London, December 8
Equities surged around the world on Monday with investors taking heart from a likely rescue plan for US automakers, a proposed US jobs plan and more government stimulus measures to reverse economic decline. Wall Street also looked set for a positive start.

The dollar fell against other major currencies apart from the yen while demand for government bonds dropped. European shares jumped, led by banks and oils, tracking gains in the United States and Asia.

The FTSEurofirst 300 index of top European shares traded 5.3 per cent higher. Earlier, Japan's Nikkei climbed 5.2 per cent to its highest close in a week.

US President-elect Barack Obama said on Saturday his plan to create at least 2.5 million new jobs included the largest infrastructure investment since the 1950s and a huge effort to reduce US government energy use.

Lawmakers in the US Congress are also working on draft legislation to help out the embattled auto industry.

Global stocks as measured by MSCI were up around three per cent. For the year to date, however, they remain down more than 46 per cent.

The dollar fell broadly, hitting its lowest against the euro and a basket of major currencies in more than a week as the steep rally in European shares indicated renewed risk appetite and boosted higher-yielding currencies. The euro rose 1 per cent to $1.2867 while the dollar index fell 1 per cent.

However, the yen tumbled, hitting its lowest level against higher-yielding currencies, including the Australian dollar, the euro and sterling in roughly a week due to the slight pullback in risk aversion which boosted European shares.

The dollar was up 0.4 per cent to 93.24 yen, off its highs.

Euro zone government bond yields rose sharply. — Reuters

New Delhi, December 8
Indian Railways today effected a one percentage point hike in freight rates for cement, coal and coke — a move which the industry criticised as going against the spirit of a stimulus package announced by the government yesterday.

As a result, the freight rates stand at 8 per cent per tonne with effect from today, as per a notification issued on November 28.

The cement industry said this could lead to an average around Rs 1 per bag increase in transportation cost of the construction material, thinning the relief to consumers that could have resulted from yesterday's 4 per cent excise duty cut.

The hike comes as part of Railway's revision for "classification of cement from class 140 to class 150 and coal and coke from class 140 to class 150 for trainload movement," said the notification "It is a very complex situation. The increase in freight rates by the Railways has compounded the entire thing. We are still working on how to address the issue," Cement Manufacturers Association president H.M. Bangur told PTI.

Industries consuming coal and coke said they would approach the government seeking rollback of the hike.

"If coal and coke cost goes up, our cost goes up," JSW Group CFO Seshagiri Rao said, adding that the move will put pressure on all the companies operating in the infrastructure sector.

Ispat Industries vice-chairman and managing director Vinod Mittal said, "This is the time to stimulate the customer and the demand (and) not hurt the sentiments and the prevailing cost. Railways should reduce the freight rate." Bangur said the cement industry would have passed on the entire benefit of the four per cent reduction in CENVAT to customers, but the hike in freight charges would affect this plan.

The prices of cement vary between Rs 150 and Rs 250 across various parts of the country and the price cut would depend on these rates, he added.

Top sources in SAIL confirmed that the PSU would take up the matter with the Railway Board. An email query sent to Tata Steel was not answered immediately.

Industry experts said coal and coke customers including power, steel, cement companies will have to shell out about Rs 3,00,000 more for one rake of load with a capacity of nearly 3,800 tonnes. — PTI

New Delhi, December 8
Responding to Centre's reducing CENVAT by four per cent, country's second largest car maker Hyundai today slashed the prices of all its models by up to Rs 44,792.

The company reduced the prices of its flagship brand 'Santro' between Rs 8,834 and Rs 12,492, Hyundai Motor India said in a statement.

'i10', the company's latest offering to the market, would now be available between Rs 3.26 lakh and Rs 5.25 lakh, cheaper by up to Rs 18,381. HMIL also said its premium hatchback 'Getz' would be cheaper by Rs 13,413-Rs 19,422 across different variants.

Likewise, its mid-size sedan 'Verna' would see a price reduction between Rs 19,625 and Rs 26,174, while Accent price is lowered by Rs 15,540. Its top-end sedan 'Sonata' has been made cheaper between Rs 38,006 and Rs 44,792.

Meanwhile, the country's biggest carmaker Maruti Suzuki India Ltd (MSIL) today said it has decided to reduce prices of all models with immediate effect, except Grand Vitara, as it is not impacted by the CENVAT changes.

The price reduction (ex-showroom Delhi prices) ranges from Rs 6,500 for Maruti 800 to Rs 23,000 for the top-end SX4 Sedan, the company said in a statement.

The company has announced price reduction in all 11 car models manufactured in Gurgaon and Manesar plants.

The Maruti 800 will now cost Rs 1,86,968, while Alto and Wagon R will be priced at Rs 2,57,528 and Rs 3,14,917, respectively. — Agencies

Chandigarh, December 8
The push given to the staggering textile sector by the government in the form of excise duty relaxations, pumping in money under Technical Upgradation Fund Scheme (TUFS) and relaxation in rate of interest charged to exporters, has failed to enthuse the textile sector in the region.

