Tokyo, October 16
Fears of a global recession sent Asian stocks plunging today, with Tokyo down almost 10 per cent after Wall Street suffered its worst percentage drop in two decades.

Renewed panic erupted on global markets after a dismal US retail sales report stoked fears that the credit crunch will push some of the world’s biggest economies into deep downturns.

Japan’s Nikkei dropped almost 1,000 points or more than 10 per cent in early trade, wiping out most of Tuesday's record rally. By early afternoon it was down 9.5 per cent, close to its biggest loss in two decades.

Elsewhere, Seoul lost 7.3 per cent while Sydney dropped 6.3 per cent. Hong Kong sank 6.1 per cent in early trade while Shanghai fell 3.2 per cent.

The market has “picked up on the fear factor,” said ABN Amro Morgans private client adviser Bill Bishop.

The Dow sank 7.87 per cent yesterday after US retail sales fell much more than expected and Federal Reserve chairman Ben Bernanke said a recovery from the financial crisis would not happen right away.

Oil prices continued to fall, with Brent North Sea crude dropping below $70 a barrel for the first time since June 2007.

World stock markets have fallen heavily this year as the global credit crisis brought down once-mighty Wall Street giants Bear Stearns and Lehman Brothers and prompted a raft of government bailouts of troubled Western banks.

The Dow has fallen 35 per cent in 2008, the Nikkei has lost almost 44 per cent and the London FTSE 100 is down about 37 per cent.

“The stock market is buried by recession fears,” said Al Goldman at Wachovia Securities.

US retail sales slumped 1.2 per cent in September, a sign of deeper troubles for an economy hit by the squeeze in credit and the worst financial crisis since the Great Depression.

San Francisco Federal Reserve president Janet Yellen said the US economy was probably already in recession.

The dollar languished at around the 100 yen level as investors fled risky assets. Japan’s central bank pumped 600 billion yen ($6 billion) into the short-term money market to try to keep credit flowing.

Most analysts now say a US recession appears virtually certain as a crippling credit crunch and housing meltdown drags down the rest of the economy despite a $700-billion banking sector rescue plan.

Share markets around the globe were battered again.

The London FTSE 100 shed 7.16 per cent yesterday while in Paris the CAC 40 fell 6.82 per cent and the Frankfurt DAX gave up 6.49 per cent.

In Brussels, European Union leaders gathering for a summit warned that the financial crisis was far from over and that the real cost to jobs and growth was only now becoming clear.

The leaders of the Group of Eight (G8) major economies pledged in a joint statement to hold a global financial crisis summit “in the near future” with other key countries.

Stocks across Latin America also tumbled Wednesday.

Brazil’s share market, the biggest in the region, finished down 11.39 per cent, while Argentine equities slumped 12.14 per cent. — AFP

Tokyo’s Nikkei stock index plunged more than 11 per cent today, its biggest loss in two decades, on growing fears of a global recession.

Japan’s parliament today enacted a $18-billion emergency spending plan to stimulate Asia’s largest economy as fears of a recession grow.

The opposition-led upper house approved the extra spending bill, a little more than one week after it was passed by the lower house, which is controlled by Prime Minister Taro Aso’s coalition, officials said.

The 1.81-trillion-yen plan includes measures to help consumers, companies and farmers cope with high fuel costs and a credit crunch.

It is part of an 11.7-trillion-yen emergency package announced in late August. The rest of the plan consisted mainly of lending-related measures. — AFP

New Delhi, October 16
The headline inflation rate for the week ended October 4 declined to 11.44 per cent as against 11.8 per cent in the previous week. Although it is still far above the Reserve Bank’s tolerance level, wholesale prices-based inflation has been south-bound for three straight weeks now and dipped by 0.36 per cent mainly due to 11 per cent decline in steel and naphtha prices and six per cent fall in aviation fuel rates.

The annual inflation rate was 3.22 per cent during the corresponding week of the previous year, according to official data released here today. However, there is no cheer as regards the prices of foods is concerned as several items like fruits and vegetables, pulses and cereals continued to remain dearer during the week.

To give the sanguine markets a boost, the government released inflation figures in the first half of the day as against the normal practice of making the data public on Thursday evening, but even the declining data failed to cheer the mood of the markets which sunk by 700 points in morning trades.

