Mumbai, January 3
The Bombay Stock Exchange Sensex rallied the most in nearly two weeks on Tuesday, led by ICICI Bank, construction major Larsen & Toubro and software bellwether Infosys, as investors bet the Reserve Bank of India will soon start cutting interest rates to bolster growth.

Signs of an improvement in global risk appetite also boosted the outlook for capital inflows after foreign funds had been net sellers last year.

The 30-share BSE index rose 2.72%, or 421.44 points, to 15,939.36, its highest close since December 26, with all but two of its components rising. The benchmark gained as much as 2.9 % during trade.

"People are slowly realizing the fact we are at the peak of the interest rate cycle and this has triggered a rally in the rate sensitive stocks," said Kaushik Dani, fund manager at Peerless Mutual Fund. "There are chances of some sort of easing in the key rates this month."

BNP Paribas forecast the BSE index to trade in a range of 14,000-19,000 in the coming months and touch 18,500 by the end of 2012, helped by decline in inflation and interest rates and "eventual recovery" in some areas of infrastructure construction.

"Some domestic economic drivers are obvious — declining inflation and easing of the policy cycle are some of them," it said in a note. "We expect a mild recovery in the capex cycle from 2H12 and the earnings downgrade cycle to continue in the near term, but to stop from around mid-2012." — Reuters

New Delhi, January 3
In a major foray into the media sector, Mukesh Ambani’s Reliance Industries Ltd on Tuesday announced it was investing in Network 18 and TV 18 which owns several leading TV channels including CNBC TV18 and CNN IBN.

An RIL statement said Independent Media Trust, a trust set up for the benefit of Reliance Industries, has agreed to fund the promoters of Network 18 and TV18 to enable them to subscribe to the proposed rights issue announced by both the companieson Tuesday.

The promoter companies of Network18 and TV18 and the trust have entered into a term sheet under which the trust would be subscribing to the optionally convertible debentures to be issued by the promoter companies. Though the amount was not disclosed, estimates are it is close to Rs 1700 crore.

Reliance will leverage its deep understanding of the Indian markets — consumer insights, technological expertise, and the ability to build & manage scale - to make this a “win win” partnership. This will create value and be accretive to RIL shareholders.

The statement said Raghav Bahl and his team will continue to have full operational and management control of both the companies.

RIL also announced a part of the interest owned by it in the ETV Channels was being divested to TV18. As part of the deal, Infotel Broad Band Services Ltd, a RIL subsidiary, has entered into an MoU with TV18 and Network18 Media and Investments Limited (Network18) for preferential access to all their content for distribution through the 4G Broadband Network being set up by it.

New Delhi, January 3
The government on Tuesday approved Reliance Industries Ltd’s $1.529 billion investment plan for developing four satellite fields in the flagging KG-D6 block after sitting on the proposal for months.

The investment plan, which will help boost falling output in the Krishna-Godavari Basin KG-D6 block, has been pending with the authorities for two years and it took some prodding from top government functionaries for it to be cleared.

The KG-D6 block oversight committee, which includes officials from the oil ministry and its technical arm, the directorate general of hydrocarbons (DGH), met for the third time in three months today to finally approve the proposal, sources privy to deliberations at the so-called management committee (MC) meeting said.

The MC approval, which is the final approval an operator needs before beginning work, however, puts a cap on the cost of developing the four fields that surround the currently producing Dhirubhai-1 and 3 (D-1 & D-3) fields in the KG-D6 block.

The cost cannot vary by more than 15%, they said, adding that the investment proposal was signed by the three partners in the block — RIL, UK's BP Plc and Niko Resources of Canada — and the representative of DGH, while the Oil Ministry official is likely to sign it in the next couple of days.

The MC had at its two previous meetings in November and December refused to approve the field development plan (FDP) for the Dhirubhai-2, 6, 19 and 22 (D-2, D-6, D-19 and D-22) fields after the government representative raised certain objections.

Sources said BP chief executive Bob Dudley last month wrote to Oil Minister S Jaipal Reddy stressing on the need for early approvals for the plan, without which one full year would be lost as the fair weather window in the Bay of Bengal only permits field developmental work between December and March. — PTI

New Delhi, January 3
The telecommunications ministry on Tuesday questioned the jurisdiction of the Telecom Dispute Settlement & Appellate Tribunal (TDSAT) on entertaining the petitions of five telecom operators, including Bharti Airtel and Vodafone, challenging the government's directive to stop 3G roaming agreements.

Additional Solicitor General AS Chandiok, appearing for the department of telecommunications (DoT), told the tribunal that it has no jurisdiction to entertain the petitions which are altering the terms of the telecom licences.

Terming the intercirle roaming pacts among telecom service providers for 3G services in areas where they do not have the designated spectrum as "illegal", the government had issued notices to five players to stop such services immediately. The operators — Bharti, Vodafone, Idea, Tatas and Aircel — had challenged the government's decision in the TDSAT.

Chandiok said in its recent judgement the Supreme Court had said the tribunal could not entertain the petitions that were altering the licence conditions.

On this the tribunal asked the government to file a separate application in this regard. Chandiok said, "It would be filed today (Tuesday) only."

Further, the tribunal asked the operators to file replies of the new coming application questioning its jurisdiction by Friday this week and directed to list the matter on Monday (January 9) for next hearing.

Meanwhile, state-owned telecom operator Bharat Sanchar Nigam Ltd (BSNL) on Tuesday requested to implead into this ongoing dispute and make it a party in the suite.

