IRDA issues insurance demat norms

MUMBAI: Insurance buyers will soon be able to open demat or 'e-insurance' accounts for their contracts which will allow them to hold policies in electronic form. Having an -insurance account will reduce hassles for buyers as it does away with the need to provide age and address proof every time a policy is bought. It will also save insurers crores in printing and dispatching policies.

The move will bring in benefits similar to the efficiency gains in the capital markets after Sebi introduced dematerialization of equities. Dematerialization in capital markets speeded up transactions, dramatically reduced transaction costs and completely eliminated fraudulent transactions.

Taking a leaf out of the securities market, the Insurance Regulatory and Development Authority wants to create insurance repositories on the lines of securities depositories like the National Securities Depository or the Central Securities Depository. These repositories will be licenced by the regulator and connected to all insurance companies.

"This is one of the most positive steps which will impart efficiency and better customer service," said Sandeep Bakhshi, MD, ICICI Prudential Life Insurance. He said the benefits in terms of convenience to policyholders will be enormous while insurers will save in costs. Since the repository will consolidate all policies under a single account, the family will immediately come to know of the policies purchased by an individual in an emergency.

IRDA on Thursday issued guidelines for creating the insurance repositories and electronic issuance of policies. In the guidelines, the regulator said that it will grant licences to and regulate 'insurance repositories', which will act as service providers to life insurance companies.

The repository will give a unique number to every individual and all his policies will come under that account. It will hold all types of policies, including life, health, motor and group covers. The data maintained by the repository will include history of the claims data of the individual. It will also have the names of the beneficiary, assignees and nominees.

Dematerialized policies will be more liquid than paper policies as these contracts can be easily assigned. IRDA has said that whenever the policies are assigned, the assignee shall have the same rights as the policyholder. According to the IRDA guidelines, any insurance policyholder or a prospective policyholder can open an e-insurance account. Opening an account will require identity proof and address proof.

But not all companies are in favour of full-fledged dematerialization. Some of the players were not very keen to have a depository right now and they wanted only partial demat. Even the Life Insurance Corporation is not keen on giving that option to all policyholders immediately as it has a very large database and has concerns of data security.

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Sensex opens 93 points higher on Asian cues

MUMBAI: Snapping a three-day losing streak, the Bombay Stock Exchange benchmark Sensex recovered by over 93 points in opening trade today on the back of a fresh spell of buying by funds as well as retail investors amid a firming trend on other Asian bourses.

However, participants kept their commitments restricted, today being the last session of monthly expiry in the derivatives segment on the NSE.

The 30-share barometer, which has lost nearly 153 points in the previous three sessions, rose by 93.36 points, or 0.48%, to 19,542.05.

The wide-based National Stock Exchange index Nifty also moved up by 22.50 points, or 0.38%, to 5,856.40.

Brokers said the emergence of buying by funds and investors, taking positive cues from other Asian markets in line with overnight gains in the US market following the Federal Reserve's decision to hold short-term interest rates near zero, boosted the sentiment here.

Meanwhile, in the Asian region, Hong Kong's Hang Seng index was up by 0.54% and Japan's Nikkei by 1.13% in morning trade today. The US Dow Jones Industrial Average ended 0.76% higher in the previous session.

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RBI grants relief to banks on NPAs

MUMBAI: In a move that will ease pressure on bank profits, Reserve Bank of India has said that an earlier guideline requiring additional funds to be set aside for bad loans will not apply to loans that turn bad after September 2010.

This move will benefit all lenders as RBI has now specified the end point for setting aside additional provisions on bad loans. These guidelines on additional provisions were issued in October 2009 after banks turned in large profits following a bounce back from the global financial crisis.

At that time, the central bank had said that the idea was to build up a capital buffer during good times so that it could be used ifthe outlook for the economy changes. suddenly

State Bank of India will gain directly from this measure as RBI has said that even for those banks that have not achieved the prescribed provision coverage ratio, the target date continues to be September 30, 2010. SBI has been struggling to meet the 70% PCR and was expected to meet the target in the current fiscal. "Some of the banks that had been granted extension of time beyond the stipulated date for achieving the PCR of 70% on their request should calculate the required provisions for 70% PCR as on September 30, 2010 and compute the shortfall there from," said RBI "What this means is that after making provisions for NPAs as on September 2010, banks will only need to make the normal provisions for bad loans and the additional burden on the balance sheet will cease. But going forward, provision requirement could get stiffer as regulators move towards advanced accounting standards," said the chairman of a public sector bank.