The rate of price rise eased mainly on account of prices of those petroleum goods that are linked to international crude prices that declined to below $75 a barrel in recent weeks.

In the manufactured goods category, the index, measured movement in the wholesale prices, declined by 0.5 per cent on account of cheaper imported edible oil, steel, pig iron and lead ingots.

Inflation figure came a day after the Reserve Bank announced a further cut in the mandatory deposit that banks have to keep with the apex bank (cash reserve ratio) by 100 basis points to ease liquidity.

The series of the liquidity infusion measures taken by the RBI in the last 10 days has unlocked about Rs 1,00,000 crore in the cash-starved banking system.

Interestingly, the RBI had raised the ratio to contain inflation.

There are fears that the easy liquidity could further fuel inflationary expectations.

Hyderabad, October 16
Flying 10 hours non-stop from Toulouse (France), the world’s largest passenger aircraft Airbus A380 landed at the country’s first civilian air show at Begumpet Airport amidst cheers and impromptu applause. This is A380’s second visit to India.

After making a low fly pass, A380 landed on the runway almost dwarfing other aircrafts in its vicinity. The almost-five-story high aircraft managed to make a presence and bring cheer by its sheer size amidst an air show that has been largely marked with negative growth projections of India’s aviation industry on one hand and layoffs by the country’s leading airlines on the other.

That the slow down in the industry is here to stay for the time being became evident once more from Kingfisher indicating today that it does not want to take the deliveries of any A340s. However, as of now its order for five A380s stands.

Inaugurating the show, civil aviation minister Praful Patel had called the show a “modest beginning”. The show was announced amidst cheap airfares and domestic airlines expanding their route network but since then there has been a complete turnaround and that’s why A380’s landing was perhaps the only time that the gathered crowd at the Hyderabad airport broke into an impromptu applause.

The aircraft, despite its size, is 25 to 26 per cent more cost effective than other aircrafts. It has the least fuel burn per seat, cutting away direct operating cost from 25 to 26 per cent, Airbus officials said.

Meanwhile, Air India and European Aeronautic Defence and Space Company have joined hands to set up aircraft maintenance, repair and overhaul centre in Delhi.

The centre that will start operations from 2009 at the India Gandhi International Airport will become a member of the Airbus MRO network. The two companies today signed a joint venture agreement. The two firms will initially be 50:50 equity partners in the joint venture.

New Delhi, October 16
There has been uproar in the political circles over the decision of Jet Airways sacking people. Earlier, it was Raj Thackeray of the Maharashtra Navnirman Sena and today Congress minister Murli Deora also joined the chorus of criticism stating that Jet Airways’ decision to sack 1,900 employees in the midst of the festival season was not in good taste.

“I appeal to Jet Airways chairman Naresh Goyal not to retrench people and try to find some solution. We have supported Goyal several times but this is not the right time to retrench people, particularly before Diwali,” he said.

The oil minister revealed that the airline has outstanding dues of nearly Rs 259 crore towards fuel bills to oil marketing companies.

The minister had earlier convened a meeting between Jet chairman and IndianOil chief Sarthak Behuria in Mumbai where it was agreed that the airline would make a payment within 60 days to state-run oil firms. However, the company did not keep up to the agreement and defaulted on the payment.

These are difficult times for the airline industry and oil companies. State run oil companies are doing their business only on borrowed funds and so the airlines have to clear their outstanding bills at the earliest.

Petroleum secretary said the present pricing structure of ATF was fixed at imported price because around 80 per cent of the crude oil used to produce the fuel was imported at international rates.

Kingfisher owed Rs 110 crore to the oil companies, of which Rs 60 crore remained unpaid after expiry of the credit period. National Aviation Company of India Ltd (NACIL) did not have any grace period with oil firms and had an outstanding of Rs 606 crore as on October 8. Kingfisher bought jet fuel worth Rs 72 crore every month, while NACIL’s monthly fuel bill ran into Rs 337 crore. 

Chandigarh, October 16
Unhappy with the inability of the Punjab government to extend concessions granted to QuarkCity for setting up its special economic zone (SEZ) and integrated township, the company has reportedly expressed its inclination to stop all its activities in the state.

