According to early trends, the AIADMK looked like knocking out the ruling DMK in Tamil Nadu, as the Trinamool Congress appeared set to sweep away the Left Front in West Bengal. The Congress-led United Democratic Front has the edge over the Left in Kerala
The favourites took sharp leads in the counting of votes taken up this morning for five states that went to the polls in the past month, according to early trends available.
In West Bengal, Mamata Banerjee’s Trinamool Congress (TMC) looked like sweeping the ruling CPI(M)-led Left Front out of power after 34 years, with a lead in three-fourths of the constituencies for which trends were available at 10am. The TMC-Congress alliance was ahead in 180 of the nearly 250 constituencies. West Bengal has a 294-member legislative assembly. TMC had only 31 members in the previous house and the Congress just 20, compared to the CPI(M)’s 176.
In Tamil Nadu, the other state that was tipped to see a change of government, J Jayalalitha’s All India Anna Dravida Munnetra Kazhgam (AIADMK) was ahead in 118 of the 155 constituencies for which trends were available. The opposition AIADMK-led front had 69 members, as against the 163 of the DMK-Congress in the 234-member state legislative assembly.
However, in Kerala, it was neck-and neck with the ruling Left Front ahead in 64 constituencies against 66 for the Congress-led United Democratic Front (UDF). The state has never returned a ruling party to power, but this time the Left Democratic Front (LDF) was expected to make a better fight of it. The LDF had 98 seats against the UDF’s 42 in the previous state assembly.
In Assam and Puducherry, the ruling Congress party appeared to be making good gains to be able to strengthen its position further in the two states. In Assam, the Congress was leading in counting in 50 constituencies, compared to five for the Asom Gana Parishad (AGP)-Bharatiya Janata Party (BJP) alliance for which trends were available. The Congress-led government had 53 members in the 126-member state assembly. In Puducherry, the Congress was leading in 10 constituencies of the 16 for which trends were available in the 30-member house of representatives.
Macro-economic indicators reveal a slowdown in growth, going forward
The local market is likely to open range-bound following weak industrial output numbers which were announced on Thursday. Besides, elections results from four states and one Union Territory set to be announced today, will keep investors keep investors guarded.
On the global front, the US markets closed with gains on Thursday as a decline in the dollar led to higher commodity prices and boosted the appetite for riskier assets. Markets in Asia were mixed in early trade today as China raised its bank reserve requirements by 50 basis points. The SGX Nifty was 6.50 points higher at 5,493 compared to its previous close of 5,486.50.
The market opened lower on Thursday, tracking the weak Asian markets in early trade and concerns about the industrial output data for March and weekly food inflation numbers. The Sensex opened at 18,525, down 60 points from its previous close and the Nifty was 27 points lower at 5,538. The subdued trend prevailed till the mid-morning session, when a small bounce-back was noticed taking the market to the day's high. However, even after the Index of Industrial Production (IIP) data turned out better than expected, the market dipped into the red.
An easing of the food inflation numbers for the week ended 30th April also did not help the market. The slide continued through the post-noon session with the pressure on metals, banking and capital goods sectors. A weak opening on key European bourses also added to the woes.
The indices touched their intra-day lows at around 3.05pm with the main indices at 18,314 and 5,476. With the exception of the BSE Realty index, all sectoral indices were in the negative.
At the end of trade, the Sensex closed 249 points lower at 18,336 and the Nifty was down 79 points at 5,486. With yesterday’s decline, a fresh downturn has started that may take the Nifty to 5,400 and in case of extreme selling to 5,250.
Markets in the US ended higher on Thursday as a rise in the dollar boosted commodity prices and lured investors to riskier assets. The gains were led by healthcare and commodity stocks Shares of Merck & Co gained 1.6% and Tyson Foods surged 4.6%. On the other hand, financial stocks fell after Rochdale Securities banking analyst Dick Bove put a “sell” rating on Goldman Sachs Group and reduced the price target on the stock to $120 from $163, citing litigation worries. Goldman shares declined 3.5% following the development.