Additional Solicitor General AS Tankha appearing for BSNL submitted that that PSU is going to be affected very largely by the outcome of its hearing and it should be heard. He also submitted that an application in this regard would be filed today only.

On this, the TDSAT chairman, Justice SB Sinha, said it should be decided only after deciding on the preliminary objections raised by DoT. — PTI

New Delhi, January 3
Both gold and silver rose in the bullion market here on Tuesday on increased buying by stockists and jewellery makers for the marriage season amid a firming global trend.

While gold added Rs 255 to Rs 27,895 per 10 grams, silver moved up by Rs 200 to Rs 51,600 per kg on increased offtake.

Traders said the sentiment was bolstered after gold climbed in global markets on concerns that geopolitical risks in the Middle East may increase after Iran made progress on a nuclear program, increasing demand for the metal as a safe haven.

In Singapore, gold rose by 1.4 per cent to US $1,587.60 an ounce.

Besides, increased buying by stockists and jewellers for the wedding season further fuelled the uptrend in the precious metals.

On the domestic front, gold of 99.9% and 99.5% purity surged by Rs 255 each to Rs 27,895 and Rs 27,755 per 10 grams, respectively. Sovereigns remained steady at Rs 23,300 per piece of 8 grams.

Similarly, silver ready rose by Rs 200 to Rs 51,600 and weekly-based delivery by Rs 700 to Rs 52,000 per kg. — PTI

New Delhi, January 3
After allowing portability of mobile numbers and health insurance policies, the Indian government plans to give customers the flexibility to change his/her bank without changing the savings banks account numbers, a senior official said Tuesday.

Financial services secretary DK Mittal said the finance ministry was keen to allow savings banks account number portability and was already working on the proposal.

“Right now there are some technical problems. We have identified them and will overcome them soon,” Mittal told reporters here.

In a major relief to customers, the government last year allowed portability of mobile numbers under which users can change service provider without changing their numbers after paying a nominal fee. From July 2011, the regulator also allowed health insurance portability under which policy holders have the flexibility to switch from one insurer to another on same terms.

Mittal said banks would have to work on certain issues like know your customers norms and core banking solution to allow account number portability. — IANS

New Delhi, January 3
The oil sector is sinking deeper into the red with under recoveries ballooning but tough economic decisions to pass on prices to the end consumers are being held up due to political compulsions, the latest being the five state assembly elections including Punjab, Uttarakhand and Uttar Pradesh.

Latest figures released by the petroleum ministry show under recoveries of the oil marketing companies on account of the three regulated products — diesel, LPG and kerosene have touched Rs 388 crore a day. These include an under recovery of Rs 11.30 per litre on diesel, Rs 28.50 per litre on kerosene and Rs 326 per cylinder on cooking gas. For the first six months of the fiscal under recoveries were at Rs 65,000 crore.

Leave alone the regulated products that are considered sensitive, even petrol prices which have been deregulated have become a hot potato issue. This fortnight, petrol prices will not be raised as the state-owned oil companies apparently could not get political clearance for the over Rs 2 per litre hike in rates needed to achieve parity with the imported cost on account of the weakening rupee.

The oil firms had not raised prices last month also probably because Parliament was in session and a hue and cry would have ensued. Petrol prices were due to be increased from December 31 but till now it has not happened and chances are that they may not be raised even this fortnight.

UPA alliance partner Trinamool Congress has been a shrill opponent of rising petrol prices and there was a mini crisis last time they were raised. Added to that, with the announcement of assembly polls in five crucial states, including UP and Punjab, sources said even raising petrol prices can become difficult due to electoral considerations.

They, however, added that given the mounting losses of the oil sector some tough decisions would have to be taken soon which may happen now only after the polls in March.

The oil retailers usually revise petrol prices on the 1st and 16th of every month, based on the average imported price of oil and exchange rates during the previous fortnight.

New Delhi, January 3
Even though the Reserve Bank has now hinted at a pause to its rate hike cycle, Crisil says it expects the interest coverage ratio to remain under pressure on the back of a dip in overall growth expectations.

Crisil Ratings said the repeated interest rate hikes by the Reserve Bank of India and lower operating profits on the back of high input cost have pulled down India Inc's interest paying ability to a five-year low.

Even though the cental bank has now hinted at a pause to its rate hike cycle, Crisil says it expects the interest coverage ratio to remain under pressure on the back of a dip in overall growth expectations.

"While interest coverage is still healthy at 4.8 times, the magnitude of drop over the past few quarters is high," Crisil's chief executive and managing director Roopa Kudva said.

Uncertainties in the industrialized countries and lower GDP (gross domestic product) growth domestically will push India Inc into a slower revenue growth phase which could increase the pressure on profit and further deteriorate interest coverage ratios, she added.

The central bank adopted a unilateral strategy of attacking the inflation number and successive hikes saw the repo rate — at which it lends to the system — growing from 5 per cent in March 2009 to 8.50 per cent in December 2011.

While the headline inflation number continues to be elevated, the hikes have ended up impacting growth as investment activity steadily slowed down.

The government and the central bank have been repeatedly revising down GDP forecasts for the fiscal and recently Governor D Subbarao had raised doubts if the economy will achieve even the 7.6 per cent projected by him earlier.

The Crisil study also says that, after a gap of eight quarters, the September quarter also witnessed a decline in the operating profit and reported profit after tax by companies.

Commenting on a sectoral basis, the capital markets director at the research arm Tarun Bhatia said FMCG (fastmoving consumer goods), information technology and pharmaceuticals fare better on interest coverage while companies in the real estate and infrastructure are the laggards. — PTI