Sensex plunges 506 points: rupee breaches 47 a dollar

The rupee slipped below 47 to a dollar-a two-year low and the BSE Sensex plunged to its lowest level in two months, closing out at 12,595.75, as Indian markets fell in tandem with their Asian and European peers on Monday. FIIs pulled out $149.8 million in equities from domestic markets.

Real estate and banking stocks led the rout with ICICI Bank dropping 12% to its lowest in more than two years. IT stocks also plunged on fears that the global financial crisis will reduce software spends.

The Sensex fell 506.43 points, or 3.9%, to 12,595.75, the steepest since July 29. All but one of the 30 stocks in the benchmark index declined as it touched a one and a half year low of 12,402.84 points during the session.The S&P CNX Nifty of the NSE slid 135.20 points, or 3.4%,to 3,850.05.

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HCL counter bid: it's yesterday once more

There was a feeling of dejavu when HCL Technologies made a counter bid for Axon Plconlate Friday evening.

India should remember the fierce battle waged by Mittal Steel and Tata Steel to acquire Arcelor and Corus a couple of yearsago.

With only a few hours remaining for Infosys to make its counter bid, the HCL Axon-Infosys saga could be equally action packed.In August,Infosys had made an offer to acquire Axon for £407 million.

Axon, for which HCL topped Infosys' bid by around 8% (£441 million), will mark the largest overseas acquisition by an Indian company in the IT space. However, it would also be the first time two Indian corporate houses have gotten into a bidding war.

After HCL upped its bid by 50 pence a share, Infosys had 60 hours to make a counteroffer,which expires on Monday.Industry experts feel that Infosys will not bow out soon as the senior management must have factored in a counter offer before making the first bid.

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Bush pushes bailout as GE cuts profit outlook

President George W Bush will press for agreement on a massive bailout of US financial firms on Thursday in an emergency meeting with lawmakers including the two men battling to succeed him.

The meeting takes place after the United States' biggest industrial conglomerate, General Electric Co, cut its earnings forecast in the face of a slowing economy and cited "recent dramatic developments in the financial markets".

Troubles at Wall Street firms have triggered the proposed $700 billion rescue that is the subject of a fierce political debate and drawn global markets into their worst crisis since the Great Depression. The crisis has forced central banks to pump in billions of extra dollars each day as nervous banks refuse to lend to each other.

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Now, Google places its software in wireless smartphones

Google isn't just for Web browsing anymore.The giant Internet search service joined with cellular carrier T-Mobile USA to unveil the first cellphone based on Google software. It's an aggressive bid to pry open the market for advanced wireless smartphones.

Cole Brodman, CTO for T-Mobile USA, noted only about 16% of Americans use their wireless phones to access Internet. "We're going to change all that," he said. But the new phone, the G1 from Taiwan's HTC, contains few breakthrough features and seems unlikely to challenge the popularity of rival smart phones like Apple's iPhone."I don't think that this phone itself is a ground breaking thing," said Jane Zweig,chief executive of telecom research firm the Shosteck Group in Columbia.

Instead, the G1 is the first step in Google's strategy to remain relevant in a world in which billions of people go online via pocket-sized devices.

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Media cross-holding under Trai review

To foster greater competition in the Rs 51,300-crore media business, growing at 19% a year,the Telecom Regulatory Authority of India (Trai) has decided to examine if ownership across different media segments proves detrimental to the overall health of the sector.

Asked by the information & broadcasting ministry to review the concentration of interest in the media and not obstruct "plurality of players", Trai has floated a consultation paper on cross media ownership in the country. The broadcast regulator has invited stakeholders to express their views on whether there is need for cross-media ownership restrictions and whether existing laws are adequate to address the concerns.

The regulator says as an increasing number of broadcasting and telecom companies are entering into the delivery of services, it is necessary to ascertain if restrictions on the ownership of cable, DTH, IPTV or mobile TV companies by broadcasting/telecom companies,or vice-versa,is feasible.

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Goldman and Morgan turn into commercial banks under Fed

The Wall Street that shaped the financial world for two decades ended on Sunday night New York time, when Goldman Sachs Group Inc and Morgan Stanley concluded there is no future in remaining investment banks now that investors have determined the model is broken.

The Federal Reserve's approval of their bid to become banks ends the ascendancy of the securities firms, 75 years after Congress separated them from deposit-taking lenders, and caps weeks of chaos that sent Lehman Brothers Holdings Inc into bankruptcy and led to the rushed sale of Merrill Lynch & Co to Bank of America Corp.

