General Affairs
Rains Stop in Chennai, But Life Still Difficult
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CHENNAI: Life for people in Chennai continue to be difficult though the rains have stopped in the capital.
Many areas in Chennai still remain under water and supplies of essentials was difficult, said residents.
"Water logging continues to be there. The only mercy was that there were no rains," said Viswanath, a resident.
The water flow in Adyar river has come down and the amount of surplus water was released into the river from the Chembarambakkam lake.
The Southern Railways have announced special trains to Tirunelveli, Rameswaram and Howrah from Chennai Beach station.
The power supply was restored in the areas where water has receded, but it was still cut in many other places.
However, communication lines -- landline and mobile -- continue to disrupt.
In heavily flooded areas like Mudichur and Tambaram, people were looking up to the skies praying for the rains to stop, and for relief materials.
CHENNAI: Life for people in Chennai continue to be difficult though the rains have stopped in the capital.Many areas in Chennai still remain under water and supplies of essentials was difficult, said residents.
"Water logging continues to be there. The only mercy was that there were no rains," said Viswanath, a resident.
The water flow in Adyar river has come down and the amount of surplus water was released into the river from the Chembarambakkam lake.
The Southern Railways have announced special trains to Tirunelveli, Rameswaram and Howrah from Chennai Beach station.
The power supply was restored in the areas where water has receded, but it was still cut in many other places.
However, communication lines -- landline and mobile -- continue to disrupt.
In heavily flooded areas like Mudichur and Tambaram, people were looking up to the skies praying for the rains to stop, and for relief materials.
Every 13th New Cancer Patient is an Indian: JP Nadda
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NEW DELHI: Every 13th new cancer patient in the world is an Indian as the country shares 7.5 per cent of global cancer burden, Health Minister JP Nadda said today.
Replying to a question in Lok Sabha, the minister said out of 1,40,67,894 cases of cancer in 2012, India reported 10,57,204 cases.
"The increase in the number of cancer cases in the country may be attributed to larger number of ageing population, unhealthy lifestyles, use of tobacco and tobacco products, unhealthy diet, etc," he said.
Mr Nadda said, India shares 7.5 per cent of the global cancer burden which implies that every 13th new cancer patient in the world is an Indian.
The Central government supplements the efforts of the state government for improving healthcare, including prevention, diagnosis and treatment of cancer, he said.
"The objective of National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke being implemented under National Health Mission for interventions upto the district level, which includes awareness generation for cancer prevention, screening, early detection and referral to an appropriate level institution for treatment," the minister said.
NEW DELHI: Every 13th new cancer patient in the world is an Indian as the country shares 7.5 per cent of global cancer burden, Health Minister JP Nadda said today.Replying to a question in Lok Sabha, the minister said out of 1,40,67,894 cases of cancer in 2012, India reported 10,57,204 cases.
"The increase in the number of cancer cases in the country may be attributed to larger number of ageing population, unhealthy lifestyles, use of tobacco and tobacco products, unhealthy diet, etc," he said.
Mr Nadda said, India shares 7.5 per cent of the global cancer burden which implies that every 13th new cancer patient in the world is an Indian.
The Central government supplements the efforts of the state government for improving healthcare, including prevention, diagnosis and treatment of cancer, he said.
"The objective of National Programme for Prevention and Control of Cancer, Diabetes, Cardiovascular Diseases and Stroke being implemented under National Health Mission for interventions upto the district level, which includes awareness generation for cancer prevention, screening, early detection and referral to an appropriate level institution for treatment," the minister said.
BJP Questions Akhilesh Yadav's Statement Over Police Recruitment
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LUCKNOW: The Bharatiya Janata Party (BJP) has questioned Uttar Pradesh Chief Minister Akhilesh Yadav's announcement that 35,000 new policemen will be recruited soon in the state.
In a state where for 100 peon posts, more than 23 lakh applications had come, how will the government handle the police recruitment when it has decided to waive off the written exams, state BJP spokesman Vijay Bahadur Pathak, said on Friday.
"This is yet another attempt by Samajwadi Party (SP) government to fool the unemployed people. It very well knows that such an exam would be a mammoth task which cannot be accomplished," Mr Pathak told news agency IANS.
"With state assembly elections a year away, a discredited government is making a last-ditch effort to generate some good will, but people are smart enough to see it through," Mr Pathak said.
Questioning fairness in the proposed recruitment, the BJP spokesman said, during the last stint of the SP there was a massive scam in the recruitment as a result of which over two dozen Indian Police Service and Provincial Police Service officials were suspended and a probe was ordered.
By doing away with the written exams when the education eligibility of the candidates has been raised from class Xth to class XII, the government was walking into a blind alley, he pointed out.
The recruitments in the last three years have been shrouded with one or the other controversy, Mr Pathak said.
Even the high court had warned the state government over the appointment of chairman of the Public Service Commission and had set it aside.
LUCKNOW: The Bharatiya Janata Party (BJP) has questioned Uttar Pradesh Chief Minister Akhilesh Yadav's announcement that 35,000 new policemen will be recruited soon in the state.In a state where for 100 peon posts, more than 23 lakh applications had come, how will the government handle the police recruitment when it has decided to waive off the written exams, state BJP spokesman Vijay Bahadur Pathak, said on Friday.
"With state assembly elections a year away, a discredited government is making a last-ditch effort to generate some good will, but people are smart enough to see it through," Mr Pathak said.
