Abu Dhabi's ADIA invests $200 million in India real estate: sources

Abu Dhabi Investment Authority (ADIA) plans to invest about $200 million in Indian real estate, two sources said, underscoring a trend for large Gulf sovereign wealth funds to diversify away from traditional developed markets such as Europe.

ADIA, which manages the surpluses the Gulf emirate earns from oil exports, has appointed Kotak Realty Fund, run by Kotak Mahindra Bank Ltd (KTKM.NS), to invest the money, one of the sources familiar with the matter said.

Earlier this month, Oman's State General Reserve Fund and the Government of Singapore Investment Corp (GIC) GIC.UL and Temasek committed to invest $200 million in a real estate fund run by India's biggest mortgage lender, Housing Development Finance Corporation (HDFC.NS).

In May, Qatar paid $1.26 billion for a 5 percent stake in Indian telecoms firm Bharti Airtel Ltd (BRTI.NS), the world's fourth-biggest mobile phone company by customers.

India's finance minister P. Chidambaram visited the Gulf region in May for the second time in two months seeking investment in Asia's third-largest economy.

ADIA has investments of about $400-$500 million in India which includes an 11.22 percent stake in Infrastructure Leasing & Financial Services and a $50 million investment in Red Fort Capital, a real estate private equity fund.

Kotak's appointment comes a little over a year after ADIA hired an India-dedicated investment manager for real estate and infrastructure to look at direct investment opportunities in the country.

Both sources declined to be named as the information is not public yet. ADIA and Kotak declined to comment.

ADIA, whose assets range from Citigroup (C.N) bonds to a stake in Britain's Gatwick airport, allocates between 5 to 10 percent of its portfolio to real estate and prefers to invest mainly through third-party fund managers or joint venture agreements, it said in its 2012 annual review.

The sovereign fund's real estate portfolio is widely believed to be skewed towards developed countries but it said in its review it is seeking more investments in emerging markets.

ADIA has undisclosed assets that analysts estimate at between $400-$600 billion - equivalent to about 1 percent of the value of the world's major stock exchanges.

Kotak Realty Fund has $811 million of assets under management and has invested in more than 32 real estate projects in India since it was set up in 2005, according to its website.

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Ford India recalls diesel variants of EcoSport

New Delhi: US auto major Ford is recalling diesel variants of its newly launched compact SUV EcoSport in India to rectify defects in the instrument used as an aid in starting the engine.

"As part of routine checks, we discovered a potential concern with EcoSport diesel variants related to the Glow Plug Module which requires relocating the module. We are contacting customers to take their vehicle to their Ford dealership to have the work carried out," Ford India said in a statement on Thursday.

The company, however, did not share the number of vehicles it is recalling.

The company, which is present in the country through a wholly-owned subsidiary Ford India, added that no accidents or injuries have been reported related to the issue and this is a proactive, voluntary recall action to ensure customers' safety and satisfaction.

Ford had launched the much-awaited SUV in India last month at a starting price of Rs 5.59 lakh (ex-showroom Delhi).

The EcoSport is available with three engine options- 1 litre petrol with Ecoboost technology, 1.5 litre petrol and 1.5 litre diesel engine.

While the price of 1 litre Ecoboost petrol version starts at Rs 7.90 lakh, the 1.5 litre petrol variant is priced at Rs 5.59 lakh.

The EcoSport with 1.5 litre diesel has price starting at Rs 6.69  lakh (ex-showroom Delhi). The automatic transmission version in 1.5 litre petrol starts at Rs. 8.45 lakh (ex-showroom Delhi).

Ford India has invested $142 million at its Chennai plant to manufacture the EcoSport. It is also investing $1 billion to set up its second production facility at Sanand that will be operational by 2014. The plant will have an installed output capacity of 2.4 lakh vehicles and 2.7 lakh engines annually.

With completion of the Sanand plant in Gujarat, Ford India will have a total installed capacity of rolling out 4.4 lakh vehicles and 6.1 lakh engines every year.

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Why the rupee may fall to 70 against dollar

The Indian rupee recovered sharply on Tuesday after key regulators took steps to curb speculative trading in the currency, but some gains were knocked off in minutes and the currency was back below the psychological barrier of 60.

Independent expert Moses Harding said this is not a bullish reversal, but a firefighting activity so that you don't allow the rupee to post a new historic low every day.

Other experts told RTTN that the recovery might be short lived as these measures will do little to correct the fundamental reasons that are driving the rupee lower.

A V Rajwade, consultant in currency and interest rate risk management said the rupee fall is far more a function of what is happening in the domestic economy rather than what happens to the dollar in the global markets.

Mr Rajwade was referring to comments that attributed the slide in the rupee on account of a rally in the U.S. dollar, which climbed to a three-year high on Monday.

"That becomes a very glib kind of explanation, which in a way many policymakers prefer because that avoids introspection as to where have we gone wrong...," he said.

Mr Rajwade blamed government's macro-economic policy, particularly the exchange rate policy followed over the last 4-5 years, behind the current crisis.

