New Delhi, September 3
Fears of a rating downgrade and rising tensions in Syria led to a massive selloff in the BSE Sensex which plunged over 651 points, its biggest fall in over a fortnight. The rupee was also in a downward spiral breaching the 68-mark versus the US dollar before closing at 67.63, down a whopping 163 paise.

The bloodbath in stock markets saw investors becoming poorer by a whopping Rs 1.63 lakh crore as nearly 1,500 stocks on the BSE platform ended the trade as losers.

After gaining 918 points in the last four sessions, Sensex plunged by 651 points, or 3.45 per cent to 18,234 after hitting the day's low of 18,166.17.

The Syrian crisis assumed panic proportions after there were reports quoting Russian news agencies said the country's missile early warning system had detected the launch of two missiles from the central part of the Mediterranean Sea fired towards the Sea's eastern coastline, amid growing fears of Western military action in Syria.

Another factor that exacerbated the negative sentiment was marquee foreign brokerage, Goldman Sachs lowering India's growth forecast for the current fiscal to 4 per cent from 6 per cent earlier and is expecting the rupee to touch 72 against the US dollar in next six months.

The latest downgrade is among the spate of downgrades by foreign brokerages which have now pegged this year’s GDP growth target at around 4 per cent. The first quarter GDP growth rate came in at 4.4 per cent.

In the near term, Goldman Sachs sees risks as the economy is likely to need an adjustment in the current account and fiscal balances, and says it "may require below-potential growth for several more quarters to reduce inflation, before we can see an economic recovery".

The report further added that not only has data come in worse-than-expected in Q2 2013, the external funding pressure since early May was the major driving factor behind the GDP downgrade.

Sanjeev Prasad, senior executive director & co-head, Kotak Institutional Equities, said there are significant risks of slippage in both current account deficit and fiscal deficit targets set by the government.

“The government can resort to financial chicanery (postpone cash payments and burden the national oil companies with more subsidies) but that is unlikely to impress the markets (bond, currency and equity) or the rating agencies. Finally, the Government’s recent measures to attract capital flows have failed to excite investors as seen in continued large equity and debt outflows. Our assumption of $15 billion of capital inflows in FY14 is at large risk with this year’s outflows at $5.7 billion”. 

London, September 3
Slowdown in some large emerging economies, including India, will lead to sluggish global economic growth in the near term, notwithstanding improved prospects in the developed world, Paris-based think-tank OECD said today.

"Moderate recovery" is under way in most of the major advanced economies including Japan and the United Kingdom, said the Organisation for Economic Co-operation and Development (OECD). Growth has slowed in some of the large emerging economies, its interim economic assessment report added.

"One factor has been a rise in global bond yields — triggered in part by an expected scaling back of the US Federal Reserve's quantitative easing — which has fuelled market instability and capital outflows in a number of major emerging economies, such as India and Indonesia.

"Since they now account for a large share of the world economy, the slowdown in the emerging economies points to sluggish near-term growth globally, despite the pick-up in advanced economies," OECD said. — PTI

Mumbai, September 3
Microsoft Corp will buy Nokia Corp's struggling cellphone business for 5.44 billion euros ($7.2 billion), as the US-based firm tries to catch up in a fast-growing mobile market dominated by Samsumg and Apple.

Post deal, the nature of the two companies will change - Nokia will be just a network equipment maker after it exits from the mobile-phone business it once dominated, while the world's largest software marker will move aggressively into hardware.

Nokia's Canadian boss Stephen Elop, who ran Microsoft's business software division before moving to Nokia in 2010, will now return to the US firm as head of its mobile devices business.

As part of the deal for Nokia's devices-and-services business, Microsoft will bring aboard 32,000 Nokia employees, including Elop.

Elop is being considered a successor to Microsoft's retiring CEO Steve Ballmer, who is trying to remake the US firm into a gadget and services company like Apple before he departs, after disastrous attempts so far to compete in mobile devices.

