Petrol price hike fails to lift rupee, diesel eyed

The rupee fell to a fresh record low on Thursday as a sharp increase in petrol prices failed to lift investor sentiment even as it fuelled expectations New Delhi might soon take the more politically fraught step of raising diesel prices.

India’s hefty subsidy bill for diesel, kerosene and LPG is a budget-buster that forces heavy government borrowing and weighs on investor sentiment. High global energy prices and a declining rupee, meanwhile, exacerbate the current account deficit in a country that imports 80 per cent of its oil.

Oil companies lose about 14 rupees ($0.25) per litre on diesel, which is much more widely used than petrol, and a weakened government has been unable to push through a price rise or allow full market pricing in the face of political opposition, including from within the ruling coalition.

“Petrol is a low-hanging fruit, as the challenges will come when the government would be deciding on diesel, liquefied petroleum gas, and kerosene, because this is where the subsidies are larger,” said Shubhada Rao, chief economist at Yes Bank in Mumbai. “Signal wise, it is a step in the right direction.”

A panel of ministers is due to meet on Friday to discuss diesel, LPG and kerosene prices, according to unconfirmed reports, although full deregulation is not expected.

“We think the government’s ability to implement this price hike could raise market expectations about price hikes in other more critical fuels. While diesel prices in particular would need immediate attention, significant price increases are unlikely, in our view,” Goldman Sachs wrote on Thursday.

The country’s three big state oil retailers said late on Wednesday they would raise the price of petrol by about 11.5 per cent.

The rupee hit an all-time low of 56.40 to the dollar on Thursday, continuing a slide that has seen it lose 13.8 per cent from a February peak as global risk aversion hits India especially hard due to its twin deficits and sluggish policymaking, all of which has scared off investors.

While the Reserve Bank of India has taken administrative measures and sold dollars in recent weeks to defend the currency, it has refrained from taking bolder steps and appears resigned that more aggressive intervention in the market could prove futile.

“Since the US dollar is gaining strength against the major counterparts like euro, we can see rupee weakening further. We expect a 1-3 months range of 54-57 with overall weakening bias in rupee,” Abhishek Goenka, CEO of India Forex Advisors, wrote in a note on Thursday.

Economists have been downgrading their growth forecasts for Asia’s third-largest economy. Standard Chartered now expects India to report annual growth in the March quarter slowed to 6 per cent, from 6.1 per cent in the previous quarter and below earlier expectations of an improvement to 6.5 or 7 per cent.

Facebook raises IPO price band to $34-$38 a share

Facebook has raised the price band for its initial public offering to $34-$38 a share from the previous range of $28 to $35.

Facebook, already planning the largest-ever Internet-company IPO, would raise as much as $12.8 billion and seek a valuation of as high as $104.2 billion, based on the upper end of the new range.

Chief executive officer Mark Zuckerberg, in a roadshow to pitch the IPO to investors, may be winning over skeptics who initially balked at buying the shares, said Erik Gordon, a professor at the University of Michigan’s Ross School of Business, “Raising the range would be the best signal of what the underwriters are hearing from their institutional buyers who have seen the roadshow,” Gordon said. “Despite the doubts, the buyers like what they’re hearing.”

At the upper end of the new range, Facebook would be valued at 26 times trailing 12-month sales, more than double Google’s valuation when the search-engine operator went public in 2004. The company was already in a position to surpass United Parcel Service Inc. as the most valuable company in history to go public in the US, based on market capitalization, data compiled by Bloomberg and Dealogic show.

Facebook plans to stop taking orders on Tuesday for its initial public offering, two days ahead of schedule, a person with knowledge of the transaction said. The offering of 337.4 million shares is oversubscribed, according to people with knowledge of the matter, who declined to say by how much orders exceeded the amount of stock being offered.

“They’re swamped with the orders that are in,” said Jon Merriman, chief executive officer at investment firmMerriman Holdings Inc. in San Francisco. “They just need time to determine the price. They can send the message – the books are closing, send in your orders now.”

Some institutional investors had balked at buying into Menlo Park, California-based Facebook over concern about the site’s growth prospects, people with knowledge of the matter said last week. In a Bloomberg Global Poll of more than 1,250 investors, analysts and traders, 79 per cent said Facebook doesn’t deserve such a high valuation.

“Facebook’s pricing seems to be quite expensive,” said Yves Maillot, head of investments at Robeco Gestions SA in Paris, who helps oversee $6.8-billion assets. The IPO is also pressing ahead in a “very difficult environment for the US equity market.”

Sensex down 84 points in early trade

The BSE benchmark Sensex declined by over 84 points in early trade Friday on sustained selling by funds and retailers, triggered by disappointing corporate earnings amid a weak trend on Asian bourses.

The 30-share barometer, which has lost almost 168 points in the last two trading days, moved down further by 84.35 points, or 0.49 %, to 17,066.84.

Similarly, the broad-based National Stock Exchange Nifty index declined by 24.75 points, or 0.48 %, to 5,163.65.

Auto, realty and banking sectors were major losers, dragging the Sensex down.

Brokers said fresh selling by funds and retailers as sentiment remained bearish on disappointing Q4 earnings, a weakening rupee and subdued trend on the Asian bourses.

In the Asia region, Hong Kong’s Hang Seng index fell by 0.48 %, while Japan’s financial markets remained closed today for a public holiday.