Questioning fairness in the proposed recruitment, the BJP spokesman said, during the last stint of the SP there was a massive scam in the recruitment as a result of which over two dozen Indian Police Service and Provincial Police Service officials were suspended and a probe was ordered.
By doing away with the written exams when the education eligibility of the candidates has been raised from class Xth to class XII, the government was walking into a blind alley, he pointed out.
The recruitments in the last three years have been shrouded with one or the other controversy, Mr Pathak said.
Even the high court had warned the state government over the appointment of chairman of the Public Service Commission and had set it aside.
In 'Toxic' Delhi, Leave Your Car Home on Alternate Days
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NEW DELHI: Under fire over rising pollution in Delhi and the lack of a concrete plan to tackle it, the Arvind Kejriwal government has announced that private vehicles with odd and even registration numbers will be allowed on the roads of the national capital only on alternate days starting next month.
This means that from January 1, 2016, if vehicles with number plates ending with an odd number can be driven one day, only those ending with an even number can be brought out the next day. This will not apply to public vehicles.
"Every year pollution level increases in winter. For some time, odd and even numbered vehicles will run on alternate days. Alternate arrangements are being made to bolster public transport. DTC buses, Metro services will ply extra. We are still working out the modalities," said KK Sharma, Delhi Principal Secretary.
The government said it hoped to cut down vehicular pollution in the state by half with the measure, which is likely to be very controversial.
A joint meeting of all stakeholders including traffic police, transport department and Municipal Corporation of Delhi will be called to prepare a blueprint for swift implementation of the executive order.
It was announced after an emergency meeting called by Chief Minister Arvind Kejriwal on Friday, a day after the Delhi High Court said living in Delhi was like "living in a gas chamber". The government also decided at the meeting to close down a unit of the Badarpur coal plant.
The High Court and the National Green Tribunal or NGT have repeatedly sought workable action plans to combat the menace of pollution in Delhi where the Air Quality Index, a measure of pollutants in the air, has hit dangerous levels in recent days.
The court yesterday ordered a "time-bound action plan" by December 21. Plans submitted by the union environment ministry and the Delhi government were "not comprehensive", the judges said, because they did not specify responsibilities and a timeline.
The NGT has called for a "stay-at-home" alert for children and older people.
The World Health Organisation said last year that New Delhi is the most polluted city on Earth; the five most polluted areas in the country on Friday morning were all in Delhi.
An expanding metro system has failed to slow the spread of private vehicles and 1,400 extra cars hit the streets every day in the capital.
Pollution typically worsens in the winter months as the cooling of temperatures combines with pollution to cover the city, home to 16 million people, in smog.
NEW DELHI: Under fire over rising pollution in Delhi and the lack of a concrete plan to tackle it, the Arvind Kejriwal government has announced that private vehicles with odd and even registration numbers will be allowed on the roads of the national capital only on alternate days starting next month.This means that from January 1, 2016, if vehicles with number plates ending with an odd number can be driven one day, only those ending with an even number can be brought out the next day. This will not apply to public vehicles.
"Every year pollution level increases in winter. For some time, odd and even numbered vehicles will run on alternate days. Alternate arrangements are being made to bolster public transport. DTC buses, Metro services will ply extra. We are still working out the modalities," said KK Sharma, Delhi Principal Secretary.
The government said it hoped to cut down vehicular pollution in the state by half with the measure, which is likely to be very controversial.
A joint meeting of all stakeholders including traffic police, transport department and Municipal Corporation of Delhi will be called to prepare a blueprint for swift implementation of the executive order.
The High Court and the National Green Tribunal or NGT have repeatedly sought workable action plans to combat the menace of pollution in Delhi where the Air Quality Index, a measure of pollutants in the air, has hit dangerous levels in recent days.
The court yesterday ordered a "time-bound action plan" by December 21. Plans submitted by the union environment ministry and the Delhi government were "not comprehensive", the judges said, because they did not specify responsibilities and a timeline.
The NGT has called for a "stay-at-home" alert for children and older people.
The World Health Organisation said last year that New Delhi is the most polluted city on Earth; the five most polluted areas in the country on Friday morning were all in Delhi.
An expanding metro system has failed to slow the spread of private vehicles and 1,400 extra cars hit the streets every day in the capital.
Pollution typically worsens in the winter months as the cooling of temperatures combines with pollution to cover the city, home to 16 million people, in smog.
Astronomers Spot Faintest Galaxy From the Early Universe
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NEW YORK: Harnessing the combined power of NASA's Hubble and Spitzer space telescopes, astronomers have found the faintest object ever seen in the early universe.
It existed about 400 million years after the big bang, 13.8 billion years ago, the researchers estimated.
The team has nicknamed the object Tayna, which means "first-born" in Aymara, a language spoken in the Andes and Altiplano regions of South America.
Though Hubble and Spitzer have detected other galaxies that are record-breakers for distance, this object represents a smaller, fainter class of newly-forming galaxies that until now have largely evaded detection.
These very dim objects may be more representative of the early universe, and offer new insight on the formation and evolution of the first galaxies.
"Thanks to this detection, the team has been able to study for the first time the properties of extremely faint objects formed not long after the big bang," said lead author Leopoldo Infante, an astronomer at the Pontifical Catholic University of Chile.
The new object is comparable in size to the Large Magellanic Cloud (LMC), a diminutive satellite galaxy of our Milky Way, the study said.
The results were published in The Astrophysical Journal.