"The decision marks the end of Wall Street as we have known it," said William Isaac, a former chairman of the Federal Deposit Insurance Corp. "It's too bad."

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PepsiCo commits $500 million, aims to triple business

PepsiCo on Sunday announced a $500-million investment in India in a clear endorsement of the attraction of emerging markets like India amidst a global financial meltdown.The $39-billion food & beverage giant's plans cover the next three years. The fresh investments underscores that the company is betting big on the continuation of the Indian growth story that is pushing up the number of middle class every year.

The chairman & CEO of PepsiCo, Indra Nooyi, said the current financial turmoil on Wall Street would not hit her company, which has strong cash reserves. She said the India investment would create 50,000 direct and indirect jobs. PepsiCo has so far invested $700 million in the country,which means the new investment would push the aggregate figure above the $1-billion mark.

Chennai-born Nooyi said PepsiCo hopes to triple its business in the country in the next five years. Considering the country's growth potential and economic parameters, this is a conservative estimate, she said. Inflation, she said, is a major concern. "Sometimes you can cover part of it with changes in product prices but when you have inflation over 10-12% it is difficult to coverall,"she said.

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News magazine segment liberalised

In a significant further opening up of the print media, the Union Cabinet on Thursday approved are vised policy that would allow Indian editions of foreign magazines in the news and current affairs category. However, foreign publishers seeking an Indian presence will have to enter into financial tie ups with Indian partners, as permission for such editions would be granted only to domestic companies.

The review of print media policy permits Indian publishers entering into such agreements to include local content and carry domestic advertisements, both of which were for bidden under previous guidelines. Indian media houses now hope that the FDI limit in the sector would also be eventually raised to 49% from the current 26%.

Ashish Bagga,CEO of the India Today Group,India's largest magazine publication house,told FE, "We welcome the move.It was a long standing demand of the magazine industry that will enable most international magazines to launch their Indian editions.

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Fearing meltdown, Fed bails out American International Group Inc with $85-billion package

The US government took control of American International Group Inc (AIG) in an $85-billion bailout to prevent the bankruptcy of that nation's biggest insurer and the worst financial collapse in history. The Federal Reserve will provide a two-year loan, take 79.9% of the New York-based company's stock and replace its management because " a disorderly failure of AIG could add to already significant levels of financial market fragility",according to a statement by the US central bank late on Tuesday.

The dollar fell against the yen as the Fed's bailout of AIG failed to quell concern that credit losses will deepen. AIG unravelled as the worst housing crisis since the Great Depression led to more than $18 billion in losses over the past year. A meltdown could have cost the financial industry $180 billion, according to RBC Capital Markets, because AIG provided insurance on more than $441 billion of fixed-income investments held by the world's biggest institutions, including $57.8billion in securities tied to sub prime mortgages.

The government is lending AIG the money at 8.5 percentage points above the three month Libor, or a current rate of about 11.5%.

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Rupee slide persists

The rupee fell the sharpest in a decade on speculation that the trouble on Wall Street would lead to emerging-market asset sell-offs by jittery global investors.The currency hit its lowest level against the dollar in more than two years. The Sensex also fell for a sixth day in tandem with equity markets world wide. It lost a marginal 12.47 points to end at 13,518.80, heading for its first annual loss since 2001.

The rupee may come under more intense pressure as FIIs continue to hawk Indian equities. The Indian currency ended at 46.89/90 against the dollar, off a trough of 46.99-its lowest since July 24, 2006-as banks arbitraged with a weaker overseas market. Dealers suspected RBI intervened to halt the slide just short of 47 against the greenback. JPM organ forecasts the rupee to drop to 47 by the end of the year. The rupee was the second biggest loser among the ten most active currencies in Asia outside Japan on Tuesday.

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Lalu assures cooperation to Tanzania railways

The minister of railways Lalu Prasad,in a meeting with a Tanzanian delegation here on Monday , said the Indian Railways will extend all necessary assistance to operate and manage Tanzanian railways.

Prasad assured a Tanzanian delegation led byits Minister of Infrastructure development ShukuruJKawambwa that the Tanzanian government's request for providing the Indian line of credit on soft terms amounting to $83 million will be considered positively to make Tanzanian Railways a viable entity in long term.He said that RITES,a Public Sector Undertaking of Indian Railways, will continue to extend professional expertise and provide requisite resources to Railways in Tanzania.Both the ministers have agreed that the management of Railways in Tanzania is part of the cooperation and would further strengthen the bilateral relations between the two countries in the field of rail transportation.

