Mumbai, August 5
India's volatility index, a measure of near-term volatility, on Friday saw its sharpest rise in two years spiking over 30 per cent after stock markets sank as fresh worries on the health of the global economy prompted investors to cut positions in risky assets.

The volatility index of the National Stock Exchange touched a day high of 26.40, up 30.6 percent from Thursday's close, in what could be the highest intra-day jump after the Lehman crisis, several analysts said.

"Volatility index is actually an index of fear and this clearly shows uncertainty prevailing in the market. Traders are actually confused and were not expecting such a heavy sell-off," said Alex Mathews, head of research at Geojit BNP Paribas Financial Services.

Indian shares touched their lowest level since June 2010 on Friday, joining a slide in Asian stocks, as fresh worries that the global economy is slipping back towards recession prompted investors to cut positions in risky assets.

Meanwhile, Europe's main investor fear gauge hit a 14-month high on increased concerns the U.S. economy could be heading towards another recession and jitters the euro zone debt crisis could spread to Italy and Spain.

"Implied volatility is not cooling off, indicating the current negative trend may continue," said Nandish Patel, derivative analyst at Sharekhan. "Its a panic selling and so will be very difficult to predict a good support (for Nifty)."

Asian markets tumbled on Friday after the overnight selloff on Wall Street, on fears the United States is staring at another recession

"There are lot of call writing and put buying in terms of headging. Overall I expect volatility index to go up and the market to slide to 4,800 if it closes below 5,300 levels," said Nitin Muruka, head-derivative research at SMC Global.

Credit Suisse has cut forecasts for earnings per share growth in the U.S. for 2011 and 2012 to 12 percent and 6 percent from 14 percent and 9 percent previously.

New Delhi, August 5
There could be trouble in store for habitual tax evaders. Faced with sluggish industrial growth and its impact on revenue collections, the government on Friday said it would step up "surveys" to maintain the tax buoyancy.

"We are trying to maintain (tax) buoyancy by enhancing/strengthening the tax collecting machinery; by bringing more people through surveys and other information within the tax net...”, finance minister Pranab Mukherjee said in the Lok Sabha.

The word 'survey' according to the Income Tax Act, 1961 refers to collection of information at business premises, assessing expenditure on marriages parties and other celebrations.

Replying to a debate on demands for supplementary grants of Rs34,724 crore for this fiscal, Mukherjee said that so far in 2011-12, the revenue collections have been robust with indirect tax collection growing by 30% and direct tax revenues up 26% so far. However, he conceded that the government revenue would take a hit if industrial production goes down.

"If the industrial production goes down then it will have an adverse impact in future", he said adding the government is also trying to resolve tax disputes through a settlement mechanism to unlock the money.

The amount stuck in income tax cases was Rs2,42,377 crore as on 31 December 2010 as compared to Rs2,88,336 crore at the end of 2009.

While the industrial growth has remained in the positive territory, the pace of expansion has come down to 5.7% during the April-May period this fiscal against 10.8% a year ago.— PTI

New Delhi, August 5
A Group of Ministers (GoM) on fertilizers today approved decontrol of urea prices and allowed fertiliser companies to raise the rate of the key farm nutrient by up to 10 per cent in the first year of the policy.

The maximum retail price (MRP) of urea stands at Rs 5,310 per tonne now which could go up by over Rs 500 if the Cabinet approves the draft policy.

The domestic urea production has been stagnant at 21 million tonnes for some years now and the remaining requirement of 6-7 million tonnes is met through imports.

Industry body Fertilizers Association of India said freeing urea prices would help boost the domestic production.

The GoM, headed by Finance Minister Pranab Mukherjee, has cleared the draft policy under which fertiliser companies, starting second year, will have the complete freedom to fix the maximum retail price of ureas based on market dynamics, sources said.

The government had in April last year introduced the nutrient-based subsidy scheme (NBS) for phosphatic and potassic fertilizers such as Di-ammonium phosphate (DAP)and Muriate of Potash (MoP) to ensure a balanced use of fertilizers.

Sources added that the ministerial panel now decided to bring urea under NBS.

The drat, prepared by the Committee of Secretaries (CoS) headed by Planning Commission member Saumitra Chaudhuri, was approved in toto, sources said. — PTI

Mumbai, August 5
State-run NMDC raised its iron ore output target to more than 30 million tonnes in the year to March 2012, after the country's top court allowed it to restart mining in a key region of Karnataka state from August 6, its chairman said on Friday.

"Because of Kumaraswamy (mine) we will able to produce 2 million tonnes more," said Rana Som.

On Tuesday the company had said it expected to produce 28-29 million tonnes of iron ore in 2011-12.

The Supreme Court partially lifted an iron ore mining ban imposed last week in the Bellary region by allowing NMDC to mine up to 1 million tonnes per month of the steel-making ingredient, according to a court document seen by Reuters.