The US Dow Jones Industrial Average ended 0.47 % lower in yesterday’s trade on weak economic data.

Sensex opens volatile: RIL up 0.5 per cent, Infy falls 1 per cent

The BSE Sensex and NSE Nifty started of trade with mild gap down on first day of the week, but immediately rebounded. Overall it was a volatile opening ahead of expiry on Thursday.

The BSE benchmark was up 37 points to 17,410.56 and the NSE benchmark went up 12.65 points to 5,303.50.

Index heavyweight Reliance Industries dropped 0.6 per cent initially, but bounced back with 0.5 % gains. Company surprised the street by reporting gross refining margin at USD 7.6 a barrel versus USD 6.8 a barrel QoQ while its net profit fell 4.6 % to Rs 4,236 crore during the same period.

Software company Infosys lost 1 % after The Economic Times reported that the foreign brokerage firm CLSA sent letter to the company on performance.

Ambuja Cements, Sterlite Industries, JSPL and JP Associates too were under pressure. However, Cairn India was up 1 %, even after the company reported a fall of 11 % YoY and 3.35 % QoQ in its consolidated net profit of Rs 2,186 crore due to forex loss of Rs 217 crore versus Rs 38 crore YoY.

M&M, Maruti, Hero Motocorp, BHEL and L&T were other gainers. The CNX Midcap rose 23 points to 7,649. About two shares advanced for every share declining on the National Stock Exchange.

IDBI Bank was up 2.5 % as its Q4 net profit increased to Rs 770 cr. from Rs 516 cr. (YoY).

Viceroy Hotels was up 3 % and Raymond was up 1.3 %.

Max India went up 3 % as The Economic Times reported that the company will sell Polypropylene biz for Rs 800 cr.

Sensex gains 53 points in early trade

Extending gains for the fourth straight session, the BSE benchmark Sensex increased by another 53 points in early trade on Thursday on sustained buying by funds and retail investors.

The 30-share barometer, which had gained nearly 300 points in the previous three sessions, up by 53.18 points, or 0.31 %, at 17,445.57.

All sectoral indices, except capital goods, were trading in the positive zone with gains of up to 0.69 %.

The wide-based National Stock Exchange index Nifty moved up by 15.90 points, or 0.30 %, to 5,315.90.

Brokers said continued buying by funds and retail investors, driven by a cut in lending rate by RBI on Tuesday amid expectations of encouraging Q4 earnings by corporates, mainly influenced the sentiment.

In the Asian region, the Hong Kong’s Hang Seng Index increased by 0.17 %, while Japan’s Nikkei index shed 0.91 % in morning trade Thursday. The U.S. Dow Jones Industrial Average ended 0.63 %  lower in Wednesday’s trade.

Infosys plan to hire 35,000 employees in FY’13

India’s second largest IT company Infosys on Friday said it will hire 35,000 people this fiscal, including 13,000 for its BPO operations.

“We are going to add 35,000 more people next year, which includes 13,000 people for the BPO operations,” Infosys member of the board and chief financial officer V. Balakrishnan said.

Infosys and its subsidiaries included 10,676 workers in the fourth quarter of FY12, while the net addition during the period stood at 4,906 people.

Its total employee strength was 149,994 as on March 31.

Infosys reported a 27.4% jump in consolidated net profit at Rs 2,316 crore for Q4 FY12, as against Rs 1,818 crore in the January-March quarter of FY11.

The company’s rate of attrition (excluding subsidiaries on last twelve month basis) has come down slightly to 14.7% in the reported quarter against 15.4% in the October-December quarter of 2011-12.

Infosys also plans to hire about 1,200 in the US.

“In the last two years, we hired 1,200 people onsite in the US each year (who were) local hire. We are going to continue with that this year and will hire 1,200 people…local hire in the US,” Balakrishnan said.

Over the past months, anti outsourcing promotion against Indian technology companies has gained momentum in the US and European Union—main markets for the country’s software and IT service companies.

Politicians and governments in these countries have been objecting to off shoring of work by their companies to countries like India so as to retain jobs back home. Industry experts have called such criticism a political rhetoric.

Most Indian technology companies have been consistently hiring more and more in the western countries over the past few years to blunt the criticism of ‘taking away’ jobs.

Of late, the proportion of the recruit in the US and the EU has seen a marked increase.

Sensex Gains 157 Points on Low-Level Buying

The BSE benchmark Sensex recovered by over 157 points in early trade today on fresh purchasing by funds and retailers at attractive lower levels.

The 30-share barometer, which had lost almost 200 points in the past two sessions, recovered by 157.08 points, or 0.92 percent, to 17,215.69.

All the sectoral indices were trading in positive territory with gains of up to 1.56 percent.

The wide-based National Stock Exchange index Nifty also moved up by 44.65 points, or 0.86 percent, to 5,223.50.

Brokers said emergence of buying by funds and retail investors at existing lower levels amid start of new monthly settlement in the derivatives segment, helped Sensex to trade in the positive zone.

They, however, added that a weakening trend on other Asian bourses restricted buying activity here.

Meanwhile, in Asian region, Hong Kong’s Hang Seng index was being quoted 0.87 percent lower, while Japan’s Nikkei shed 0.59 percent in early trade today.