India's largest private sector firm Reliance Industries, which has highest weightage in the Sensex, was down 6.20 per cent amid reports that the company has tied up with three foreign firms for its plans to set up an integrated coal mining, a coal-to-liquid plant, and a 1,000 megawatt power plant and fly-ash utilisation unit. — PTI

London, October 15
Reversing the two-day rally, Asian and European shares slipped into the red as the US administration's move to snap up equity stakes in banks to improve liquidity, failed to quell rising recessionary fears.

After witnessing huge rallies for two consecutive trading sessions, most of the Asian benchmark indices excluding Japan's Nikkei 225 tumbled, with India's 30-share Sensex crashing nearly six per cent.

London Stock Exchange's FTSE 100 fell over three per cent while France's Cac 40 and Germany's benchmark index Dax were also trading in the negative territory.

However, Nikkei 225 swarm against the bearish trend and ended the day at 9,547.47 points, gaining little over one per cent. It had jumped over 14 per cent on Tuesday, making it one of the best rallies for the benchmark index.

Another major loser in the Asian region was Hong Kong's Hang Seng Index that plummeted nearly five per cent to close at 15,998.30 points.

Besides, Singapore's Strait Times ended the day down 3.24 per cent at 2,059.39 points.

China's key Shanghai SE Composite IX dropped 1.12 per cent to 1,994.67 points, while South Korea's Kospi Index fell two per cent to 1,340.28 points.

Snapping its gaining streak, London Stock Exchange's FTSE 100 declined over three per cent to 4,242.50 points. Moreover, France's Cac 40 fell 2.92 per cent to 3,522.58 points and Germany's benchmark index Dax tumbled 3.02 per cent to 5,042.30 points.

US bellwether index Dow Jones Industrial Average had yesterday closed down 0.82 per cent, while Nasdaq composite had settled down 3.54 per cent.— PTI

Mumbai, October 15
A sudden spurt in demand for US dollar today cut short the two-day winning stream of Indian rupee which closed the day at 48.52/53, weaker by 43 paise, against the greenback.

Foreign Exchange (forex) dealers said overseas banks made hectic dollar purchases in the Non-Delivery Forwards amid sustained capital outflows in stock markets, thus affecting greenback supply in the market.

The domestic currency resumed weak at 48.38/40 a dollar and later moved in range between 48.37 and 48.62 during the day. It had closed at 48.09/10 a dollar on Tuesday.

Traders said a sudden dollar buying spree blocked the rupee's two-day winning streak as there was virtually no support from the central bank.— PTI

Washington, October 15
The US budget deficit hit a record $455 billion in fiscal 2008 as a slowing economy sapped revenues while spending on wars, bank failures and unemployment-related benefits soared, the Treasury Department said on Tuesday.

The deficit for the year ended September 30 far outstripped the White House's most recent estimate of $389 billion, made in July, and nearly tripled the previous year's budget gap of $162 billion.

It beat the previous record of $413 billion set in fiscal 2004, which was swelled in part by tax cuts and Iraq war spending.

The Treasury's statement did not revise the White House's $482 billion estimate for the fiscal 2009 deficit, despite the Treasury's commitment of potentially more than $1 trillion to backstop the country's banking system.

''This year's budget results reflect the ongoing housing correction and the manifestations of that in strained capital markets and slower growth,'' US Treasury Secretary Henry Paulson said in a statement. ''We are taking aggressive actions to stabilise our financial markets and strengthen our financial institution so they can finance growth.''

The fiscal 2008 budget deficit was estimated at about 3.2 per cent of gross domestic product compared with 1.2 per cent of GDP in fiscal 2007. Among recent years, the deficit to GDP ratio had reached 3.6 per cent in 2004, and 4.7 per cent in 1992 as the United States dug itself out of the 1990-91 recession.— Reuters

New Delhi, October 15
The prevailing cash crunch due to the global meltdown will not affect the process for the auction of the third generation (3G) spectrum and rollout of the service on schedule, the government said today.

“We are not delaying the 3G auction process as of now,” minister for communication and IT A. Raja told reporters here on the sidelines of an industry conference. “We are looking at the liquidity crunch in the market, we will discuss the matter with the finance minister,” he said while adding that “no changes have been planned and the timeline remains the same”.

Responding to media reports that spectrum winners may get to pay the bid price in instalments, the minister said: “There has been no dilution of law, and I will speak to the Prime Minister about this.”

The 3G spectrum is scheduled to be auctioned by December-end.

There have been media reports that the government was considering relaxing the auction guidelines to make it easier for the telecom operators to pay large sums which would be required following the auction of the 3G spectrum space.

Reports suggested that the government was considering introduction of a staggered payment option for successful bidders.

It said successful bidders may only have to pay the reserve price upfront and pay the rest in equal instalments. The base price for pan-India spectrum has been set at about Rs 2,020 crore by the Department of Telecom (DoT).

