Mumbai, July 23
Rising for the fifth straight day, the BSE benchmark Sensex today closed at over 30-month highs gaining 143 points on earnings-related buying in consumer durables, FMCG and banking shares, amid firm global cues.

The Sensex, which gained 308 points in past four sessions, advanced by 143.01 points, or 0.71 per cent to 20,302.13, a level last seen on January 5, 2011. Twenty-one stocks gained in the 30-share bluechip index.

Investors today became richer by Rs 40,000 crore with market capitalisation standing at Rs 66.32 lakh crore as around 1,150 stocks gained on the BSE on good buying.

The broad-based National Stock Exchange index Nifty rose by 46 points, or 0.76 per cent to 6,077.80.

The move by RBI yesterday to curb gold imports to slash record current account deficit (CAD) was one of the reasons that helped boost sentiments in markets, brokers said.

A shift in funds into domestic stocks from bullion and forex markets was also seen supporting the market, they added.

Gains in ITC, Infosys, RIL, ICICI Bank and HDFC Bank helped Sensex stay in positive zone throughout the session.

Sectorally, the BSE consumer durable sector index gained the most — 3.85 per cent — to 6,570.53, followed by BSE FMCG index by 1.53 per cent to 7,548.43, BSE Realty by 1.42 per cent to 1,448.57 and BSE Bankex by 1.29 per cent to 163.47.

Globally, Asian shares were firm and Europe opened higher after unexpected drop in existing home sales in June in the US renewed hopes that the Federal Reserve will maintain its monetary stimulus for a little longer, experts said. — PTI 

Mumbai, July 23
With the rupee still continuing to be weak, the Reserve Bank of India today announced additional liquidity tightening measures to contain excessive speculation and volatility in the foreign exchange market.

RBI has reduced the liquidity adjustment facility (LAF) for each bank from 1 per cent of the total deposits to 0.5 per cent, thus limiting the access to borrowed funds from the central bank. The limit will come into force with immediate effect and continue till further notice, the RBI added.

In another measure to suck out liquidity from the system, RBI has asked banks to maintain higher average CRR (cash reserve ratio) of 99 per cent of the requirement on daily basis as against earlier 70 per cent. CRR is portion of deposits that banks are required to keep with RBI.

According to bankers, the measures could suck out Rs 4,000 to Rs 5,000 crore from the system. The additional measures to check exchange rate volatility comes within 10 days of RBI taking stern steps to suck out liquidity from the system.

On July 15, the RBI had raised short-term interest rates and announced to sell government securities worth Rs 12,000 crore. However, it raised only 2,532 crore from the open market sales (OMS) on July 18.

Initially, the RBI injected dollars into the market to check slide of rupee, which touched a life time low of 61.22 level against the dollar. It fell four paise to end at a week's low of 59.76 against the dollar. — PTI 

New Delhi, July 23
Warning that the FDI in multi-brand retail policy would wipe out small retailers, a Parliamentary panel looking into the issue has asked the government to create a regulatory authority for the sector which can act as a whistleblower in case of anti-competitive behaviour and abuse of dominance by foreign retail chains.

The Parliamentary Standing Committee on Industry said in a report that initially the game plan of foreign big retail giants would be to attract the customers from the indigenous retail shops by offering low prices.

“In doing so, they will completely eliminate our retailers and create a situation where they will have monopoly over retail trade. Later they will sell the same goods at an unreasonably higher price which the consumers would be forced to buy in the absence of any other option available to them. Their continuing dominance and their direct dealings with farmers by giving attractive prices in the beginning will cripple our mandis and markets, which form part of our rural economy”, the report said.

Once such mandis are eliminated, the big foreign retail giants will manipulate prices and farmers would be forced to sell their products at a low price dictated by them. “Our own squeezed out retailers and all those associated with the markets and retail trade would lose their livelihood and become jobless”, the report added.