NEW YORK: Harnessing the combined power of NASA's Hubble and Spitzer space telescopes, astronomers have found the faintest object ever seen in the early universe.It existed about 400 million years after the big bang, 13.8 billion years ago, the researchers estimated.
The team has nicknamed the object Tayna, which means "first-born" in Aymara, a language spoken in the Andes and Altiplano regions of South America.
These very dim objects may be more representative of the early universe, and offer new insight on the formation and evolution of the first galaxies.
"Thanks to this detection, the team has been able to study for the first time the properties of extremely faint objects formed not long after the big bang," said lead author Leopoldo Infante, an astronomer at the Pontifical Catholic University of Chile.
The new object is comparable in size to the Large Magellanic Cloud (LMC), a diminutive satellite galaxy of our Milky Way, the study said.
The results were published in The Astrophysical Journal.
Business Affairs
Sensex ends 248 points down, Nifty at 7,782 amid global sell-off
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Extending losses for the third session, the domestic markets ended sharply lower on Friday, tracking a global sell-off after the European Central Bank's (ECB) stimulus package fell well short of markets' high expectations.
The S&P BSE Sensex settled the day at 25,638.11, down 248.51 points, while broader CNX Nifty ended below its key support level of 7,800. The 50-share index quoted 7,781.90, down 82.25 at close.
Market breadth remained fairly negative with 25 of the 30 Sensex components ending the day in red.
S&P BSE Power index was the top sectoral loser and ended the day 1.78 per cent lower.
The ECB cut its deposit rate deeper into negative territory and extended its asset buying by six months on Thursday.
However, its rate cut of 0.10 per centage point, to -0.30 per cent, was smaller than a 0.15 to 0.20 per centage point reduction many traders expected.
The rupee too hit a more than two-year low against the greenback at 67.01 per dollar on Friday.
"Concerns of a US interest rate hike, ECB's stimulus package and impact of rains in Chennai are impacting the market," said Alex Mathews, head of research at Geojit BNP Paribas.
Among Asian markets, China's Shanghai Composite lost 1.67 per cent, while Hong Kong's Hang Seng was down 0.81 per cent. Japan's Nikkei settled the day 2.18 per cent lower.
Overnight, Wall Street's benchmark S&P 500 stock index logged its biggest one-day per centage decline since September 28, dropping 1.4 per cent. The Dow Jones industrial average fell 252.01 points, and the Nasdaq Composite dropped 85.70 points.
Lowdown on markets today
01:22 pm
Sensex at 25,720.49, down 166.13 points
Nifty at 7,807.70, down 56.45 points
11:00
Sensex at 25663.18, donw 223 points
Nifty at 7790.40, down 73 points
9:23 am
Sensex at 25,703.33, down 183.29points
Nifty at 7,806.25, down 57.90 points
Extending losses for the third session, the domestic markets ended sharply lower on Friday, tracking a global sell-off after the European Central Bank's (ECB) stimulus package fell well short of markets' high expectations.
The S&P BSE Sensex settled the day at 25,638.11, down 248.51 points, while broader CNX Nifty ended below its key support level of 7,800. The 50-share index quoted 7,781.90, down 82.25 at close.
Market breadth remained fairly negative with 25 of the 30 Sensex components ending the day in red.
S&P BSE Power index was the top sectoral loser and ended the day 1.78 per cent lower.
The ECB cut its deposit rate deeper into negative territory and extended its asset buying by six months on Thursday.
However, its rate cut of 0.10 per centage point, to -0.30 per cent, was smaller than a 0.15 to 0.20 per centage point reduction many traders expected.
The rupee too hit a more than two-year low against the greenback at 67.01 per dollar on Friday.
"Concerns of a US interest rate hike, ECB's stimulus package and impact of rains in Chennai are impacting the market," said Alex Mathews, head of research at Geojit BNP Paribas.
Among Asian markets, China's Shanghai Composite lost 1.67 per cent, while Hong Kong's Hang Seng was down 0.81 per cent. Japan's Nikkei settled the day 2.18 per cent lower.
Overnight, Wall Street's benchmark S&P 500 stock index logged its biggest one-day per centage decline since September 28, dropping 1.4 per cent. The Dow Jones industrial average fell 252.01 points, and the Nasdaq Composite dropped 85.70 points.
Overnight, Wall Street's benchmark S&P 500 stock index logged its biggest one-day per centage decline since September 28, dropping 1.4 per cent. The Dow Jones industrial average fell 252.01 points, and the Nasdaq Composite dropped 85.70 points.
Lowdown on markets today
01:22 pm
Sensex at 25,720.49, down 166.13 points
Sensex at 25,720.49, down 166.13 points
Nifty at 7,807.70, down 56.45 points
11:00
Sensex at 25663.18, donw 223 points
Nifty at 7790.40, down 73 points
9:23 am
Sensex at 25,703.33, down 183.29points
Nifty at 7,806.25, down 57.90 points
Reliance Communications to sell tower, optic fibre business to Tillman and TPG
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Reliance Communications, part of Anil Ambani-led Reliance group, has inked a pact to sell its tower and optic fibre assets in India to private equity firms TPG and Tillman Global in a deal estimated at about Rs 30,000 crore.
RCom intends to utilise the proceeds of the proposed transaction to reduce its debt, which is estimated at about Rs 40,000 crore.
The company said in a statement that "a non-binding term sheet" has been signed for the proposed acquisition of RCom's nationwide tower assets and related infrastructure by Tillman and TPG Asia.
