mangement issues and what should be the margin," she said.

Tata Power to invest $3.2 bln in hydro JV

India's Tata Power plans to invest Rs 150 billion($3.2 billion) over five to eight years in a joint venture with Norwegian firm SN Power to develop hydropower projects in India and Nepal, a company official said on Friday. The partners aim to have 2,000 megawatts under construction or in operation by 2015 and a total of 4,000 MW by 2020, "We will be able to raise financing from international lenders," SN Power Chief Executive Oistein Andresen.

Govt sets sugarcane FRP at Rs129.84/quintal

The Union Cabinet gave its ex-post approval to changing the concept of “minimum price” to “fair and remunerative price” of sugarcane by Amendment to section 3 (3C) of the Essential Commodities Act, 1955 by promulgation of EC (Amendment & Validation) Ordinance 2009 on 21.10.2009 and consequential amendment to the Sugarcane (Control) Order, 1966 vide Order dated 22.10.2009. Following these amendments, a fair and remunerative price of sugarcane to be paid by sugar mills in 2009-10 sugar season has been approved by the Government at Rs.129.84 per quintal linked to 9.5 % recovery subject to a premium of Rs.1.37 per quintal for every 0.1 per cent increase in the recovery above 9.5 per cent. This price will be uniformly applicable in all the States. The deletion of the proviso has been made to make the wording of item (g) free of any future ambiguity regarding working of the margins of risk and profit and also to reduce the possibility of litigation on computation of fair and remunerative price. By introducing F&RP from 2009-10 sugar season, the sugarcane farmers will get a higher price for sugarcane in 2009-10 sugar season as compared to Rs.107.76 per quintal which was fixed on 25th June, 2009

IOC - Updates

Indian Oil Corporation Ltd (IOC) has informed that a fire incident has occurred at the Jaipur Terminal of the Company on October 29, 2009. All efforts are being made to contain the fire. However, there would be no major impact on the operations of the Company. The loss due to the fire is yet to be determined. The petroleum stocks are covered by insurance

FM may mull stimulus withdrawal post Q2, Q3 growth

The government today said it may take a call on exiting from fiscal stimulus after reviewing the economic growth in the second and third quarters of this financial year. Finance Minister Pranab Mukherjee would also share his perception on exit strategy at the G-20 Finance Ministers' meeting in Scotland, starting from November 6. "So far we are concerned, I think I shall have to watch situation for the (economic) progress in the second quarter and third quarter. Perhaps, I may be in a position, I am not asserting that position, to articulate it (exit strategy), sometimes when the d-day will come," Mukherjee said at the Hindustan Times Leadership Summit here. "Next week, I am going to share my perception what should be the exit policy in G-20 Finance Ministers meeting in Scotland, just next Saturday," he said. He said instead of blanket exit strategy for all nations, each country should devise their own plans depending on their economic situation. "We are strongly advocating that at different points of time, the crisis was held by the country concerned, and they know where the shoe pinches, therefore instead of having any blanket exit strategy all over the world, let the states make an assessment in the context of the situation prevailing at that point of time and take appropriate decision," he said.

Expect to return to 9% growth in 2 yrs - Mukherjee

Growth in India was likely to pick up from the October-December quarter of FY10 and the country can return to 9 percent growth in the next two years, Finance Minister Pranab Mukherjee said at a summit on Friday. Economic recovery was there but it was halting and slow, Mukherjee said.

BHEL gets $1.1 bln power plant order

India's largest power equipment maker Bharat Heavy Electricals said on Friday it has secured a Rs 50.4 billion($1.07 billion) order from Jindal Power to build a 2,400 megawatts power plant in the central Indian state of Chattisgarh. Under the agreement, BHEL will set up four units of 600 MW each for the plant.