The panel has recommended that an institutional monitoring mechanism is essential to remove any unwarranted consequences of this policy. The Committee concurs with the recommendation of the Parliamentary Committee on Commerce in this respect, which suggested that “There is a need for setting up of a Retail Regulatory Authority to look into the problems and act as a whistleblower in case of anti-competitive behaviour and abuse of dominance.”

Keeping in mind the observations of the PM's Task Force, the committee is of opinion that the FDI for retail may not have beneficial impact on the medium and small enterprises (MSME) sector. The report says that the committee is also cognizant of the recent media reports suggesting that the expected investment in multi-brand retail has not come yet and the retail companies are negotiating with the government to dilute sourcing norms. The Committee cautions against any such dilutions. “The committee feels that without efficient regulatory framework, this policy will not give intended benefits to the MSME sector, instead it may imperil its very survival”, it said. 

New Delhi, July 23
The Group of Ministers (GoM) headed by Finance Minister P. Chidambaram will meet early next week to look at measures that can be taken to revive the two public sector telecom companies — BSNL and MTNL.

The GoM comprises Telecom Minister Kapil Sibal, Commerce and Industry Minister Anand Sharma, Planning Commission Deputy Chairman Montek Singh Ahluwalia, I&B Minister Manish Tewari and Minister of State in the PMO V Narayanasamy.

This would be the second meeting of the GoM and would take up the measures needed to rejuvenate the two loss-making telecom PSUs.

The DoT had in the last meeting put up a series of measures, including financial support for both public sector units, especially spectrum-related, to the tune of Rs 22,964 crore, preference to them for providing services to government departments and entry of these PSUs in broadcast segment, among others.

In the last meeting on June 12, the DoT had also presented the position of both BSNL and MTNL and requested for grant of Rs 22,964 crore to meet its liabilities.

The two have been piling up losses in the past few years in the wake of increased competition from private sector operators and lack of modernisation and that has led to a major drain on its subscriber base.

MTNL posted a loss of Rs 5,321.12 crore for 2012-13, compared to Rs 4,109.78 crore in 2011-12 while BSNL posted loss of around Rs 8,198 crore for 2012-13, compared to Rs 8,851 crore in 2011-12.

New Delhi, July 23
The government will get an additional Rs 14,900 crore by way of royalties and taxes on the incremental gas price accruing to state-owned producers ONGC and Oil India in 2014-15 fiscal, Goldman Sachs has said.

The additional revenue will be more than Rs 14,600 crore incremental fertiliser subsidy the government will have to bear on account of doubling of natural gas price to $8.4 per million British thermal unit from April 1, 2014, it said in a report.

"We note about 65 per cent of incremental gas revenue from a price hike would flow back to the central and state governments as royalties, VAT, taxes and dividend, and calculate this amount to be Rs 14,900 crore in FY15," it said.

"This would be higher than the incremental fertiliser subsidy of Rs 14,600 crore." Of the gross incremental gas price of USD 4.70 (after including VAT), 50 cents would go towards payment of 12 per cent VAT and other 38 cents in royalties to the Central government. — PTI

New Delhi, July 23
Consumer confidence in India declined during the second quarter of this year putting it on third position globally with concerns of rupee devaluation and continuing inflation bothering urban Indians, according to global information and insights provider Nielsen.

As per a global consumer confidence index study by Nielsen, India which was ranked second in first quarter of 2013 has now slipped to the third most optimistic country, after Indonesia and the Philippines.

"India has slipped to the third most optimistic country, after Indonesia and the Philippines indexed at 124 and 121, respectively," the survey said.

Consumer confidence in India was indexed at 118 in Q2 2013, a two-point decline from Q1 2013 (120), and a one-point decrease from Q2 2012 (119).

"The dip in confidence over the past six months reflects the concerns of the devaluation of the rupee and the continuing inflation for urban Indians," Nielsen India Region president Piyush Mathur said. — PTI

New Delhi, July 23
The world's largest retailer, Walmart, has expressed its inability to the government on meeting the sourcing norm in the multi-brand segment that requires 30 per cent procurement from small industries, stating it can procure only about 20 per cent.