While the company did not disclose the deal size, sources said the proposed transaction values RCom's mobile towers at about Rs 22,000 crore and the valuation of the related infrastructure including optic fibre assets, is estimated at about Rs 7,000-8,000 crore. This would be one of the biggest transactions in the Indian telecom sector.
The company said the realisation of the deal proceeds would help bring down its interest cost by 75 per cent to Rs 600 crore a year.
RCom said it will continue as an anchor tenant on the tower assets, under a long term agreement, for its integrated telecommunications business.
"Tillman and TPG will also evaluate purchase of RCom's extensive nationwide inter-city and intra-city optic fibre assets, in a separate and independent transaction," the statement added.
Reliance Communications, part of Anil Ambani-led Reliance group, has inked a pact to sell its tower and optic fibre assets in India to private equity firms TPG and Tillman Global in a deal estimated at about Rs 30,000 crore.
RCom intends to utilise the proceeds of the proposed transaction to reduce its debt, which is estimated at about Rs 40,000 crore.
The company said in a statement that "a non-binding term sheet" has been signed for the proposed acquisition of RCom's nationwide tower assets and related infrastructure by Tillman and TPG Asia.
While the company did not disclose the deal size, sources said the proposed transaction values RCom's mobile towers at about Rs 22,000 crore and the valuation of the related infrastructure including optic fibre assets, is estimated at about Rs 7,000-8,000 crore. This would be one of the biggest transactions in the Indian telecom sector.
The company said the realisation of the deal proceeds would help bring down its interest cost by 75 per cent to Rs 600 crore a year.
RCom said it will continue as an anchor tenant on the tower assets, under a long term agreement, for its integrated telecommunications business.
"Tillman and TPG will also evaluate purchase of RCom's extensive nationwide inter-city and intra-city optic fibre assets, in a separate and independent transaction," the statement added.
Gold prices fall: 5 factors to watch out for before investing
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Gold prices rebounded from their 2010 lows on Friday as the dollar slipped versus the euro after the European Central Bank (ECB) disappointed investors with a meagre cut in deposit rate against expectations of aggressive expansion of easy-money policies.
While spot gold ticked up 0.3 per cent to $1,063.80 an ounce and looked set to post a 0.5 per cent gain for the week on Friday, the yellow metal is still far from recovering the nearly 7 per cent it lost in November - the biggest monthly fall since June 2013 - as investors remained focused on a possibly rate hike by the US Federal Reserve.
Higher rates tend to weigh on non-interest-paying gold.
In the domestic market, gold prices rose by Rs 173 to Rs 25,110 per 10 grams in futures trade on Friday as speculators created fresh positions amid positive cues from overseas markets.
The low prices offer investors the temptation to buy the yellow metal. However, there are factors to be considered before you take the plunge:
1) Dollar strength: The US Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, hit a high of 100.38 in November on expectations of the Fed rate hike, which now seems highly likely after Fed Chair Janet Yellen said this week she was 'looking forward' to a rate hike, indicating the US economy has recovered from recession. The Fed's next policy meeting is to be held on December 15-16. "The next 6-month outlook on gold remains bearish because the strength in dollar index indicates US Fed hike is imminent," said Ajay Kedia of Kedia Commodities to BT Online. The yellow metal loses its appeal when interest rates rise as its value recedes relative to other interest-bearing assets.
2) Gold demand: The World Gold Council in a recent report said the usual uptick in demand in September-December quarter owing to festive season may not be seen this this time as a plunge in prices in the September quarter triggered early purchases, eating into the fourth quarter demand. "Lingering concerns over the health of the rural Indian economy and local gold prices remaining in close proximity to the Rs 27,000/10g level in recent weeks also give reason to adopt a prudent outlook for the usual fourth quarter uplift in Indian demand," the report added. Demand in China is also expected to remain muted, given the slackening macro picture. "But demand should begin to pick up in the closing weeks of the year, as momentum builds ahead of the Chinese New Year in early February," said WGC report.
3) ECB monetary policy: The world's two largest central banks - US Federal Reserve and ECB - stand in opposite directions on formulation of monetary policies. While the former is adamant on reducing quantitative easing, the latter is still printing money. This makes the case for stronger dollar against euro, thus a negative development for gold.
4) Yuan inclusion in SDR: The recent entry of the Chinese currency into International Monetary Fund's Special Drawing Rights (SDR) basket can also have an impact on gold demand as investors may turn more willing to hold yuan at the expense of gold. However, the inclusion may turn out to be positive in the long-term, because its emergence as one of the reserve currencies is negative for dollar.
{blurb}
"There is potential for the yuan's inclusion to be slightly beneficial for the yellow metal in the very long run, because gold generally moves inversely to the US dollar. Thus could be helped if the dollar's role as a reserve and settlement currency is diminished," Jeffrey Nichols, managing director of the consultancy American Precious Metals Advisors and economic consultant for Rosland Capital told commodity website Kitco.
5) Government policies: Expectations of a cut in gold import duty, which currently stands at 10 per cent, by the Narendra Modi government may also alter gold demand scenario. Commerce and Industry Minister Nirmala Sitharaman has urged the Finance Ministry to consider reducing the duty to 2 per cent. "There are expectations that govt may slash import duty in a span of one year... Industry is hoping for 8 per cent cut, but I believe there can only be a duty-cut of 2-4 per cent. If that happens, we may see proportionate fall in gold prices in domestic markets, but rupee depreciation will boost prices," Sugandha Sachdeva of Religare Securities, told BT Online.