The global liquidity crisis has made it difficult for telcos to borrow. AT&T’s global chairman Randall Stephenson had recently warned that the company was facing difficulty borrowing as banks were “limiting their lendings”. Although he was not referring to India, difficulties in fund-raising could hit its plans here as well. An India entry will cost AT&T upwards of $4 billion.

Reports further said that the proposal was at an initial stage and it needed to be discussed with the finance ministry also.

The government hopes to raise about Rs 40,000 crore from the 3G auctions. However, the policy entitles successful bidders a maximum of 5 MHz of 3G frequency, which is inadequate for new foreign telcos to launch operations.

Hyderabad, October 15
Flying together, India's two largest domestic carriers — Jet Airways (India) Ltd and Kingfisher Airlines — will be able to save as much as Rs 1,500 crore per annum.

But the consolidation could mean a body blow to national carrier, Air India, and perhaps hundreds of employees of the two leading domestic airlines, considering that the latest mantra of the financial crisis-hit aviation industry is flab cutting.

With two bitter rivals becoming business partners, the new alliance may also mean lesser options for ordinary flyer, fear industry experts.

At the end of a chief executives' conclave here today at the India Aviation 2008 air show, Jet Airways chief Naresh Goyal and Kingfisher Airlines chief Vijay Mallaya said code-sharing and operational alliance was needed to avoid bankruptcy and ensure profitability.

“Code-sharing and route rationalisation were needed by both of us to avoid bankruptcy," Goyal said after an open-house interactive session between civil aviation minister Praful Patel and CEOs.

Allaying speculation that there could eventually be a merger between the two airlines, Mallya and Goyal said, as of now there were no plans for equity sharing and also there were no discussions on this issue.

Justifying the coming together of the two airlines, which account for about 60 per cent of the market share, Goyal said break-even point for the aviation sector was at 90 per cent capacity utilisation, whereas the industry was operating between 60-70 per cent, explaining why the two airlines were losing nearly Rs 150-200 million a day.

This kind of an alliance was “inevitable” and happened in every other industry, he added.

Aviation expert Kapil Kaul maintains the alliance between the two aviation majors was not “loose” but “deep one” and something which might end up benefiting corporate flyers. But, he says, it is a move that may spell bad news for the national carrier with a mere 15 to 20 per cent market share.

Mallaya said the alliance would increase efficiency, and cut costs which would be beneficial for consumers.

The civil aviation minister said the government had taken a note of the merger and was watching the developments carefully.

“The DGCA has enough power to ensure that rules and regulations are followed and nobody is able to take advantage of a situation,” he said, allying fears of cartelisation.

On the issue of Jet laying off employees, Goyal said, "the people laid off were probationary employees and there will be no retrenchment of permanent employees. Our employees are our family and we will take care of all of them," he assured. Jet Airways had on Monday sacked 600 employees, including mostly cabin crew and engineers.

But officials hint that the two airlines may have to lay off more employees as it cuts back on flights amidst soaring costs.

Meanwhile, Patel maintained that there would be no intervention from the civil aviation ministry in case of sackings by airlines.

Hyderabad, October 15
These are difficult times for the Indian aviation story — air fares are soaring, passenger load factor is coming down and airlines are losing money. In all, it is an extra-ordinary and tough situation that may require extra-ordinary and tough measures by the government.

Civil aviation minister Praful Patel on Wednesday said his ministry was willing to go to any extent to support the industry, including a central government diktat to states to lower sales tax on ATF, besides issuing direct instructions to banks and financial institutions to give the bleeding industry a breathing space.

As India's first ever international exhibition and conference on civil aviation India Aviation 2008 kicked off here today, the minister said he would take up the issue with the finance minister and talk to banking and financial institutions to ensure they do not put undue pressure on airlines.

"They should be given a window and time to tide over the crisis," he said.

The industry is demanding a relief to make operations financially viable during rough weathers, the minister said, adding that the overall future and financial health of the industry had already been discussed at the highest level.

“I would meet the finance minister and bankers to ensure credit facilities to the airlines and ease pressure on airlines. High tax regimes on ATF is one of the main reason behind the problem, for which states are directly responsible,” he said.

However, he did add that the finance minister was not in favour to issue any “Central Diktat” as he (the FM) thinks would be against the Federal structure of the country.

As the country's leading private airlines fight to survive the crisis, top CEOs of aviation met to thrash out issues plaguing the industry, like high cost of ATF, falling passenger demand, high taxes, too much competition making fares uneconomical.

Private airlines once again reiterated their demand for a $1 billion bailout package from the government to counter slowing passenger traffic, rising costs and an industry-wide liquidity crunch, for which the civil aviation minister gave a clear thumbs-down.

On being asked whether the government was considering any financial bailout to the industry, he said the government could not provide any direct financial support to private airlines.

Among their demands are a cut in taxes on aviation fuel, reduction or withdrawal of duty on spare parts for aircraft maintenance, a 50 per cent reduction in airport landing, route and terminal navigation charges for 24 months for domestic operations and a freeze on increase in airport service charges.

