India signs defence, security agreements with Qatar

Giving a strategic depth to their bilateral ties, India and Qatar signed agreements on defence and security addressing maritime security and sharing of intelligence to prevent terrorist activities.

The defence cooperation agreement includes issues of maritime security, while the pact on security and law enforcement would cover issues like common threat perceptions and sharing of data.



The agreements were signed as Prime Minister Manmohan Singh arrived in Doha from Muscat on a two-day visit to this energy rich Gulf country.



Singh met Qatar's Prime Minister Sheikh Hamad bin Jassem bin Jabr al Thani for talks on enhancing trade, defence and energy cooperation.



Singh would call on Qatar's Emir Sheikh Hamad bin Khalifa al Thani on Monday, who is also hosting a private lunch for the Prime Minister and his wife Gursharan Kaur.



Earlier, Singh, accompanied by a high-level delegation, held wide-ranging discussions with the Omanese leadership on enhancing trade, economic and energy ties.



In Doha, the Prime Minister was received by Qatar's Minister of State for Foreign Affairs Ahmad Bin Abdullah

Al-Mahmoud and the Council of Ministers. He was also presented a guard of honour.



An additional 2.5 million tonnes would be shipped under the same contract from January, but Petronet LNG Ltd, which imports LNG from Qatar, needs to tie up a similar quantity to fill the gap after the capacity of its Dahej import terminal in Gujarat is doubled to 10 million tonnes by March next year.

State-run gas utility GAIL India's proposal to set up a mega petrochemical plant in joint venture with Reliance Industries also figured during the discussion.

The GAIL-Reliance joint venture had earlier this year sought rich gas from Qatar, which holds world's third-largest gas reserves, for the petrochemical plant, but Doha had made no commitments, saying all its current production was tied up.

Singh would call on the Emir of Qatar Sheikh Harmed bin Khalifa al Thani, who is also hosting a private lunch for the Prime Minister and his wife Gursharan Kaur on Monday afternoon.



PM for cooperation with Gulf nations to ensure stability



Concerned over criminal and terrorist activities in India and the oil-rich Gulf, Prime Minister Manmohan Singh has said the two sides should work closely to ensure "a stable and prosperous region".



"Piracy, criminal activities and terrorism on our seas and land threaten the Gulf countries and India as well," Singh, on his maiden visit to the region, said addressing the Indian expat community in Muscat on the second day of his three-day visit to Oman and Qatar.



The Gulf region is part of India's "extended neighbourhood," and the largest source of the country's energy supplies, Singh said.



"The Gulf region is an area of great importance to India. It is part of our extended neighbourhood, and home to five million Indians. It is the largest source of our energy supplies," he said.



The Prime Minister, whose first stop on the visit was Oman, on Saturday evening held delegation level talks with Deputy Prime Minister Sayyid Fahd Mahmoud Al Said. He met the nation's Sultan Qaboos bin Said on Sunday afternoon.



He said "there are many reasons for us to work closely together with Oman to ensure a stable and prosperous region."



Lauding the contribution of the Indian expat community, Singh said annual remittances from Oman to India were more than USD 780 million.

"This is a reflection of your ties with the motherland and your confidence in India," Singh said.

The Government, he said, was alive to the welfare of the non-resident Indian community citing the memorandum of understanding with Oman on labour mobility, protection and welfare of workers signed on Saturday.

The Ministry of Overseas Indian Affairs is in the process of establishing Overseas Indian Community Welfare Funds in all Indian Missions in the Gulf, besides the Overseas Workers Resource Centre, a toll free helpline, has been established for Indian workers in the Gulf, Singh said.

An Overseas Indian Facilitation Centre provides opportunities for expats to invest in India.

The Prime Minister said destinies of the Gulf countries and India are closely interlinked, with large number of Indian expats based in the region acting as a "bridge between us".

"We have had a tradition of trade and civilisation contracts through the sea over many centuries. The large Indian community in Oman (numbering over 550,000) serves as a bridge between us, contributing to wealth and prosperity for both Oman and India," Singh said.

