Indian Business News , Stock Market News and Other Market News

Sensex gets resistance at 11,000 level
Sat Aug 05,2006

MUMBAI: The stock market added 1.74 percent to its kitty in the week under review but the key benchmark Sensex faced strong resistance at the 11,000 level. In the week till August 5, the Bombay Stock Exchange (BSE) 30-share sensitive index (Sensex) attempted to break 11,000 resistance, rising past the psychological mark twice during trading, but ended at a 11-week high of 10,866.51 against last weekend's close of 10,680.23, a net rise of 186.28 points.

The NSE S&P CNX Nifty also spurted by 45.95 points or 1.47 percent to end the week at 3,176.75 from previous weekend’s close of 3,130.80. Though some momentum in buying was seen during the week, analysts ruled out any wholehearted participation by bulls unless the key indices Sensex and Nifty end above the 11,000 and the 3,210 levels.

The market was largely influenced by a firm trend in global markets while Foreign Institutional Investors (FIIs) slowed down activity in view of international developments. FIIs pumped in a meagre Rs 756 crore in derivatives and Rs 548 crore including provisional figure of August 4, during the week.

Mutual funds, however, were net sellers. The European Central Bank raised interest rate by 25 basis points to 3.00 percent, a widely anticipated decision, while the Bank of England surprised the market by also raising the rate by 25 basis points to 4.75 percent.

However, the disappointing US employment report for July reduced the chances of a further hike in interest rates by Federal Reserve at its policy meeting on August 8.

The investors are looking forward to more surprises in the coming week, whereby they are more susceptible to the volatile stock trends.

“Infrastructure sharing” might be the key for telecom growth
Sat Aug 05,2006

NEW DELHI: The telecom sector seems to be shrouded in mystery over many regulatory issues. The main problem being that the telecom operators and the regulators are not able to solve the issues with a consensus.

Clashes over spectrum, FDI and unified licensing regime are a regular scenario for the telecom sector. Nripendra Misra, Chairman of Telecom Regulatory Authority of India (TRAI), talks about various regulatory issues that are currently hampering the growth of telecom sector in India and hints towards their possible solutions.

Arcelor, Mittal name CEO of merged group
Sat Aug 5,2006

LONDON/BRUSSELS (Reuters) - A low-profile Arcelor executive took over leadership of Arcelor and Mittal Steel on Friday, saying his challenge was to forge a single company from the world's two largest steelmakers.

The long-awaited announcement of new leadership named as chief financial officer Aditya Mittal, son of Mittal's founder, but froze out the old CEO of Arcelor who had opposed the deal.

"First thing we all have to do is to make sure we can present one face to the customer,"said the new CEO, Roland Junck, 50, who was executive vice president of the Luxembourg-based Arcelor and is from the Grand Duchy.

Junck kept a relatively low profile during the takeover battle with Mittal, offering little comment to journalists about Arcelor's efforts to thwart Mittal's hostile bid.

The rough-and-tumble fight ended in late June and by last week Mittal Steel held 92 percent of the shares in Arcelor, though the two companies will not formally complete their merger for some time -- possibly for up to a year.

"We had an amazing fight, but we have an amazing alignment," said Laksmi Mittal, the company founder, who will serve as co-chairman with Arcelor's chairman, Joseph Kinsch.

Junck recently led Arcelor's efforts to buy a 38 percent minority stake in China's Laiwu Steel, a region where the new group is keen to expand.

Growrh Regions

"China and India are our focus areas," Laksmi Mittal told Reuters on the sidelines of the London news conference.

The four other members of the management board are Arcelor's Deputy Chief Executive Michel Wurth, Arcelor Chief Financial Officer Gonzalo Urquijo, Mittal's Chief Operating Officer Malay Mukherjee and Mittal Steel South Africa Chief Executive Davinder Chugh.

Wurth, who was also seen as a possible leader of the new group, played a more visible role in the hostile bid saga. He chaired the Luxembourg Chamber of Commerce which unsuccessfully tried to push through new takeover rules with the potential to torpedo the deal.

Wurth became less vocal in his opposition to Mittal's bid as the prospects grew of a friendly deal between the two rivals, leaving the opposition role to Arcelor's CEO Guy Dolle, who said the deal carried too many risks.

Dolle "will not have any executive role. He has offered his services wherever he is required by us. There is no fixed role," Lakshmi Mittal said.

Mittal also said he was optimistic about the prospects of the new group.

"Steel demand will continue to be strong. The concern which everyone has are the exports from China, but my point is that the Chinese are not low-cost producers. At these prices they cannot make profits," he told Reuters.

India's cotton exports may hit record 5 mln bales
Sat Aug 05,2006

MUMBAI (Reuters) - India's cotton exports will hit a record 4.5 to 5 million bales in the year ended September, surging from 1 million the year before on the back of a rich harvest and carryover stocks, an industry official said on Saturday.