RBI to issue rules on provisioning soon

The Reserve Bank of India will soon issue guidelines on meeting provisioning rules and some banks have sought time to meet them, its deputy governor Shyamala Gopinath said on Friday. "Banks have made certain submissions to us in the policy, in terms of little more time. We are going to come up with guidelines soon," Gopinath said. The Reserve Bank in its policy review on Tuesday proposed to advise banks to augment their provisioning cushions consisting of specific provisions against non-performing assets as well as floating provisions, and ensure that their total provisioning coverage ratio, including floating provisions, is not less than 70 percent. "Banks should achieve this norm not later than end-September 2010," the policy document said. She also said RBI was working out details regarding margin payments and risk management with regards to the introduction of trade in cross-currencies in the currency futures market. "The issue is really working out the risk mangement issues and what should be the margin," she said.

Markets head higher

The leading Sensex gainers are Grasim (stronger by 2.3% at Rs 2,200), L&T (higher by 2.2% at Rs 1,601) and Tata Steel (up 2.1% at Rs 542). ITC and NTPC have also gained in the region of 2% each.Hindalco, Jaiprakash and State Bank of India have shed 2.6%, 2.3% and 1.5% and are trading at Rs 137, Rs 231 and Rs 2,318 respectively.The market breadth is still negative, though. Out of 2,654 stocks traded on the BSE, there are 1,181 advancing stocks as against 1,387 declines.

Allocate to check KG-basin reservoir damage: RIL to govt

Reliance Industries has warned of irreversible damage to the Krishna Godavari basin reservoir saying the failure of the government to name additional customers has led to natural gas flow from KG-D6 fields being artificially restricted. RIL said production capacity from KG-D6 has far exceeded the 40 million standard cubic meters per day (mmscmd), for which buyers have been tied-up, and has asked the government to immediately name customers for an additional 25 mmscmd so as to avoid irreversible damage to the field reservoirs. "We would like to bring to your kind notice that due to the delay in additional allocation of KG-D6 gas to various customers awaiting allocation, the KG-D6 reservoir is being exposed to frequent increases and decreases in production levels," RIL Executive Director P M S Prasad wrote to Oil Secretary R S Pandey last week. He asked the government to name customers for 25 mmscmd on a firm basis and users for another 20 mmscmd on a temporary or fall-back basis till the time RIL can on a sustained basis produce over 80 mmscmd of peak output. RIL has drilled and completed wells in the KG-DWN-98/3 or KG-D6 block that can produce 65 mmscmd but is forced to restrict the flow to around 40 mmscmd. The company had crossed the ability to produce 40 mmscmd in August and has since then been waiting for the government to name customers beyond the initial volumes.ss Even the volumes allocated to fertiliser, power and steel sectors are subject to wide fluctuations as plants reduce or increase offtake on a near daily basis. An Empowered Group of Ministers (EGOM) headed by Finance Minister Pranab Mukherjee is scheduled to meet tomorrow to consider additional allocation of KG-D6 gas. Since production started in April, in about 70 days the production from KG-D6 reservoir had to be reduced due to a sudden change in demand from customers, Prasad wrote on October 19. "None of the incidents of reduction were caused due to production issues, but were solely due to variation in demand from the customers due to various operational reasons at the customer end." "You would appreciate that the optimal extraction of gas reserve is possible only through a smooth draining of the reservoir. Frequent changes in gas production levels result in repeated adjustment in production profile of the wells, which may cause irreversible damage to the reservoir itself," he wrote. "These frequent changes in production levels can be very well avoided by increasing the customer base for supply of KG-D6 gas, for which we made several requests to the government over the last few months." Prasad said India is currently importing around 5-6 cargoes of liquefied natural gas (LNG) from the spot market per month to meet gas requirements of various customers. This translates into daily consumption of about 18 mmscmd of spot LNG. "The price of spot LNG is significantly higher than that of KG-D6 gas and the differential is expected to increase further. This is resulting in the out go of Rs 25 crore per day in terms of foreign exchange," he wrote. "Lack of additional allocation is resulting in a double whammy for the country - on one side KG-D6 reservoir is being exposed to frequent variations of demand causing irreversible damage and on the other hand we continue to import spot LNG resulting in avoidable increase in costs to customers and transfer of wealth outside the country," he added. "To prevent irreversible damage to the reservoir due to frequent reduction in production, it is requested for an immediate allocation of KG-D6 gas to additional customers," he said.

