Mauled markets toil to gain composure
Tech picks to hold back FIIs
Rupee hits 47.58
Poor surveillance root cause of scam: Jalan
Carrier offers VRS to cut costs
Toyota mulls launch of small Daihatsu model
Foreign Exchange, Bullion, Stock Indices

Mumbai, Sept. 13: 

Sensex below 3000

Skittish markets, clueless after Wall Street and Nasdaq remained shut down for an unprecedented third day, were bracing for revenge strikes by the US on targets many fear could lie in the sub-continent.

Dalal Street was gripped by uncertainty, the Bombay Stock Exchange (BSE) sensex sinking below the 3,000-mark to close at 2987.50 in a loss of 45.21 points.

The failure of the index to hold on to an important psychological threshold for the first time was blamed on a selloff by local institutions and a clutch of foreign funds.

According to unconfirmed reports, leading foreign fund Morgan Stanley and a few other US-based institutions were offloaded their holdings. The early selloff gnawed away at the some of the gains made by shares like Grasim, Reliance, L&T, MTNL ITC, Bhel and ACC.

There was something redeeming, though, in the way the sensex behaved: showing signs of recovery, it hit an intra-day high of 3068.49, buoyed by early gains on the European marts and the rally on bourses across Asia. Having lost 244.10 points, or 7.55 per cent, in the last seven days, many say a recovery is around the corner. The BSE-100 index ended the day with a loss of 17.67 points at 1423.02 compared with its previous close of 1440.69.

In the specified group, 89 scrips, including 22 from the index, suffered sharp to moderate losses, while 82 finished higher. The volume on BSE was pegged at Rs 1100.15 crore, up from Rs 1086.69 crore on Wednesday Infosys dipped by Rs 19.05 at Rs 3160.30, Ranbaxy by Rs 21.65 at 622.50, Wipro by Rs 26.80 at Rs 1434, Digital by Rs 31.30 at Rs 313.50, Satyam Computers by Rs 10.50 at Rs 146.70, Cipla by Rs 22 at 1210.45, Dr Reddy’s by Rs 36.80 at Rs 1838.

Global trend steady

Though the US markets continued to remain closed for the third day today, New York Stock Exchange chairman Richard Grasso said equities trading in New York will resume as early as Friday and no later than Monday.

The US Treasuries, trading for the first time since Tuesday’s attack, opened sharply higher in anticipation of fresh Federal Reserve rate cuts to fend off recession. “It’s a combination of fear, psychology of the Fed being more aggressive than they were, and uncertainty, so investors want to stay as short in duration as possible,” said John Santoro, head government bond trader at SG Cowen Securities.

Meanwhile, the European stock market remained strong with Britain’s FTSE 100 closing at 4943.6, up 61.5 points from its previous close. The dollar was little changed at $0.9062 to the Euro and 1.6585 Swiss francs in sparse trade.

Trading in Singapore showed dealers pricing in up to half a percentage point of additional Fed easings, with an inter-meeting cut expected.

Tokyo’s main Nikkei average rose 2.99 points to close at 9,613.09 after plunging nearly 7 per cent on Wednesday.

The European Central Bank has left interest rates unchanged. Other central banks have injected more than $ 120 billion to ease a possible banking cash crunch.


Sept. 13: 
This may sound a little morbid: several foreign institutional investors, who pressed the panic button and started unloading stocks on the bourses after Black Tuesday in the US, reckon the disaster could provide just the right impetus to the technology sector which has been knocked into the ground after the dotcom bust last year.

Most of the FIIs who spoke to The Telegraph expressed optimism that barring short-term volatility in the markets and the temporary spike in oil prices — which is seen as a knee-jerk reaction — the outlook in the medium-to long-term continues to be good even though the market closed with a 45-point loss on Thursday.

“Traditionally, it has been observed that disasters ramp up an economy, and so, this may spur the US economy, rather than bring it down further. Besides, there have been worse disasters like hurricanes in the past and the US has survived them brilliantly,” Ask Raymond James and Associates CEO John Band said.

Band says the buildings that have suffered the worst damage, including the Pentagon, have been nerve centres for technology operations and the best companies to restart them will be Indian technology companies which have the twin advantage of quality and cost-effectiveness. “The World Trade Centre had approximately 20 million square feet space and it would require at least $ 50,000-60,000 per seat to restart them,” Band said.

This view was echoed by DBS Securities Research Head Subrata Ray who felt the sharp fall in stock prices had been more of a knee-jerk reaction.

“A lot of positive things can develop for the Indian economy and the markets which have been ignored by the speculators,” Ray said.