As per sources, the representatives of the company had met Department of Industrial Policy and Promotion (DIPP) officials in the second week of this month and informed about the company's stand on the contentious sourcing issue.

"Recently there was a meeting between Walmart and officials of DIPP. The company has said they will not be able to meet the mandatory 30 per cent sourcing norm and can only source about 20 per cent," sources said.

However, they said it would be ‘really’ difficult for the government to ease this provision as ‘it is a politically sensitive issue’.

Walmart India spokeswoman said: "We are still very early in the process on FDI but are excited by the opportunity in front of us.

"We continue to work with the Government to better understand the rules that exist for FDI and we appreciate the Government’s willingness to consider our requests for clarity on conditions contained in the new FDI policy".

As per the foreign direct investment (FDI) policy for multi-brand retail trading, at least 30 per cent of the value of procurement of manufactured/processed products shall be sourced from Indian 'small industries'.

Several global retailers have raised their concerns over the sourcing restriction.

In a meeting with Commerce and Industry Minister Anand Sharma, the global chains have flagged the issue and have demanded to alter the condition to 'preferably' from 'mandatory' as in the case of single-brand retail. — PTI

New Delhi, July 23
ArcelorMittal, under attack from authorities for scrapping $12 billion Odisha steel project, today contested charges of being "non-starter" and lacking greenfield experience, saying it had made good progress until faced with "physical resistance and violence on the ground".

"ArcelorMittal made all the efforts it could to set up a greenfield project in Odisha... We were making good progress until we faced physical resistance and violence on the ground," a spokesperson of the world's largest steel maker said. — PTI

New Delhi, July 23
Gold today shot up by Rs 685 to hit an over one-month high of Rs 28,365 per 10 grams in the national capital region on brisk buying following the RBI imposing fresh import norms, amid firm global cues.

The trading sentiment bolstered after the RBI yesterday set stringent conditions for importers, linking inward shipments to future exports, a decision that will make it costlier. — PTI

New Delhi, July 23
The Supreme Court could not take up for hearing today an appeal filed by Reliance Telecom Ltd challenging the summons issued to ADAG chairman Anil Ambani and his wife Tina by a trial court.

RTL’s petition was listed for today before a Bench headed by Justice GS Singhvi. Justice Singhvi said since he was not holding court along with Justice KS Radhakrishnan today, the matter would have to be deferred.

BRIEFLY

Tata Motors’ Australia plan
Melbourne: Tata Motors is set to launch its light commercial vehicles in Australia through an agreement with a local distributor Fusion Automotive. Under the deal that gives Fusion Automotive exclusive marketing and distribution rights within the country, it will first start with a range of commercial vehicles in the fourth quarter of 2013, according to media reports. — PTI

Bond auction oversubscribed
Mumbai: Showing strong demand for government bonds despite a weakening rupee, foreign institutional investors (FIIs) have put in bids worth over $4.3 billion in an auction for debt securities worth $3.96 billion. The auction was held on Monday at the BSE and NSE for allocation of FII investment limits in government debt securities worth Rs 23,661 crore. — PTI

BHEL bags 2 NTPC contracts
New Delhi: BHEL said on Tuesday it has bagged two contracts worth Rs 132 crore from NTPC for executing two solar power projects at Unchahar in Uttar Pradesh and Talcher in Odisha. "BHEL has won turnkey contracts for setting up two eco-friendly Grid-Connected Solar Power Plants of 10 MW capacity each at Unchahar (UP) and Talcher in Odisha," it said. — PTI

L&T Finance net up 20%
Mumbai: L&T Finance Holdings, the financial services arm of L&T, on Tuesday reported a 20 per cent rise in its consolidated net profit at Rs 144.9 crore in the June quarter. Net profit of the company stood at Rs 120.67 crore during this period of the previous fiscal. — PTI