India, he said, was undergoing a major transformation. "Our economy is expanding rapidly. New opportunities for our youth are emerging every day. Our Government has embarked on the largest education, social welfare, skill development and employment generation programmes in the history of our country."

India's total non-oil trade with Oman, which was less than USD 200 million in 2000, has gone up seven fold to around USD 1.4 billion this year and Singh projected it to go up to USD 2 billion in near future.(AM-10/11)

India gold futures up on global cues

ndia gold futures opened higher on Monday tracking foreign markets, where the yellow metal gained due to a weak dollar and firm crude, but a strong rupee may cap gains, analysts said.

"The precious metals space is supported by the strong overseas leads but a strong rupee might cap the gains in gold and silver," said Harish Galipelli, head of research, Karvy Comtrade Ltd.

India imports most of its gold and pays for it in U.S. dollars and so the exchange rate plays an important role in determining local prices.

The rupee edged higher on Monday as a strong opening in the local stock market raised expectations of renewed capital inflows, with steps by the central bank to boost market liquidity also helping.

December gold is likely to trade in the range of 11,467- 11,770 rupees, said Pradeep Unni, senior research analyst, Richcomm Global Services DMCC.

December silver may be confined to 16,728 and 17,392 rupees, Unni added.

Open interest for December gold on MCX was at 8,912 lots, up from 8,842 a day earlier. Volume on Saturday was 1.81 kg.

World oil prices move $2 higher

World oil prices were higher in Asian trade today after OPEC refused to rule out further output cuts and China announced a massive stimulus package aimed at boosting domestic spending.

New York's main contract, light sweet crude for December delivery, advanced $2.13 to $63.17 a barrel. Brent North Sea crude for December delivery rose $2.14 to $59.49 a barrel.

China's four-trillion-yuan (€450 billion) stimulus package aimed at boosting its economy will mean increased demand for commodities including oil, dealers said.

The giant Asian nation is a major buyer of commodities and its thirst for oil imports to fuel its runaway economic growth in recent years was a key factor behind the surge in crude prices to record levels above $147 in July.

Meanwhile, OPEC president Chakib Khelil indicated over the weekend another round of production cuts may occur if oil prices remained below the cartel's preferred range of $70-90 a barrel.

The Organisation of the Petroleum Exporting Countries (OPEC), which pumps more than 40% of the world's crude, announced in October that its daily output will be cut by 1.5 million barrels to 27.3 million barrels from November.

The production cuts were aimed at shoring up prices which had fallen sharply from July's highs on fears energy demand would be hit by slowing economic growth.

OPEC's next meeting is scheduled to take place in Oran, Algeria, on December 17. Before that, OPEC's Arab members will meet in Cairo on November 29, said Khelil.

HSBC's US write-downs hit $4.3bn

Losses at Europe's biggest bank, HSBC, relating to the US housing market crisis reached $4.3bn (£2.7bn) in the third quarter.

The unprecedented turbulence in financial markets continued to present "enormous challenges", the bank added.

HSBC said it was still unclear whether there were "further risks to be uncovered" in the financial sector.

The bank recently announced it was cutting 1,100 jobs worldwide because of the current financial turmoil.

HSBC said its US losses reflected the continuing weak housing market and rising level of unemployment.

Elsewhere its battered investment banking business took a $600m hit due to credit crunch losses.

In a trading statment, HSBC said its profit for the third quarter was higher than during the equivalent period in 2007, without giving precise figures.

For the nine months ended 30 September 2008, pre-tax profit was lower than in the equivalent period in 2007, it added.

The bank said that its asset sales and growth in Asia helped offset the worsening US economy.

Stocks surge after China stimulus

Asian markets have risen sharply, a day after China announced a huge investment plan to kick-start its slowing economy.

Stocks leapt in Japan, China and Hong Kong, buoyed by China's efforts to sustain its growth rates, on which many Asian economies depend.

About $586bn (£370bn) is to go into housing, infrastructure and post-earthquake reconstruction in China over the next two years.

Correspondents say the package is a response to falling growth and exports.