Kedia believes the impact of gold monetization schemes, launched by Prime Minister Narendra Modi in November, may also play on domestic and international gold demand. "We don't expect Indian households to tap gold monetisation scheme, owing to their emotional attachment with the yellow metal, but temple gold may enter markets, because temples are heavily paying for security, but they are not getting any reward out of gold hoards," said Kedia.
"If government thoroughly markets the scheme, we may see at least 1000-1500 tonnes of gold entering markets. As net gold import in India stands at around 900-950 tonnes, we may not need to import gold for two years. If India, world's second biggest consumer of gold after China, doesn't import gold, it will create negative impact in the international market and can bring down prices to near $800 level," Kedia added.
Gold prices rebounded from their 2010 lows on Friday as the dollar slipped versus the euro after the European Central Bank (ECB) disappointed investors with a meagre cut in deposit rate against expectations of aggressive expansion of easy-money policies.
While spot gold ticked up 0.3 per cent to $1,063.80 an ounce and looked set to post a 0.5 per cent gain for the week on Friday, the yellow metal is still far from recovering the nearly 7 per cent it lost in November - the biggest monthly fall since June 2013 - as investors remained focused on a possibly rate hike by the US Federal Reserve.
Higher rates tend to weigh on non-interest-paying gold.
In the domestic market, gold prices rose by Rs 173 to Rs 25,110 per 10 grams in futures trade on Friday as speculators created fresh positions amid positive cues from overseas markets.
The low prices offer investors the temptation to buy the yellow metal. However, there are factors to be considered before you take the plunge:
1) Dollar strength: The US Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, hit a high of 100.38 in November on expectations of the Fed rate hike, which now seems highly likely after Fed Chair Janet Yellen said this week she was 'looking forward' to a rate hike, indicating the US economy has recovered from recession. The Fed's next policy meeting is to be held on December 15-16. "The next 6-month outlook on gold remains bearish because the strength in dollar index indicates US Fed hike is imminent," said Ajay Kedia of Kedia Commodities to BT Online. The yellow metal loses its appeal when interest rates rise as its value recedes relative to other interest-bearing assets.
2) Gold demand: The World Gold Council in a recent report said the usual uptick in demand in September-December quarter owing to festive season may not be seen this this time as a plunge in prices in the September quarter triggered early purchases, eating into the fourth quarter demand. "Lingering concerns over the health of the rural Indian economy and local gold prices remaining in close proximity to the Rs 27,000/10g level in recent weeks also give reason to adopt a prudent outlook for the usual fourth quarter uplift in Indian demand," the report added. Demand in China is also expected to remain muted, given the slackening macro picture. "But demand should begin to pick up in the closing weeks of the year, as momentum builds ahead of the Chinese New Year in early February," said WGC report.
3) ECB monetary policy: The world's two largest central banks - US Federal Reserve and ECB - stand in opposite directions on formulation of monetary policies. While the former is adamant on reducing quantitative easing, the latter is still printing money. This makes the case for stronger dollar against euro, thus a negative development for gold.
4) Yuan inclusion in SDR: The recent entry of the Chinese currency into International Monetary Fund's Special Drawing Rights (SDR) basket can also have an impact on gold demand as investors may turn more willing to hold yuan at the expense of gold. However, the inclusion may turn out to be positive in the long-term, because its emergence as one of the reserve currencies is negative for dollar.
1) Dollar strength: The US Dollar Index, which measures the strength of the greenback versus a basket of six other major currencies, hit a high of 100.38 in November on expectations of the Fed rate hike, which now seems highly likely after Fed Chair Janet Yellen said this week she was 'looking forward' to a rate hike, indicating the US economy has recovered from recession. The Fed's next policy meeting is to be held on December 15-16. "The next 6-month outlook on gold remains bearish because the strength in dollar index indicates US Fed hike is imminent," said Ajay Kedia of Kedia Commodities to BT Online. The yellow metal loses its appeal when interest rates rise as its value recedes relative to other interest-bearing assets.
2) Gold demand: The World Gold Council in a recent report said the usual uptick in demand in September-December quarter owing to festive season may not be seen this this time as a plunge in prices in the September quarter triggered early purchases, eating into the fourth quarter demand. "Lingering concerns over the health of the rural Indian economy and local gold prices remaining in close proximity to the Rs 27,000/10g level in recent weeks also give reason to adopt a prudent outlook for the usual fourth quarter uplift in Indian demand," the report added. Demand in China is also expected to remain muted, given the slackening macro picture. "But demand should begin to pick up in the closing weeks of the year, as momentum builds ahead of the Chinese New Year in early February," said WGC report.
3) ECB monetary policy: The world's two largest central banks - US Federal Reserve and ECB - stand in opposite directions on formulation of monetary policies. While the former is adamant on reducing quantitative easing, the latter is still printing money. This makes the case for stronger dollar against euro, thus a negative development for gold.
4) Yuan inclusion in SDR: The recent entry of the Chinese currency into International Monetary Fund's Special Drawing Rights (SDR) basket can also have an impact on gold demand as investors may turn more willing to hold yuan at the expense of gold. However, the inclusion may turn out to be positive in the long-term, because its emergence as one of the reserve currencies is negative for dollar.
{blurb}
"There is potential for the yuan's inclusion to be slightly beneficial for the yellow metal in the very long run, because gold generally moves inversely to the US dollar. Thus could be helped if the dollar's role as a reserve and settlement currency is diminished," Jeffrey Nichols, managing director of the consultancy American Precious Metals Advisors and economic consultant for Rosland Capital told commodity website Kitco.