Asian markets end in green

Asian markets have ended in the green today. The Hang Seng added 379 points (2%) to 22,590. The Nikkei was up 79 points at 10,363. The Seoul Composite added 17 points (1%) to 1,657. The Taiwan Weighted moved up 19 points to 7,668.The Straits Times and the Shanghai Composite ended flat at 2,720 and 3,110, respectively. The Asian markets are exhibiting flattish movement now.The Hang Seng has advanced 379 points or 2% to 22,590. The Nikkei has added 80 points at 10,363.The Shanghai Composite is marginally down at 3,098.The Seoul Composite Index is up 17 points or 1% at 1,657 and the Taiwan Weighted Index has moved 19 points higher at 7,668, respectively. The Asian markets have opened on a positive note today morning. The Hang Seng has advanced 379 points or 2% to 22,589. The Nikkei is up 100 points at 10,383.The Shanghai Composite is down 24 points at 3,084.The Seoul Composite and the Taiwan Weighted Index have increased 1% each to 1,658 and 7,733, respectively.

Adani Ent Board to consider Bonus & Rights Issue

With reference to earlier annoucement dated October 16, 2009 regarding Q2 results on Oct 30, 2009, Adani Enterprises Ltd has now informed that the Board at its meeting to be held on October 30, 2009, inter alia, also consider the following businesses: 1. To issue Bonus Equity Shares 2. To issue shares by way of Rights

L&T sells stake in Voith Paper Technology

Larsen and Toubro has announced the sale of its shares in Voith Paper Technology India Limited effective october1, 2009 to its long term Joint Venture Partner, GmbH, Heidenheim, Germany. VPTIL was a 50:50 JV between L&T and Voith Paper Gmbh,Germany, providing design, consultancy and other value added services to the Indian paper Industry that included setting up of complete paper plants.

Sensex may reach 19,000 level by March 2010: JP Morgan

The Bombay Stock Exchange's benchmark index Sensex may reach 18,000-19,000 points level by end-March 2010 led by improved investor confidence, a survey by J P Morgan Asset Management company said. "Both investors and advisors expect (the) Sensex to reach 18,000-19,000 in March 2010. Ninety-three per cent of advisors and 68 per cent of retail investors expect the Sensex to rise from current levels," J P Morgan said in a report 'Investor Confidence Index'. J P Morgan said these expectations hinged on prospects of a global economic recovery coupled with a sustained confidence in the Indian economy across the board. According to the survey, the Investor Confidence Index stood at 146.4 in September 2009, up by 10.5 points from July 2009, the survey said. The report said about 50 per cent of corporate investors considered GDP growth and the possibility of India exceeding the 7 per cent target for FY 10 as the biggest positive indicator, while retail investors considered the rise in stock markets as the biggest indicator. It added that advisors, on the other hand, viewed the inflow of foreign money as the most positive indicator. The next six months Indian retail investors would seek more investment. "Retail investor confidence has improved on both portfolio appreciation and likelihood of increasing investment further. Combined with the high expectation from the BSE Sensex and the improved global prospects, the findings suggest that the retail investor will be seeking suitable investment opportunities over the next six months," J P Morgan said. As much as 56 per cent of retail investors anticipated their incomes to increase, while indicating that they would make additional investments over the next six months against 48 per cent in July 2009, the survey found. This wealth may be created by money pouring into stocks, as investment activity in mutual funds dropped to 70 per cent from from 82 per cent, J P Morgan said. Banks, however, exuded maximum confidence on expectations of "global recovery and an increased expectation from clients to increase investments further over the next six months". However, investors and corporates opined inflation as the most negative economic indicator in India, while advisors viewed the high Government borrowing or fiscal deficit with concern, in the current scenario, the survey said. J P Morgan's respondents include 1,639 retail investors, 52 corporate treasuries and 293 advisors, that had invested in instruments excluding savings accounts, time deposits, retirement and insurance products, property, gold and other bullion over the past 12 months.