But banks that have already made a provision will need to keep it aside as an additional buffer. "The surplus of the provision under PCR vis-Ã -vis as required according to prudential norms should be segregated into an account styled as countercyclical provisioning buffer. This buffer will be allowed to be used by banks for making specific provisions for NPAs during periods of system-wide downturn with the prior approval of RBI," the central bank said.

In a recent report on the banking sector, Care ratings had said that banks had improved its provision coverage ratio to 58.31% by end-December 2010 from 52.85% a year back.

Private banks have already crossed RBI's prescriptions by achieving a PCR of 74% as against 70% mandated by RBI but public sector banks continued to lag with a PCR of 54.41%. "On an overall basis, provisioning expenses rose by 54.48% on y-o-y basis in 9MFY11 on back of higher NPA provisioning by banks to achieve the RBI mandated 70% NPA provision coverage," Care said.

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Sensex spurts 349 points on monsoon forecast, firm global markets

MUMBAI: Across-the-board buying pushed up the BSE Sensex by 349 points on Wednesday to 19,470.98 on heavy capital inflows amid forecast of normal monsoon for this year and firm global markets.

Buying was so robust that all the 13 sectoral indices closed in the green as auto, IT, metal and banking segments made big gains.

Experts said investors chose to ignore a string of negatives like arrests of senior officials of telecom firms in 2G spectrum allocation scam, inflation and high oil prices.

The Bombay Stock Exchange 30-share barometer resumed with upside gap at 19,274.21 and remained in the positive terrain throughout the session to settle at 19,470.98, a net rise of 349.15 points or 1.83 per cent over Tuesday's close.

Similarly, the NSE 50-issue Nifty spurted 110.90 points or 1.93 per cent to 5,851.65.

FIIs, the main market drivers, bought shares worth Rs 1693.19 crore as per the provisional figures, while domestic institutional investors (DIIs) injected Rs 208.33 crore yesterday.

While monsoon forecast lifted investor sentiment, it was bolstered by Asian markets which recorded gains following a rebound on the Wall Street yesterday after strong results from tech bellwether Intel and other US firms.

Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan closed up between 0.29 per cent and 2.23 per cent.

European markets too displayed a firm trend, tracking gains. The CAC was up by 2.02 per cent, the DAX by 2.26 per cent and the FTSE by 1.85 per cent.

"Good set of numbers declared by HCL tech and Yes Bank also aided the uptrend," said Shanu Goel, senior research analyst (equity) at Bonanza Portfolio.

He said the afternoon session witnessed a volatile movement, as market reacted adversely to 2G scam related news but that was quickly discounted and momentum gained strength as the session progressed.

Market sentiment is likely to be affected by TCS and Reliance results on Thursday, Goel added.

"It was an impressive trading session for the Indian stock market on Wednesday amid strong gains across global equity markets, especially in Europe," said Amar Ambani, Head of Research ( India Private Clients) - IIFL.

In addition, forecast of normal monsoon and strong export growth added to the cheer, Ambani added.

He said that as a result, the news of CBI court rejecting the bail pleas of top telecom honchos didn't make any major dent, barring a brief hiccup in the afternoon session.

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Sensex up 192 pts in opening trade on normal monsoon forecast

MUMBAI: Bombay Stock Exchange benchmark Sensex opened 192 points up today, extending its gains from yesterday on continued buying by funds, supported by a normal monsoon forecast and firming trend on Asian bourses.

The 30-share index rose by 192.14 points, or 1% to 19,313.97 points in opening trade. It had gained 30.66 points in yesterday's volatile session.

Stocks of financials, IT, capital goods and metal sectors led the rally in early trade.

Similarly, broad-based National Stock Exchange index Nifty rose by 60.05 points, or 1.05%, to 5,800.80 level.

Brokers said sentiments turned better following a normal monsoon forecast for this year and firming trend on other Asian bourses following overnight gains in the US market.

Meanwhile, Japan's Nikkei and Hong Kong's Hang Seng Index were up by 0.92% and 0.94%, respectively, in the early trade today. In the US, the Dow Jones Industrial Index ended 0.53% higher yesterday.

