Following the US credit rating downgrade by Standard and Poor's, gold zoomed in the overseas market as investors shifted funds from other options like equities and dollar to gold
New Delhi: Gold prices breached the crucial Rs25,000-level for the first time ever in history here, tracking strong trends in global markets where financial uncertainty increased the metal's appeal as a safe investment haven, reports PTI.
With international prices rallying amid concerns that the global economy is slowing, gold in the bullion market here gained Rs460 to set an all-time record of Rs25,230 per 10 grams.
Traders said heavy buying by stockists and investors in tandem with rising global trend, mainly led to the prices touching record level in spot as well as futures trade here.
In addition, some local buying ahead of marriage season also boosted the sentiment, they added.
Gold of 99.9% and 99.5% purity surged by Rs460 each to Rs25,230 and Rs25,110 per 10 grams, respectively.
Sovereigns followed suit and shot up by Rs200 to a new peak of Rs19,800 per piece of eight grams.
Following the US credit rating downgrade by Standard and Poor's (S&P), gold zoomed in the overseas market as investors shifted funds from other options like equities and dollar to gold.
After S&P cut the US credit rating from AAA to AA+, gold prices surged by $44.40 to $1,707.80 an ounce in Singapore amid slump in equities and the dollar.
Silver ready gained by Rs1,300 to Rs59,900 per kg on increased offtake by industrial units and coin makers and weekly-based delivery gained Rs1,605 to Rs59,980 per kg.
Silver coins flared up to Rs66,000 for buying and Rs67,000 for selling of 100 pieces from previous level of Rs64,000 and Rs64,500, respectively.
Employees' costs have shot up for the engineering company to Rs94 crore in the April-June 2011 period. Sales, however, have declined by 20% to about Rs280 crore
The cost of employees for Alstom Projects India increased by nearly a third in the first quarter of the current financial year, but strangely this has not produced any growth in sales which in fact decline by nearly 20% in the three-month period.
According to the figures announced by the company a few days ago, the payout for employees shot up by 28%, or about Rs20crore, to Rs 94 crore in the April-June 2011 period from the previous corresponding quarter. However, sales declined from Rs346.41 crore in the first quarter of 2010-11 to Rs279.63 crore in the first quarter this year, a surprising decline for the engineering and power equipment company.
Understandably, the company's operating profit nosedived from Rs51 crore in the first quarter last year to just Rs5 crore in the period this year. It would make shareholders wonder whether the additional compensation and benefits for the workforce has been worth it at all.
The Alstom stock has lost about 20% year-to-date. The share closed at Rs550.10 on the Bombay Stock Exchange today. It is down 8% since the first quarter results were announced on 1st August, against the 7% fall on the Sensex in this period.
The multinational company also provides railway equipment and technology solutions.
It has been a similar story in the previous quarters. Wages grew by 22% in the quarter to December 2010 and by half in the March 2011 quarter even though the number of employees increased only marginally from 3,899 in March 2010 to 3,941 in March 2011. So, it's not as if the company has taken on additional hands.
Then, has the company been paying out quarterly bonuses? A look at the break-up of employee's costs indicates that salaries, wages and bonuses were up by 12% from Rs222 crore in the entire financial year 2009-10 to Rs249 crore in 2010-11. The contribution to provident fund increased by 49%.
There was a major increase in contribution towards 'workmen and staff welfare expenses'. The contribution to 'employee welfare' more than doubled from Rs21 crore in FY10 to Rs45 crore in FY11. Full year sales were lower by 11%, whereas operating profit increased by 4% over the period.
A close above 5,300 may mean respite from bears—for now
The market closed lower today on the impact of the downgrade in US sovereign credit rating over the weekend and fears that this could lead several economies into a recession all over again. Markets across the world fell sharply from the Asian markets to Europe. The decline in the domestic market was on a volume of 73.98 crore shares on the National Stock Exchange (NSE). Any gains from here on will depend on developments in the US and Europe in the days to come. A close above 5,300 on the Nifty would imply some meaningful gains.
The Nifty opened this morning with a deep cut of 128 points at 5,084 and the Sensex resumed 398 points down from the weekend close. IT and metal sectors led the fall early on. Assurances by policymakers over the weekend that India could withstand global pressures were in vain as sellers dominated the market.