The court directed that the ore mined by NMDC will be used only for local consumption and cannot be exported. It also revised the royalty rate from 10% on the pit head rate of Rs 610 per tonne to 10% of “current market value” of iron ore mined by NMDC.

This will amount to nearly Rs 500-600 per tonne of ore, depending on the quality. The differential from the new royalty is to be accounted for by the Karnataka government and used for rehabilitation and restoration of the area, the court directed.

The court permitted NMDC to operate after the Union ministries of environment, steel, mines and commerce responded to the court’s questions last week on what the iron ore demand from the domestic steel industry was. In 2010-11, about 26 million tonnes of Bellary iron ore was used by domestic industry in Karnataka, said the CEC. — Agencies

New Delhi, August 5
Gold sparkled at an all-time high of over Rs 24,500 per 10 grams in Kolkata today as the metal's appeal as a safe haven increased amid a worldwide crash in other investment options -- equities and the dollar.

Market players domestic prices were influenced by firm cues in global markets, where gold climbed to an all-time high of USD 1,683.30 an ounce in New York last evening, amid fears of recession in the US and debt problems in the Euro zone.

Moving in tandem with global prices, gold prices rose by Rs 160 to Rs 24,535 per 10 grams in Kolkata; it went up by Rs 210 to Rs 24,455 in Chennai. In the national capital, it spurted by Rs 70 to hit a new high of Rs 24,350. Similarly in Mumbai, it gained Rs 135 to Rs 24,280 per 10 grams.

Good domestic demand ahead of the festive and the mariage season also helped it surpass all records, they added. In futures trading at the Multi Commodity Exchange (MCX), gold for delivery in October shot up by Rs 224, or 0.90 per cent, to a new high of Rs 24,289 per 10 grams, with a business turnover of 3,431 lots.— PTI

Chennai, Aug 5
The Directorate of Revenue Intelligence today issued a showcause notice to Hyundai Motor India Ltd for allegedly evading tax to the tune of Rs 266 crore in the last five years, a top DRI official said.

"We have issued a showcause notice to Hyundai for evading tax to the tune of Rs 266 crore between July 2005 and December 2010..," DRI Additional Director General C Rajan told PTI here.

Hyundai Motor India, which is the second largest automaker, had been given a month's time to respond, failing which further action was likely to be taken, he said. Company officials were not available for comments.— PTI

New Delhi, Aug 5
Drug maker Ranbaxy Laboratories today reported a consolidated profit after tax (PAT) of Rs 243.2 crore for the second quarter ended June 30, 2011.

The company had a PAT of Rs 325.7 crore in the same period previous fiscal, Ranbaxy Laboratories said in a statement.

Consolidated net sales of the company stood at Rs 2,059.3 crore for the second quarter ended June 30, 2011. It was Rs 2,095.3 crore in the same period last financial year.

Washington, August 5
US job growth accelerated more than expected in July as private employers stepped up hiring, a development that eased fears the economy was sliding into a fresh recession.

Nonfarm payrolls increased 117,000, the Labor Department said on Friday, above market expectations for an 85,000 gain. The unemployment rate dipped to 9.1 percent from 9.2 percent in June, mostly the result of people leaving the labor force.

The payrolls count for May and June was revised to show 56,000 more jobs added than previously reported. The report was the first encouraging piece of economic data in some time.

"While I do not think this sounds the all-clear signal, it does quell some of the conversation that the U.S. is falling back into a recession," said Tom Porcelli, chief US economist at RBC Capital Markets in New York.

"There are still plenty of headwinds, like Europe. This report pulls us back from the ledge a little bit."

Fears that the U.S. economy might be sliding back into recession, coupled with Europe's inability to tame its spreading debt crisis, have roiled global financial markets. Economists see the odds of a US recession as high as 40 per cent.

US stock index futures rallied more than 1 percent on the report, while prices for Treasury debt slid. The dollar trimmed losses against the yen.

The US central bank has cut interest rates to zero and spent $2.3 trillion on bonds. Policymakers have said they want to see how the economy fares before taking any further action.

Mumbai, August 5
In sharp contrast to huge losses suffered by the stock markets today, shares of oil companies, led by ONGC, gained on the bourses on possibility of de-control of diesel prices.

On the BSE, shares of ONGC finished 1.08 per cent up at Rs 276.10, while HPCL ended 2.60 per cent up at Rs 402.60. IOC closed at Rs 332.05, up 0.82 per cent and BPCL gained 1.97 per cent to settle the day at Rs 699.45.

On the NSE, ONGC gained 1.48 per cent to settle the day at Rs 277.25, HPCL closed 2.97 per cent up at Rs 404, IOC finished 0.73 per cent up at Rs 331.80 and BPCL ended 1.87 per cent up at Rs 701.50.

Finance Minister Pranab Mukherjee had yesterday said the government was moving in the direction of decontrol of diesel price. — PTI