The decision of the G7 leaders to intervene in the currency markets to curb the yen’s rise supported markets worldwide
The local market is likely to open in the green as Japan stepped up efforts to restore power at a damaged nuclear power plant. The development boosted markets in Asia, which were trading in the positive zone in early trade on Friday. Overnight Wall Street closed with decent gains on easing of worries in Japan and a fall in initial jobless claims. The SGX Nifty was 13 points higher at 5,492 compared to its previous close of 5,479.
The market opened lower on Thursday, tracking the Asian markets that were trading in the red on concerns over developments in Japan and West Asia, and their impact on the global recovery. During the day, the Sensex hit a high of 18,354 and the Nifty went up to 5,510 before the announcement of the credit policy. But after the credit policy announcement the Sensex went down to hit a low of 18,104 and the Nifty was down to 5,435. Eventually, the Sensex closed at 18,150, down 209 points and the Nifty closed at 5447, a loss of 65 points.
Markets in the US closed higher on Thursday, breaking the three-day declining streak after the Group of Seven (G7) leaders suggested intervention in the currency market to curb the strengthening yen. Japan’s efforts to restore power supply to a damaged nuclear power plant supported investor sentiment.
In economic news, the Labor Department said on Thursday its Consumer Price Index rose 0.5% last month, the largest gain since June 2009, after increasing 0.4% in January. Core CPI—excluding food and energy—rose 0.2% after a similar rise in January. On the other hand, initial claims for unemployment benefits fell 16,000 to a seasonally adjusted 385,000 last week, in line with expectations, hinting at a strengthening in the labor market.
The Dow gained 161.21 points (1.39%) at 11,774.51. The S&P 500 rose 16.81 points (1.34%) at 1,273.69 and the Nasdaq added 19.23 points (0.73%) to close at 2,636.05.
Markets in Asia were in the positive terrain in early trade on Friday after G7 leaders agreed to intervene in the currency market to curb the rise in the yen even as Japan stepped up efforts to restore power at a damaged nuclear power plant, easing fears of radiation. The positive outlook in Japan also supported gains in other markets across the region.
The Shanghai Composite was up 0.63%, the Hang Seng gained 0.40%, the Jakarta Composite rose 0.64%, the KLSE Composite added 0.15%, the Nikkei 225 surged 1.77%, the Straits Times rose 0.18%, the Seoul Composite surged 0.87% and the Taiwan weighted advanced 1.08% in early trade.
However, developments in Libya and the Middle East remains a cause for concern as crude prices rose once again. The United Nations Security Council on Thursday voted to foil Libyan leader Muammar Qaddafi’s air force and to grant military authority to the US and its allies to protect civilians in the trouble nation.
US crude for April delivery on the Nymex settled up $3.44, or 3.51%, at $101.42 a barrel on Thursday, after rallying to $101.99. It was also the biggest one-day percentage gain. Brent crude for May delivery advanced $4.30, or 3.9%, to $114.90.
Back home, the Union Cabinet has approved the tabling of a revised Pension Fund Regulatory and Development Authority (PFRDA) Bill in the current session of Parliament. It has also decided to push for the passage of the State Bank of India (Subsidiary Banks Laws) Amendment Bill, 2009 in this session, which is to end on 25th March.
The PFRDA Bill seeks to grant statutory status to the pension sector regulator, while the SBI (Subsidiary Banks Laws) Bill would enable the five associate banks of SBI to raise their capital by issuing equity shares through the public or preferential allotment/private placement.
This is the third time it has lowered the export price since lifting the ban on exports last month
New Delhi: The government has slashed the minimum export price for onions to $275 a tonne from the previous $350 a tonne. This is the third time in a month that the minimum export price has be lowered.
"The minimum export price (MEP) for onions other than Bangalore Rose onions and Krishnapuram onions will be $275 per metric tonne FOB (freight-on-board)," the Directorate General of Foreign Trade stated in a notification today.
On 1st March, the government lowered the MEP from $600 a tonne to $450 a tonne, and again on 8th March to $350 a tonne. This was after it had withdrawn the ban on exports
Last month, the government lifted a ban on onion exports that was imposed to curb the extraordinary price rise after onion crop was destroyed in unseasonal rain. But it pegged the export price at a high $600 a tonne to minimise the quantity of exports, towards checking domestic prices. The MEP for Bangalore Rose and Krishnapuram onions was $1,400 per tonne.
Onion production in the country is likely to be around 10.5 million tonnes in 2010-11, down from 12 million tonnes last year.
While the recent devastating earthquake and tsunami will have an impact on the automobile component industry, M&M sales are not likely to be affected, the company's automotive division president Pawan Goenka said
Mumbai: Auto major, Mahindra & Mahindra (M&M) today said there would be an impact on auto component supplies this month due to the calamity in Japan but it will not impact the sales of the company, reports PTI.
"Yes, imports of some automobile components from Japan are likely be affected this month (March) because of the recent earthquake and tsunami in Japan. But I do not think it (Japan situation) will have an impact on the sales of our company," M&M Automotive president, Pawan Goenka, told reporters here.
The Japan earthquake and tsunami have been devastating for the automobile industry and also hit the component supply industry.
Mr Goenka, who has been appointed as chairman of South Korea's Ssangyong Motor Company (SYMC) said the company plans to set up assembly unit for SYMC vehicles at Chakan near Pune by end-this year.
"We are planning to set up assembly unit for SYMC vehicles at Chakan near Pune by 2011," he said, adding the investment would be less than Rs100 crore.
Mahindra has taken control of the South Korean carmaker after buying a 70% stake in it.
M&M, which emerged as the preferred bidder for SsangYong in August 2010, will now hold a 70% stake in SYMC, for which it has shelled out $463-million (about Rs2,105 crore).
The company plans to launch two vehicles-the Rexton and Korando-C-in India by end-this year and also plans to set up operations of its finance arm, Mahindra Finance, in Korea to boost sales of Ssangyong.
"We will launch Rexton and Korando-C in India by 2011," he said, adding "We will send a team to Korea soon for setting up of our finance arm there."
"There are some regulatory issues to be sorted out before we can set up our finance arm there," he said.
Mr Goenka described today's rate hikes by the Reserve Bank of India (RBI) as "a matter of concern" as it could affect automobile sales.
The central bank today upped both its repo and reverse repo rates by 0.25% each to 6.75% and 5.75%, respectively.
Over the last few months, carmakers have jacked-up prices of cars following a rise in input costs.
"Commodity prices have been increasing of late and now we have the Japan calamity which will affect supplies of auto components. The RBI's rate hikes coming at this time is a matter of concern," Mr Goenka said.