The indices touched the day's lows in the first hour itself, as the sell-off intensified. The Nifty sank to 5,054 and the Sensex plunged below the 17,000-mark to 16,759, off by 157 points and 547 points respectively. The intra-day lows on the Nifty and the Sensex were at levels last seen on 11 June 2010.
However, investors saw a good opportunity at the lower levels and resorted to bargain hunting, lifting the indices upwards slowly. The market touched the day's high in noon trade, with the Nifty up to 5,204 and the Sensex touching 17,248, although in negative territory.
In the post-noon session, the market pared some gains again, as nervousness was evident on reports of weak US stock futures weighed down sentiments further. The Nifty finally closed at 5,119, down 93 points, and the Sensex finished trade at 16,990, a cut of 316 points. The market closed in the negative for the fifth straight day.
The advance-decline ratio on the National Stock Exchange (NSE) was 329:1381.
The BSE Mid-cap index declined 1.52% and the BSE Small-cap index tanked 2.23%.
The decline resulted in all sectoral indices closing lower today. BSE Realty (down 4.46%), BSE IT (down 4.33%), BSE TECk (down 3.60%), BSE Metal (down 3.50%) and BSE Power (down 1.62%) were the top losers.
Hero MotoCorp (up 4.03%), ONGC (up 2.35%), Mahindra & Mahindra (up 1.68%), Bajaj Auto (up 0.86%) and Hindustan Unilever (up 0.86%) managed to stay on top in the Sensex list. The main losers were DLF, Hindalco Industries (down 6.85% each), Tata Motors (down 6.51%), Infosys (down 4.73%) and TCS (down 4.49%).
Among the new entrants on the Sensex, Coal India shed 0.01% to close at Rs392.30, while Sun Pharma added 0.04% to end at Rs497.90.
Beating the reversal, Hero MotoCorp (up 3.85%), M&M (up 2.70%), Punjab National Bank (up 2.27%), ONGC (up 2.11%) and Ambuja Cement (up 2.01%) finished as the top gainers on the Nifty. Reliance Capital (down 7.68%), Hindalco (down 7.52%), Reliance Power (down 7.31%), DLF (down 7.11%) and Tata Power (down 6.68%) were the major losers on the index.
Markets in Asia ended weak, even as world leaders worked towards stemming concerns of a fresh recession. G7 finance leaders pledged to take whatever action was needed to stabilise markets, while the European Central Bank, in a statement, suggested it would buy Italian and Spanish bonds in a bid to stop the debt crisis from spreading further.
The over 7% dive in the Seoul Composite earlier today forced the Seoul bourse operator to suspend trading on the main exchange for five minutes.
The Shanghai Composite plunged 3.79%, the Hang Seng sank 2.17%, the Jakarta Composite slipped 1.82%, the KLSE Composite declined 1.80%, the Nikkei 225 tumbled 2.18%, the Straits Times tanked 3.70%, the Seoul Composite and the Taiwan Weighted both closed down 3.82%.
Back home, foreign institutional investors were net sellers of stocks worth Rs1,788.96 crore on Friday. On the other hand, domestic institutional investors were net buyers of equities worth Rs1,372.49 crore.
Rainbow Papers, as a part of its corporate social responsibility (CSR) activities, has decided to set up 'Rainbow Institute of Technology & Research' for imparting practical training in the field of paper manufacturing, power generation and other allied matters. The stock slipped 1.27% to Rs58.50 on the NSE.
Cholamandalam Investment & Finance Company has drawn up plans to raise Rs60 crore through two-year bonds at a coupon rate of 10.35% The company is among the top five NBFCs in the country operating in vehicle finance, home equity, corporate and mortgage finance segments. The scrip closed at Rs160, down 0.59% on the NSE.
India's largest lender, State Bank of India (SBI) expects to raise Rs23,000 crore through a rights issue by the end of the fiscal. The bank is also looking to raise lending rates by as much as 50 basis points this week. The government owns 59.4% in the bank and it needs to infuse around Rs14,000 crore if it wants to retain its 59% stake. The stock fell 0.84% to close at Rs2,216.10 on the NSE.