Microsoft will pay 3.79 billion euros for Nokia's devices unit and 1.65 billion euros for patents, according to a statement from the firms. — PTI

New Delhi, September 3
Industry body CII has submitted a 10-point agenda to revive the country's economic growth, which includes measures like containing the current account deficit (CAD), trimming the fiscal deficit, and introducing the much-awaited Goods and Services Tax.

"While the Government has outlined targets for CAD and fiscal deficit, specific steps are urgently required to stimulate growth and to improve investor sentiments," CII president Kris Gopalakrishnan said. — PTI

New Delhi, September 3
The government today cleared a major pharma FDI transaction with the Rs 5,168-crore deal of the US-based Mylan Inc for acquiring Bangalore-based pharma firm Agila Specialties, a subsidiary of Strides Arcolab.

The decision was taken at a meeting of the Cabinet Committee of Economic Affairs (CCEA) held here, Information and Broadcasting Minister Manish Tiwari told reporters.

The acquisition, however, is subject to certain conditions. After the completion of acquisition process, Mylan has to maintain the investment level in R&D in value terms for five years at absolute quantitative level at the time of induction of FDI, according to sources.

Further, the US-based company would also have to maintain the production level of National List of Essential Medicines (NLEM) drugs and consumerables and their supply to domestic market at the time of induction of FDI for the next five years at an absolute quantitative level.

The benchmark for this level would be decided with reference to level of production of NLEM drugs in three years immediate preceding to year of induction of FDI.

Since the investment proposal was of over Rs 1,200 crore, it came up before the Cabinet Committee on Economic Affairs for final approval after it was cleared by the Foreign Investment Promotion Board last month.

In February this year, Mylan had announced that it would acquire entire issues and outstanding share capital of Agila Specialities - a subsidiary of pharma firm Strides Arcolab.

London, September 3
US telecom giant Verizon and Vodafone announced yesterday that the British company would sell its 45-per cent stake in their joint venture Verizon Wireless for $130 billion (99 billion euros).

The blockbuster deal — which would be one of the biggest transactions in corporate history — would allow Vodafone to bounce back from hefty losses, pay down debt, make new acquisitions and return money to shareholders, according to analysts.

It would also mark the group's exit from the United States market and inject several billion euros into the British economy that is struggling to lift out of the doldrums.

The company's share price jumped 3.59 per cent today to close at 213.65 pence before the announcement the deal had been reached, while London's FTSE 100 index rose 1.54 per cent overall.

Vodafone said it would return $84 billion of the funds it receives back to shareholders and plough over $9 billion into organic investments over the next three years to improve its networks and services.

Vodafone said shareholders would receive all Verizon shares and nearly 24 billion in cash "totalling $84 billion, equivalent to 112p per share and representing 71 per cent of the net proceeds" from the transaction.

Vodafone Group Chairman Gerard Kleisterlee said the company's investment in Verizon Wireless has created a great deal of value for shareholders and "Verizon's offer now provides us with an opportunity to realise this value at an attractive price." — AFP

Mumbai, September 3
Market regulator SEBI today asked stock exchanges to calculate circuit limits the maximum permissible movement allowed to Sensex or Nifty in a trading session — on a daily basis as against the current practice of doing the same on a quarterly basis.

Currently the stock exchanges calculate the circuit filters on the basis of the level attained by Sensex and Nifty at the end of every quarter and the same limits are applicable for every day of trade for the next three months.

The new calculation would apply for 10 per cent, 15 per cent and 20 per cent circuit limits in Sensex and Nifty, the two benchmark indices of Indian stock market, with effect from October 1, 2013.

While 10 per cent and 15 per cent limits result into temporary trading halts, a 20 per cent movement triggers into trading getting halted for the entire day. These limits were fixed as per the closing value of Sensex at the end of previous quarter, April-June 2013. — PTI