5) Government policies: Expectations of a cut in gold import duty, which currently stands at 10 per cent, by the Narendra Modi government may also alter gold demand scenario. Commerce and Industry Minister Nirmala Sitharaman has urged the Finance Ministry to consider reducing the duty to 2 per cent. "There are expectations that govt may slash import duty in a span of one year... Industry is hoping for 8 per cent cut, but I believe there can only be a duty-cut of 2-4 per cent. If that happens, we may see proportionate fall in gold prices in domestic markets, but rupee depreciation will boost prices," Sugandha Sachdeva of Religare Securities, told BT Online.
Kedia believes the impact of gold monetization schemes, launched by Prime Minister Narendra Modi in November, may also play on domestic and international gold demand. "We don't expect Indian households to tap gold monetisation scheme, owing to their emotional attachment with the yellow metal, but temple gold may enter markets, because temples are heavily paying for security, but they are not getting any reward out of gold hoards," said Kedia.
"If government thoroughly markets the scheme, we may see at least 1000-1500 tonnes of gold entering markets. As net gold import in India stands at around 900-950 tonnes, we may not need to import gold for two years. If India, world's second biggest consumer of gold after China, doesn't import gold, it will create negative impact in the international market and can bring down prices to near $800 level," Kedia added.
5) Government policies: Expectations of a cut in gold import duty, which currently stands at 10 per cent, by the Narendra Modi government may also alter gold demand scenario. Commerce and Industry Minister Nirmala Sitharaman has urged the Finance Ministry to consider reducing the duty to 2 per cent. "There are expectations that govt may slash import duty in a span of one year... Industry is hoping for 8 per cent cut, but I believe there can only be a duty-cut of 2-4 per cent. If that happens, we may see proportionate fall in gold prices in domestic markets, but rupee depreciation will boost prices," Sugandha Sachdeva of Religare Securities, told BT Online.
Kedia believes the impact of gold monetization schemes, launched by Prime Minister Narendra Modi in November, may also play on domestic and international gold demand. "We don't expect Indian households to tap gold monetisation scheme, owing to their emotional attachment with the yellow metal, but temple gold may enter markets, because temples are heavily paying for security, but they are not getting any reward out of gold hoards," said Kedia.
"If government thoroughly markets the scheme, we may see at least 1000-1500 tonnes of gold entering markets. As net gold import in India stands at around 900-950 tonnes, we may not need to import gold for two years. If India, world's second biggest consumer of gold after China, doesn't import gold, it will create negative impact in the international market and can bring down prices to near $800 level," Kedia added.
Rupee hits more than two-year low; RBI intervenes
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The domestic currency hit a more than two-year low against the greenback on Friday as domestic shares fell after an underwhelming stimulus package from the European Central Bank, forcing the Reserve Bank of India to sell dollars via state-run banks.
The rupee tumbled to 67.01 to the dollar, the lowest since September 4, 2013, from its previous close of 66.6525/66.6625.
Traders said the RBI likely stepped in to support the rupee at around 66.98 per dollar, sparking a rebound. The local currency was at 66.8600/8650 per dollar as of 12:11 pm.
The disappointment over the ECB comes amid growing worries of the impact on India and other emerging markets as the US Federal Reserve gears up to raise interest rates for the first time in around a decade this month.
Foreign investors sold a net $1.7 billion in Indian shares and debt in November, the highest sales since August.
"Unless RBI intervenes in a big way, rupee will remain under pressure," said Ashtosh Raina, head of FX trading at HDFC Bank in Mumbai.
Some traders anticipate the rupee to fall to 67.50 to the dollar closer to the Fed policy meeting on Dec. 15.
The rupee fell 2.1 per cent against the dollar last month, its biggest drop since August, and is down 0.3 per cent so far in December.
The fall in the local currency on Friday tracked a retreat in domestic shares after the ECB disappointed markets with a smaller-than-expected stimulus measure. India's broader NSE index fell 0.9 per cent.
The limited easing measures come as Fed Chair Janet Yellen, speaking before Congress' Joint Economic Committee on Thursday, said the United States may be "close to the point at which we should be raising" rates.
Markets will eye the US jobs data due later in the day for further cues on Fed rate move, although a rate hike is broadly being priced into the currency, traders said.
The domestic currency hit a more than two-year low against the greenback on Friday as domestic shares fell after an underwhelming stimulus package from the European Central Bank, forcing the Reserve Bank of India to sell dollars via state-run banks.
Traders said the RBI likely stepped in to support the rupee at around 66.98 per dollar, sparking a rebound. The local currency was at 66.8600/8650 per dollar as of 12:11 pm.
The disappointment over the ECB comes amid growing worries of the impact on India and other emerging markets as the US Federal Reserve gears up to raise interest rates for the first time in around a decade this month.
Foreign investors sold a net $1.7 billion in Indian shares and debt in November, the highest sales since August.
"Unless RBI intervenes in a big way, rupee will remain under pressure," said Ashtosh Raina, head of FX trading at HDFC Bank in Mumbai.
Some traders anticipate the rupee to fall to 67.50 to the dollar closer to the Fed policy meeting on Dec. 15.
The rupee fell 2.1 per cent against the dollar last month, its biggest drop since August, and is down 0.3 per cent so far in December.
The fall in the local currency on Friday tracked a retreat in domestic shares after the ECB disappointed markets with a smaller-than-expected stimulus measure. India's broader NSE index fell 0.9 per cent.