"The problems are fundamental and our policy makers do not seem to realise the basic problem which is the huge deficit on current account and over dependence on capital inflows. Nobody can live forever on somebody else's money," he said.

The biggest problem seems to be India's huge current account deficit, which hit a record high 4.8 per cent of gross domestic product in fiscal year 2013.

This deficit was being financed by foreign money for last many years, but as the U.S. economy gathers momentum, there is increasing likelihood that the Federal Reserve will taper its bond buying programme (also called quantitative easing) as early as September.

The fear of Fed pulling the plug on easy money has triggered a selloff by foreign institutional investors (FIIs), who have pumped almost $14 billion into India so far this year and $22.2 billion last year.

"We cannot expect foreign investors to keep financing us when we keep incurring deficits year after year. Somewhere the music was going to stop... whether it happens because Mr Bernanke said something or because foreign investors are getting extremely disappointed with what's happening with Indian economy, but the basic problem is we continue to live on borrowed money year after year," Mr Rajwade said.

The government's decision to hike duty on gold, the second biggest import item, has helped cut imports by 81 per cent in June from the previous month. However, if FIIs continue to pull out, the government will have to come up with new plans.

Mr Harding says 62-65 may be the new normal for the rupee if no corrective steps are taken.

The Reserve Bank, too, lacks fire power because it has foreign exchange reserves to cover imports for seven months only. The central bank's many interventions so far have miserably failed to stop the rupee from posting record lows nearly every week.

Market analyst Saumil Trivedi says the current cycle of weakness in the rupee started way back in July 2011, but given the current momentum, upside shootouts can be dramatic and disturbing.

Last month, Nomura's forex valuation analyst said the rupee is still about 17.6 per cent overvalued against the dollar, which means the rupee can slide all the way to near 70.

"Somewhere around the mid-60s would not be unrealistic for the Indian rupee especially given the move in bond yields that we have been seeing," Mohammed Apabhai of Citi told RTTN.

The message is loud and clear. Unless more concrete steps are taken to address the fundamental problems plaguing the rupee, the currency will continue its slide on a one-way street.

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Infosys global sales head Basab Pradhan quits to start own venture

Mumbai: Weeks after N.R. Narayana Murthy returned to Infosys, the country's second largest software exporter today saw its global sales and marketing head Basab Pradhan quitting the company.

Mr. Pradhan, who was the member of the Infosys executive council, said he is planning to start his own venture.

The exit comes just ahead of Infosys announcing first quarter numbers on July 12.

"Leaving Infosys to go back to the start-up world. To all my friends at Infosys, please stay in touch," Mr. Pradhan tweeted this evening.

The company gave no reason for Pradhan's departure in its brief email statement and Infosys officials declined to give details, according to news agency Reuters.

"We confirm that Mr. Basab Pradhan has resigned. We wish him all the best," Reuters said citing the statement.

Mr. Pradhan's departure comes at a time when Mr. Murthy has returned to the company as executive chairman last month.

Mr. Murthy is trying to rebuild the company, which has been posting disappointing numbers for the past many quarters. During the past 18 months, the once-cynosure of the domestic IT industry lost many good hands, with its HR head and board member T.V. Mohandas Pai quitting on April 16, 2012 amid the company reporting another set of poor results.

On the same day, another senior executive Shaji Farooq, quit to join rival Wipro after spending over a decade in the financial services vertical.

Prior to that, Infosys lost its sales head Subhash Dhar and chief operating officer of BPO division Ritesh Idnani. This was Mr. Pradhan's second innings at Infosys. He had returned to Infosys in 2011, when the company restructured its strategy as part of Infosys 3.0 plan.

He had worked at Infosys between 1995 and 2005. He left Infosys to start a venture-funded startup Gridstone Research, in the area of unstructured data in financial information.

Details of Mr. Pradhan's new venture could not be ascertained immediately.

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Rupee near one-week high

The rupee is trading at 56.36/37, after touching 54.3250, its highest since May 30, and higher versus its close of 56.44/45 on Tuesday.

Traders say sentiment for the dollar weak after the government and RBI steps on Tuesday.

India is likely to raise the cap on foreign investment in sovereign debt by $5 billion soon, two finance ministry officials said.

The Reserve Bank of India also extended the restrictions on the import of gold on consignment basis by banks to all nominated agencies and trading houses.

Some traders also cited dollar flows towards the Unilever stake raising deal, though it was not too large, they said.

Unilever Plc plans to pay up to $5.4 billion to raise its stake in its Indian subsidiary Hindustan Unilever Ltd (HLL.NS). The open offer opens June 21 and closes July 4. HSBC is the manager to the open offer.

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Cabinet nods for non-binding conciliation with Vodafone over tax dispute row

New Delhi, June 5 : The union cabinet has approved the start of a conciliation process with Vodafone Group Plc, in a dispute over more than $2 billion in taxes stemming from its 2007 acquisition of mobile phone assets in the country. Addressing a news conference in New Delhi, Finance Minister P Chidambaram said on Tuesday that the cabinet had approved to enter into a 'non-binding' conciliation. On reaching consensus from both the sides, the outcome of the conciliation would be discussed in the Parliament for amending the income tax act of the country. Last year, the Supreme Court of India ruled in Vodafone's favour, saying that the UK telecoms carrier was not liable to pay any tax over the acquisition.