9% GDP growth rate in 2011-12 difficult: Montek Singh Ahluwalia

NEW DELHI: Concerned over high headline inflation, the Planning Commission on Friday raised doubts over clocking the targeted 9 per cent economic growth in the current fiscal.

"We may not hit 9 per cent (economic growth rate in 2011-12). 6 per cent is the rate of inflation which we should be willing to accept this fiscal," Planning Commission deputy chairman Montek Singh Ahluwalia told reporters here.

The government and the Planning Commission had earlier projected a growth rate of 9 per cent during 2011-12, up from 8.6 per cent in the previous fiscal.

Referring to rise in headline inflation to 8.98 per cent in March from 8.31 per cent in February, Ahluwalia said, "inflation has been a concern. It has not come under control as much as I had hoped. There is need to use fiscal and monetary policy to get rid of supply constraint wherever they exist."

Referring to growth prospects in the current fiscal, he said, it may be difficult to achieve 6 per cent farm sector growth expected to be recorded during 2010-11.

"There is no chance for agriculture to grow at 6 per cent this fiscal, it may probably grow at 3 per cent", he said.

He pointed out, "Even to stay at 8.6 per cent GDP growth this fiscal, industry will have to do much better. Now industry has done about 7.8 per cent in 2009-10 (so far till February end)".

According to the latest data, the index of industrial production for April-February last fiscal stood at 7.8 per cent and the factory output dipped to 3.6 per cent in the month of February as compared to 3.9 in January.

Exuding confidence of maintaining growth momentum this fiscal, Ahluwalia said, "Between 8.6 to 9 per cent (GDP growth this fiscal) there is no big deal. I think the down side of 9 per cent is more relevant", he said adding it will not be "way off" (the 9 per cent mark).

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Inflation overshoots target, at 8.98% in March

NEW DELHI: Despite rampant rate hikes initiated by India's central bank and assurances from policy makers, the annual rate of inflation rose to 8.98% in March from 8.31% the month before, way above the target of 8% set by the Reserve Bank of India, official data showed on Friday.

The rise in the general price level was due to higher prices of fuels and manufactured products, according to data released by the commerce and industry ministry.

The provisional annual rate of inflation for December, which was earlier pegged at 8.23% for January, stood revised upwards to 9.35%.

The data will increase the pressure on the government to address supply side inefficiencies and not just look at prompting the Reserve Bank of India to raise rates to curb inflation -- something which the central bank has done eight times in the past 15 months.

The government will also be worried over high prices as five states go to vote in April-May to elect their new legislative assemblies.

The limited weekly data for the week ended April 2 showed a third successive decline in food inflation, which was registered at 8.28%.

Following is the 12-month inflation for some sub-indices within the overall wholesale price index:

Primary articles: 12.96%

Food Articles: 9.47%

Vegetables: 9.17%

Cereals: 3.96%

Pulses: (-)4.17%

Non-food articles: 25.88%

Fuels and power: 12.92%

Cooking gas: 14.99%

Petrol: 23.14%

Diesel: 6.22%

Manufactured products: 6.21%

Sugar: (-)7.46%

Edible oils: 12.54%

Manmade Textiles: 11.35%

Cotton Textiles: 27.45%

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Sensex falls 310 points on inflation concerns and Infosys results

MUMBAI: The BSE Sensex fell 310 points to 19,386.82 as higher inflation numbers triggered fears of interest rate hikes and Infosys reported lower-than-expected fourth quarter results, amid a weak global trend.

The Bombay Stock Exchange index, Sensex, which had gained 434 points in the previous session, was pulled down 310.04 points to 19,386.82 by the Infosys stock which has the second heaviest weight in the 30-share benchmark.

The broad-based National Stock Exchange index Nifty dropped by 86.95 points to 5,824.55, after touching the day's low 5,806.45.

Infosys plunged 9.59 per cent to Rs 2,988.80; the second major Tata Consultancy by 1.52 per cent to Rs 1,190.55 and third biggest Wipro fell the most in three months by dropping 5.04 per cent to Rs 449.60.

Meanwhile, March inflation rose to 8.98 per cent, from 8.31 per cent in the previous month, raising fears that RBI will raise policy rates to curb price rise.

The Reserve Bank of India had predicted last month that inflation would be 8 per cent by March, while it raised rates for the eighth time in a year. Oil prices were up 26 per cent from the year-ago period.

Banking stock came under selling pressure, with ICICI Bank falling 2.37 per cent to Rs 1,101.30 and HDFC Bank by 0.50 per cent to Rs 2,360.20.

