Top Business India News Stories of 21st October 2008

Daily news summary

Market recovers on PM’s assurance
Indian equities opened strong and continued to recover loses buoyed by the cut in a key lending rate by the central bank and Prime Minister Manmohan Singh's statement that the Indian economy continued to be resilient. Mid-afternoon, the sensitive index (Sensex) of the Bombay Stock Exchange was at 10,673.15, up 450.06 points or 4.40 percent from its previous close Monday at 10,223.099 points. The Sensex opened at 10,428.11 points today, touched a high of 10,437.81 before sliding somewhat and then gained steadily until it reached an intra-day high of 10,750.20 before falling down again. At the National Stock Exchange, the Nifty index also showed a similar trend. The Nifty also suffered another dip on profit booking but steadily gained after that to reach 3229.40, up 106.6 or 3.41 percent from its previous close Monday at 3,122.80 points. The BSE midcap index was at 3,572.72, up 66.37 points or 1.89 percent from its previous close Monday at 3,506.35 points. The BSE smallcap index was at 4,183.11, up 70.29 points or 1.71 percent from its previous close Monday at 4,112.82 points. The reassuring statements of the Prime Minister and the repo rate cut by the central bank together with positive global cues seemed to be the cause, analyst said.

India-Pakistan trade route reopened
Bridging a divide of six long decades, India and Pakistan have moved ahead on the path of peace as trade convoys crossed the Line of Control (LoC) admist drumbeats and loud cheers. As cross-LoC trade on the Srinagar-Muzaffarabad and Poonch-Rawlakote routes began for the first time since 1948, 14 trucks crossed the border to enter Pak occupied Kashmir. As the first trucks carrying rice, garlic, spices, dry fruit, onions and the famous Peshawri shoes left for Indian Kashmir, a similar convoy from Srinagar carrying goodies like carpets, apples, walnuts and papier mache items left the Salamabad trade facilitation centre. Both the countries have allowed trade in 21 items that are produced or prepared locally. The move to open the traditional trade route was decided when Pakistan Prime Minister Asif Ali Zardari and Prime Minister Dr. Manmohan Singh met in New York Governor NN Vohra flaged of the 14 truck convoy in Salamabad and his adviser H.H. Tyabji did the honours in Rangar and kick off trade between Poonch and Rawlakote -- only 30 km from each other.

India expects a surge in gas pipeline investments
India is expecting an investment worth Rs.455 billion in the gas pipeline sector in the next four years, said an industry lobby report released here today. The report, jointly prepared by Associated Chamber of Commerce and Industry of India (ASSOCHAM) and accounting firm Ernst and Young (E&Y), said the amount will be invested in building the pipeline networks. Though coal will remain the primary energy source but the oil and gas share is expected to increase from 36 percent to 41 percent in the coming decade, the report stated. Thus an additional investment of Rs.800 billion would be needed by 2015 as gas pipeline network is becoming a priority in the Indian petroleum sector. Currently India has 10,000km long pipeline. Gas Authority of India (GAIL) plans to develop 8000km long pipeline spread over 15 states. Private sector industry Reliance is also developing its own pipeline project, which includes the development of a 1440-km Kakinada-Ahmedabad East-West Pipeline and a Southern India pipeline network.

Bankers, industry welcome RBIs move of repo rate cut
Bankers, market analyst and the industry have welcomed the RBIs decision to cut the repo rate by 100 basis point. The move, which takes immediate effect, came ahead of a monetary policy review. Considering it to be a positive move in the wake of the global crisis, many bankers echoed that they had expected the cut down to be 50bps and this move took them by surprise. The general feeling is that the markets may rise as a result of this positive step. However critics say that it reflects the premature attitude of the central bank, which has taken the view that inflation is going to ease in the coming months. FICCI on the other hand has also called for the lowering of the rate of statutory liquidity ratio (SLR).

Daiichi completes acquisition of Ranbaxy
India’s major drug manufacturing company, Ranbaxy officially became a subsidiary of the Japanese drug maker Daiichi Sankyo. The Japanese company now owns 52.5 percent shares after the board of directors approved the allotment of equity shares and warrants on preferential basis. A joint statement issued by the companies said that Ranbaxy has now received $736 million or Rs.35.85 billion through the preferential issue of equity shares and warrants. Despite being a subsidiary Ranbaxy will operate as an autonomous company under Malvinder Mohan Singh. The Ranbaxy chief has commented that this substantial cash being infused by Daiichi Sankyo will assist in the expansion of the business and provide the necessary leverage for new initiatives.

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