The limited easing measures come as Fed Chair Janet Yellen, speaking before Congress' Joint Economic Committee on Thursday, said the United States may be "close to the point at which we should be raising" rates.
Markets will eye the US jobs data due later in the day for further cues on Fed rate move, although a rate hike is broadly being priced into the currency, traders said.
RBI's tricky strategy to ease market's pre-Fed jitters
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Haunted by memories of 2013 markets' crash, the country's central bank is engaging in a tricky balancing act with domestic yields to keep volatility out of its bond markets ahead of the Federal Reserve's historic policy decision this month.
The Reserve Bank of India (RBI) is seeking to prevent wild swings in bond markets by agreeing to pay higher interest rates to investors at bond auctions, people with knowledge of the central bank's operations say, while also buying bonds in the open market to stop yields rising too much.
Although India has outperformed many emerging markets this year, it has not been immune to Fed jitters, with foreign investors selling around $1.7 billion in bonds and shares last month.
The people familiar with RBI operations say it is worried weak market participation at its auctions ahead of the Fed's December 15-16 meeting could trigger a selloff. In 2013, Fed "taper" fears sent the rupee to a record low.
"It is best to avoid adding any negative news before the Fed. When there is so much (bond) supply, yields can't stay low," said one of the people.
The RBI has in its past two weekly government bond auctions allotted tenders to bidders below market prices, effectively paying higher-than-normal yields.
Typically, the RBI sets a maximum cut-off yield for bids and employs a process known as "devolvement" for weak bond tenders in which the auction's underwriting dealers buy up the shortfall in undersubscribed tenders at the cut-off yield.
"A devolving auction could mean that there is not enough demand for bonds, which sends a negative signal," the person said.
This is why the RBI has avoided devolvement at its November 27 and 20 auctions, despite tepid appetite, and has chosen to accept all bids, even those demanding yields above the majority of the bidders.
The RBI's last devolved auction took place in June when demanded yields rose to rates that were uncomfortably high for the central bank.
Last Friday, the RBI sold Rs 15,000 crore of bonds, almost half of which were 10-year benchmark bonds priced at a 7.76 per cent yield, 4-5 basis points higher than market rates on that day.
Another person familiar with RBI operations said the central bank is also likely to avoid devolved auctions ahead of the government's budget in February.
"It is a conscious decision to not devolve and keep things on the safer side ahead of the Fed and the budget," the person said, adding that devolvement will only happen if yields rise dramatically.
An RBI spokesperson did not have a comment on central bank operations.
A surprise RBI announcement on Wednesday to buy $1.5 billion of government bonds in the secondary market, however, is targeted at countering the recent rise in yields and easing tight cash conditions. The move helped push yields down six basis points on Thursday.
And as a result, yields at this week's RBI bond auction on Friday are also likely to be lower.
However, analysts say the RBI's current strategy comes with hazards and may perversely create more problems.
An entrenched practice of accepting bids at high yields, while supporting short-term demand, will push up the government's 6 trillion rupee borrowing costs while open market purchases could add to inflationary pressures.
"In the past, the RBI devolved bonds when they were uncomfortable with high yields," said Ashish Vaidya, head of trading at DBS Bank in Mumbai.
"This time, the RBI not devolving makes us believe that probably the signal is yields should be higher given demand supply dynamics. Having tasted the success of getting stock at higher yields, market participants will be tempted to further bid at higher yield," Vaidya said.
Haunted by memories of 2013 markets' crash, the country's central bank is engaging in a tricky balancing act with domestic yields to keep volatility out of its bond markets ahead of the Federal Reserve's historic policy decision this month.
The Reserve Bank of India (RBI) is seeking to prevent wild swings in bond markets by agreeing to pay higher interest rates to investors at bond auctions, people with knowledge of the central bank's operations say, while also buying bonds in the open market to stop yields rising too much.
Although India has outperformed many emerging markets this year, it has not been immune to Fed jitters, with foreign investors selling around $1.7 billion in bonds and shares last month.
The people familiar with RBI operations say it is worried weak market participation at its auctions ahead of the Fed's December 15-16 meeting could trigger a selloff. In 2013, Fed "taper" fears sent the rupee to a record low.
"It is best to avoid adding any negative news before the Fed. When there is so much (bond) supply, yields can't stay low," said one of the people.
The RBI has in its past two weekly government bond auctions allotted tenders to bidders below market prices, effectively paying higher-than-normal yields.
Typically, the RBI sets a maximum cut-off yield for bids and employs a process known as "devolvement" for weak bond tenders in which the auction's underwriting dealers buy up the shortfall in undersubscribed tenders at the cut-off yield.
"A devolving auction could mean that there is not enough demand for bonds, which sends a negative signal," the person said.
This is why the RBI has avoided devolvement at its November 27 and 20 auctions, despite tepid appetite, and has chosen to accept all bids, even those demanding yields above the majority of the bidders.
The RBI's last devolved auction took place in June when demanded yields rose to rates that were uncomfortably high for the central bank.
Last Friday, the RBI sold Rs 15,000 crore of bonds, almost half of which were 10-year benchmark bonds priced at a 7.76 per cent yield, 4-5 basis points higher than market rates on that day.
Another person familiar with RBI operations said the central bank is also likely to avoid devolved auctions ahead of the government's budget in February.
"It is a conscious decision to not devolve and keep things on the safer side ahead of the Fed and the budget," the person said, adding that devolvement will only happen if yields rise dramatically.
