Mumbai/New Delhi, Feb 21
The benchmark BSE S&P Sensex posted its biggest single day fall since July 2012, diving by over 317 points to year's lowest level on Thursday as investors were spooked by weak global events. Banking stocks such as ICICI Bank fell a day after RBI data showed loan growth was still a concern and on weakness in global shares due to worries over the US Federal Reserve slowing its bond-buying programme.

This was largely a reflection of the fall in risk assets which fell after minutes of the Fed's last policy meeting cast doubts over how much longer the US central bank would stick to its stimulus plan.

Brokers said heavy capital outflows before the budget on fears of imposition of taxes to narrow the budget deficit and a weak global trend on renewed concerns that the Fed’s policy-tightening moves to reduce liquidity influenced the market sentiment.

The Dow Jones index closed 0.8% down last night while losses at Nasdaq were sharper at 1.55% as foreign investors seen profit booking and taking out money from equities and commodities.

There are now worries of a global risk off trade which would mean FIIs that have pumped in record amounts into Indian equities become risk averse. This factor becomes all the more important as basically FII inflows have been driving the markets while domestic investors have been constantly selling.

"The selling pressure is more global, than due to local factors. Some liquidation might continue after such high inflows," said Phani Sekhar, a fund manager at Angel Broking.

“The markets turned distinctively weak today and closed at the lowest levels in 2013. We believe this was largely due to the weakness in global markets," said Dipen Shah, head of private client group research at Kotak Securities.

Besides global cues, brokers said, heavy capital outflows happened a week ahead of the budget on fears of new taxes. The government may peg its fiscal deficit target at 4.8% of GDP for the next fiscal year, but it needs to explain as to how the figure is arrived at, he said.

The budget to be presented on February 28 will be keenly watched as a test of the government's commitment to fiscal responsibility, whether it has a credible plan for reducing the deficit and whether populist measures can be avoided before the general elections in 2014.

The BSE S&P Sensex fell 1.62%, or 317.39 points, to end at 19,325.36, posting its biggest daily fall since July 23, 2012. The index closed at its lowest level since December 24, 2012. The 50-share Nifty fell 1.53%, or 90.80 points, to end at 5,852.25.

Kuala Lumpur/New Delhi, February 21
Malaysia's AirAsia Bhd, Asia's biggest budget carrier, will invest between US $30 to $60 million into its new airline venture in India, said chief executive Tony Fernandes on a conference call with the media on Wednesday.

The company has sought approval to establish a new airline with unlisted firms Tata Sons Ltd and Telestra Tradeplace Pvt Ltd.

The new Indian airline is likely to start operations by the fourth quarter of this year with an initial investment of about $50 million by the Malaysian budget carrier.

The airline, which would be based on the low-cost, no- frill model, would launch its operations with three to four Airbus A-320 aircraft and "scale up (the fleet) quickly thereafter," Fernandes said. The airline will be based in Chennai and in the initial phase concentrate on destinations in South India where AirAsia already operates, he added.

AirAsia's initial investment in the airline, which would be run through a joint venture that includes the Tata Group and Arun Bhatia of Telestra Tradeplace, would be about $50 million. Asked by when the new airline would take to the sky, Fernandes said "it is in the hands of the Indian regulator ... but most likely it will start by the fourth quarter" of this year or the winter season.

"It will have a fleet of A-320s. We plan to start with three to four planes and scale up quickly after that," he said.

While the board of the airline would be dominated by Indians, Fernandes said the name of the CEO would be announced in the next few weeks and that of the airline's senior management soon thereafter. — PTI/Reuters

New Delhi, February 21
Having invested in billions, CDMA operator Sistema Shyam Teleservices, in which the Russian telecom major Sistema and the Russian government are the majority stakeholders, announced Thursday it would participate in the spectrum auction to be held next month.

Having been asked by the Supreme Court to vacate the spectrum it was holding despite the cancellation of the licences in February last year, Sistema Shyam, which operates under the brandname MTS, also announced it would be closing operations in 10 service areas after 30 days.

In a statement Sistema Shyam Teleservices president & CEO Vsevolod Rozanov said: "I’d like to confirm our intention to participate in the upcoming spectrum auctions in March 2013. The ‘go forward’ plan includes continuing its focus on data centric-voice enabled strategy in select circles".

It could also mean cutting down of around 300 jobs as it exits from ten telecom circles.

The Russian telecom major invested of over $3.2 billion in Indian wireless market. It has been in talks with Aircel for a possible merger to save its investments in India.

The company said it has started the process of informing its customers in 10 circles — Assam, Andhra Pradesh, Bihar, Himachal Pradesh, Haryana, Jammu & Kashmir, Madhya Pradesh, Northeast, Orissa and Punjab — to switch to other telecom operators of their choice. It will impact around 2.2 million customers on its network.

"Sistema Shyam is providing a 30 day time window to all its customers in the 10 circles to exhaust their balance and to port out to a telecom operator of their choice," it added.

"Sistema Shyam has a customer base of over 14 million, out of which less than 15% come from the impacted circles," the firm said.

There was, however, no clarification on whether the company would be bidding for CDMA spectrum in the 11 circles where it has not mentioned any closing of operations.

Chandigarh, February 21
British Prime Minister David Cameron’s visit to a leading Amritsar rice exporter, Amar Singh Chawal Wala, could well be the game changer for basmati rice exports from Punjab to the niche European market. The firm has signed a contract with UK-based East End Foods to export 12,000 metric tonnes of white milled basmati rice, almost 50% more than the total basmati exported from India to the UK. India’s total export of basmati rice to Britain is around 8,000 mt a year.

Sources close to the rice said so far rice exports to Britain and most other European countries was restricted to brown basmati (which is not milled). This meant that most of the brown rice exported is milled and polished in the UK itself, branded there and then sold. As a result, Indian basmati brands never got a foothold in the British market.

Since it is the premium traditional basmati varieties that are being exported to Britain, with the signing of the MoU with East End Foods will give a big boost to traditional basmati cultivation in the state. These traditional varieties fetch a much higher price in the global market than the newly developed basmati varieties like PUSA 1121. It will also mean better farm practices amongst basmati growers and lower levels of pesticide use to ensure the basmati is taken by exporters at a higher price.

Arvinder Singh, MD of Amar Singh Chawal Wala, said one of the reasons why only brown unmilled basmati was exported to Britain was that the export duty on white basmati was too high. On the other hand, the duty on brown basmati exports was refunded back to the exporter after the brown rice was milled, thus making brown rice exports more convenient.

Punjab Rice Exporters Association director Ashok Sethi said this tieup will have a huge impact on rice exports from Punjab, which exports around 2 million tonnes of rice. “Because of the buoyancy in rice exports, cultivation of basmati varieties in Punjab will also get a boost, and production would go up substantially over the current output of 2.88 million tonnes,” he added.