Band claims that the sales that have been pressed since the attack in the US were made by Hong Kong- and Singapore-based FIIs who have done it more out of panic seeing the other Asian markets. He says FIIs have been making aggressive purchases the whole of this year in both equities and debt. Although they have been net sellers to the tune of Rs 154.5 crore, Band feels that it this was because of the need to book short-term profits.

There is also a section that believes the Tuesday Terror will force FIIs to pull up the drawbridge on all countries, India included, susceptible to extremist attacks. To the extent that happens, says DSP Merrill Lynch vice-president Raj Kataria, squeeze out investment flows.

Band, however, says the scenario in India is different and in fact better than other Asian economies. With India joining with US in fighting terrorism, a lot of destabilising forces will be neutralised and this may develop into better Indo-US relations and prosperity for the Indian economy in the long run.

In fact while market reports speak of Morgan Stanley Dean Witter and other US-based FIIs like Salomon Smith Barney pressing heavy sales during the past two days in key pivotals, these FIIs themselves have announced their commitment to start investing with a vengeance.


Mumbai, Sept. 13: 
The rupee again fell today, marking a continuous decline in the Indian currency’s value over the past five sessions. Another day of dollar buying by importers and foreign funds saw the rupee breaching the 47.50 dollar barrier and hurtling to a new intra-day low of Rs 47.57/58 per dollar, before closing at 47.56/57 to a dollar, which also marks a new historic low for a closing quote.

Dealers believe that the worst is not yet over and analysts expect the rupee to fall by another 5 paise in the immediate term as corporate demand for dollars is expected to continue.

Unlike yesterday, today the nationalised banks were not successful in thwarting a huge decline in the rupee’s value. Though some banks sold dollars, the supplies proved to be quite thin. However, the situation may improve tomorrow as supplies from the New York region are expected to resume.

The rupee opened marginally weak today at Rs 47.4350/4450 per dollar. Companies and importers are believed to have turned panicky after the rupee crossed the 47.50-mark. The buying was due to fears that the currency would lose its value further.

Gold shows little movement

Today the price of gold was steady after yesterday’s rally. Standard gold opened steady at yesterday’s closing level of Rs 4,575 per 10 gram. After moving in a narrow range, it closed at Wednesday’s level. Ten-tola gold bar (.999 purity), resumed weak at Rs 53,400, but improved marginally to end at Rs 53,450 a loss of Rs 50 over yesterday’s close of Rs 53,500. Silver, however, showed marginal rise.

Oil prices move up

World oil prices rose today after Iraq said the US and British warplanes bombed its southern region, even though this was swiftly denied by Washington and London.

The report prompted nervous buying by traders who are wary that the US reprisals of Tuesday’s attack could hit an oil exporting country. European benchmark Brent Blend crude oil for November delivery climbed 32 cents to $ 28.55 per barrel at 1406 GMT. Having spiked up more than $3 immediately following the strikes on New York and Washington on Tuesday, oil prices are now just 50 cents above their level before the attacks.

Prices moved up when Iraq said the US and British warplanes fired missiles on targets in Wasit province, 170 km from Baghdad.


New Delhi, Sept. 13: 
Reserve Bank of India (RBI) governor Bimal Jalan today expressed concern over the poor implementation of the guidelines issued by the government to prevent scams like the one which brought the bourses crashing earlier this year, but fought shy of taking on the job itself.

Jalan, who was deposing before the Joint Parliamentary Committee probing the recent stock scam, said despite strict guidelines on surveillance and inspections to prevent stock market crises, “their implementation was not vigorous enough”.

In what could be interpreted as a strong criticism of other government agencies, the RBI governor said “adequate and timely punishment of the guilty” is lacking.

Jalan was answering a specific query from a JPC member on whether the central bank felt it needed more surveillance and policing powers.

While the RBI chief expressed contentment with his current powers, he made it clear that policing was not an area the central bank wished to enter.

Briefing newspersons, JPC chairman Prakash Mani Tripathy said he asked the RBI to report action taken by it against banks found guilty of triggering off the scam. He said the JPC wanted to ensure adequate and timely punishment for the errant banks.

The RBI governor said out of the 25 urban co-operative banks suspected to be involved in the scam, Madhavpura Mercantile Co-operative Bank and the City Co-operative Bank accounted for most of the violations. The other 23 banks have already received varying degrees of warnings or punishments, he said, adding some urban co-operative banks had extended funds to share brokers despite several circulars and warnings.

Tripathy clarified that while Jalan was satisfied with the rules and regulations in place, he appeared concerned with their implementation.

