US begins GM bankruptcy planning

General Motors and the US Treasury have improved the offer to GM's bondholders, as they prepare for the firm's move into bankruptcy protection.

Bondholders with $27bn (£17bn) of GM debt are now being offered the option to buy an extra 15% of GM shares as part of a proposed bankruptcy deal.

This is on top of the 10% they had previously been offered.

If bondholders back the new offer, it will allow GM to exit bankruptcy protection more quickly.

The US car giant is expected to apply for bankruptcy protection by 1 June.

GM said it had already secured the backing for the new offer from bondholders representing 20% of the bond debt.

Under its plans to reorganising its share base, the US government will take a 72.5% stake.

Sensex soars 350 pts in opening trade on global cues

The Bombay Stock Exchange benchmark Sensex surged by over 350 points in early trade on Wednesday on increased buying by funds as well as retail investors after strong rally in the global markets.

The 30-share index surged by 354.22 points to 13,943.45 points with most of the index stocks rising sharply.

The BSE barometer had lost 323.99 points on Tuesday.


The wide-based National Stock Exchange index Nifty rose by 103.90 points, or 2.52 percent, to 4,220.60 points.

Marketmen said sentiments were largely bolstered on firming trends in global markets after US consumer confidence showed its biggest monthly jump in six years.


Short-covering by speculators ahead of tomorrow's May month expiry in the derivatives segment also supported the rally, they added.

Major gainers were Reliance Industries (1.54 per cent at Rs 2,177.00), Infosys (1.93 per cent at Rs 1,573.00) and ICICI Bank (4.71 per cent at Rs 698.50).

Reliance Communications spurted by 5.51 per cent to Rs 307.50, DLF Ltd by 3.44 per cent to Rs 348.50, Tata Steel by 3.66 per cent to Rs 374.20, Sterlite Industries by 4.65 per cent to Rs 565.00, Larsen and Toubro by 2.94 per cent to Rs 1,291.70, State Bank of India by 2.91 per cent to Rs 1,737.

Meanwhile, Hong Kong's Hang Seng was up 3.86 per cent and Japan's Nikkei gained 1.84 per cent in early trade.

Surprise trade surplus for Japan

Japan's export slump eased in April, leading to an unexpected trade surplus for the world's second largest economy, official figures show.

Exports fell by 39.1% compared with the same month last year, slightly better than the 45.6% fall recorded in March.

This resulted in a trade surplus of 68.9bn yen ($722.7bn; £452.7bn), much better than economists had expected and Japan's third straight monthly surplus.

Japan's economy shrank at a record rate in the first three months of this year.

'Optimistic'

"Today's release supports our view that exports are past the worst," said Chiwoong Lee at Goldman Sachs.

A slump in exports, triggered by the global economic slowdown that hit demand for Japanese cars, electronics and other goods, led to an economic contraction of 4% between January and March this year.

But some economists are predicting a turnaround in the country's economic fortunes.

Government stimulus and a recovery in exports should ensure that the economy avoids contraction in the current quarter, said Masamichi Adachi at JP Morgan.

"In the short term, we are rather optimistic. But after that, there are many challenges facing the Japanese economy," he added.

Last week, Japan's central bank upgraded its economic outlook, saying the worst of the recession might be over.

Rupee surges 41 paise against dollar in opening trade

The Indian rupee on Wednesday soared by 41 paise against the dollar on anticipation of heavy foreign capital inflows as stock market may open higher in tandem with other Asian markets.

At the Interbank Foreign Exchange (Forex) market, the domestic unit was quoted at 47.51 a dollar in the opening trade, a rise of 41 paise over the previous close.

Rupee had nosedived by 64 paise to close at 47.92/93 on Tuesday, its biggest fall in almost three months.


Dealers said expectations of a surge in the domestic stock markets in line with other firming Asian markets leading to capital inflows strengthened the rupee sentiments.


However, month-end dollar demand from importers and refiners capped the rupee's gains to some extent, they added.


The Asian equity markets rose by up to 3.7 per cent in the morning trade on Wednesday.

Consumer confidence buoys market

US shares have risen after a survey suggested US consumer confidence was at its highest level since last September.

The Conference Board's Consumer Confidence Index jumped to 54.9 for May from 40.8 last month - well beyond the average 42.3 predicted by economists.

The indicator is being closely watched as a guide to whether consumers are likely to start shopping again.

The Dow Jones added 2.4%, despite other data showing record house price falls in the first quarter of 2009.

The Conference Board index suggested consumer confidence had hit its highest level since last September.

That was when the collapse of Lehman Brothers accelerated the global financial crisis.

No recovery signs

House prices fell by 19.1% in the first three months of the year from the same time last year, the Standard & Poor's/Case-Shiller National Home Price index suggested.

It also showed home prices had fallen 32.2% since peaking in the second quarter of 2006.

However, it suggested that the pace of month-on-month declines had slowed.

The housing index, which looks at 20 key cities, saw prices fall by 18.7% in March from the year before.

These declines were slightly better than February's falls, and it was the second straight month that indexes did not post record drops.

But there were still no signs that home prices had hit the bottom, said David M Blitzer, chairman of the S&P index committee.

"We see no evidence that a recovery in home prices has begun," he said.

