India-Global Market Summary 23-05-12Are you confused with savings and investment? Attend our webinar session conducted on everySunday from 11:00 a.m to 1:00 p.m and clarify all your doubts in finance planning. Visitwww.ifmaonline.com and enroll yourself to take up training. • Market declined for the second day on macro economic worries due to increasing fiscal and current account deficits. Falling Indian rupee and slowing economic growth adversely affected the sentiment. Euro-zone debt worries also weighed on investor sentiment as stocks fell across the globe. Sensex fell 0.49% to 15948.1 and Nifty fell 0.51% to 4835.65. The market breadth, indicating the overall health of the market, was negative. • Prime Minister said that the government needs to make tough decisions on spending and tax generation to boost foreign and local investment. Meanwhile, the Organization for Economic Cooperation and Development (OECD) in a report suggested that it would be prudent for the Reserve Bank of India (RBI) to wait for clear signs that inflation is falling back to more comfortable levels before reducing interest rates. The OECD report said the government needs to narrow its fiscal deficit to support monetary policy and ensure a sustained drop in inflationary pressures. • The rupee fell to a new record low of 56.21 against the dollar as global risk appetite was knocked after a former Greek Prime Minister said preparations for an exit from the euro zone are being considered. This is the sixth consecutive day that the rupee has fallen to a record low against the dollar. India is caught in a vicious cycle of rising fuel import costs because of a weak rupee, which swells its fiscal and current account deficits. A weak rupee makes imports costlier.
• Shares of aviation companies jumped as oil companies cut jet fuel prices recently, the third straight reduction in rates since April 2012. Many realty stocks extended recent losses. Fertiliser shares rose on hopes good monsoon may spur demand for fertilizers on higher crop cultivation. Most metal stocks declined after the World Bank said global commodity prices could drop unexpectedly in the event of a faster-than-expected slowdown in China.• Bhel edged higher on reporting good results. Reliance fell in choppy trade. Tata Power lost after reported net loss in fourth quarter.• Tata Steel and Tata Motors dropped on worries the ongoing political crisis in Greece could deepen the euro zones debt crisis. Shares of Adani group edged lower.• Software pivotals were mixed. Telecom stocks fell on worries of intensifying competition after Idea Cellular on Tuesday announced up to 70% price reduction on its 3G services.• GAIL edged higher on reports state-owned energy companies from India and Pakistan will today sign a 20-year agreement with Turkmenistan to purchase up to 33 billion cubic meters of gas a year through pipeline via Afghanistan.• Canara Bank fell 1.8% after consolidated net profit fell 17.16% to Rs 3341.69 crore on 31.29% growth in total income to Rs 33920.15 crore in the year ended 31 March 2012 over the year ended 31 March 2011.
Global news• European stock markets dropped on Wednesday, in the wake of comments late the prior session from former Greek Prime Minister Lucas Papademos and as markets awaited a European Union summit. Asian stocks declined on Wednesday ahead of a meeting of European leaders, with renewed fears that Greece would leave the euro bloc dampening appetite for riskier assets.• Former Greek Prime Minister reportedly warned that preparations for a Greek exit were being considered, with the remarks coming one day ahead of an informal summit of European Union leaders expected to target options to avoid that outcome.• The Organisation for Economic Co-operation & Development (OECD) on Tuesday forecast that global growth would fall to 3.4% this year from 3.6% in 2011, before accelerating to 4.2% in 2013. Growth across the Paris-based organisations 34 members, considered the richest in the world, would drop this year to 1.6% from 1.8% in 2011 and then reach 2.2% in 2013, roughly in line with previous estimates.• The World Bank cut its economic growth forecast for China this year to 8.2% from its prediction of 8.4% growth in its November report. Risks faced by China include the slowing domestic housing market and a sluggish global economy that offer little promise for a pick up in international trade. Meanwhile, the Japanese government reported a disappointing export performance, including a drop in shipments to China, that saw Japans trade deficit widen more than expected in April.
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