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No fast rebound for India's moribund economy

India's economic growth likely remained stuck around a near four-year low in the March quarter, compounding the government's woes as it heads into a busy election period weighed down by graft scandals and a record of poor economic management.

A Reuters poll of 37 economists showed gross domestic product (GDP) expanded 4.8 percent year-on-year, only slightly better than the 4.5 percent growth in the previous three months, which was the lowest in fifteen quarters. India's statistics office will release the data at 11 a.m. on Friday.

If the forecast materialises, it means India's full-year economic growth for 2012/13 (April/March) was about 5 percent, its worst in a decade, and a far cry from the 9 percent annual expansion recorded until two years back.

Years of fiscal profligacy, a long struggle with high inflation, high interest rates, persistent political gridlock and fragile global economy have put India back in a rut.

"It is imperative that both the government and the RBI get their acts together," said Jyotinder Kaur, an economist with HDFC Bank, who believes the Reserve Bank of India (RBI) should take action to get money flowing into the real economy.

"The room for policy response is limited but it is not completely absent."

Prime Minister Manmohan Singh leads a minority, coalition government that has been weakened by a series of high profile graft cases, and there is little sign of the fast economic rebound that could shore up its prospects in state elections this year and a national vote due by May 2014.

Opposition parties have used the scandals linked to allocation of resources including coal and telecoms to paralyze parliament, delaying legislation aimed at attracting funds to lift capital investment growth from an eight-year low.

The deep economic slowdown has tarnished the image of octogenarian Singh, a venerated economist whose far-reaching reforms two decades ago laid the ground for boom years that followed.

His poor record of delivering on promises, coupled with myriad regulatory hurdles - including high-profile tax battles with foreign companies - has driven investors away. Foreign direct investment into the country has fallen, while outbound corporate investment is on the rise.

SIGNS OF RECOVERY?

To arrest the growth slide, Singh and Finance Minister P. Chidambaram launched a slew of steps from last September to encourage investment and control a high fiscal deficit. They expect those measures to help push up the economic growth to at least 6 percent this financial year.

The government is due to publish full year fiscal deficit data later on Friday, as well as infrastructure output data for April, a more up-to-date reading of the economy.

There are some signs that global firms are betting on India's prospects as one of the world's largest emerging consumer markets, with several large investments announced in recent months.

A recovery in annual industrial production and exports along with slowing inflation is also holding out some hope for Asia's third largest economy. But economists caution against reading too much into it.

"Based on the current trends, it is far too premature to say that we are in the middle of an economic recovery," said Kaur, citing anemic corporate investments and consumer demand.

RATE CUTS

Weak public finances has constrained the option of pump-priming the economy out of the slowdown. On the contrary, Singh has been forced to slam the brakes on public spending to retain India's investment-grade sovereign rating.

The Reserve Bank of India's (RBI) 75 basis points interest rate cuts since January should have given some help, but a persistent liquidity shortage and locked-in high cost deposits mean Indian banks are reluctant to pass on the lower rates.

H.R. Khan, one of the deputy governors at the RBI, this week said the central bank is likely to take steps to address the tight liquidity situation. Kaur expects the bank to make more bond purchases from the market and auction the government's idle cash balance parked with it.

Enthused by slowing inflation, financial markets are hopeful of more monetary easing even though the central bank has warned of limited room for further easing.

Finance ministry officials say lower interest rates along with benign inflation will help bolster consumer demand that is growing at its slowest pace in at least 8 years.

Normal rains this summer, they argue, should also boost economic growth by lifting farm output and income. (Reporting by Rajesh Kumar Singh; Editing by Frank Jack Daniel and Simon Cameron-Mo

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Bharti Airtel falls on possible 6.5 billion rupee fine

Shares in Bharti Airtel fall nearly 2 percent after reports that the company could be asked to pay 6.5 billion rupees for alleged breach of telecoms licensing rules nearly a decade ago.

Bharti was allowing roaming subscribers to make and receive calls at local prices, which the telecoms ministry says bypassed rules for national long-distance calls, according to an official with knowledge of the matter. The services were allowed between 2002 and 2005, according to an internal memo seen by Reuters.

A Bharti Airtel spokesman declined to comment saying the company was yet to receive any notice from the ministry. Typically, the telecoms ministry asks companies to first explain why action should not be taken against them before sending the penalty notice.

Carriers including Bharti have in the past challenged in courts fees and penalties imposed by the government. The cases are still on.

Bharti shares were down 1.7 percent at 309.70 rupees.

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SBI plummets over 8 per cent, m-cap down Rs 12,867 cr on weak results

The shares of SBI on Thursday fell sharply by over 8 per cent, wiping-off Rs 12,867 crore from its market value, after the state-owned bank reported 18.54 per cent decline in net profit for the fourth quarter ended March 31.

