Mumbai, August 21
The BSE Sensex rose 1.1 percent on Tuesday to its highest close in five months led by Infosys after a U.S. court dismissed a lawsuit from an employee, while consumer good stocks gained on signs of improving rainfalls late in the monsoon season.

Shares also benefited from continued global demand for risk assets on hopes the European Central Bank will act to lower Spanish and Italian borrowing costs. The tentative optimism helped send European indices to 13-month highs, with the U.S. S&P 500 remaining at near four-year highs.

The improved global sentiment comes despite caution at home about whether the government will announce bold fiscal measures as well as other action to attract foreign investments into sectors such as aviation and retail.

Foreign institutional investors were net buyers of Rs 8.98 billion in domestic stocks last week, marking a third consecutive week of purchases, and bringing their total for the year to about $10.41 billion.

"The market appears in a bullish trend. Political and economic scenario at present doesn't permit government of India to take any bold steps. In spite of that, market is showing signs of improvement and breached 5,400, which is moving purely on FIIs inflows."

The BSE Sensex rose 1.1% to 17,884.10 points, its highest close since March 14. The Nifty rose 1.02% to end at 5,421.00 points. Despite the gains, plenty of other caution remains amid continued signs of slowing economic growth during a period of high inflation. — Reuters

Bangalore/Mumbai, Aug 21
Infosys shares rose on Tuesday after a US court dismissed harassment charges filed by a US employee, providing a win for the company in its biggest market. A second, similar, lawsuit remains.

In the dismissed lawsuit, Jack Palmer, an Infosys employee in the United States said he was retaliated against by the company after pointing out what he said was the misuse of U.S. B1 visas.

Infosys shares rose as much as 3.7% to a six-week high, and were up 2.7% at 10:35 am.

The "decision is a short-term positive," Wells Fargo senior analyst Edward S. Caso wrote in a note to clients after the verdict. In a US election year, employment visas have come under intense scrutiny. Corporations including Indian outsourcing providers use thousands of visas to bring in employees mainly from India, a practice seen by some as hurting the American job market.

The US judge's decision confirmed that Jack Palmer's claims were "completely unfounded", Infosys said in a statement. However, Caso said the issue remained unresolved as a second similar case and a separate investigation of Infosys' use of visas were pending. Infosys has said it is investigating the complaint.

In May, Infosys said it and some of its employees had been named in an investigation by a grand jury of the U S District Court for the Eastern District of Texas. — Reuters

New Delhi, August 21
India's annual consumer price inflation slowed slightly in July to 9.86 percent, helped by a drop in petrol prices at the pump, government data showed on Tuesday, but a drought in parts of the country pushed food prices higher.

India has the highest retail inflation among the BRICS group of emerging economies — Brazil, Russia, China, and South Africa —and is way above what the Reserve Bank of India calls its comfort level.

The RBI's next policy review will be on September 17.

Food prices for consumers accelerated to 11.53 in July from 10.71 percent in June.

Inflation as measured by India's benchmark wholesale price index dropped to 6.87 percent in June, nearly three-year low, helped by slower increases in fuel prices, data on August 14 showed.

Unlike most central banks, the RBI mainly uses the wholesale price index for monitoring inflation. Annual consumer price inflation data was only launched this year. — Reuters

New Delhi, August 21
The government is not planning to deregulate diesel, cooking gas and kerosene prices by withdrawing subsidy on them, Minister of State for Petroleum & Natural Gas R.P.N Singh said Tuesday. "At present, there’s no such proposal," he said in a written reply to the Rajya Sabha, when asked if the government planned to deregulate diesel and LPG.

He said the government was providing subsidy of Rs 0.82 per litre on PDS (public distribution system) kerosene and Rs 22.58 per 14.2 kg LPG cylinder from the fiscal budget.

"In addition, the public sector oil marketing companies also incur underrecoverries (or revenue loss) on sale of diesel, PDS kerosene and domestic LPG as the prices of these products are being modulated by the government," he added.

In FY2011-12 the three fuel retailers lost Rs 138,541 crore in revenues on selling diesel, LPG and kerosene. To make up the losses the government gave Rs 83,500 crore in cash assistance, beyond the subsidy from fiscal budget, to the oil firms while upstream firms like ONGC chipped in Rs 55,000 crore. "Rs 41 crore was borne by the fuel retailers," he said.

Indian Oil, BPCL and HPCL currently lose about Rs 450 crore a day on sale of diesel, domestic LPG and kerosene. They are losing Rs 15.55 a litre on diesel, Rs 29.97 a litre on kerosene and Rs 231 on every 14.2 kg LPG cylinder.

The losses are besides close to Rs 3.8 per litre loss on the sale of petrol, which was deregulated in June 2010 but its rates haven't moved in tandem with cost because of government's aim to keep inflation in check. — PTI

Mumbai, August 21
The Reserve Bank of India on Tuesday tightened the NBFC securitization norms by stipulating that a nonbanking finance company will have to retain at least 5% of the loan being sold to another entity.

The revised guidelines, issued by the RBI also stipulate that NBFC cannot sell or securitize a loan unless three monthly instalments have been paid by the borrower.

These stipulations, the central bank said are aimed at checking "unhealthy practices" and distributing risk to a wide spectrum of investors.

The RBI said a loan up to two years can be securitized only after payment of three EMIs by the borrower. The limit for loans between two and five years is six EMIs and above five years, 12 EMIs. With regard to minimum retention requirement (MRR) for securitization, the guidelines said the NBFCs selling loans will have to retain 5% of the amount if the loan is for less than two years and 10% if it is of over two years.

The originating NBFCs, it said should disclose to investors the weighted average holding period of the assets securitized and the level of its MRR.They should also ensure that prospective investors have readily available access to data on the credit quality. — PTI