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To: Perspective who wrote (209329)	7/6/2009 5:51:02 AM
From: RockyBalboa	Read Replies (2) \| Respond to of 306849

The Indian banks are blowing up, off 9% and 12% HDFC down 9% to 2353, ICICI down about 10% to 680 ------------------------------------------------- India’s Mukherjee to Borrow Record to Fund Budget; Stocks Slump Share \| Email \| Print \| A A A By Cherian Thomas and Kartik Goyal July 6 (Bloomberg) -- India’s Finance Minister Pranab Mukherjee announced plans to borrow a record 4.51 trillion rupees ($93 billion) to fund budget spending on roads, power and aid for the poor. Stocks, bonds and the currency slumped. Unveiling the budget for the year to March 2010, Mukherjee said India’s fiscal deficit is expected to widen to a 16-year high of 6.8 percent of gross domestic product from a revised 6 percent. Indirect taxes will be streamlined through a goods and services tax, he said in his speech in New Delhi today. Prime Minister Manmohan Singh’s government is spending more to speed up economic growth and reduce poverty in a nation where malnutrition is worse than Sub-Saharan Africa. Stocks and the currency weakened on investor disappointment that Mukherjee didn’t announce major asset sales and concerns a ballooning budget deficit may lead to a credit-rating cut. “The budget has failed to instill confidence as to how the government will achieve fiscal consolidation,” said Rupa Rege Nitsure, chief economist at state-owned Bank of Baroda in Mumbai. “With this kind of a deficit, there is a possibility that India’s rating may be downgraded.” The Bombay Stock Exchange’s Sensitive Index fell the most in three months, declining 4.19 percent to 14,287.54 at 1:34 p.m. in Mumbai. The currency weakened 0.9 percent to 48.32 a dollar and the yield on the benchmark five-year bond climbed 19 basis points to 6.42 percent. Mukherjee, 73, provided for only 11.2 billion rupees this year from the sale of stakes in state-run companies. Advisors to the finance minister, in a report on July 2, estimated the government could raise as much as 250 billion rupees each year over the next five years from asset sales. Election Victory Investor expectations of an acceleration in asset sales had surged after Prime Minister Singh won a stunning re-election victory in May, reducing his dependence in parliament on allies such as the communists who had opposed such offerings. “Any downgrade would adversely affect the outlook for foreign investments into the country and hurt growth,” said Chetan Ahya, a regional economist at Morgan Stanley in Singapore. Moody’s Investors Service places India’s long-term local currency rating at Ba2, two levels below investment grade. Standard & Poor’s and Fitch Ratings have a BBB- long-term rating on India, their lowest investment-grade level. The government plans to overhaul subsidies and is banking on 8 percent to 9 percent economic growth in the next two years to boost tax revenue and reduce the budget deficit to 5.5 percent of GDP by March 2011 and to 4 percent in the following 12 months. Tax Revenue India’s record growth of close to 9 percent in the five years ended March 31 helped tax revenue more than double since 2004. The $1.2 trillion economy expanded 6.7 percent last year, the slowest pace since 2003. A goods and services tax will be introduced from April 1 next year, which will subsume all indirect taxes and will levy only value-added production so that manufacturers don’t pay taxes twice. The fringe benefits tax will be scrapped. Mukherjee, who ran a closed economy as the finance minister in Indira Gandhi’s cabinet from 1982 to 1984, returned to the portfolio this year after serving as the defense and foreign minister during the bulk of Singh’s first five-year term. The budget also allocates more to ports, power, roads and other infrastructure, where inadequacies shaves about two percentage points off India’s growth rate, according to the finance ministry. Singh’s government wants to sustain growth rates of over 9 percent to help reduce poverty. The World Bank estimates 76 percent of Indians live on less than $2 a day, compared with 72 percent in the Sub-Saharan African nations. According to India’s National Family Health Survey, the child malnutrition rate in India is 46 percent, double that in Sub-Saharan Africa. “The first challenge is to revert the economy back to the high GDP growth rate of 9 percent per annum at the earliest,” Mukherjee told parliament today. “The second challenge is to deepen and broaden the agenda for inclusive development.” To contact the reporter on this story: Cherian Thomas in New Delhi at Cthomas1@bloomberg.net. Last Updated: July 6, 2009 04:57 EDT

To: Perspective who wrote (209329)	7/6/2009 8:00:54 AM
From: ChanceIs	Read Replies (1) \| Respond to of 306849

India up 75% since April. Time for a retrenchment. Obama in Russia??

