New Delhi, June 10
Foreign investors pulled out over Rs 1,000 crore in the first eight days of trading this month from bourses amid concerns over domestic economic growth and depreciating rupee.

During June 1 to 8, foreign institutional investors made gross purchase of equities worth Rs 16,954.10 crore and sold shares valued at Rs 18,021 crore, translating into a net outflow of Rs 1,067 crore, according to the data available with the market regulator SEBI. FIIs had pulled out Rs 347 crore from the equity market in May and another Rs 1,109 crore in April.

Market experts attributed the outflow to a slew of reasons such as depreciating rupee, slowing economic growth, high fiscal and current account deficit as well as lack of reform momentum.

"Foreign investors are staying away from the Indian equity market, despite having an attractive valuation, mainly on account of volatility in rupee, which is hovering around the 56-level against US dollar," a broker said, adding, "In any country, foreign investors get badly hurt if the local currency continues to depreciates because FIIs bring in dollar to invest and take back less of it when they sell."

Another major setback for FIIs was slowing economic growth. The latest official figure showed that in 2011-12 India’s GDP growth dropped to 6.5%, and, even worse, the growth in the January-March quarter was only 5.3%, lower than economists’ projections.

In June so far, while foreign investors took out a total of Rs 1,067 crore from stocks, however they seem to be bullish on the debt market and poured in Rs 1,927 crore. This takes the collective net investment into stocks and bonds to Rs 860 crore during the period.

The BSE benchmark Sensex has lost 500 points or three per cent in the first week of the month to close at 16,718.87 on Friday.

In the first three months of calendar 2012 witnessed FIIs pumping huge capital into the equity markets, while in the the next two months of Q2 saw foreign investors pulling out funds from the country. However, in the first three months of 2012, FIIs had invested a record Rs 43,951 crore and in the next two months they withdrew a total of Rs 1,456 crore.

After taking the latest withdrawals into account, FIIs have made investments of Rs 41,427 crore into the equity market so far this year and Rs 21,107 cr into the debt market in the same period. — PTI

Brussels/Madrid, June 10
Eurozone finance ministers agreed on Saturday to lend Spain up to 100 billion euros (US $125 billion) to shore up its teetering banks and Madrid said it would specify precisely how much it needs once independent audits report in just over a week.

After a 2 1/2-hour conference call of the 17 finance ministers, which several sources described as heated, the Eurogroup and Madrid said the amount of the bailout would be sufficiently large to banish any doubts.

"The loan amount must cover estimated capital requirements with an additional safety margin, estimated as summing up to 100 billion euros in total," a Eurogroup statement said.

Spain said it wanted aid for its banks but would not specify the precise amount until two independent consultancies — Oliver Wyman and Roland Berger — deliver their assessment of the banking sector's capital needs some time before June 21.

"The Spanish government declares its intention to request European financing for the recapitalisation of the Spanish banks that need it," Economy Minister Luis de Guindos said at a news conference in Madrid. He said the amounts needed would be manageable and that the funds requested would amply cover any needs.

A bailout for Spain's banks, beset by bad debts since a property bubble burst, would make it the fourth country to seek assistance since Europe's debt crisis began.

With the rescue of Greece, Ireland, Portugal and now Spain, the European Union and the IMF have now committed around 500 billion euros to finance European bailouts.

Washington, which is worried the eurozone crisis could drag the United States economy down in an election year, welcomed the announcement. — Reuters

New Delhi/Mumbai, June 10
Frustrated by a lack of opportunities in India, Germany's Fraport, the world's No. 2 airport operator, is shutting its development office in the country, the latest in a growing list of companies exiting Asia's third-largest economy.

Regulatory uncertainty and policy gridlock have battered foreign corporate sentiment towards India, adding to a dramatic slowdown in economic growth and exacerbating a widening current account deficit that has knocked the rupee to record lows.

"When we came to India in 2006, we were actually extremely bullish about the market. We felt India had a lot of potential at that time," Ansgar Sickert, who heads Fraport's India operations, told Reuters in a telephone interview on Friday.

Government plans then to privatise dozens of airports in smaller cities have not come to fruition. "We were disappointed when none of these opportunities materialized," said Sickert.

Many foreign companies in other sectors have seen their India plans thwarted by sluggish or inconsistent policymaking under the embattled government of Prime Minister Manmohan Singh.

The list of companies to leave India includes telecoms carriers Etisalat of Abu Dhabi and Bahrain Telecommunications Co, whose licences were among those ordered cancelled by the Supreme Court amid a corruption probe.

Another firm, Norway's state-backed Telenor, which has invested roughly $2.5 billion in India and had its licences ordered cancelled, has threatened to pull out but is lobbying through diplomatic channels for favourable rules and to lower the price of airwaves to be auctioned.

"India definitely faces the threat of more foreign companies signalling an exit in the near future, as well as warding off new entrants unless it sends a very strong and immediate signal to boost foreign investor confidence, said Bundeep Singh Rangar, chairman of London-based IndusView Advisors.