In economic news, weekly initial claims for jobless benefits fell 44,000 to 434,000, while retail sales rose 0.5%, below analysts’ estimates for a 0.6% rise. Producer-price inflation was also a little higher than expected, rising 0.8%.
Among commodities, gold futures edged higher, while silver pared a sharp drop to finish down 71.60 cents, or 2%, at $34.7930 an ounce. Crude oil futures fell as low as $95.25 a barrel before turning around to push back above $100 a barrel. Oil finished up 76 cents, or 0.8%, at $98.97, off sharply from a close of nearly $104 a barrel on Tuesday, and down 13% for May.
The Dow gained 65.89 points (0.52%) at 12,695.92. The S&P 500 added 6.57 points (0.49%) at 1,348.65 and the Nasdaq rose 17.98 points (0.63%) at 2,863.04.
Markets in Asia were mixed in early trade on Friday reacting to China’s rate tightening news. The People’s Bank of China increased banks’ reserve requirements by 50 basis points, the eighth time since October in an attempt to ease inflationary pressures. Also, the Bank of Korea left its key policy rate unchanged the second month in a row.
The Shanghai Composite gained 0.26%, the Jakarta Composite rose 0.30%, the KLSE Composite climbed 0.41%, the Straits Times advanced 0.32% and the Taiwan Weighted was up 0.19%. On the other hand, the Hang Seng declined 0.32%, the Nikkei 225 fell by 0.24% and the Seoul Composite was 0.36% lower in early trade.
Back home, the government on Thursday exempted NBFCs, banking, insurance and power companies from filing their annual documents, including profit and loss accounts, in electronic format XBRL.
Last month, the ministry of corporate affairs (MCA) had said that all big companies would be required to file their annual result of 2010-11 in XBRL to ensure greater transparency and improvement in corporate governance.
The MCA circular released yesterday said that all companies—other than the above—listed in India and their subsidiaries, having paid up capital of Rs5 crore and above, or a turnover of Rs100 crore or above will have to file their document in XBRL format.
Chief economic advisor Kaushik Basu also said the country's headline inflation is likely to be around 8.5% in April below the 9% average projected by the RBI for the first half of 2011-12
New Delhi: The finance ministry today said the 9% growth projection for this fiscal may have to be revised on account of the high global commodity prices and the ongoing debt crisis in Europe, reports PTI.
"It is true the way the global scenario has moved… And in Europe there has been deterioration. We are worried about Greece and the oil price which, despite softening over the last week, has been very high.
"In this scenario it is likely we are going to downgrade growth projection a little bit," chief economic advisor Kaushik Basu told reporters here.
Mr Basu also said the country's headline inflation is likely to be around 8.5% in April (the data of which will be released next week) below the 9% average projected by the Reserve Bank of India (RBI) for the first half of 2011-12.
His comments came a day after finance minister Pranab Mukherjee said it would not be possible to achieve the targeted growth rate of 9% in 2011-12 because of rising global commodity prices.
"Due to volatility in international commodity prices and other supply constraints, it may not be possible to achieve the growth rate of 9% (+/- 0.25%) for the current financial year," Mr Mukherjee had said yesterday.
The Indian economy grew by 8.6% during 2010-11.
"Overall inflation that we will get for the month of April now looks like it will be somewhere between 8.5% and 8.6% which is a decent drop," Mr Basu said.
This is below the 9% average inflation projected for the first half of this fiscal by the RBI in its monetary policy released earlier this month.
Headline inflation was 8.98% in March, much above the government's comfort zone of around 5%.
Though rising food prices were the main contributors to inflationary pressure in 2010, recent months have witnessed a rise in prices of core (non-food) items. Core inflation was above 7% in March.
The RBI had hiked interest rate by 50 basis points earlier this month to tame demand and control inflation. It was the ninth hike in short-term lending and borrowing rates made by the central bank since March 2010.
Mr Basu, however, added that other fiscal targets remained on track.
"I don't think anything has happened to change our view... We want to hold on to 4.6% (fiscal deficit) and borrowing at Rs3,40,000 crore. We want to hold on to those targets. Nothing has happened as yet to require a change in these positions," he said.