An RBI spokesperson did not have a comment on central bank operations.
A surprise RBI announcement on Wednesday to buy $1.5 billion of government bonds in the secondary market, however, is targeted at countering the recent rise in yields and easing tight cash conditions. The move helped push yields down six basis points on Thursday.
And as a result, yields at this week's RBI bond auction on Friday are also likely to be lower.
However, analysts say the RBI's current strategy comes with hazards and may perversely create more problems.
An entrenched practice of accepting bids at high yields, while supporting short-term demand, will push up the government's 6 trillion rupee borrowing costs while open market purchases could add to inflationary pressures.
"In the past, the RBI devolved bonds when they were uncomfortable with high yields," said Ashish Vaidya, head of trading at DBS Bank in Mumbai.
"This time, the RBI not devolving makes us believe that probably the signal is yields should be higher given demand supply dynamics. Having tasted the success of getting stock at higher yields, market participants will be tempted to further bid at higher yield," Vaidya said.
General Awareness
Maharashtra topped in GSDP – Brickwork Report
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In accordance with the 4th edition of report by credit rating agency Brickwork, Maharashtra is the biggest economy within India at Rs 16.87 lakh crore in terms ofgross state domestic product (GSDP). The rating agency looked at the State government’s willingness and ability to honour debt obligations.
- Maharashtra’s GSDP has grown by 69% for the financial year ended March 31, 2015 and is followed by Tamil Nadu and Uttar Pradesh.
- The state earns approximately 70% of its total receipts through tax revenues which is the highest among the bigger states and is followed by Gujarat and Tamil Nadu.
Rating criterion
It includes an analysis of political, economic, budgetary, financial and institutional parameters that were considered relevant to the Maharashtra government’s creditworthiness.
Manufacturing sector
Gujarat and Maharashtra led this sector with 27.26% and 25.18% of GSDP respectively in 2014-15.
- Other states with higher manufacturing sector share were Tamil Nadu (19.1 %), Jharkhand (18.8%) and Haryana (18.1%).
Services sector
Karnataka leads in the growth of services sector due to the growth in the IT/BPO/ KPO sector followed by Tamil Nadu, Maharashtra and Andhra Pradesh.
Agriculture sector
Agriculture has been the mainstay of most states by employing 40-60% of the workforce directly or indirectly but it has been neglected sector.
National level
India’s GDP growth rate at 7.3% in 2015 exceeded that of China which grew at 6.9%.
- The fastest-growing states were Bihar at 17.06%, Madhya Pradesh(16.86%) and Goa (16.43%) while Telangana (5.3%), Punjab (10.16%) and Rajasthan (11%) have shown a slow progress.
- Maharashtra along with Karnataka has also been able to keep the expenditure on general services under check.
- Bihar, Orissa, Tamil Nadu and Kerala spend the most on pensions.
- Maharashtra’s infant mortality rate (IMR) of 25 is below the national average for all states, which stands at 50.
In accordance with the 4th edition of report by credit rating agency Brickwork, Maharashtra is the biggest economy within India at Rs 16.87 lakh crore in terms ofgross state domestic product (GSDP). The rating agency looked at the State government’s willingness and ability to honour debt obligations.
- Maharashtra’s GSDP has grown by 69% for the financial year ended March 31, 2015 and is followed by Tamil Nadu and Uttar Pradesh.
- The state earns approximately 70% of its total receipts through tax revenues which is the highest among the bigger states and is followed by Gujarat and Tamil Nadu.
Rating criterion
It includes an analysis of political, economic, budgetary, financial and institutional parameters that were considered relevant to the Maharashtra government’s creditworthiness.
It includes an analysis of political, economic, budgetary, financial and institutional parameters that were considered relevant to the Maharashtra government’s creditworthiness.
Manufacturing sector
Gujarat and Maharashtra led this sector with 27.26% and 25.18% of GSDP respectively in 2014-15.
Gujarat and Maharashtra led this sector with 27.26% and 25.18% of GSDP respectively in 2014-15.
- Other states with higher manufacturing sector share were Tamil Nadu (19.1 %), Jharkhand (18.8%) and Haryana (18.1%).
Services sector
Karnataka leads in the growth of services sector due to the growth in the IT/BPO/ KPO sector followed by Tamil Nadu, Maharashtra and Andhra Pradesh.
Karnataka leads in the growth of services sector due to the growth in the IT/BPO/ KPO sector followed by Tamil Nadu, Maharashtra and Andhra Pradesh.
Agriculture sector
Agriculture has been the mainstay of most states by employing 40-60% of the workforce directly or indirectly but it has been neglected sector.
Agriculture has been the mainstay of most states by employing 40-60% of the workforce directly or indirectly but it has been neglected sector.
National level
India’s GDP growth rate at 7.3% in 2015 exceeded that of China which grew at 6.9%.
India’s GDP growth rate at 7.3% in 2015 exceeded that of China which grew at 6.9%.
- The fastest-growing states were Bihar at 17.06%, Madhya Pradesh(16.86%) and Goa (16.43%) while Telangana (5.3%), Punjab (10.16%) and Rajasthan (11%) have shown a slow progress.
- Maharashtra along with Karnataka has also been able to keep the expenditure on general services under check.
- Bihar, Orissa, Tamil Nadu and Kerala spend the most on pensions.
- Maharashtra’s infant mortality rate (IMR) of 25 is below the national average for all states, which stands at 50.
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