According to a Nomura report last month, multinationals pulled $10.7 billion out of the country in 2011, up from $7.2 billion in 2010 and $3.1 billion in 2009.

To be sure, that's far less than inbound corporate investment, which surged 88% to a record $36.5 billion in the year that ended in March, according to official data, fuelled in part by two multibillion-dollar energy deals.

TOUGH TIMES: India's economy grew just 5.3% in the March quarter, its worst in nine years and far below the 9% pace that drew a flood of investment before the global financial crisis.

Singh's government has been weakened by fractious coalition partners and a spate of scandals, undermining its reform agenda. — Reuters

New Delhi, June 10
Industry bodies are time and again telling the government and the Reserve Bank of India to act swiftly as business sentiment and investor confidence is plummeting.

A snap poll conducted by CII, revealed that the GDP growth for the year 2012-13 is expected to be less than 6.5% and called for urgent comprehensive economic revival package to be announced to stop further worsening of macroeconomic indicators. The CII snap poll was conducted to gauge the economic outlook for fiscal 2012-13.

“The CII snap poll results clearly indicate towards deteriorating business sentiments and expectations. Urgent actions are needed from the government such as announcements on implementation of another 50 large projects on an urgent basis with all clearances and approvals in place along with a credible third party monitoring mechanism are needed. In addition, a direction towards further opening up of the economy by relaxing FDI limits in civil aviation, defence production and opening up multibrand retail to FDI will greatly boost global investors’ confidence and help arrest further slide of the Rupee”, said CII director general Chandrajit Banerjee.

Differing with the RBI view that high interest rates are not crippling the growth, industry body Assocham has recommended a six-pronged strategy to the RBI for controlling inflation, dampen risk to growth and reinstill investors’ confidence as the economy has become a “victim of loss of confidence and, indeed, not of opportunities”.

“In such testing times responsibility of the apex bank RBI becomes all the more important to address growing concerns on the falling investment and liquidity faced by the system as the government borrowings shoot up,” said Rajkumar Dhoot, MP and president of Assocham.

According to Assocham, the cushion that the economy has built up over the last few years is its predominant dependence on domestic consumption, There is a strong case based on the slowdown in GDP as well as depreciating rupee to further open up avenues for improved foreign exchange inflows and perk up investments that seems to have been on hold due to escalating cost of funding.

In the CII poll, a majority of the industry leaders expected their top line and bottom line growth to decline and in some cases it was expected to be negative. This clearly indicates there will be pressure on margins, thus leaving less room for capital expansion. On investment plans for expansion, 32% of those polled have revealed the expansion plans in their companies to be at the same level as compared to last year, while 29% of them have revealed contraction in expansion plans domestically.

On investing abroad, 47% of them revealed their preference to maintain the same levels of investment abroad as in last year, while 43% of them said they would increase their investments abroad. This clearly shows lower business sentiment domestically.

San Francisco, Calif., June 10
When Apple Inc kicks off its annual conference for software developers on Monday, all the power players in the Apple universe will be on hand, save the one that is in many ways driving the agenda: Google Inc. More than ever, the consumer electronics juggernaut finds itself in a pitched battle with the online search giant — in smartphones, cloud computing and the never-ending competition for the hearts and minds of the best software developers.

Apple on Monday is expected to announce its own mapping application, challenging the position of Google Maps as one of the most-valued features on the iPhone.

It will unveil closer integration of its iPhone apps and iCloud storage service with all its devices, the latest riposte in its battle with Google’s Android smartphone software.

Apple is looking to differentiate its mobile devices from Google's Android by further enticing consumers deeper into its app ecosystem, said Carolina Milanesi, analyst at Gartner Research.. — Reuters

Sheer thoughtlessness has played havoc with the Indian Pilots Guild (IPG). Its actions have not only destroyed the labour union but also irreparably hurt the interests of the striking Air India pilots.

Despite unfavourable judgments by the courts and and the firm stand taken by minister of state for civil aviation Ajit Singh, a member of the IPG who is also a small-time politician has been misleading the AI pilots by telling them "don't worry, you're on the right path".

Believing in this unrealistic assurance, the ill-informed AI pilots have been holding on their illogical strike for 31 days. If the IPG has lost its face, the pilots have lost all — jobs, salaries, allowances, perks and, above all, reputation. This is not all. But they have lost hard earned cash too.

According to a survey, each AI pilot has contributed from Rs 50,000 to Rs 200,000for their ongoing legal tussle. The total amount raised has been about Rs 80 lakh. The pilots are now beginning to realize that most of the funds have been diverted for causes other than legal issues.

The study reveals Air India pilots strike has been totally unwarranted and uncalled for. The government's stand is realistic that Indian Airlines pilots are as much a part of National Aviation Co as are those of Air India. The IA pilots have to have their share in employment and flying.

