Mumbai: The euphoria over upbeat holiday season sales and Europe coming out with a concrete solution to tackle the debt crisis has fizzled out. The US markets ended on a mixed note after rallying on Monday as markets looked for signs of progress in Europe. While Eurozone ministers agreed on Tuesday to expand the bloc’s bailout fund, the size suggested was much less than hoped for. If the officials in Europe are not able to avert the crisis, then the American banks which have large exposure to the credit default swaps (insurance for European bonds) may be affected said analysts. The Standard & Poor’s 500 Index moved up 0.2%, The Dow Jones Industrial Average ended up 0.3% and The Nasdaq Composite Index fell 0.5%.
Asian markets also retreated in early trade following subdued closing on Wall Street. Mining and property shares were leading the losses on Wednesday morning session. Japan’s Nikkei Stock Average declined 1%, China’s Shanghai Composite was down 0.6%and the Hong Kong’s Hang Seng Index fell 0.8% at the time of writing.
Amidst growing signs of a worsening of the world economy, the Markit/JMMA Japan Manufacturing Purchasing Managers’ Index for November came in at 49.1, indicating a contraction in the country’s manufacturing sector. Output recorded the fastest decline since April 2011.
Back in India, Air India will go ahead with the purchase of all the 27 Boeing aircrafts which it had decided to acquire in 2006. The cash-strapped airline has decided to go ahead with the plan; despite the fact that it is seeking to get more money from the government and is trying to pare costs. The airline is looking at a sale-and-leaseback arrangement to partially reduce the financial stress which the purchase will entail.
The Ashok Piramal Group is entering a joint venture with IDFC Project Equity Fund and Canada’s engineering group SNC-Lavalin Group Inc. to develop public private partnership highway project. The three companies will commit around Rs 1,560crore in equity over the next three-five years. Ashok Pirmal Group will hold the highest amount of stake at 51% in the JV.
GTL group will be in focus on Wednesday as the consortium of lenders led by IDBI Bank and ICICI Bank which have given money to the company have sought a personal guarantee from the promoter of the company as part of the negotiations for corporate debt restructuring (CDR), reports Business Standard. The promoter is reportedly reluctant to agree to the extent of the guarantee.
JSW Steel which was already suffering losses after the acquisition of Ispat may see turbulent times ahead. The steel major is staring at a 15 December deadline for Rs 1,588 crore infusion by promoters and also conversion of foreign currency convertible bonds in the next six months, reports Business Standard. The company had issued warrant worth Rs 2,117 crore to Sapphire Technologies to meet its capex plans. With the share prices at 50% discount to the warrant issue price, the company may see financial stress.
Lipitor is all set to go off patent in the United States as Ranbaxy continues to struggle to get approval from the American regulator, reports Economic Times. India’s third-largest company which has exclusive rights to the off-patent version of Lipitor is harping on sales of the copycat version of the drug. Analysts said that failure by Lipitor to launch the generic version of the drug will devastate the company.
India’s GDP numbers for the September quarter will be out on Wednesday. A Bloomberg survey of economists shows the median estimate of GDP growth at 6.8%.
Lastly, it is cheaper to drive cars in United States and other neighboring countries than India. Petrol in India is costlier than most of the countries because of high taxes reports Economic Times. Petrol in Delhi today costs Rs 66.42 per litre as against Rs 44.88 a litre price in the US even after the reduction in the petrol prices this month.