RITES and government of Tanzania have set up a joint venture, namely ‘Tanzania Railways Ltd'(TRL),to operate and manage Tanzanian railways with RITES holding 51 percent equity and the balance equity being held by the government of Tanzania. Under this project, the TRL will operate and manage railways on concession terms for 25 years.

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Staking Clam

Medical treatments based on stem cells might still take some time to take off in India, but excitement is building up among the healthcare providers to tap this fast emerging market. The allurement is hard to resist as the global stem cell therapy market is expected to touch $20 billion by 2010 and chances of India emerging as a hub for the treatment of deadly diseases are fairly strong. Another $10-12 billion worth of funds are being channelled into stem cell research by the governments of USA, UK, Sweden, Canada, Australia, Singapore, Korea, Japan and Germany. It's obviously a lucrative opportunity for the Indian companies and research institutes.

No wonder, stem cells are being touted as the next big thing that has happened to India. And, as they hold the promise to usher in the next great leap in medicine, Indian companies are in an equally buoyant mood.

Leading the charge is Reliance Life Sciences, which recently rolled out the first commercial stem cell treatment in ophthalmology. After successful clinical trials, the company has introduced stem cell-based treatment to restore or improve vision in people with damaged cornea.

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Mittal is unfazed by Tata troubles, to go ahead with projects

The world's largest steel producer, Arcelor Mittal, has reiterated its confidence in the India story and stated that there's no question of it reneging on its planned investments in India due to either cost overrun or issues like Singur.

Speaking to a select group of journalists in the Capital, Arcelor Mittal's chairman & CEO, India-born LN Mittal said, "One case of Singur cannot be an example for the world. One can face this kind of problem in any other country. One particular project can face this kind of opposition from people.But the country as a whole is interested in growing."

Mittal's comments assume significance as India Inc has reacted negatively to the Singur developments.

Arcelor Mittal has its own share of problems in India. Its proposed steel plants in India would cost more than the estimated $20 billion, as over the last three years capex costs for steel projects have gone up by 30-50% globally.

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Fashionistas high on first wives club

Cindy McCain or Michelle Obama for the White House?

Among fashionistas, the wives of the Republican and Democratic presidential candidates John McCain and Barack Obama are drawing the kind of enthusiasm that Nancy Reagan and Jacqueline Kennedy once attracted.

As might be expected, style mavens' critiques focus less on what the potential first ladies say or do than on what they wear.

While Obama won fans for wearing a relatively affordable $150 dress on talk show The View, McCain drew attention for her expensive tastes. Vanity Fair magazine estimated one outfit she wore at the Republican National Convention this week was worth $300,000.

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Trai asks telcos to bring down SMS charges

In a move that could halve SMS charges, the Telecom Regulatory Authority of India (Trai) has asked mobile operators to slash tariffs voluntarily. Unlike the voice traffic, the cost component in SMS is negligible–around 2 paise. Still, SMS tariffs are either higher than voice rates or at best comparable.

Sources say Trai has held two rounds of negotiations with the Cellular Operators Association of India (COAI), the apex of body of GSM mobile operators, convincing them to voluntarily bring down the tariffs, failing which it would intervene through regulation. In fact, two years back also Trai had urged the operators to bring down SMS rates.

The average tariff for local calls is Re 1, the same as the local SMS rate, while for STD calls, the average tariff is Rs 1.50 and the SMS rate is higher at Rs 2.

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Chances of first Nano rolling out of Singur look remote

Sunday was an unusual day of expectations for the people of West Bengal and the Indian industry. As news spread of West Bengal chief minister Buddhadeb Bhattacharjee and Trinamool Congress chief Mamata Banerjee meeting face-to-face for the first time over the Singur issue in the presence of governor Gopal Krishna Gandhi, every one looked forward to a break through. But it was not to be. As Mamata imposed fresh conditions, after almost reaching a breakthrough, and the governor called off a press meet schedule for Sunday night, it became clear that the first Nano car will not roll out of the Singur plant.

At the time of going to press, news is trickling in that another round of meeting is going on between the trio of Buddha Mamata-Gandhi. But as someone commented, Singur is proving to be more difficult than the nuclear issue, since a breakthrough was possible in Vienna but not in Kolkata.

PWD minister and RSP leader KshitiGoswami told reporters at the CPI(M) party headquarters that a consensus was reached by both sides on the formation of a four member committee to go into the demands of farmers to return their land.

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Gear up for the beauty parade

Car lover loosen your seat belts! It would be a sparkling Diwali even in Motown this year as leading carmakers gear up to launch new products in the local market, never mind the slump in the autoville from high prices and an impending credit squeeze.

