Rupee weak at 48.57 a dlr in early trade

The Indian rupee depreciated, in tandem with weakness in local stocks, and was quoted 25 paise lower at 48.55/57 against the greenback in early trade on Monday on some dollar demand from importers.

In lacklustre activity at the Interbank Foreign Exchange (forex) market, the domestic currency resumed weak at 48.53/55 a dollar from its last close of 48.28/29 a dollar and was steady at 48.55/57 a dollar in late morning deals.



Forex dealers said the rupee continued to remain under pressure as the Satyam accounts' scandal triggered fears of more capital outflows from the country despite some leading fund managers ruling out possibility of any capital outflow because of the Satyam fiasco.



They said oil refiners bought dollars as the global oil prices fell to around USD 40 a barrel level in Asian trade on Monday morning.



The Indian benchmark Sensex was down 268 points at 1030 hours after some foreign brokerages pointed to disappointing third quarter earnings likely to be affected by high input costs and the current liquidity crisis.

Obama plan 'could create 4m jobs'

US President-elect Barack Obama says urgent action is needed on the economy, and his $775bn (£509bn) stimulus plan could create up to four million jobs.

Mr Obama, who takes office in two weeks, wants to cut taxes and create jobs through increased government spending on public works projects.

"It's not too late to change course, but only if we take immediate and drastic action," he said.

The US unemployment rate is 7.2%, after 524,000 jobs were lost in December.

Recession fears

The number of job losses last year was 2.6 million, the largest since World War II.

The figures, released on Friday, heightened fears that the US is entering a long period of recession.

The president-elect published a detailed analysis of his recovery plan by his economic advisers, who said it could create up to four million jobs by the end of 2010.

The analysts estimated that the unemployment rate at the end of 2010 would be 1.8 percentage points lower if the plan was enacted.

"If nothing is done, economists from across the spectrum tell us that this recession could linger for years and the unemployment rate could reach double digits.

"They warn that our nation could lose the competitive edge that has served as a foundation for our strength and standing in the world," he said in his weekly YouTube address.

Margins of error

The report estimates how many jobs each part of the plan would create.

More than 40% of the new jobs should go to women and 90% of them should be in the private sector.

It concedes that the estimates are "subject to significant margins of error". This is because the assumptions on which it is based may prove wrong and the package may change as it goes through Congress.

Senior Democratic senators have expressed scepticism that tax cuts will lead to growth and job creation.

They want more money spent on infrastructure and energy projects.

Satyam rebounds on rescue hopes

Shares in Indian software firm Satyam have jumped 51% on hopes of a rescue plan for the scandal-hit firm.

On Sunday, the Indian government appointed three leading businessmen to the company's board.

The board is meeting to draw up a rescue plan for the firm that has been at the centre of a scandal over the falsifying of accounts.

Meanwhile, the World Bank revealed that Satyam and two other Indian IT firms are on a business blacklist.

The Satyam scandal has undermined investors' confidence in India's booming outsourcing industry.

Deepak Parekh, a senior banker and one of the firm's new bosses, is due to hold a news conference at 5 pm local time - about 1130 GMT.

Satyam shares were up 51% at 36.05 rupees after the stock lost 87% last week.

World Bank

India's IT sector was dealt a further blow after the World Bank said that three Indian firms, including Satyam, were on a list of- companies that are banned from doing business with the bank.


Satyam's office in Bangalore
Satyam employs more than 50,000 people

Shares in Indian software firm Satyam have jumped 51% on hopes of a rescue plan for the scandal-hit firm.

On Sunday, the Indian government appointed three leading businessmen to the company's board.

The board is meeting to draw up a rescue plan for the firm that has been at the centre of a scandal over the falsifying of accounts.

Meanwhile, the World Bank revealed that Satyam and two other Indian IT firms are on a business blacklist.

The Satyam scandal has undermined investors' confidence in India's booming outsourcing industry.

Deepak Parekh, a senior banker and one of the firm's new bosses, is due to hold a news conference at 5 pm local time - about 1130 GMT.

Satyam shares were up 51% at 36.05 rupees after the stock lost 87% last week.

World Bank

India's IT sector was dealt a further blow after the World Bank said that three Indian firms, including Satyam, were on a list of- companies that are banned from doing business with the bank.


WORLD BANK BLACKLIST
Satyam barred for 8 years
Wipro barred for 4 years
Megasoft barred for 4 years
Source: World Bank

This was the first time the World Bank had disclosed the list of companies barred from receiving direct contracts under its corporate procurement program.

Satyam was banned in September 2008 for eight years and Wipro Technologies was blacklisted for four years from June 2007 for providing improper benefits to World Bank staff.

Wipro said it was banned for offering World Bank employees shares in its stock offer in the US in 2000.

Megasoft Consultants was banned for 4 years from December 2007 for taking part in a joint venture with World Bank staff while also conducting business with the Bank.

Shares in Wipro and Megasoft fell sharply on the news.

Arrests

The entire board of Satyam, a private company, had been sacked after its founder and former chairman had been arrested.

Ramalinga Raju and his brother Rama, also a former Satyam director, were arrested on charges including criminal conspiracy and forgery.

Mr Raju admitted last week that the firm had been falsifying its accounts.

He said the company had exaggerated its cash reserves by some $1bn (£661m).

The other new directors are Kiran Karnik, the former boss of technology trade group Nasscom, and C Achuthan, a former member of the Securities and Exchange Board of India.

The company, which employs 53,000 people and enjoyed a turnover of $40bn last year, is now fighting for its life.

Its clients include Nestle, General Electric and Ford.

The Raju brothers have also been charged with criminal breach of trust and falsifying documents.

They have been remanded in custody until 23 January, and could face life in prison.

Indian police have also now detained Vadlamani Srinivas, Satyam's chief financial officer, for questioning.