There was some profit booking at front-runner stocks after the Sensex rallied 9.1 per cent in March, fanning the down-trend. A weak trend in the overseas markets was also a negative factor for the market.

The IT, teck, realty, banking, power, metal and refinery sectors were the major losers and kept the market down, while a better trend in stocks of auto, capital goods and consumer durable sectors capped the losses to some extent.

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Indian outsourcing industry to grow 23.2 percent: Report

New Delhi, April 12 (IANS) The business process outsourcing (BPO) market in India will expand by 23.2 percent in 2011 to reach a size of $1.4 billion, compared to $1.1 billion a year ago, a study by global IT research firm Gartner said Tuesday.

'Changing demographics, increasing affluence and economic growth in Asia-Pacific continues to drive shared services and BPO adoption, especially in Australia, India, Southeast Asia and China,' Gartner's research director T.J. Singh said.

'Buyers continue to invest in services that deliver scalable and consistent services across their geographical presence,' he added.

The study also forecasts that the BPO market will grow to $1.69 billion by 2012 and $2.47 billion by 2014.

According to the study, India is one of the fastest growing BPO markets in the region. However, the largest BPO country market is Australia, which is more than three times larger than India, the second-largest consumer of BPO services.

Banking and financial services, communications, government (both local and federal), technology and travel and transportation have been largest consumers of BPO services in the region.

Over the past three years, many established India-based BPO service providers and US and Europe-based multinational BPO service providers have started focusing on the Indian domestic market.

In the past, these providers focused primarily on the international or offshore market. Some of the local providers include Omnia, Kenkei, Androemeda, Genpact, Magus, MphasiS, Intelenet Global Services, Tech Mahindra, Aegis, Spanco and HTMT.

Rupee drops by 22 paise against dollar in morning trade

MUMBAI: The Indian rupee dropped by 22 paise to Rs 44.60 a US dollar in the morning trade on persistent dollar demand from importers on the back of firm dollar overseas.
According to forex dealers, there was good dollar demand from corporates as well as some buying by oil refiners, which weighed on the rupee heavily.

In fairly active trade at the Interbank Foreign Exchange (Forex) market, the domestic unit opened lower at 44.55/56 per dollar against the Monday's closing of 44.38/39 per dollar, before quoting at 44.49/50 per dollar at 1030 hours.

It moved in a range of Rs 44.45-44.60 against dollar in morning deals.

The US dollar index edged higher in Sydney market in the early trade, recovering some ground against the Japanese yen and the Swiss franc in a bout of safe-haven buying.

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RBI set to hike key rates by 25 bps

MUMBAI: The Reserve Bank of India is expected to raise interest rates while announcing its monetary policy for 2011 in early May although the index of industrial production (IIP) points to a slowdown in investments.

Economists across the board are betting on at least a 25 basis points increase in key interest rates by RBI. "The IIP reading was weaker than expected, but the consumer goods component and readings from other indicators suggest that the economic growth is holding up well. This means that inflation is still the dominant concern, not growth. This calls for continued tightening by RBI," said Leif Lybecker Eskesen, chief economist for India & Asean, HSBC Global Markets, in a report. "This means that the RBI will have to continue to tighten monetary policy, at least by 75 bps in 2011 and with 25 bps expected at the next policy meeting," he said.

Following 4% growth in January (revised up from 3.7% earlier), IIP slowed to 3.6% year-on-year in February, lower than market expectations of a growth of around 5%. According to Rohini Malkani, chief economist with Citi, there is likely to be an uptrend in consumption due to wage increases and households raising money against gold holdings, which is no longer a 'dead asset'. "With inflation likely to stay sticky at ˜7.5% through FY12, we expect the RBI to raise rates by 75 bps through early 2012," she said in a report.

Also, consumption demand is expected to remain strong because of an improvement on the agriculture front. Advance estimates released by the ministry of agriculture peg foodgrain production in the previous fiscal at 236 million tones—an increase of over 8% over the previous year following normal monsoons. According to a Deutsche Bank report, rural income in India is likely to witness a meaningful jump in FY11 driven by the sharper-than-anticipated growth in agricultural production, coupled with a continuing—albeit modest—increase in minimum support prices.