To: Perspective who wrote (209329)	7/6/2009 9:53:02 AM
From: RockyBalboa	Read Replies (1) \| Respond to of 306849

Found a few coins in the two indian banks on nyse :) Jeez, ADRs can be "sticky"

To: Perspective who wrote (209329)	7/6/2009 1:24:49 PM
From: Peter V	Respond to of 306849

Monday July 6, 08:10 PM Markets tumble on govt deficit concerns By V. Ramakrishnan MUMBAI (Reuters) – The BSE Sensex (^BSESN : 14043.4 -869.65) fell nearly 6 percent on Monday, its sharpest slide in six months, and the rupee hit its lowest in more than a week as the government boosted spending in the budget to stoke demand, widening the fiscal deficit. Unveiling his first budget after the Congress-led coalition was re-elected with a stronger mandate in May, Finance Minister Pranab Mukherjee said spending would be ramped up by 36 percent to help lift growth to 7 percent in 2009/10. Bond yields rose the most in three months as investors grew wary of large market borrowing to bridge the shortfall in funds to spend on rural and infrastructure programmes, which are expected to result in higher supplies and depress appetite. While the previous government's reform efforts were stymied by its leftist allies, investors had hoped the new administration would be able to push through market friendly measures but the budget belied those expectations. "Those of the view that the budget would encompass all sorts of exciting structural economic reforms have just had their hopes firmly dashed," said Robert Prior-Wandesforde, senior Asian economist at HSBC. "Instead this was largely a populist budget focused mainly on the poor with plenty of promises of additional infrastructure spending," he said. The main stock index ended 5.8 percent lower at 14,043.40, its sharpest fall since Jan. 7 when it slumped 7.2 percent. In intraday trade, it had fallen as much as 6.4 percent. It was the lowest close since May 26, but the index is still up three-quarters from its 2009 low in early March. Mukherjee estimated the fiscal deficit at 6.8 percent of gross domestic product, its biggest level in 16 years. Markets had expected the government to announce a fiscal deficit of up to 6.5 percent, above last year's 6.2 percent. Bank shares were among the big losers as investors believed the large borrowing plan could hurt treasury income for lenders. Top lender State Bank of India (SBIN.NS : 1653.5 -156.15) dropped 8.6 percent to 1,655 rupees, No. 2 ICICI Bank (ICICIBANK.NS : 679.7 -75.25) fell 10.1 percent to 678 rupees -- both registering their sharpest fall since March 30. "The market is bothered by the increased expenditure, especially that for subsidies," said Nischal Maheshwari, head of research at Edelweiss Securities. The partially convertible rupee closed at 48.56/59 per dollar, falling the most in three months, compared with Friday's close of 47.89/91. It hit 48.57 in intraday trade, its lowest since June 25. The yield on the benchmark 10-year bond ended at 7.03 percent, after touching 7.04 percent, its highest since April 6. It had ended at 6.83 percent on Friday. The government set the gross borrowing target for 2009/10 at 4.51 trillion rupees ($93.4 billion) above 3.95 trillion rupees forecast in a Reuters poll last week. K. Ramkumar, head of fixed income at Sundaram BNP Paribas Mutual Fund, said the market would be watching how the government manages the higher borrowing programme. "The market will be looking forward to auction announcements, any new calendar schedule and whether this new calendar will be frontloaded or uniform," he said. The government's economic growth forecast is way above the central bank's projection of about 6 percent, lower than the 6.7 percent expansion in 2008/09. The growth has slowed significantly from a blistering pace of 9 percent or more in the previous three fiscal years.