While at the top end, you can get into gleaming beauties like Ferrari, Alfa Romeo, Lexus, Aston Martin and Maserati that are waiting to finally make their Indian debut, at the modestend there would be surprises from players like Maruti Suzuki, Hyundai Motors, Honda Siel and Mitsubishi Motors.

Ferrari's range of cars for the Indian market could be the V8-powered F430 as well as a few of its 12-cylinder cars, including the 620 bhp 599 GTB, which is the fastest 12-cylinder car in the world.

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Banks need Rs 5.7 lakh crore more within 5 years: report

The Reserve Bank of India, in its ‘Report on Currency and Finance 2006-08', said as banks will have to maintain capital for operational risks, overall capital requirements are likely to go up even if there is an expected decline in the capital required on account of credit risk.

Since most of the banks in India are at present operating at capital adequacy ratios higher than the prescribed level, meeting the Basel II requirements is not an issue in the immediate future. In the medium to long-term, however, banks would need to raise capital resources to keep pace with the expansion of their business. An assessment made in the report suggests that the total capital requirements in the five years 200708 to 2011-12 are projected to go up by about Rs 5,70,000 crore assuming that banks maintain CRAR at 12%, while the total capital requirements by public sector banks are projected to go up by about Rs 3,70,000 crore.

As regards the various options available to banks, more than 85% of the capital requirements in the past were met by banks through internally-generated resources. Apart from internal resources, banks have also headroom available to raise Tier 1 capital under innovative perpetual debt instruments (IPDI) and perpetual non-cumulative preference shares (PNCPS).

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Coca-Cola to buy China juice maker for $2.4 billion

US soft drinks giant Coca-Cola said today it planned to buy Chinese juice maker Huiyuan Juice Group in a$2.4 billion deal that would be its biggest acquisition in China.

Coca-Cola will offer 12.20 Hong Kong dollars ($1.6) per share in Hong Kong-listed Huiyuan, it said in a statement, adding that three shareholders holding a total of 66 %in the company had accepted the offer.

"It is the largest proposed transaction in China and the second largest for the Coca-Cola Company," the company said in an email Coca-Cola said it intended for Huiyuan, one of China's best-known juice brands, to carry on its business, but that it would later review its operations.

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Commodities cool down:crude,edible oil decline, steel to soften on global meltdown

After rising steadily for last one year, the prices of critical commodities like edible, crude oils and steel have sharply declines, which would impact the rising graph of inflation.

While international prices of crude oil at the New York Mercantile Exchange on Monday was traded at $116.57 a barrel, down from all time high of $147.27 a barrel in Mid July, the prices of Palmolein and Soyabean oils in the international market have softens.

Both the decline in crude and edible oils is significant to the government's fight against double digit inflation as domestic prices are impacted by volatility in the international market. India imports close to 70% of its crude oil needs and around 50% of edible oil needs.

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FMCG giants cook new plans for bakery push

FMCG majors ITC Foods and Britannia Industries Ltd (BIL) are gearing up for a bakery battle in the Indian market place. To take on BIL, ITC is baking a fresh game plan to promote its new launch Sunfeast Golden Bakery. ITC’s strategy includes, extension of its product portfolio, high-voltage ad campaigns and consumer promotions. Meanwhile, soft drinks major Rasna is test marketing its bakery brand ‘Devil Doughnuts’ in Ahmedabad. After seeing the response its new launch, Rasna plans to introduce its bakery brands in Mumbai within a few months. Incidentally, Rasna has set up four fast-food retail chains with an unusual name ‘Devil’s Workshop’ in Ahmedabad. With the entry of Rasna and Amul, the branded bakery sector will soon witness a lot of action.

According to industry sources, ITC Foods is getting ready to roll out new variants of its bakery brands in the next two months. To gain high visibility for its new launches, the company is looking at high-decibel advertising and promotions. The company is also focusing on modern retail formats to promote its new launches, added sources. Armed with aggressive marketing strategy, Sunfeast Golden Bakery is all set to take on Britannia’s premium cookie Pure Magic and Good Day in the highly competitive bakery sector.

To promote its flagship brand ‘Sunfeast Golden Bakery’, ITC Foods is currently beaming television campaign featuring cine star Shah Rukh Khan. On the other hand, ITC’s rival Parle Products has roped in film star Hrithik Roshan to endorse its bakery brand ‘Parle Milano’. “As a result, there’s a star war brewing to promote cookies in India, Increasingly, Indian biscuit majors are relying on cine stars to promote their bakery brands,” said an analyst based in Mumbai.

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