"RBI has accorded less significance to IIP data in framing policy decisions. However, incrementally the information content in IIP data has only improved especially in terms of sequential trend. Nevertheless, we expect RBI to maintain a hawkish stance on inflation in response to accentuating inflationary pressure in core," said A Prasanna and Anurag Jha, ICICI Securities Primary Dealership, in a report on Monday.

According to Arun Singh, senior economist at Dun & Bradstreet, moderation in the investment activity on one hand and the building up of inflationary pressures, especially on manufactured products, on the other would add to the monetary policy dilemma for the RBI. "RBI is expected to increase repo and reverse repo rates by another 25 bps during the forthcoming policy review," he said.

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Sensex gains 434 points on global cues as oil eases

MUMBAI: The BSE Sensex on Wednesday shot up 434 points to over 19,696, snapping 5-day falling streak as investors bought stocks at lower levels amid firming global trend and easing of crude oil prices.

The 30-share Bombay Stock Exchange benchmark index, Sensex, which had lost 440 points in the last five trading sessions, gained 434.32 points to close at 19,696.86. It had opened lower than the previous close at 19,101.63.

The broad-based National Stock Exchange index Nifty shot up 125.80 points to 5,911.50, after a weak opening at 5,735.55 points.

The upsurge in the market was led by software exporting companies on expectations for robust quarterly earnings, ahead of the fourth quarter results starting with the announcement by Infosys Technologies on Friday.

The top three outsourcing companies are expected to post strong fourth quarter profits and forecast robust revenue growth for the fiscal ending March 2012 on improving global economic environment. Software exporters get about half their revenues from the US and European markets.

Tata Consultancy Services jumped 2.57 per cent to Rs 1,208.95; Wipro Ltd was up 2.94 per cent at Rs 473.45 and Infosys by 2.05 per cent at Rs 3,306. The IT index rose by 2.15 per cent to 6,686.12.

Besides, marketmen said investors were consolidating after selling for five consecutive sessions, amid a firming Asian trend and higher openings in Europe in view of easing crude oil prices.

The crude fell to a two-week low after the International Energy Agency reported signs of slowing oil demand and as Goldman Sachs Group forecast a substantial correction.

The most beaten capital goods, auto and banking sector indices gained the most. The capital goods index gained 2.73 per cent to 13,965.78, followed by auto index - up 2.54 per cent to 9,428.08.

The realty index rose by 1.57 per cent to 2,439.90 as Jaiprakash Associates surged 7.09 per cent to Rs 98.20.

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Insurance industry to be worth $400 bn by 2020: Report

New Delhi, April 10 (IANS) India's insurance industry will outpace economic growth and is likely to reach $350-400 billion in terms of premium income by 2020, making it among the top three life insurance markets, an industry report revealed.

India will also be among the top 15 non-life insurance markets by 2020, according to an industry study conducted by the Federation of Indian Chambers of Commerce and Industry (FICCI) and the US-based Boston Consulting Group.

The report points out that penetration of the insurance industry, premium as percentage of the country's gross domestic product (GDP), has increased from 2.3 percent in 2001 to 5.2 percent in 2011.

In addition, there has been a vast increase in the coverage of insurance. The number of life policies in force has increased nearly 12-fold over the past decade and health insurance, nearly 25-fold.

Better terms and availability of a wide variety of products, like unit-linked products, whole life, maximum net asset value (NAV) guarantee, auto assistance, auto pay per km insurance, disease management and wellness, have boosted the growth of the industry.

'While the industry has come a long way over the past decade, the big challenge is profitability. Private life insurers have accumulated losses of over Rs.16,000 crore till March 2010,' said Alpesh Shah, partner and director of Boston Consulting Group India, the author of the report.

'The non-life insurance industry has cumulative underwriting losses of nearly Rs.30,000 crore,' he said.

Commenting on the report, FICCI Director General Rajiv Kumar said: 'The report estimates the total insurance premium at approximately Rs.17 lakh crore to Rs.22 lakh crore in 2020, with life insurance being Rs.15 lakh crores to Rs.20 lakh crores.'

'This growth will have a significant impact on India's ranking in the global insurance industry and is based on strong fundamentals,' said Kumar.

The report will be formally released at the 14th Insurance Conference in New Delhi Monday, FICCI said in a statement.

'The report highlights the importance of insurance in Indian economy, the progress made in the last decade, key challenges associated with the sector and an action agenda for insurance companies and the government,' said Sandeep Bakhshi, chairman of FICCI's insurance and pensions committee and managing director and chief executive of of ICICI Prudential Life Insurance.