In fact, following today’s meeting with the RBI, the panel plans to ask the government to strengthen the CBI, as it felt the task of policing the implementation and violation of the guidelines was clearly the central agency’s job.

The JPC also took up the issue of flow of funds from overseas corporate bodies and said the higher level of outflow of funds from the country by these bodies as compared with their inflow, warranted scrutiny.


New Delhi, Sept. 13: 
In its first steps towards cutting costs, troubled air-conditioner maker Carrier Aircon Ltd has declared a voluntary retirement scheme (VRS) for workers at its Gurgaon factory near New Delhi.

Carrier has two manufacturing units in the country — at Gurgaon and Daman. The VRS will only be applicable to the workers at its Gurgaon plant and not cover workers at the Daman plant.

“The VRS is one of the many initiatives being taken by the company pare manufacturing costs,” B Guru Raj, company secretary and general manager (legal) of the company said. The offer will be open for only five days and will close on September 17.

The steps to downsize the workforce are in line with the new strategy drawn up by Carrier Mauritius and Carrier Singapore, which have acquired an 85 per cent stake in Carrier India. They increased their stakes by 34 per cent through the open offer that closed on July 31, at a premium of Rs 90 per share.

They were supposed to come up with a new offer for the 15 per cent stock still in public holding, but instead decided to first focus on restructuring the company, which has been making losses for some time now.

During the year ended March 31, 2001, the company reported a net sales Rs 461.77 crore against Rs 391.43 crore in the year ended March 31, 2000. However, it registered a lower profit after tax of Rs 6.31 crore in the year ended March 2001 as compared with Rs 9.15 crore registered in March 2000.

The Rs 2.84 crore dip in profits has been attributed to the higher costs incurred due to staff costs and increase in consumption of raw materials.

The VRS scheme announced in agreement with the workers’ union, offers higher payment if the number of applicants are higher.


New Delhi, Sept. 13: 
Toyota Kirloskar Motors will launch its first passenger car early next year, most likely to be a small car from the Daihatsu stable.

With the government approving Toyota’s foreign direct investment proposal Wednesday, the carmaker hopes to have its investment plans ready by next year.

For quite sometime, speculation has centred on the model that Toyota is likely to introduce first — Camry (a medium passenger vehicle) or Corolla (a light passenger car). However, sources at the carmaker said, “It may even be a smaller car of around 1000 cc which will come from our tieup with Daihatsu Motors in Japan.”

While Daihatsu has a wide range of small cars to choose from, but the toss up is likely to be between the Move, available in four engine options, and the Cuore. Toyota Motor, which has a 50 per cent stake in Daihatsu can bring in either of the models.

“By using a flexible manufacturing system that employs the same line of production for different cars we can bring down the immediate manufacturing costs. But with several other investments attached to the launch of a new product, it will take some time to sort it out,” Toyota sources said.

Flexible manufacturing systems are integrated assembly lines which can be converted and modified to produce a different car at a very short notice. The process, aided by computer designing and modifications to suit different countries, leaves only assembling, testing and certifying to the manufacturers.

Toyota also has a 34 per cent stake in Hino Motors of Japan. Hino’s international range of vehicles includes Echo, a light passenger car, and Celica, a compact passenger car. In the medium category, it has Avalon apart from Camry.

Toyota Kirloskar — a 74:26 equity venture between Toyota and Kirloskar — has an equity capital of Rs 600 crore and a total investment of Rs 900 crore in the country. The only offering from the Toyota stable now available in the country is the multi-utility vehicle Qualis.



Foreign Exchange

US $1	Rs. 47.58	HK $1	Rs.  6.00*
UK £1	Rs. 69.83	SW Fr 1	Rs. 23.15*
Euro	Rs. 43.13	Sing $1	Rs. 23.85*
Yen 100	Rs. 39.94	Aus $1	Rs. 24.15*
*SBI TC buying rates; others are forex market closing rates


Calcutta   			Bombay

Gold Std (10gm)	Rs. 4650	Gold Std (10 gm)Rs. 4575
Gold 22 carat	Rs. 4390	Gold 22 carat	   NA
Silver bar (Kg)	Rs. 7125	Silver (Kg)	Rs. 7225
Silver portion	Rs. 7225	Silver portion	   NA

Stock Indices

Sensex		2987.50		-45.21
BSE-100		1423.02		-17.69
S&P CNX Nifty	 971.70		-10.50
Calcutta	 102.31		- 1.87
Skindia GDRNA	 496.02		- 6.50

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