The package announced yesterday includes reduction in the rate of duty on cotton textiles and textile articles. To boost collateral free lending, the current guarantee cover under Credit Guarantee Scheme for micro and small enterprises on loans will be extended from Rs 50 lakh to Rs 1 crore, with guarantee cover of 50 per cent. The lock-in period for loans covered under the existing credit guarantee scheme will be reduced from 24 to 18 months, to encourage banks to cover more loans under the guarantee scheme.

Textile industry analysts feel that the impetus given to revive growth is too little and too less. Sunil Kumar Jain, president of North India Textile Mills Association (NITMA), said the textile exports would not get a fillip with the relaxation in interest rates alone. The government should have also hiked the duty drawback as has been done by Pakistan and China. “The interest subvention on export credit has been reduced to just two per cent, as compared to four per cent till September this year, before it was discontinued for three months. The main issue was increasing the duty drawback, which the government has ignored, showing that it is only a half-hearted approach,” he said.

Satish Bagrodia, vice-chairman of Winsome Yarns, said the interest subvention on export credit should have been kept at four per cent and duty drawback should have been increased by two per cent. “The government should have also allowed moratorium period for loans availed by textile units under TUFS scheme. In this age of cash crunch, such a measure would have definitely helped the industry,” he said.

It may be noted that as of now the spindlage in Baddi-Dera Bassi- Lalru belt is estimated to the tune of 12 lakh spindles. In the Ludhiana-Barnala belt, the spindlage is over 15 lakh. Punjab's total yarn and textile export stands at Rs 2,223.38 crore as on March 31, 2008.

Anil Kumar Jain, presdent of Venus Garments, one of the biggest textile exporters in Punjab, too, felt that the stimulus package would not do much for boosting growth. “Even the Rs 1400 crore announced under the TUFS scheme will only help in clearing the back log till September,” he added.

Mumbai, December 8
In response to the RBI policy initiatives announced last weekend, the Union Bank of India today cut its Benchmark Prime Lending Rate (BPLR) by 0.75 per cent to 12.5 per cent per year.

The cut, effective from today, was in addition to the earlier downward revision by a similar dose in November, taking the total cut to 1.5 per cent in a span of 35 days, the bank said in a release here.

The cut would have positive impact on micro, small and medium enterprises (MSME) sector and exporters, resulting in cheaper credit for them. Union Bank of India also offers concessional interest rate on Export Credit and Post Shipment Credit to exporters for extended period as announced by Reserve Bank of India.

The revised BPLR shall be applicable to all existing and new accounts, where the floating interest rate is charged at BPLR and above. — UNI

Chandigarh, December 8
Japanese firm Mitsui & Company will set up an integrated logistics park in Haryana with an investment of Rs 5,000 crore.

This was announced by Haryana Chief Minister Bhupinder Singh Hooda and the chairman of Mitsui and Company, Munetaka Onose, while addressing mediapersons after signing an MoU with HSIIDC and IL&FS Infrastructure Development Corporation for setting up the park.

They said the park would be spread over an area of 1,500 acres. The land will either be acquired by the state government and transferred to the developer or allotted directly. Although the location for this project is still not decided, a location study survey would be conducted within 60 days in order to find the suitable site for the project.

It is likely to create employment for about 10,000 persons directly and indirectly in the core and allied activities.

New Delhi, December 8
Global investors withdrew about $14 million from India-focussed funds, while China continued to be the most preferred Asian destination attracting foreign inflows last week, according to a report.

Global research firm Citigroup, citing data compiled by emerging market fund flow tracker EPFR, said in a report that of the outflows registered by Asian funds, investors put in $209.9 million in China-dedicated funds.

Meanwhile, Asian equity funds inflow declined to $46 million in the first week of December, while it was at $350 million in the third week of November.

The report said China equity funds have absorbed $841 million new money in the past three weeks, representing 28 per cent of the entire cash flow so far this year. "While the majority of Asian fund groups continued to face redemptions, inflows to China funds remained big," the Citigroup stated.

Further, the report added that despite a decline in foreign portfolio investment, local investors — retail, mutual funds and others — regained confidence in the Asian market.

"So much has been said about foreign investors redeeming from offshore Asian funds, the good news is that locals have returned as Asian markets stabilised," Citigroup said.

Korea pension funds and India domestic mutual funds have been net buyers too, purchasing $301 million in total during the period, it added.

Net purchases by local institutions and individuals in Thailand added up to $300 million in the past two weeks.

Among the other Asian economies which witnessed massive fund outflows in the past week are Hong Kong ($42.7 million), Singapore ($35.9 million) and South Korea ($17.6 million). — PTI

New Delhi, December 8
Market regulator SEBI is likely to set up an exchange-traded corporate bond market in a couple of months. It will help industry to raise funds at competitive rates in a transparent manner.

"We are looking at an exchange-traded corporate bond market, because there is more transparency and manipulations are not possible," SEBI wholetime member T.C. Nair said after releasing an Assocham study on derivatives here today.

The SEBI is in final stages of putting in place the system, which is expected to become operational in a couple of months.