There will also be significant cuts in company tax, while banks will be allowed to lend more to projects involving rural development and technical innovation.

The government also promised a shift to a "moderately easy" monetary policy.

"The investment expansion should be done swiftly and forcefully," a State Council meeting chaired by Premier Wen Jiabao concluded.

"It's a huge package," Dominique Strauss-Kahn, managing director of the International Monetary Fund, was quoted as saying by the Reuters news agency after a meeting of the Group of 20 finance officials in Sao Paulo, Brazil.

"It will have an influence not only on the world economy in supporting demand but also a lot of influence on the Chinese economy itself, and I think it is good news for correcting imbalances."

Market bounce

Chinese stocks rose sharply, with the Shanghai Composite Index ending 7.3% higher at 1,874.80. Tokyo's Nikkei 225 stock average closed up 5.8% to 9,081.43, helped by the weaker yen, while Hong Kong's Hang Seng Index was up 3.39% at 14,726.59.

Companies likely to benefit most from the government's investment plans did best, including banking, steel and construction firms.

Factory closures across the border in southern China have badly depressed China's manufacturing sector.

India seeks stake in Sakhalin-3 oil field

After Sakhalin-I and Imperial Energy, India is seeking more oil and gas fields in Russia, with Oil Minister Murli Deora pitching for properties in East Siberia, along with Russian Prime Minister Vladmir Putin.

Energy-hungry New Delhi is keen on sourcing one million barrels per day of oil and oil-equivalent gas from Russia, and has identified Sakhalin-3, fields in East Siberia, and Trebs and Titov oilfields in Timan Pechora region for the purpose.

Deora, on a two-day visit to Moscow to further energy ties with a nation that has the largest oil and gas reserves after Saudi Arabia, met Energy Minister Sergy Shemato on Tuesday and Putin on Wednesday.

Officials said he wanted 10-20 percent stake for ONGC Videsh Ltd, the overseas arm of state-run Oil and Natural Gas Corp (ONGC), in the giant Sakhalin-3 oil and gas field in Far East Russia.

Besides, the minister made a case for OVL joining hands with Russian firm Rosneft for exploration and development of some fields in East Siberia.



Joint bidding for Trebs and Titov oilfields in Timan Pechora region and Vankor oilfield were also raised, they said.

Inviting Russian companies to invest in new refinery and petrochemical projects in India, Deora also flagged with Putin the approval awaited for OVL's USD 2.59-billion acquisition of UK-listed Imperial Energy Plc.

Putin heads the Government Commission on Monitoring Foreign Investment in the Russian Federation, which along with Federal Anti-Monopoly Service, is to vet OVL application.

The deal is contingent upon Kremlin's approval as Imperial has assets in Tomsk region of western Siberia. OVL already has 20 percent stake in Sakhalin-I oil and gas field in Far East Russia.



Deora's interaction with Putin focussed on increasing India's presence in Russia beyond Sakhalin-1 oil and gas field in Far East Russia, in which OVL has 20 percent stake.

Officials said OVL was eyeing oil fields in East Siberia, which is estimated to hold some 20 billion barrels of reserves.



It is also looking at participating in Russian continental shelf that may contain oil and gas in 4 million sq km of its total area of 6.5 million sq km (largest in the world).

OVL has 20 percent stake in ExxonMobil-operated Sakhalin-I project, which pumps 210,000 barrel oil per day.

If Kremlin approves, Imperial would be the biggest overseas acquisition of OVL. It had paid USD 1.7 billion to buy a stake in ExxonMobil Corporation's Sakhalin-I field in Russia and USD 785 million for a stake in the Greater Nile project in Sudan, both in 2003.

Imperial produced about 10,000 barrel oil per day in December 2007 and is targeting to raise this to 80,000 barrels per day (four million tonnes a year) by the end of 2011, all of which can be shipped to India.

Oil prices up on export cut talks

The price of Brent crude has risen from its earlier 20-month low after reports suggested Saudi Arabia had already cut production to support world prices.