Silver hits new high, nears 60k

NEW DELHI: Silver continued its record spree for the sixth straight session on Friday, rising Rs 650 to Rs 59,250 per kg on frantic buying by stockists and speculators, amid strong global cues. In Mumbai, it crossed Rs 60,000.

Gold also rose by Rs 55 to Rs 21,320 per 10 grams on fresh local buying, driven by the ongoing 'Navratra' festival. Trading sentiments remained bullish as precious metals climbed to a new record level in global markets as concerns over accelerating inflation, financial turmoil in Europe and fighting in Libya bolstered their demand as a safe haven.
Gold in global markets, which normally sets a price trend on the domestic front, strengthened 0.6% to $1,468.20 an ounce and silver 1.3% to $40.15 an ounce, the highest level since 1980.

On the domestic front, silver spurted by Rs 650 to set a new record of Rs 59,250 per kg and weekly-based delivery by Rs 710 to Rs 58,560 per kg.

Silver coins followed suit and surged Rs 1,000 to Rs 65,500 for buying and Rs 66,000 for selling of 100 pieces. In line with the general firming trend, gold of 99.9 and 99.5 per cent purity rose by Rs 55 each to Rs 21,320 and Rs 21,200 per 10 grams, respectively.


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5,900 H-1B visa applications in first week after opening

WASHINGTON: The H-1B visa, the most sought after by Indian IT professionals has opened to a lacklustre response, with less than 6,000 applications received after it opened on April 1.

"USCIS has received approximately 5,900 H-1B petitions counting toward the 65,000 cap, and approximately 4,500 petitions toward the 20,000 cap exemption for individuals with advanced degrees," the US Citizenship and Immigration Services (USCIS) said in a statement, a week after it started receiving applications for the visas for the fiscal year 2012 beginning October 1, 2011.

As such, USCIS said it would continue to receive applications for the H-1B visa till the caps are reached. The popular work visa is the most sought after by the computer technology professionals from India.

As mandated by the US Congress, the USCIS will accept petitions for 65,000 H-1B visas.

Additionally, the first 20,000 H-1B petitions filed on behalf of individuals who have earned a US master's degree or higher are exempt from this 65,000 cap.

If needed, USCIS will randomly select the number of petitions required to reach the numerical limit from the petitions received on the final receipt date.

Petitions for new H-1B employment are exempt from the annual cap if the beneficiaries will work at institutions of higher education or related or affiliated nonprofit entities, nonprofit research organizations or governmental research organisations.

US businesses use the H-1B programme to employ foreign workers in specialty occupations that require theoretical or technical expertise in specialized fields, such as scientists, engineers, or computer programmers.

The H-1B cap for the fiscal 2011 was reached in January this year and on December 22 for the fiscal 2010.

Till a few years ago the cap was reached within the first few days of USCIS starting to accept H-1B petitions.

As a result, USCIS had to resort to computerized draw of lots to determine successful applicants.

Because of stringent monitoring provisions and general economic recession, there has been a sharp drop in the number of Indian receiving H-1B visas in the last few years, official figures reveal.

For instance the Infosys which received as many as 4,559 H-1B visas in the fiscal 2008 and was on top of the list of companies receiving this coveted work visa for professionals; received just 440 H-1B visas in the fiscal 2009 (October 1, 2008 to September 30, 2009), according to the latest figures released by the US immigration services.

Similarly, Wipro, which in 2008 got 2,678 H-1B visas, received just 1,964 H-1B visas in 2009; but still topped the list in the fiscal 2009.

In 2008 four out of the top five companies bagging the maximum number of H-1B visas were grabbed by Indian companies.

These were Infosys (4,559), Wipro (2678), Satyam (1917) and Tata Consultancy Services (1539).

Microsoft with 1037 H1-1B visas was the only US company to figure in top five.

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Silver gives 46% returns in 3 months, gold just 6%

NAGPUR: As silver touched Rs 58,880 a kg in Nagpur and Rs 60,000 in Mumbai, this poor cousin of gold has seen a 46% rise in the value since January. Returns on the yellow metal on the other hand have been almost stagnant during the same period.