Following the earning results, shares of State Bank of India plummeted by 8.87 per cent to Rs 2,154.5 in intra-day trade on the BSE. SBI scrip finally ended at Rs 2,176.20, down 7.96 per cent from its previous close.

At NSE, it settled at Rs 2,171.65, down 8.10 per cent.

The market value of SBI tanked by Rs 12,867 crore to Rs 1,48,859 crore.

The banking sector bellwether was the top loser on the BSE 30-stock index, Sensex.

“As SBI announced its Q4 results, with net profit falling by 18.5 per cent on a Year on Year basis, the stock was seen plunging by more than 8 per cent,” said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.

Country’s largest bank SBI today reported 18.54 per cent decline in Q4 net profit at Rs 3,299 crore on account of lower interest income. It had logged net profit of Rs 4,050.27 crore in the January-March quarter of 2011-12 fiscal.

The standalone total income of the bank rose to Rs 36,331 crore during the quarter, from Rs 33,959 crore in Q4, 2011-12 fiscal, SBI said in a statement.

Its net interest income declined 4.42 per cent to Rs 11,591 crore during the fourth quarter.

The gross Non-performing Assets (NPAs), which represents portion of bad loans, stood at Rs 51,189 crore at the end of March, up from Rs 39,676 crore in the year-ago period.

The gross NPA as a percentage of total loan rose to 4.75 per cent during the quarter, from 4.44 per cent in the year ago period.

The Sensex, meanwhile, closed at 19,674.33, down 387.91 points.

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Sensex falls below 20K, down 388 points

The BSE benchmark Sensex on Thursday lost 388 points to fall below 20,000 level on disappointing March quarter earnings from state-run lender State Bank of India, amid weak global trend after US Federal Reserve hinted at scaling down monetary stimulus.

Extending losses for the fourth straight day, the 30-share index nosedived by 387.91 points, or 1.93 per cent, to close at 19,674.33, with all the sectoral indices, led by realty and capital goods stocks, in the negative zone. The index had lost nearly 224 points in the previous three sessions.

Similarly, the broad-based National Stock Exchange index, Nifty fell below 6,000 level by losing 127.45 points, or 2.09 per cent, to 5,993.90.

MCX-SX flagship index SX40 also closed down by 178.75 points, or 1.51 per cent, at 11,682.3.

Country’s largest bank SBI today reported a 18.54 per cent decline in net profit at Rs 3,299 crore for the fourth quarter ended March 31, 2013 on account of lower interest income, causing its shares to plummet over 7 per cent to close at Rs 2,176.20 apiece on the BSE.

Federal Reserve Chairman Ben Bernanke signalling o Wednesday that monetary stimulus may be scaled back if the US economy improves further, triggered selling activity in the entire global region, traders said.

Also, reports of manufacturing activity in China contracting in May for the first time in seven months further dampened the trading sentiment further, they added.

Ranbaxy slumped 8.80 per cent to Rs 393.15 after its Japanese promoters blamed the company’s former Indian owners for concealing and misrepresenting critical information about US investigation into sale of adulterated drugs.

In 30—BSE index components, 29 stocks declined with the two most heaviest with their nearly 16 per cent weightage Reliance Industries and Infosys dropping 3.99 per cent to Rs 785.15 and by 1.23 per cent to Rs 2,358.90, respectively.

The realty sector index suffered the most by losing 5.95 per cent to 1,784.56 followed by capital goods by 5.19 per cent to 9,436.96. Power index fell by 3.96 per cent to 1,731.54 and banking index by 2.84 per cent to 14,452.86.

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Verizon Wireless to pay its parents $7 billion dividend

Verizon Wireless, the biggest U.S. mobile service provider, said on Monday it would pay its parents Verizon Communications (VZ.N) and Vodafone Group Plc (VOD.L) a dividend of $7 billion in June.

The dividend comes amid mounting speculation Verizon could buy Vodafone's stake in the venture if they can agree on a price. Reuters reported on April 24 that Verizon was preparing a $100 billion bid for the stake.

Based on Verizon's 55 percent ownership of the venture and Vodafone's 45 percent stake, this will entitle Verizon to cash payments of $3.85 billion while Vodafone will receive $3.15 billion, according to a regulatory filing from the company.

The Verizon Wireless board decided on the dividend on May 9, according to the company

The decision follows recent comments from Verizon Chief Executive Lowell McAdam to JP Morgan analysts that the two owners could face a "lean" year in terms of the dividend they receive from the Verizon Wireless.

Some analysts had seen those comments as a sign that McAdam was putting increasing pressure on Vodafone to sell the stake.

Verizon had refused to sanction a dividend from the Wireless asset between 2005 and 2011 because it said it preferred to pay down debt and make acquisitions.

That, however, was seen by analysts as a move to pressure Vodafone out of the joint venture.

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Tata Steel to book $1.6 bln impairment charge

Tata Steel(TISC.NS) said on Monday it will book a $1.6 billion non-cash impairment charge for the financial year that ended March 31 due to weak economic and market conditions in Europe, its main market.

