BSE index falls 0.29 pct; NSE ends 0.39 pct lower
* Indian shares snap 5-day winning streak
* HDFC Bank posts slowest quarterly profit growth in a
decade
* Investors turn 'equal-weight' on India - Morgan Stanley
survey
By Abhishek Vishnoi
MUMBAI, Oct 15 - India's benchmark index fell on
Tuesday, retreating from a nearly three-year high hit earlier in
the session, as blue chips declined ahead of the Oct. 17
deadline to lift the U.S. debt ceiling.
Lenders also
Land Acquisition Act to come into force from Jan 1, 2014
Rural Development Minister Jairam Ramesh
The new law received the assent of the President on September 27.
Rural Development Minister Jairam Ramesh took the decision after consideration of another view, particularly from state governments, that the Act replacing a 119-year-old legislation should be notified from April 1, 2014.
"Sooner we notify the Act, lesser the uncertainty," Ramesh said on Tuesday, and announced the decision to implement The Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013 on New Year day.
Some state governments were of the view that if the law is notified during the beginning of the new financial year, they would get "some time" to establish necessary infrastructure for its implementation.
With the Centre deciding to implement the Act early, state governments will have to soon set up at least six bodies, including the state-level Land Acquisition Rehabilitation and Resettlement Authority, in each state to hear disputes arising out of projects where land acquisition has been initiated by the state or its agencies.
According to the draft rules released by the Ministry on Monday, the state governments should take immediate steps to create and establish the State Social Impact Assessment Unit, the office of the Commissioner Rehabilitation and Resettlement and the State Level Monitoring Committee.
The bill was brought as the archaic Act of 1894 suffered from various shortcomings, including silence on the issue of resettlement and rehabilitation of those displaced by acquisition of land.
India can't afford fiscal slippages: Fitch
New Delhi: Global rating agency Fitch on Thursday cautioned that fiscal slippage could have negative bearing on India's sovereign rating, which is at the lowest investment grade in view of weakening CAD and persistent inflationary pressure.
"In India and Indonesia, both BBB- (lowest investment credit rating) with stable outlook, their relatively weak starting positions with high inflation and recent rises in current account deficits (CAD) suggest that their credit profiles have limited tolerance for policy slippage that saw their current account deficits and-or inflation rates stay high or rise further," it said.
Countries experiencing the greatest pressure on their currencies and reserve levels are those where weakening current-account positions and persistent inflationary pressure have raised doubts over the credibility of policy management - India and Indonesia in particular, it said.
In a report titled 'Emerging Asia: Slowing Growth Amid Market Pressures', Fitch sees limited scope for policy slippage for either sovereign at the current rating levels of 'BBB-' with stable outlook.
The government is taking all steps to contain fiscal deficit to 4.8 percent of the GDP in the current fiscal.
The fiscal deficit during 2012-13 came down to 4.9 percent of the GDP from 5.8 percent a year earlier.
"The government will do whatever is necessary to contain the fiscal deficit to 4.8 percent of GDP this year. The most growth-friendly way to contain the deficit is to spend carefully, especially on subsidies that do not reach the poor, and we will take effective steps to that end," Prime Minister Manmohan Singh had said.
Finance Minister P Chidambaram at many occasions has reiterated that red line has been drawn for the fiscal deficit and they will not be breached.
With aim to stick to fiscal deficit target, the government had announced slew of austerity measures including reduction in non-plan expenditure, ban on holding seminars in five-star hotels and creation of new jobs.
As for the Current Account Deficit (CAD), it was expected to be less than USD 70 billion or 3.7 percent of GDP for the full fiscal.
The CAD, which is the difference between inflow and outflow of foreign funds, was at 4.9 percent of GDP in the April-June quarter.
India's service sector activity suffers worst slump in over 4 years in Sept
Bangalore: Activity at Indian services companies shrank at the fastest pace in more than four years last month, suggesting the slowdown in Asia's third-largest economy still has some way to run, a survey showed on Friday.
The HSBC Services Purchasing Managers' Index (PMI), compiled by Markit, slipped from 47.6 in August to 44.6 in September, its weakest since April 2009.
That marked its straight third reading below 50, the threshold between growth and contraction.
It showed firms were less optimistic about the future and were cutting staff as new business dries up.
The PMI also capped the worst quarter for the Indian services sector - which accounts for nearly 60 percent of the economy - in more than four years, stoking fears that growth in the three months to September will be weaker than April through June.
India's economy grew just 4.4 percent in the quarter to June, its weakest quarterly pace since the first three months of 2009.
"Service sector activity contracted further in September ... as tighter financial conditions and heightened macroeconomic uncertainty weighed on growth," said Leif Eskesen, chief economist for India at survey sponsor HSBC.
The PMI's new business index fell to 45.0 in September from 46.6 in August, the weakest reading since February 2009 and the third month running that demand has declined.
Such weak demand augurs poorly for coming months, too.
An HSBC Markit manufacturing survey released on Tuesday showed factory activity shrank for a second month in September.
Adding to economic woes, a ballooning current account deficit has driven funds out of the country, hurting the Indian rupee and pushing the Reserve Bank of India (RBI) to adopt measures which effectively drained cash from the market.
Those moves raised funding costs for banks and companies, creating a ripple effect that has crimped investment.
The weaker currency also pushed wholesale inflation to a six-month high in August, prompting RBI Governor Raghuram Rajan's surprise repo rate hike of 25 basis points to 7.50 percent on September 20.
"Despite the weak growth backdrop, inflation readings held broadly steady. This, in turn, supports RBI's stepped up efforts to better anchor inflation expectations," said Eskesen.
However, economists in a Reuters poll taken last week were split over whether Rajan will hike rates again at the central bank's next policy review on October 29.
Rupee advances to 7-week high at 61.45 against dollar
Selling of the US currency by banks and exporters triggered by its weakness overseas helped the Indian rupee advance by 28 paise to a seven-week high of 61.45 against the dollar in late morning deals on Friday.
Good foreign capital inflows into equity market also boosted the rupee value against the dollar, a forex dealer said.
The rupee resumed lower at 61.85 per dollar as against the Thursday's closing level of 61.73 at the Interbank Foreign Exchange (Forex) Market on mild dollar demand from some banks.
However, it recovered immediately to 61.34 before quoting 61.45 per dollar at 1045 hours, on fresh selling by banks and exporters.
It may be recalled that the dollar was quoted at 61.32 on August 16, 2013.
The domestic currency hovered in a range of 61.34 and 61.95 per dollar during the morning deals.
In New York market, the dollar hit an eight-month low against the euro on Thursday as investors grew more concerned about the economic effects of a prolonged shutdown and debt-ceiling debate.
Meanwhile, the benchmark BSE index Sensex moved down by 29.66 points or 0.15 per cent to 19,872.41 at 1125hours, after earlier touching the 20K level.
Subscribe to:
Posts (Atom)