This is despite the fact that gold touched another all-time high of $1473 in the global market on Friday with the previous high just a couple of days ago. Silver being quoted $40.31 an ounce is still $10 away from the all-time high achieved in the 1980s. Gold's high did not make much impact in domestic market on account of a stronger rupee which offset the increase in dollar prices. Silver prices on the other hand took bigger leaps overcoming even the strong rupee factor, analysts said.

Silver prices moved in the range of Rs 41,000 to 46,000 in the month of January. These have now reached Rs 60,000 level. Somebody who purchased silver in January would have gained anywhere between 46% to 30% in just three months. Gold on the other hand was Rs 19,900 to Rs 21,200 in January and is now at Rs 21,300 a tola (per 10 grams). This is a gain of 6% to 0.47%. In the international market, gold was around $1360 an ounce in January and has now touched $1473 growing by 8%. Silver rates have jumped by 60% from $25 an ounce to $40 now.

Gold prices grew fuelled by a weakening greenback against Euro as well as international crises like that in Libya and Egypt. Silver prices, which follow gold too, are being further strengthened by a substantial industrial demand. Sizable purchases by industries that expect a further rise are causing the steep rise, said Nitin Khandelwal, a wholesaler from Akola.

Nilesh Rathi of SMS Bhav, a bullion rate information agency, feels now speculation is fuelling the silver prices. The prices have long reached a peak if only fundamentals are considered. There is no reason for such sharp increases within a few days unless there is heavy speculative buying, he says. The phenomenon has led to a massive increase in buying of silver bars for investment, say sources in business. However, there have been mixed reports on the demand for ornaments or silver utensils and gift articles.

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Sensex opens 83 points higher on Asian cues

MUMBAI: Snapping a three-session losing streak, the Bombay Stock Exchange benchmark sensex recovered by almost 83 points in opening trade on Friday on the back of selective buying by funds as well as retail investors amid a firming trend on other Asian bourses.

The 30-share barometer, which has lost over 111 points in the previous three sessions, rose by 82.97 points, or 0.42 per cent, to 19,674.15 on Friday morning.

The wide-based National Stock Exchange index Nifty also moved up by 21.70 points, or 0.30 per cent, to 5,907.40.

Brokers said the emergence of buying by funds and investors, taking positive cues from other Asian markets, mainly influenced the trading sentiment here.

Buying was confined to the realty, banking, FMCG and capital goods sectors, they added.

Meanwhile, in the Asian region, Hong Kong's Hang Seng index was up by 0.50 per cent and Japan's Nekkei by 0.91 per cent in morning trade on Friday, while the US Dow Jones Industrial Average ended 0.14 per cent lower in the previous session.

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Sensex up 107 points in opening trade

MUMBAI: The BSE benchmark Sensex recovered by nearly 107 points in opening trade on Wednesday on the back of fresh buying by funds and retail investors after yesterday's small losses.

The 30-share index of the Bombay Stock Exchange, which lost 14.91 points in the previous volatile session, rebounded by 106.61 points, or 0.54 per cent, to 19,793.43 with metals, auto and power sector stocks rising.

Similarly, the wide-based National Stock Exchange Nifty index also moved up by 28.25 points, or 0.48 per cent, to 5,938.30 points.

Brokers attributed the recovery in opening trade to fresh buying by funds and retail investors on expectations of better fourth quarter earnings, but a weak trend in global market and rising crude oil prices capped the gains.

Meanwhile, Japan's Nikkei index was trading 0.11 per cent lower and Hong Kong's Hang Seng Index shed 0.05 per cent in early trade today. The Dow Jones Industrial Average at the US market ended 0.05 per cent lower in yesterday's trade.

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Sensex up 68 pts in opening trade on heavy FII inflows

MUMBAI: The BSE benchmark Sensex rallied by over 68 points in opening trade on Tuesday on the back of strong FII inflows amid expectations of encouraging fourth quarter earnings by corporates.

The 30-share index of the Bombay Stock Exchange, which had gained 281.34 points in the previous session, rose further by 68.48 points to 19,770.21 points in opening trade as heavyweights such as oil and gas, PSU and power sector stocks made headway.

Similarly, the broad-based National Stock Exchange Nifty index also gained 20.20 points to 5,928.65.

Brokers said in addition to overnight gains in the US market, continued capital inflows by foreign funds and hopes of strong fourth quarter earnings also buoyed the trading sentiment here.

Meanwhile, the Dow Jones Industrial Index in the US market ended 0.19 per cent higher in the previous session.

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