"The above underlying condition is expected to continue over the near and medium term, and has led to the downward revision of cash flow expectations underlying the valuation of the European business," it said in a statement.

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Ranbaxy pleads guilty, to pay $500 mln in US settlement

Generic drugmaker Ranbaxy Laboratories Ltd(RANB.NS) pleaded guilty on Monday to felony charges related to drug safety and will pay $500 million in civil and criminal fines under the settlement agreement with the U.S. Department of Justice.

The settlement is its largest-ever with a generic drugmaker over drug safety, according to the U.S. government. It includes $150 million in payments for a criminal fine and forfeiture and $350 million in payments for civil claims.

The settlement has been in the works for some time. In December 2011, Ranbaxy set aside $500 million to resolve the potential criminal and civil liabilities related to the investigation by the government into its manufacturing practices and falsifying data.

The company reached a related settlement agreement with the U.S. Food and Drug Administration in 2011.

"The financial provision Ranbaxy established in December 2011 will be sufficient to cover all material financial obligations under the agreement," the company said in a news release announcing the conclusion of the U.S. investigation.

Ranbaxy USA pleaded guilty to three felony counts related to the manufacture of drugs at two Indian locations that did not meet safety standards and to four counts of making material false statements.

In the civil settlement, Ranbaxy has agreed to pay $350 million to resolve allegations that drugs from the two Indian plants did not meet specifications and that false claims were submitted to U.S. government healthcare programs between April 1, 2003 and September 16, 2010.

In 2008, the FDA banned the company from selling about 30 drugs in the United States after it found manufacturing deficiencies at facilities in India. In 2009, the FDA had accused the company of falsifying data and test results in drug applications and halted reviews of drugs made at a plant in northern India.

Dinesh Thakur, former Ranbaxy director and global head of research information & portfolio management, is entitled to $48.6 million as the whistleblower in the case, the Justice Department said. It was Thakur who uncovered the unsafe practices and violations at Ranbaxy.

"Ranbaxy's management was notified of these widespread problems. When they failed to correct the problems, it left me with no choice but to alert healthcare authorities," Thakur said in a statement.

"It took us eight years to help government authorities unravel a complicated trail of falsified records and dangerous manufacturing practices that threatened to compromise the quality and safety of Ranbaxy drugs," he added.

Ranbaxy, majority-owned by Japan's Daiichi Sankyo Co Ltd (4568.T), stopped selling drugs to the U.S. markets while it fixed problems with its manufacturing procedures in the United States and India.

"While we are disappointed by the conduct of the past that led to this investigation, we strongly believe that settling this matter now is in the best interest of all of Ranbaxy's stakeholders," Ranbaxy Chief Executive Arun Sawhney said in a statement.

"The conclusion of the DOJ investigation does not materially impact our current financial situation or performance," he added.

The company has since grappled with other manufacturing problems. In November 2012 it recalled some generic Lipitor, known as atorvastatin, in the United States after certain batches were found to contain glass particles. It has since resumed manufacturing the widely used cholesterol lowering medicine.

Copyright & Courtesy: Reuters

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Wall Street ends near flat after recent gains; healthcare climbs

U.S. stocks ended flat on Monday, pausing after hitting record highs last week, but strength in healthcare issues helped to keep declines in check.

The S&P 500 healthcare sector climbed 0.7 percent and was the day's best performer.

Shares of Theravance (THRX.O) jumped 17.9 percent to $41.20 after Irish drugmaker Elan (ELN.I) (ELN.N) agreed to a $1 billion deal to buy 21 percent of the royalties that Theravance receives from GlaxoSmithKline (GSK.L) (GSK.N) for its respiratory drugs.

The day's flat activity follows a third straight week of gains on the major indexes, with both the Dow and S&P 500 setting record closing highs last week. The S&P 500 remains up 14.5 percent for the year so far.

While some analysts argue the long-term trend is still higher, many see momentum waning in the near term in the absence of positive catalysts. Volume has been lighter than average, and volatility has been low in recent days.

"Intraday volatility has essentially been nonexistent. I think it means people are really sitting on the sidelines right now seeing which way it's going to go," said Uri Landesman, president of Platinum Partners in New York.

The CBOE Volatility index ended down 0.3 percent.

The Dow Jones industrial average was down 26.81 points, or 0.18 percent, at 15,091.68. The Standard & Poor's 500 Index was up 0.07 points at 1,633.77. The Nasdaq Composite Index was up 2.21 points, or 0.06 percent, at 3,438.79.

Among the day's decliners, Yum Brands Inc (YUM.N) fell 2 percent to $68.92. After the market closed on Friday, the fast food chain operator posted a steep decline in Chinese April sales.

Helping to limit the market's downside, retail sales rose 0.1 percent in April, better than the 0.3 percent drop that had been expected, and returning to growth following a decline in March. Excluding autos, gasoline and building materials, core sales rose 0.5 percent. Retail sales account for about 30 percent of U.S. consumer spending.