Brent crude rose $5.43 to $65.91 a barrel after falling as low as $58.38 during the session in London.

US light, sweet crude traded at $69.88 having peaked at $71.77.

Reports said Saudi Arabia had reduced its exports of oil by 900,000 barrels a day from their peak in August, with other oil producers following suit.

Saudi Arabia is the biggest oil exporter in the world.

Tim Evans at City Futures Perspective says the market is driven now by "a trio of supportive factors; a weaker US dollar, a push to the upside in global equity markets and market talk that Saudi Arabia may have already cut crude oil production."

Members of the Opec oil producers' cartel agreed in October to cut crude supplies by 1.5m barrels a day to boost prices, but investors had been waiting to see when the cuts would be implemented.

Growth worries

Earlier on Tuesday Brent crude fell to its lowest level since February 2007 amid concerns about the state of the US economy.

Oil prices have slumped since hitting a record of $147 a barrel in July, as consumers have cut their spending and the chances of a global recession have grown.

Credit Suisse has also cut its forecast for China's energy demand, predicting that it will remain unchanged in 2009.

Recent figures showed China's economic growth rate fell for the third quarter in a row, prompting fears of a wider downturn.

Growth slowed to an annual pace of 9% in the three months to September - down from 10.1% over the previous quarter.

There had been hopes that growth in developing nations such as China and India would help offset the slump in demand in US.

Asian stocks up on Obama victory

Asian stocks have risen following the election of Democrat Senator Barack Obama as the next US president.

Japan's Nikkei 225 index closed 4.4% up, Hong Kong's Hang Seng rose 3.2% and Singapore's benchmark index added 2.6%.

The climbs came after the US Dow Jones index had risen 3.3% on hopes a new leadership would help the US economy as it faces the threat of a recession.

There are expectations the Democrats will speed up economic measures to boost the world's largest economy.

The dollar also strengthened on the news. One euro was worth $1.2873, whereas earlier it had been worth $1.2975. The pound fell to $1.5866 after earlier trading at $1.5997.

And Australia's main stock index ended up 2.9%.

However, not all markets rose. India's Sensex index fell about 5%, and in Europe, where shares had risen strongly on Tuesday, the markets were also down. Both the FTSE 100 in London and the Cac 40 index in Paris were down by about 3%.

Change

Shares in New York rose on Tuesday as people in the US went to the polls for the presidential election. The Dow Jones Industrial Average closed up 305.5 points at 9,625.3.

Doug Kass, founder and president of hedge fund Seabreeze Partners Management, said the Wall Street rally was an "Obama bounce, not an Obama rally".

"It's growing clear that the recession is going to have a shelf life unlike the last recessions in both scope and duration," he added.

Rob Henderson, head of market economics with National Australia Bank in Sydney, said: "Well, it can't be negative for markets. It's a vote for change and has to inject a degree of optimism that America can again reinvent itself."

However, other analysts were less optimistic.

Kircy Daley, senior strategist of Newedge Group in Hong Kong said: "The knee-jerk complacency rally in Asia to an Obama win is likely creating an opportunity to sell.

He said economic fundamentals in the US were "deteriorating faster than the market can keep up with. And there is very little an Obama administration can do to shield Asia from the effects of this downturn."

As the US economy has slowed, Asian exporting firms - a mainstay of the region's economies - have been hard hit.

Fall in eurozone retail sales

Retail spending across the 15 nations of the eurozone fell in September, official EU figures have shown.

Hit by slowing consumer spending and the threat of a painful recession, retail sales fell 0.2% from August, and by 1.6% compared to September 2007.

The biggest annual fall came in Spain, where spending has fallen 7.1% in the last twelve months.

The European Central Bank (ECB) is expected to cut interest rates on Thursday to boost consumer spending.

Figures also announced on Wednesday showed that eurozone service sector activity in October fell to a record low.

Negative territory

The fall in retail spending is less than many economists had expected
"There is a slightly less-than-expected fall, but a fall nonetheless. Eurozone growth and retail sales are well into negative territory," said Matthew Sharratt at Bank of America.