The concessions granted to the company by the previous government led by Capt Amarinder Singh are now under review. According to the sources, mainly with regards to complete exemption on stamp duty, octroi exemption and VAT exemption were promised to the company under the SEZ Policy. These concessions were part of the agreement signed between the company and the state government.

“However, after a new law was enacted by the Centre, replacing the SEZ Policy, some of these exemptions will have to be reviewed. The case will be discussed in the screening committee headed by chief secretary Ramesh Inder Singh,” principal secretary (industries) S.S Channy said.

When contacted, the chief secretary said any commitments made by any government would be honoured. “However, if there is any legal issue involved, the government will have to look into it. It is, thus, that the agreement made with QuarkCity is being brought in the screening committee,” he added.

Though the chairman of QuarkCity India could not be contacted, sources said the company had asked the state to honour the commitments made to them, failing which they would stop further investments. The laying off of 400 employees of the company in Mohali over the last two days is reportedly a step in this direction. While a majority of these employers were laid off yesterday, services of some employees were dispensed away with today.

The Quark group was one of the first multi-nationals to set shop in Punjab, by committing an investment of Rs 3,600 crore for setting up SEZs and integrated township. The entry of this multinational - a subsidiary of Quark City, USA, - had in fact triggered the realty boom in the region with each and every realtor worth its name, setting shop here. The company has already invested over Rs 500 crore across the state. 

Mumbai, October 16
Biotechnology firm Biocon has announced a consolidated net profit of Rs 25.02 crore for the second quarter ended September 30, a 53.64 per cent decline from the year-ago period, largely due to rupee volatility.

The company had a net profit of Rs 53.97 crore in the second quarter of FY’08, Biocon stated and added that its net sales rose to Rs 439.30 crore for the quarter under review, from Rs 263.66 crore last year.

BRIEFLY

Rupee falls to 48.89
Mumbai: After hitting the 49-level against the dollar in opening trade, the rupee recovered 37 paise and was trading at 48.89 due to heavy dollar demand from foreign banks amid a steep fall in Asian equity markets. Foreign Exchange (forex) dealers said foreign banks made hectic dollar purchases in the non-delivery forwards even as bourses witnessed sustained capital outflows affecting dollar supplies in the market. — PTI

Jindal Drilling bags ONGC order
MUMBAI: Jindal Drilling & Industries on Thursday said it has bagged a $165-million order (about Rs 810 crore) for leasing its rig to state-run Oil and Natural Gas Corporation (ONGC). In a filing to the Bombay Stock Exchange, the drilling firm said it has deployed a jack-up rig for ONGC in the west coast offshore. — PTI

TDI Infrastructure
NEW DELHI: TDI Infrastructure plans to invest Rs 300 crore in developing two township projects over the next 4-5 years. “In the next six months, we will be launching two residential townships in Indore and Meerut spread over 150 acres each. Once all regulatory issues are solved, we will start construction,” TDI Infrastructure managing director Kamal Taneja said here. — PTI

Parle Agro launches ‘Saint Juice’
MUMBAI: Parle Agro has entered into the pure juice segment of the Rs 7,000-crore beverage market with the official launch of ‘Saint Juice’ brand here on Thursday. Director, Parle Agro, Nadia Chauhan, assured that the company’s late entry would not affect its sales and market share in the Rs 150-crore segment. — UNI

Raymond expansion plans
NEW DELHI: Raymond is expanding its newly launched brand ‘Be Home’ with investing Rs 30 crore to take the total number of exclusive stores to 11 from present three by the end of current fiscal. These multi speciality premium stores would sell six specialised verticals catering to the whole gamut of home living segment. “We have just opened a ‘Be Home’ store in Delhi, which is the third one after stores in Mumbai and Pune. We are planning eight more stores in the metros and tier-I cities by the end of this fiscal,” Raymond president (home living) Robert Lobo said. — PTI

Mallya is Kingfisher chairman
MUMBAI: Kingfisher Airlines on Thursday said its board has approved the appointment of Vijay Mallya as chairman and CEO of the company and G.R Gopinath as the non-executive director and vice-chairman. “Vijay Mallya has been appointed as Managing Director of the company and designated as chairman and CEO,” Kingfisher Airlines said. — PTI