Investors are at odds over whether positive economic data can help the market rise further, or whether it will spell the end of the Federal Reserve's monetary stimulus, which could derail the rally, said Joseph Tanious, global market strategist at J.P. Morgan Funds.

Other data showed business inventories were unchanged in March for a second straight month, versus expectations of 0.3 percent rise, suggesting restocking could help second-quarter economic growth.

Earnings have been mostly better than expected. With 90 percent of the S&P 500 having reported, 67.2 percent of companies have topped earnings expectations, according to Thomson Reuters data, even with the average over the past four quarters. Only 46.9 percent have beaten revenue expectations, below the 52 percent average over the past four quarters.

U.S.-listed shares of Perion Network (PERI.O) surged 10.6 percent to $13.94 after the Israeli consumer Internet company posted first-quarter earnings.

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Gold sales escalate ahead of festival 'Akshaya Tritiya'

Gold sales pick-up in Rajkot as tumbled prices encouraged people to buy the yellow metal ahead of Hindu festival, Akshaya Tritiya.

Sona Chandok, a customer said that she is happy to see such good offers ahead of the festival.

"We are getting a discount of rupees one thousand and that is the reason we have come here to shop for gold. I saw a lot of varieties of necklaces but I chose the one I am wearing so most probably I will buy this one. Marriages are coming and at the same time this is a festival season and on top of it we are getting discounts because of festival Akshay Tritiya", Sona Chondok said.

The wedding season has begun in India and will continue till early June. Akshaya Tritiya, the second biggest gold buying festival after Dhanteras, also falls in this period.

Businessmen in the city are reaping good profits as they have come up with exciting offers to lure gold lovers.

The Rajkot Gold Dealers Association that has more than 130 gold show rooms under the association have kept special discounts of 1000 rupees per 10 grams on the labour charges on all sort of gold ornaments ahead of the auspicious occasion.

Akshaya Tritiya, the third day of the lunar fortnight of 'Vaishakh' - the second month according to Hindu calendar, is considered one of the foremost sacred days of the year.

The word Akshaya means, 'which never diminishes'. Hence it prompts people to buy valuables particularly gold.

A large number of buyers were seen thronging the jewellery shops.

The Gold traders expect good business on this occasion

The Akshaya Tritiya festival is one of the two most auspicious days of the year to buy the yellow metal in the world's largest gold market, as Hindus believe they can get lasting prosperity by buying precious metals on the day. The other festival is Dhanteras in November.

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Inflation, FII inflows to be key for Indian stocks

The bulls are back and their four-week winning streak saw the Nifty close at a 29-month high of 6107 on Friday, up about 2.75 percent for the week. Liquidity flows remain robust, fuelling the momentum despite political heat in New Delhi.

The Congress win in Karnataka boosted positive sentiment, followed by industrial output data that was marginally better than expectations. The overall earnings season has been favourable and along with the global rally provided the right environment for the markets to cross the psychological barrier of 6100 in the Nifty and 20000 on the Sensex. The only thing missing is euphoria on the street and broader participation by investors.

Politics was in the spotlight with the Congress romping to a comfortable win in the Karnataka assembly election. The victory in the key southern state took the sting out of the resignation of two cabinet ministers. Parliament had already been adjourned without a date.

The diesel price increase of 0.9 rupees per litre is more evidence that the government is not backing down from reform measures. But there is speculation the pace of reforms will now slow considerably as opposition parties have smelt blood.

Though industrial production data was better than expected at 2.5 percent, it’s still too early to spot green shoots. The new investment cycle could take longer than expected as the country gets into election mode. The HSBC PMI data for services was at an 18-month low. A check at the ground level with retailers shows a considerable slowdown, one that explains the extended discount season. Car sales have also disappointed for the sixth month in a row.

Despite these signals, the market has been gaining strength based on liquidity flows with FIIs pumping in $700 million last week. It’s probably Finance Minister P. Chidambaram’s relentless marketing of the India story during his recent overseas visits. Surprisingly, the rupee declined to 54.80 against the dollar despite expectations of a lower current account deficit and continued FII inflows.

The deadline for promoter dilution to meet minimum public shareholding rules will see a spate of offers for sale or placement with institutions. The government too is expected to go ahead with PSU divestment that had slowed due to adverse market conditions. Though this could soak up liquidity, the mammoth HUL buyback will infuse about 300 billion rupees in the system by July 2013.

In the coming week, consumer price index data will be announced on May 13, followed by wholesale price inflation a day later. Favourable data could further fuel the market rally on expectations that rate softening by the Reserve Bank of India will gather momentum. Some important results next week include Bank of Baroda, Bajaj Auto, ITC and Dr. Reddy’s Labs.

It would be disastrous to predict the extent of the current rally. The perceptible slowdown in consumer sentiment and political upheaval is bound to affect the market at some point. I would advise a short-term trader to follow the trend but it would be prudent for an investor to continue booking out at every rise. Though India has been immune to political risk in the longer term, the short to medium impact has been too big to ignore.