Patel said the government would help national carriers financially as it owns them. “Air India has proposed and the ministry supports equity enhancement up to Rs 1000 to Rs 1,500 crore. Since IPO is not coming shortly due to various known reasons, so the government will enthuse fresh equity. The national carriers has given its intent for talking a loan of Rs 1,000 crore to tide over,” he said.

Chandigarh, October 15
The entry of agri-corporates in the mandis of Punjab for procurement of basmati varieties has failed to bring cheer to the farmers. Most of the agri-corporates are offering much lower rates (Rs 300 per quintal less) as compared to last year.

According to information gathered by The Tribune, PUSA 1121 is fetching just Rs 1,800- Rs 1,900 per quintal in various mandis of the state. Comparatively, last year, this variety was fetching Rs 2,200-Rs 2,300 per quintal in various parts of the state. With the Government of India having classified this variety as a non-basmati variety, its rate has fallen down this year.

Officials in the Agriculture Department, Punjab, confirmed that the prices being offered in the mandis for these basmati varieties were less as compared to last year. They said PUSA 1121 had fetched just Rs 1,900 per quintal in Fazilka yesterday, while RH 10 variety (used for mixing in basmati) had fetched Rs 1,000-Rs 1,150 per quintal (Rs 1,300-1,500 per quintal last year). Even the duplicate basmati variety (mucchal) had fetched just Rs 1,700-Rs 1,900 per quintal (as compared to Rs 2,100-Rs 2,200 per quintal last year).

Mahinder Kumar Arora, a leading commission agent in Rajpura, informed TNS that today a private company had earlier quoted a price of Rs 2,270 per quintal for procuring PUSA 1121. “But after the auction, the buyer refused to lift the stock at this high price. As a result, these varieties continue to be sold at Rs 1,800-Rs 1,900 per quintal,” he added.

Officials said the main reason for the price having fallen this year is the new regulation by the Government of India, banning the mixing of evolved basmati into pure basmati varieties. Earlier, the exporters would mix 20 per cent sharbati or RH 10 varieties, into the pure basmati, before exporting these.

Companies like KRBL, Olam, LT Overseas, Sunstar Overseas and Veetee have now entered the mandis and begun participating in the procurement process. Since the state government agencies and FCI purchase only the levy rice, the field is open for these private companies to procure the basmati varieties, which are generally exported to Europe, West Asia and Australia.

Raj Sood, a leading commission agent in Khanna, informed TNS that though these companies were going slow on procurement now, they would go full steam from next week as basmati varieties begin to arrive in the mandis. He, however, said that it was unlikely that farmers get as high a price as last year. 

BRIEFLY

L&T Q2 net up 32 pc
Mumbai: Engineering firm Larsen and Toubro on Wednesday announced a profit after tax of Rs 460.26 crore, a 32.25 per cent growth over the corresponding period a year-ago. The company had a net profit of Rs 348.02 crore for the second quarter of FY'08, L&T said in a filing to the Bombay Stock Exchange. The total income rose 40 per cent to Rs 7,842.26 crore for the quarter under review, from Rs 5,614.51 in the same period last fiscal.— PTI

BSNL broadband offer
New Delhi: Keeping the festive season in mind, BSNL on Wednesday announced a 20 per cent discount on rent for its new broadband customers for a period of six months starting from October. The offer is applicable on all broadband plans for new broadband customers, the company said in a statement.— PTI

CSC to hire 2,000 persons
New Delhi: Amidst big corporate houses retrenching employees over the global financial turmoil, here comes an exception with IT services firm Computer Sciences Corp (CSC) announcing its plans to hire 2,000 persons in India in the next six months to keep up its good performance in manufacturing and financial services. Headquartered in Virginia, the company has nearly 90,000 employees and a revenue of $17.1 billion for the year ended July 4, 2008.— UNI

Oil at 13-month low
London: Oil prices fell on Wednesday to their lowest level in 13 months, dragged down by expectations that economic weakness will cut further into demand for crude. US crude fell to $75.62 a barrel, the lowest price since September last year. By 1144 it had pared the loss and was trading $2.67 lower at $75.96. London Brent crude dropped by $2.58 cents to $71.95.— Reuters

RBI to issue new Rs 100 notes
Mumbai: The RBI on Wednesday said it would shortly issue Rs 100 denomination notes with inset letter 'A'. Except for the change in the inset letter, the design of these notes to be issued now is similar in all respects with additional and new security features issued on August 24, 2005, RBI said in a release.— PTI

Airtel, Infosys in pact
Bangalore: Bharti Airtel on Wednesday announced it has entered into an innovation and technology partnership with Infosys Technologies to deliver superior customer experience to the customers of Airtel digital TV, its Direct-To-Home (DTH) TV service. Infosys would provide a suite of products, including devices, application servers and interactive applications that will focus on providing an enhanced digital lifestyle to Airtel digital TV customers, a joint statement said.— PTI