Rupee down 22 paise against USD in early trade

The Indian rupee depreciated 22 paise against the US dollar in early trade on Monday, snapping its six-session upward journey, on expectations of fresh capital outflow by foreign funds as domestic bourses may open in the negative zone, in line with other Asian markets.

At the Interbank Foreign Exchange (Forex) market, the local unit, which had gained nearly 4.9 per cent during the last week, turned weak and fell 22 paise to 47.32 a dollar.


On Friday, the domestic currency had ended 27 paise higher at 47.10/12 against the greenback.


Forex dealers said the benchmark Sensex is likely to open on a weak note in line with other Asian markets, which are down up to 1.5 per cent, leading to capital outflow by foreign funds.


Month-end dollar demand also put pressure on the rupee, they added.

Oil holds above USD 60 in Asia

Oil held above USD 60 a barrel in Asian trade on Monday ahead of a meeting this week of the Organisation of Petroleum Exporting Countries (OPEC).

New York's main futures contract, light sweet crude for delivery in July, was down 33 cents to USD 61.34 a barrel in morning trade.


Brent North Sea crude for July delivery retreated 23 cents to USD 60.55.


Prices eased as investors cashed in on profits ahead of the OPEC meeting on Thursday.


"Traders are taking profit from the markets," said Mark Pervan, a senior commodities analyst with ANZ Bank in Melbourne.


"It's probably a view that there is less likelihood of an output cut. OPEC has been fairly quiet on cutbacks so far," he said.


Algerian oil Minister Chakib Khelil was quoted by Newswires as saying that he expected oil prices to hit USD 70 dollars a barrel next year.



Oil at USD 70 a barrel is widely seen as the sustainable level for producers to resume large efforts to search for oil and gas.


The global economic crisis which towards the end of 2008 has seen energy demand plummets, dragging prices along with it.


Oil prices have fell from a record around USD 147 per barrel in July to about USD 32 in December as demand dropped off but have since risen gradually.

Shares rebound after test shock

Shares in South Korea suffered sharp falls following news of North Korea's nuclear test, before recovering.

South Korea's Kospi index fell as much as 6%, before rebounding strongly to end just 2.85 points lower at 1400.90.

There was little impact elsewhere in the region, with Tokyo's Nikkei index closing up 1.3% and Hong Kong's Hang Seng closing up 0.35%.

European markets opened lower, while the UK and the US markets are closed for a public holiday.

At 1000 BST France's Cac 40 index was less than 1% down at 3198.66 points. In Frankfurt the Dax was 1.2% lower at 4858.16.

Rupee breaches 47 level to hit five-mth high of 46.98 a dlr

The Indian rupee continued its upward march for the sixth consecutive day and breached the crucial 47-level against the US currency for the first time after 19th December, 2008, on sliding dollar in the overseas markets.

The rupee also drew support from encouraging trend in the local stocks and continued optimism about faster reforms in the financial sector paving the way for increased capital inflows.



At the Interbank Foreign Exchange (Forex) market, the domestic currency resumed stronger at 47.15/20 a dollar from its previous close of 47.37/38 a dollar and later hit a five-month high of 46.98 against the American currency.



It, however, pared gains and was quoted at 47.14/15 a dollar in late morning trade.



Forex dealers said weak dollar overseas provided a fresh impetus to the Indian currency.



The dollar fell to its recent lows against the basket of currencies on fears about the US losing the AAA rating.



They said the rupee trimmed its gains due to some dollar buying by banks, probably on behalf of oil companies.

Japan upgrades economic outlook

Japan's central bank has upgraded its economic outlook, saying the worst of the recession might be over.

The move came after the bank's two-day policy meeting, at which it opted to keep interest rates on hold at 0.1%.

While domestic demand is expected to remain low, the bank said exports, on which Japan is heavily reliant, were forecast to pick up.

Data on Thursday showed Japan's economy shrank in the first quarter at its fastest rate since records began.

Output contracted by 4% during the first three months of the year, or by 15.2% on an annual basis, as exports fell, according to official figures.

Recovering

"The pace of deterioration in the Japanese economy will likely moderate," the Bank of Japan said.

"Going forward, although domestic private demand is likely to continue to weaken, exports and production, after levelling out, are expected to start recovering and public investment to increase."

The latest outlook is more optimistic than the bank's forecast in April, when it said economic conditions had "deteriorated significantly".

While the bank did not provide new growth forecasts with numbers, it said it would expand the types of collateral on offer in order to encourage lending.

High costs fuel record loss at BA

British Airways has announced the biggest loss since the company was privatised in 1987.

BA reported a loss before tax of £401m for the year to 31 March, after seeing its results hit by a weak pound and higher fuel costs.

BA made a revised profit of £922m in the previous year.

Although revenues increased to almost £9bn, BA faced a near-£3bn fuel bill. Chief executive Willie Walsh said he saw "no signs of recovery anywhere".

Fuel costs rose 44.5% after the price of oil soared last year. The weaker pound also contributed to rising costs as fuel is bought in US dollars.

The results included redundancy-related costs of £78m.

BA said it had cut more than 2,500 jobs since last summer and added that it was in talks with unions about "pay and productivity changes".

"The prolonged nature of the global downturn makes this the harshest trading environment we have ever faced and, with no immediate improvement visible, market conditions remain challenging," Mr Walsh said.