Copyright & Courtesy: Reuters

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Dollar hits 100 yen, stocks slip after rally

The U.S. dollar broke through 100 yen on Thursday, its highest level against the currency in over four years, while stocks in major markets slipped from recent record levels.

Investors sold the low-yielding yen as support from central banks around the world continued to push cash into higher-yielding assets. U.S. stocks fell slightly after recent gains from a rally that had taken the S&P 500 index to record highs for five straight sessions.

The dollar got support from U.S. data showing first-time applications for unemployment insurance fell last week to the lowest level in more than five years.

"A stampede out of safety and brightening U.S. job prospects helped catapult the dollar over the key triple-digit threshold against the yen," Joe Manimbo, senior market analyst at Western Union Business Solutions in Washington, said in a note.

The yen is on track for eight straight months of declines against the greenback, shedding more than 30 percent since its September high near 77. A major stimulus program by the Bank of Japan last month to revive the economy has helped prolong the yen's weakening trend.

U.S. stocks slipped but the recent uptrend remains intact, giving room for declines after the strong climb.

"This market is so stretched to the upside that if we get some little wiggle somewhere, I can easily see us getting back down to 1,580" on the S&P 500, said Stephen Massocca, managing director of Wedbush Equity Management LLC in San Francisco.

Pullbacks in U.S. equities have been short-lived and shallow even as traders have said the market could benefit from a correction. The expectation of continued accommodative monetary policy from central banks globally has sustained support for stocks.

At the close the Dow Jones industrial average fell 22.5 points or 0.15 percent, to 15,082.62, the S&P 500 lost 6.02 points or 0.37 percent, to 1,626.67 and the Nasdaq Composite dropped 4.1 points or 0.12 percent, to 3,409.17.

The Euro STOXX 50 index dropped 0.4 percent, retreating from a near two-year high but finding support at an upward trendline from lows hit on April 18. The pan-European FTSEurofirst closed flat to stay near five-year highs.

The MSCI world index , which tracks stocks in 45 countries, was down 0.7 percent after earlier hitting its highest level since June 2008.

GREENBACK RISES BROADLY

The U.S. dollar rose against major currencies almost 1 percent and above its 14- and 50-day moving averages.

The yen closed the session down 1.6 percent at 100.59 per dollar.

The euro was down 0.8 percent at $1.3045 after earlier hitting a high of $1.3177.

The euro was pressured by slightly softer-than-expected demand at a Spanish debt auction, while Spanish government bond yields rose.

Brent crude edged up in volatile trade and U.S. crude settled slightly down, as investors weighed Middle East tensions against weak demand and high inventories.

U.S. oil fell 23 cents to settle at $96.39 a barrel and was down further in extended trading. Brent crude edged up 13 cents to settle at $104.47 per barrel and later dropped 9 cents to $104.25.

Brent has dipped from a one-month high of $105.94 touched on Tuesday after Israeli air strikes on Syria over the weekend stoked supply fears.

"There's a tug of war here; the demand is not going to be there, but the economy is slowly improving," said Mark Waggoner, president at Excel Futures in Bend, Oregon.

Saudi Arabia increased crude oil output by 160,000 barrels per day to 9.3 million bpd in April, industry sources said this week, adding to an already well-supplied global market.

Spanish bond yields rose on speculation Madrid may be planning another bond sale after borrowing costs fell at Thursday's auction of just over 4.5 billion euros of new debt.

The country's 10-year bond yields were 8 basis points higher at 4.195 percent, having moved away from the 2-1/2 year lows of 3.954 percent touched last Friday.

Prices for U.S. Treasuries were flat as investors balanced stronger-than-expected jobs data with expectations that riskier assets such as equities could see a correction soon.

The U.S. 10-year Treasury note yield inched up to 1.811 percent, the highest in nearly a month. The U.S. 30-year bond traded down 5/32 to yield 2.994 percent from 2.987 percent late on Wednesday.

Gold prices fell after the U.S. jobs data, with dollar strength weakening the price further. Spot gold was down 1 percent to $1,456.69. The metal gained 1.4 percent in the previous session, its biggest one-day rise in two weeks.

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No plan to retire forex forward deals, says RBI Governor

The Reserve Bank of India (RBI) has no plans to retire foreign currency forward contracts to meet the liquidity deficit in the financial system, and will instead consider bond purchases and other measures, Governor D. Subbarao said here on Thursday.

Dr. Subbarao has previously said that the central bank does not use forex intervention to manage liquidity as a matter of policy, but, on Thursday, he specifically ruled out redeeming the country’s outstanding foreign debt to bridge the cash deficit.

“There are uncertainties about liquidity in the system. We will try to manage that actively,’’ Dr. Subbarao told reporters after the RBI board meeting here.

“We do not use forex intervention as a measure of managing liquidity,’’ he then added.

His comments come as the country’s persistent tight liquidity deficit has worsened this week. Banks borrowed Rs.1.05 lakh crore ($19.40 billion) on Thursday from the central bank, the third consecutive day where repo borrowings have surpassed the Rs.1 lakh crore-mark.

