Market Cues: World stocks surge, budget deficit blues and more
December, 01st 2011
Asian markets in Japan, Hong Kong, Korea and Taiwan jumped three to five per cent as global markets overnight witnessed a bounce back. A move by the world's central banks to lower the cost of borrowing sent the Dow Jones industrial average in US soaring by 490 points. It was the Dow's biggest gain since March 2009 and the seventh-largest of all time. Markets in Europe surged, too, with Germany's DAX index climbing 5 percent. Banking shares were in the limelight world over.
Petrol price cut
Petrol is cheaper by 78 paise per litre in Delhi from today, belying market speculation of a major price reduction despite a sharp fall of $7 a barrel in international petrol rates. Indian Oil Corp, the biggest fuel retailer in the country said the rupee depreciation had offset gains of falling international petrol prices. The three state oil companies had reduced petrol prices by Rs 2.22 a litre last fortnight after the international petrol rates dropped by $5.74 a barrel.
Wither fiscal deficit
In the first seven months of 2011-12, the centre's fiscal deficit has already touched 74.4% of the annual estimate. The fiscal deficit for 2011-12 till October stood at Rs 3,07,000 crore versus Rs 1,62,000 crore. With the government planning to spend Rs 56,850 crore extra through second supplementary demand, fiscal deficit numbers may aggravate.
Tax revenue lower
As growth keeps falling, fiscal deficit may also widen due to low tax collections. All India net direct tax collections at Rs 2,40,000 cr, up 5% (over last year). Direct tax collections contribute more than half of the central government's revenue. In the past eight months, the government has realised only 40% of the set target for the entire year. The finance ministry set an annual direct tax target of Rs 5,85,000 crore of which only Rs 2,40,000 crore have been mopped up till now.
Top telecom honchos got no assurance from the government after they met with the telecom minister and then with prime minister Manmohan Singh. They presented their viewpoint for allowing 3G roaming. Bharti, Vodafone and Idea are talking about allowing it. Reliance communication says fresh guidelines needed. The focus is more on clear policy guidelines and clear policy framework for the telecom, sources told NDTV Profit.
Core sector growth halts
Reinforcing the view that the economic slowdown could be steeper than what the policymakers have predicted, the growth of eight infrastructure sectors virtually came to a halt in October, a situation seen only six years ago. The core sector industries grew a mere 0.1% as compared to 7.2% last year. In September 2011, the core sector industries grew 2.3%. Coal and natural gas proved major blots on infrastructure with a negative growth of 9% and 7.4% during October as compared to a year ago. Crude oil, petroleum products and fertilisers also witnessed reduction in output at 0.9%, 2.8% and 2.1% respectively. Surprisingly, electricity generation grew 4.9% despite coal supply issues. Steel also expanded 3.8%.
GVK capital raise
The GVK Group is planning to raise $7 bn of debt to help fund its coal mine, rail and port project in Australia. Reports suggest that the group also plans to raise $3 billion by selling equity stakes in the $10 bn project in Queensland.