K.F. Jhunjhunwala, president of the East India Cotton Association, said crop output this year would slightly exceed official estimates at 24.5 million bales due to the use of better seeds and a larger area under cultivation.

The Cotton Advisory Board had estimated the crop at 24.4 million bales.

"In spite of massive exports, we will be left with huge stocks at the end of the season. Further, the crop prospects for next year are very bright," he told a cotton conference in Mumbai.

"This would afford a great opportunity for exports during the next season." India produced 24.3 million bales in the year ended September 2005.

"So far, the rainfall in cotton growing areas has been very, very satisfactory," he added.

The cotton crop, prone to attack by pests such as bollworm, has remained largely pest-free this year due to more widespread use of pest-resistant, genetically modified cotton. New hybrid seeds were also helping to increase yields.

Eye on China

Jhunjhunwala said Indian industry should aim to increase its exports China, where it was a distant second to the U.S. in market share. While the U.S. has a 45 percent share of world cotton exports to China, India has only 12 percent.

Textile Minister Shankarsinh Vaghela urged cotton traders to pay farmers more than the minimum support prices set by the government to boost their earnings.

Thousands of cotton farmers have committed suicide in the past five years in just four western and southern states as they have struggled to repay debts.

Activists say the farmers have been driven into the clutches of private money lenders by a lack of water to irrigate fields, poor crops, and limited cheap credit.

In July, Prime Minister Manmohan Singh announced over $400 million in one-time grants, interest waivers and debt restructuring besides a one-year moratorium on loan repayments for eligible farmers.

But those borrowing privately are not eligible for government relief. Vaghela urged the industry to educate farmers about the use of new technology, the seeds available, and how to maximise yields.

Textile Commissioner J.N. Singh said more cotton processing mills were needed to match the booming cotton production. He said the government would help by speeding up clearances for new units.

India, Pakistan, Iran to appoint gas rate consultant
Friday Aug 04,2006

NEW DELHI (Reuters) - India, Pakistan and Iran will appoint a consultant to suggest a price for Iranian gas to be delivered to the two energy-hungry South Asian nations through a proposed pipeline after officials failed to agree a rate.

All three nations remained committed to the $7 billion pipeline project, officials said, despite opposition from the United States, which is seeking to isolate Tehran over its controversial nuclear programme.

India and Pakistan have suggested the names of two consultants -- Poten and Partners and Vicce -- and Iran will now choose which it wants appointed. That company will have to submit its report within a month, after which representatives of the three nations will meet in Tehran.

"We have decided to employ a consultant. Based on those figures, we will meet again," Iran's Deputy Oil Minister Mohammad Hadi Nejad-Hosseinian told reporters during a second and final day of talks on the issue in the Indian capital.

India and Pakistan are at odds with Iran, with New Delhi refusing to meet Tehran's asking price. Iranian officials have offered a formula of ten percent of the Brent crude price plus a fixed cost of $1.2 per million metric British thermal units (mmBtu).

At present prices, the Iranian proposal would mean the two South Asian countries paying $8 per mmBtu, an official said on Thursday. New Delhi has offered a far lower $4.25 per mmBtu.

Separately, India and Iran are bickering over a multi-billion dollar LNG deal -- with New Delhi saying Tehran has increased the price tag. Oil ministry officials say that, according to a revised Iranian offer, India would have to shell out $12 billion more over 25 years than previously agreed.

India is treading a fine line as it negotiates with Iran, finding itself sandwiched between the United States and one of Washington's chief adversaries. India faces a natural gas deficit of 200 million cubic metres a day in 20 years.

It is trying to satisfy its appetite for hydrocarbons while not upsetting the Bush administration, with which it has reached a landmark civilian nuclear cooperation deal intended to boost the country's nuclear power capacity as a way to meet soaring energy needs.

The deal is currently being reviewed by U.S. legislators amid criticism it would reward India with nuclear technology and fuel while the country refuses to sign the Nuclear Non-Proliferation Treaty and has conducted nuclear tests.

Experts say the agreement would allow India to produce nuclear weapons more easily as it frees up domestic supplies for military use.

U.S. Assistant Secretary of State for South and Central Asia Richard Boucher said in Kolkata on Friday that final legislation to approve the nuclear pact would stick to a draft agreed by the two countries and not include any dealbreakers.

Some lawmakers in Washington have been openly critical of India's links with Iran. But Indian officials sought to play down any link.

"The pipeline has nothing do with our other plans or with United States of America. We are serious about the pipeline," Oil Minister Murli Deora told reporters when asked if New Delhi was cooling towards the project due its nuclear deal with the U.S.

The pipeline was first proposed more than a decade ago, but progress has been slow because of hostility between India and Pakistan and, more recently, growing U.S. opposition to Iran.

Iran has the second-largest natural gas reserves in the world behind Russia -- about 940 trillion cubic feet -- while growing Asian economies, including India and Pakistan, are scrambling to find energy sources to feed industrial expansion.