Saturday, August 14, 2010
Global Key Events
* More Americans unexpectedly filed applications for unemployment insurance last week. Initial jobless claims rose by 2,000 to 4,84,000 in the week ended Aug. 7.
* The trade deficit in the US unexpectedly widened in June to the highest level since October 2008 as consumer goods imports rose to a record and exports declined. The gap expanded USD 7.9 bn, the most since record-keeping began in 1992, to USD 49.9 bn in June.
* The UK’s trade deficit narrowed more than forecast in June as exports rose to a two- year high. The goods-trade gap shrank to GBP 7.4 bn from GBP 8 bn in May. Exports jumped 4.3% to the highest since June 2008, and imports rose 1%.
* European industrial production unexpectedly declined in June, led by a drop in durable consumer goods. Output in the economy of the 16 nation’s euro region dropped 0.1% from May, when it increased 1.1%.
* German exports rose more than economists forecast in June as the global recovery helped bolster an export-led expansion in Europe’s largest economy. Sales abroad, adjusted for working days and seasonal changes, rose 3.8% from May, when they increased a revised 7.9%.
* China’s industrial output rose the least in 11 months, retail sales growth eased and new loans climbed less than estimated, adding to signs that a slowdown is deepening. Production rose 13.4% in July from a year earlier, the statistics bureau said. Retail sales grew an annual 17.9% in July.
* China was a net buyer of Japanese bonds for a sixth straight month in June which is the biggest annual increase on record dating from 2005, according to a report released today by the ministry of finance in Tokyo. China purchased a net 456.4 billion yen of Japanese debt in June, which followed a net buy of 735.2 billion yen in May.
* Japan’s current-account surplus unexpectedly shrank for a second month in June as export growth cooled in a sign the recovery in the world’s second- largest economy is losing momentum. The gap narrowed 18% to Yen 1.047 tn from a year earlier.
Domestic Key Events
* The Centre’s indirect tax collections grew a strong 46.2% in the first four months of the current fiscal from a year ago, pointing at a pick up in economic activity in July after industrial production growth in June came in below expectation.The total indirect tax mop for April-July was Rs 96,223 crore, driven largely by customs collections, which grew over 70% in this period to Rs 41,545 crore.
* Govt will impose a 10% import tax on power equipment for big projects within weeks to help level the playing field between domestic and foreign firms jostling in what may soon be the world's biggest market. The tax would reverse a policy of zero import duty on equipment for mega projects introduced to meet India's urgent capacity shortages.
* Government agreed to allow import of Chinese-made telecom equipment by leading telecom operators in India. The decision was taken after Prime Minister's Office (PMO) level talks. By this new instruction the department of telecommunications (DoT) will allow leading operators to import equipments, which have been stuck for over eight months and were menacing the launch of 3G services.
* Food inflation rose to 11.4% for the week ended July 31. On an annual basis, cereals turned expensive by 6.97%. Within this group, prices of pulses soared by over 20% while rice and wheat increased by 6.89% and 7.93%, respectively.
* India has allowed export of 1,50,000 tonnes to 2,00,000 tonnes of sugar that was imported by millers but could not be shifted out of the port due to a shortage of railway wagons. Indian millers had asked the government to allow exports of about 7,50,000 tonnes of imported sugar, which has piled up at a key port due to a shortage of railway wagons.
* Growth in industrial production slipped to its slowest pace in 13 months, whereas food price inflation shot through the double digit mark yet again. IIP for the month of June to be only 7.1% higher than its level a year ago, way below the May growth rate of 11.3% and lower than markets expectation.
* State-owned BHEL is in the process of setting up new manufacturing plants at Pudukottai in Tamil Nadu for which it would invest Rs 293 crore and another at Jagdishpur in Uttar Pradesh at an investment of Rs 230 crore.