Resolution authority

The RBI said a proposal was afoot to set up a resolution authority to deal with the widespread distress caused by failure of financial institutions.

“...within India we are coming up with a resolution authority for what can be done when institutions come under stress,” Dr. Subbarao said in response to a query as to whether it was right to impose ‘sin tax’ to bail out distressed investors of the Saradha group in West Bengal. Citing examples of developed nations, he said, it was done in the U.S. when the government used tax payer money to bail out many financial institutions which came under stress due to global meltdown in 2008.

The RBI, he said, would soon issue a public advisory to spread awareness among people about unscrupulous scheme operators.

“The RBI, as a public policy institution, is responsible for spreading awareness about what are the legal schemes and what is illegal, who is the responsible for regulating these schemes, how can ordinary people know what is legal and what is illegal and how can they protect themselves against frauds,” he added.

Stating that alleged financial fraud by the Saradha group recently should not be termed as chit fund scam, he said, “what has been blown up by media in the last few days some are collective investment schemes, which are registered with SEBI. There are irregularities, and SEBI is taking action.’’ Noting that the non-banking sector was very large and diverse segment, Dr. Subbarao said the sector was regulated by different entities.

“There are several types of institutions and schemes, operations in the non-bank sector. Different regulatory agencies are responsible for regulating such schemes in particular,” he said.

Deposit-taking NBFCs registered with the RBI were to be regulated by the RBI, he said. In case they were not registered with the central bank, they would come within the purview of the Ministry of Corporate Affairs, he pointed out.

Dr. Subbarao further said that “the collective investment schemes such as Saradha are within the purview of SEBI so there is got be a clear understanding in the media and through you in public of the diversity of the structure and the responsibilities of various regulators.”

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EU imposes anti-dumping duties on India's steel wire exports

The European Union has imposed provisional duties on India's exports of stainless steel wire to counter dumping that has hurt Italian, German and Spanish producers.

Indian government support and a policy of selling the wire used in batteries at below production costs meant European companies had been unable to benefit from a booming market, the European Union said in its Official Journal on Wednesday.

The European Union and Asia's third largest economy accuse each other of protectionism and talks towards a free trade pact that started in 2007 have stalled.

Europe wants access to India's vast market of 1.3 billion potential customers, but Indian Prime Minister Manmohan Singh and Germany's Chancellor Angela Merkel were unable to break the impasse during a meeting in Berlin in April.

The EU, which launched its steel wire investigation in August last year, said producers such as Germany's Hagener Feinstahl, Spain's Inoxfil and Italy's Rodacciai suffered as Indian imports grew by almost 50 percent between 2007 and 2011.

Indian companies that could be affected include Kei Industries  and Mukand Ltd .

"Prices of imports from India have remained consistently below prices of imports from other countries," said European steel industry lobby group Eurofer, which brought the complaint.

"This has caused serious difficulties for European producers, which had to cut production and have reported significant losses from 2007 until 2011," Eurofer said.

The anti-dumping and anti-subsidy duties come into force on Thursday and EU governments must now vote on whether to make the duties definitive for a period of up to five years.

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Rupee weakens; dollar demand from oil, custodian banks hurts

The rupee remained in a tight range on Wednesday as positive sentiment due to stronger Asian currencies and the euro was offset by choppy domestic shares and demand for the greenback from custodian banks and oil importers.

Most Asian currencies gained as strong trade data from China and a record yuan boosted sentiment.

However, the rupee failed to benefit as much given Indian shares were volatile for most of the session, leading to dollar demand from custodian banks.

The rupee did not gain much even as a late spurt led the BSE Sensex to a new three-month closing high, with mortgage lender HDFC Ltd hitting a record high after its earnings beat estimates.

"The rupee was closely tracking stocks and the euro today. Later we also saw some oil bids in the market," said A. Ajith Kumar, a foreign exchange dealer with Federal Bank.

"The next key support for the dollar/rupee is at 54.05 while 54.15 will pose some resistance," Kumar added, predicting a range of 53.90 to 54.25 for Thursday.

The partially convertible rupee closed at 54.16/17 per dollar, little changed from 54.1350/1450 on Tuesday, after moving in a thin range of 54.04 to 54.19 during the session.

Traders said volumes in the market were also slightly below normal in the absence of any large flows.

Investors are expected to shift their focus to the consumer price index and industrial production data on Friday, which will be followed by wholesale inflation data on Monday, dealers said.

The data comes as India cut short the budget session of parliament on Wednesday, two days ahead of its scheduled close and without passing major reforms like the food security and the land acquisition bills.

However, concerns about political instability could ease somewhat as India's ruling Congress party was set for a resounding election victory in the southern state of Karnataka on Wednesday, according to early results.

In the offshore non-deliverable forwards, the one-month contract was at 54.26 while the three-month was at 54.78.

In the currency futures market, the most-traded near-month dollar/rupee contract on the National Stock Exchange, the MCX-SX and the United Stock Exchange all closed at around 54.18 with a total traded volume of $3.4 billion.

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