Century Textiles to develop Worli land

Century Textiles and Industries, part of the BK Birla Group, plans to start commercial real estate development at its Worli mill land and will float a separate division to control it, a senior executive told ET. Century Textiles is fighting a legal battle with the Wadias for control of 10 acre of land on the same Worli mill property. Century has 40 acre land in Worli, including the 10 acre leased to it by the Wadias. In an exclusive interaction with RK Dalmia, senior president, Century Textiles, said: “We have almost finalised the plan, which is expected to be approved within a month. We will develop commercial complexes that will be leased to banks, financial institutions and for other commercial purposes.” Century Textiles also has interests in cement and pulp and paper manufacturing businesses. Mr Dalmia said the initial estimated cost for the first phase of the real estate project will be over Rs 600 crore. “There will be no equity dilution by the company, as our banks are ready to lend money for our projects.” The pay back period will be two years, after which the company may start generating revenues, he added. The BK Birla Group flagship company is also expecting a robust growth from the new venture as rental prices have started looking up. “By the time the project is completed, rents may touch the level it was a year back,” said Mr Dalmia. Century had moved the Bombay High Court against Nusli Wadia, chairman of Bombay Dyeing, and member of the Wadia family, in the dispute over the use of leased land for real estate development. In 1898, the Wadias leased 10 acre of land to the BK Birla Group for textile manufacturing purposes. However, since BK Birla’s textile business didn’t function well, it closed its textile operations at Worli in 2007 and planned to unlock land value through real estate development. However, Mr Dalmia denied reports that Century would sell the land. The company has already obtained permission from state authorities to start work. It has also started rehabilitation of nearly 900 workers. “We have hired architectures and are in the process of floating tenders to select contractors for the construction work,” said Mr Dalmia. The move comes close on the heels of a recent move by Mumbai-based textile major Raymond that diversified into real estate. One of the major factors pulling textile firms into real estate business is that many of them have huge areas of land at places where prices are high and operations aren’t lucrative, said an analyst with a leading brocking firm.

Govt's easy monetary policy may remain through March - pane

India's accommodative monetary policy may continue until the end of March, with the need for tightening once inflation picks up, a government panel that advises the prime minister said on Wednesday. Former Reserve Bank of India (RBI) governor C. Rangarajan, who heads the panel, said growth in the fiscal year that ends in March 2011 would accelerate to 7 to 8 percent after growing by about 6.5 percent in 2009/10, with inflation at around 6 percent by the end of March 2010. "The stance of monetary policy will have to change from its highly accommodative position. But that has to wait. It will depend on the growth prospects of the economy and also inflationary pressures," Rangarajan told a news conference. The Reserve Bank of India is expected to keep interest rates on hold when it meets for its quarterly policy review on Oct. 27, with many economists predicting a tightening in rates starting in early 2010. The Reserve Bank of India slashed its key interest rate by 425 basis points to 4.75 percent between October 2008 and April and the government cut import and factory gate duties and boosted spending to shield India from the worst of the global downturn. India's wholesale price inflation rose by 0.92 percent in the year through Oct. 3, below forecasts, but economists expect it to accelerate quickly in coming months as the base effect from last year's high energy and commodities prices recedes and food prices remain high. The Prime Minister's economic advisory council also forecast a consolidated fiscal deficit, which includes shortfalls at the state level, of 10.09 percent of GDP in the current fiscal year, compared with 8.6 percent last year, and the influential panel urged a return to fiscal consolidation. Its report can be found by clicking .The Indian economy grew by 6.7 percent in the fiscal year that ended in March, slower than the 9 percent or more in the previous three years, and top government officials have repeatedly stressed the need to maintain pro-growth policies until a recovery gains momentum.