The strike is as suicidal as the IA-AI merger, of which it was said: "The merger is a kind of marriage between two incompatible individuals having wide variances with hardly any meeting ground". It was also suggested that responsibility should be fixed on persons responsible for this ill-fated merger.

While the Air India pilots' issue has gone from bad to worse, there is utter confusion and chaos in fares on national and international routes. Greedy private operators have jacked up fares causing inconvenience and harassment to passengers. This is because there is no discipline. There is no authority, national or international, which can regulate the fares. The market has turned deregulated and some private operators are taking undue advantage on the plea of supply and demand.

Never in the history of Indian civil aviation has the situation reached such a low.

In the last decade the number of women-centric initiatives in India by the government, corporate world, nonprofit organizations and many other bodies has probably exceeded the total number of McDonald's outlets! The point I am trying to make is that during the past several years, every organization has been studying and focusing on the behaviour of the female audience. Educate the girl child, women's empowerment, special bank account for women, crystal-studded mobile phones for girls, insurance for women, ladies taxi service - the list goes on. Of course, one of the major reasons for such initiatives was to rescue women from the evils of discrimination and make them independent but, somewhere during this transition, organizations also realized the growing importance of women in the society and their spending power.

Women earlier were considered to be "inhouse" resource, but recent studies suggest that for every new job opening the ratio of male to female applicants is 7:1 from the earlier ratio of 39:1. Nowadays many women are equally sharing the household responsibility and financially contributing the same as much as their male counterparts. Yet, the male member of the house is regarded as the breadwinner and is associated with carrying the maximum risk. The fact that the male member should have sufficient insurance cover to safeguard the future of his family now holds true for the female member of the house too. Be it life, health or accident insurance, women also need to be appropriately covered and protected.

The markets were in a really cheerful mood last week. The Bombay Stock Exchange Sensex gained 753.71 points or 4.72% to close at 16,718.87 points. This was the best weekly gain in points or percentage since the beginning of the year 2012. The National Sock Exchange Nifty gained 226.75 points or 4.68% to close at 5,068.35 points.

PN: Moratorium Period is course period + 1 year or 6 months after getting job, whichever is earlier Maximum Loan Amount for studies in India is Rs 10 lacs and Rs 20 Lacs for studies abroad Some banks offer discount on interest rate for female students. Interest subsidy offered by central government on education loans for students from Economically Weaker Sections (EWS) with annual gross parental/family income upto Rs 4.50 lacs pa for studies in India  Source: Apnapaisa Research Bureau, www.apanapaisa.com

The broader markets saw the BSE 500, BSE 200 and BSE 100 gain 4.08%, 4.28% and 6.31%, respectively. The BSE MidCap gained 2.86% while the BSE SmallCap gained 2.13%. The top sectoral gainers were the BSE Cap that gained 10.90%, the BSE Bankex (up 7.76%) and the BSE Auto (up 5.90%).

In individual stocks the top gainer was capital goods manufacturer Larsen & Toubro which gained 15.33%. Other gainers included Sterlite (up 10.31%), Hero Moto (up 10.04%) and SBI (up 7.6%).

The week began on a weak note with the Sensex posting a new low for the year 2012 at 15,748 points. The markets then rallied on Monday and closed positive for the day. Friday saw a similar movement with the markets remaining weak till the last hour of the day. There was a sharp rally from there and the markets which were down at their lowest point by 164 points closed positive with a gain of 69 points and in the process recovered 233 points in intraday trading.

The markets have closed at very crucial levels having recovered the 200 day moving average and closing above them after a few months. The markets have risen on short covering and some buying interest on the back of global cues. Almost all global markets have had a great run in the last week. The markets have discounted the possibility of a rate cut in the Reserve Bank of India's monetary policy review meet to be held on June 18.

The week ahead has a number of events in the country and globally which would have a significant bearing on the way markets react to these events. Each of them has the potential to move the market upwards or downwards. Tuesday sees IIP numbers for May being declared while Thursday sees inflation for May being announced. Friday sees announcement of results for the byelection in Andhra Pradesh. Friday also brings results advance tax data for the first quarter of the current financial year.

In global news crucial election results from Greece would be available on Sunday. Europe in particular would be reacting by the time trading comes to an end on Friday to the possible outcome to the elections. The future of Greece as a member of the eurozone would depend on these elections.

The coming week would be extremely volatile and markets are likely to move in either direction quite sharply. Looking at the way markets have moved last week further upward movement is likely.

The BSE Sensex has support at 16,546, then at 16,263, then at 15,955 and finally at 15,748 points. It has resistance at 16,776, then at 16,944, then at 17,074 and finally at 17,255 points. The NSE Nifty has support at 5,013 points, then at 4,924, then at 4,864 and finally at 4,770 points. It has resistance at 5,103, then at 5,175, then at 5,217 and finally at 5,255 points

The markets are very critically poised and sharp two sided movements in the coming week are likely. Trade cautiously and use movement of banking stocks as a trend for the bourses.

The author is founder of KRIS, an investment advisory firm. The views expressed are his own