Nair also hinted at the possibility of a fourth exchange for currency futures in the near future. "There are some banks and financial institutions which have applied and we are considering their proposal," he said.

At present, there are three exchanges — the BSE, NSE, and MCX — which have trading in currency futures.

Supporting a strong domestic corporate bond market, IIFCL CMD S S Kohli said, "Developing a corporate debt market is essential for the infrastructure sector. A corporate debt market is going to be the main source of investing in infrastructure." Unlike the corporate debt market, Nair said the market for government securities is well developed. He said the current scenario, with interest rates going down, is conducive for bond markets.

Currently, most trades in the corporate debt market happen through private placements. Setting up a bond market, tradable on exchanges, will help create a liquid market for bonds and it will enable retail investors to participate, he said. — PTI

Chandigarh, December 8
Himachal Pradesh is the second best e-governed state in 2008-09, followed by Haryana, which has secured the fourth position, according to findings of the fifth IDC India study conducted for CyberMedia’s flagship fortnightly Dataquest.

Tamil Nadu and Andhra Pradesh have climbed three spots each over last year’s ranking, to emerge as the number one and fifth state, respectively. Himachal Pradesh and Haryana have climbed up 5 and 14 places, respectively. Delhi has slipped two ranks from number one last year.

The results are based on a two-level survey that assesses every state’s IT vision, implementation plan and ease of use of services. It also takes into consideration IT allocation for new projects in 2007-08, implementation of new projects, and user satisfaction among 3,150 citizens and businesses.

In the category of land services, Himachal Pradesh, not surprisingly, has taken the lead with Uttar Pradesh and Assam following far behind. The state government’s unique initiative ‘Himbhoomi’ is bearing fruit. The project is land record computerisation and significantly includes land reform details, a feature not used in any other similar software in the country.

Haryana has also rolled out an online treasury information system implemented in 100 per cent treasuries, providing a linkage to multiple treasury bank branches.

Commenting on the findings of the survey, Prasanto K Roy, chief editor, Dataquest, said the other state that deserved mention was Punjab. He said the fact that the state had been ranked in the e-readiness index is clear indication that citizens are gradually arriving at the threshold of being ready to embrace technology. In terms of the share of IT spending as a portion of the state budget, Punjab has been ranked ahead of other states like Haryana, Andhra Pradesh and even Tamil Nadu.

The report noted that Punjab’s performance in citizen and business satisfaction left a lot to be desired. It said while the state had managed to more or less stay constant in the citizen satisfaction index, in business satisfaction, it has dropped seven places to number 14.

New Delhi, December 8
Abolition of import duty on naphtha under the government's stimulus package has come as a much-awaited breather for power projects running on dual-fuel.

"Lifting of 10 per cent import duty on naphtha is likely to reduce production cost by $1.5 per million British thermal unit (mmBtu). This means that tariff benefit of about 50-55 paise per unit can be expected," NTPC chairman and managing director R.S. Sharma told PTI. Consumers are also expected to reap benefits, as this may result in tariff reduction of 50-55 paisa per unit. — PTI

BRIEFLY

HDFC Bank cuts PLR by 50 bps
Mumbai: Country's second largest private sector lender HDFC Bank on Monday reduced its benchmark lending rate by 50 basis points to 16 per cent, pursuant to liberal monetary policy announced by the RBI on Saturday. — PTI

Govt clears 22 SEZs
New Delhi: The government on Monday approved 22 proposals for setting up special economic zones, including those of real estate major Emaar MGF Land in Tamil Nadu and Dr Reddy's Laboratories in Andhra Pradesh. The Board of Approval in the commerce ministry gave 19 'formal' approvals, while three were given 'in-principle' clearances.— PTI

Jet to pay 3 pc commission
Mumbai: Bowing to pressure from travel agent bodies, private air carrier Jet Airways on Monday said it would be paying a three per cent agency commission on gross fare on sale of its tickets by travel agents. The commission scheme would come into force with immediate effect and would replace the transaction fee model. — PTI

Unitech, Idea get spectrum
New Delhi: The government on Monday awarded start-up spectrum to two telecom operators — Unitech and Idea Cellular — in Kolkata to enable them start operations. In a statement to the BSE, Unitech Wireless said it had been allocated 4.4 MHz of spectrum in 1800 MHz GSM band in respect of Haryana, Himachal Pradesh and Kolkata service areas, while the Aditya Birla company said it had got radio waves for Kolkata circle.— PTI

Fire at RPL refinery
New Delhi: A fire was reported at the site of Reliance Petroleum Ltd's (RPL) under-construction export-oriented refinery at Jamnagar in Gujarat. The fire was reported at the "dumping ground" of the refinery, but it could not be ascertained if the unit had been affected or if there was any casualty. A spokesperson was not immediately available for comment.— PTI

Markets closed
Mumbai: The Bombay Stock Exchange, the National Stock Exchange, Forex, Money market and Oils & Oilseeds will remain closed on Tuesday on account of 'Bakri-Id'. — PTI