He added that the figures should "virtually guarantee" a 0.5% interest rate cut from the ECB.

Spending on food, drinks and tobacco remained unchanged, while spending on non-food products fell by 0.3% from August.

The fall on the previous month across all 27 countries in the EU was 0.1%, and 0.4% from September last year.

Of the 15 eurozone economies, Germany suffered the biggest drop in retail trade from August, falling 2.3%. Compared with September last year, Spain suffered the biggest drop, with trade falling 7.1%.

Belgium experienced the biggest growth in retail sales, with a 1.4% increase over August and a 4.2% increase over September 2007.

Service sector

Meanwhile, the Markit Eurozone Purchasing Managers' Index for the services sector has revealed that activity in the sector in October fell to its lowest level since the index was introduced 10 years ago.

The index slumped to 45.8, below both economists' forecasts and September's score of 48.4. Any score below 50 represents a contraction in the services sector.

On Monday, Markit announced that the purchasing index for the manufacturing sector fell to 41.1, also a record low.

"The surveys continue to show record pessimism," said Guillaume Meneut at Merrill Lynch.

The European Commission announced on Tuesday that the eurozone economy contracted by 0.2% in the second quarter, and that the EU economy would "grind to a standstill" in 2009.

Cabinet to consider easing FDI in defence production

As part of the drive to shore up investor confidence and give thrust to manufacturing, government will consider relaxing rules for foreign direct investment in defence production, Commerce and Industry Minister Kamal Nath said.

The issue would be taken up by the Union Cabinet in the near future, Kamal Nath said on Tuesday.


"India can become a great manufacturer of defence items. So, we will like to see some easing up there," the Minister told reporters on the sidelines of a meeting organised by business chambers with visiting Belgian King Albert II.


He said the Cabinet would consider options to provide new thrust to the manufacturing sector.



Besides, streamlining the procedures for FDI would be on the government agenda.



Currently, 26 per cent of FDI is permitted in the defence sector.


Nath said despite troubles in the world economy, India continued to attract FDIs and the target of USD 35 billion for 2008-09 fiscal would be achieved.


In September this year, FDI inflows went up by 259 per cent to USD 2.56 billion, against USD 713 million in the same month last year.



For April-September period this year, the inflows went up to USD 17.21 billion from USD 7.25 billion in the comparable period a year ago, showing a rise of 137 per cent.


The government has made concerted efforts in the last few weeks to limit the impact of shrinking global credit on the Indian economy.


The Reserve Bank has injected liquidity in excess of Rs 260,000 crore, besides reducing the overnight lending rates.



The prices of aviation turbine fuel have been cut along with scrapping of the import duty.


The banks are considering lowering interest rates as well.

Sensex recoups from early losses to end higher by 293 points

Stock markets rose for the fifth day in a row on Tuesday as the benchmark Sensex advanced further by over 290 points on strong buying support sparked by bankers' assurance to Finance Minster P Chidambaram on considering cutting lending rates.

Markets opened weaker by 221 points after a four-day gaining spree which saw the Sensex rising over 1800 points but the bellwether index not only recovered the losses but gained further to settle the day higher.


The 30-share Sensex finally ended at 10,631.12, up by 293.44 points, or 2.8 per cent.



Its total gains in five straight sessions are now nearly 2100 points, a stark contrast to relentless decline seen last month during which it tested lowest level in three years.


The wide-based National Stock Exchange index Nifty also gained 98.25 points, or 3.23 per cent at 3142.10.


Brokers said markets which were down were revived by reports of Finance Minister P Chidambaram's comments that banks have assured him that they would consider the demand for lowering lending rates.


Realty and banking sectors surged on expectations of boom on likely cut in interest rate and assurance of housing and SME sectors of adequate liquidity.


Meanwhile, country's largest public sector lender State Bank of India on Tuesday said it will consider cutting down the benchmark lending rate by up to 50 basis points on Wednesday.


Punjab National Bank and Union Bank have already lowered their benchmark prime lending rate following a series of monetary measures taken by the Reserve Bank.