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short stories
INTRA-DAY
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R463.10

HURDLES AHOY TATA COFFEE UP Corruption scandals ON STARBUCKS and food prices have compounded Indias Boosted by the tieup with US coffee chain troubles as it eyes Starbucks, Tata group firm Tata Coffee on Friday China-style growth extended its morning
9:00 am

Slowdown blues here again

10
CHALLENGES THAT HURT THE INDIA STORY
Scamonomics
scandals are hitting political sentiment that can in turn hurt business climate. India has been rocked by five major scams last year. 2G spectrum sale and the Common wealth Games have put government behaviour under scrutiny
Corruption

HANG SENG 24,283.2 +44.3

KOSPI 2,108.2 +18.7

SHANGHAI 2,791.3 -36.4

H I N D U STA N T I M E S , M U M B A I S AT U R DAY, J A N U A RY 1 5 . 2 0 1 1

In 2011, everything gets a little better. Intel is very well positioned to benefit from the growth in data centres.
RUPEE/ 72.0 -0.7 BRENT CRUDE 98.3 $/bbl +0.2 LME COPPER 9,620.0 $/tn -45.0

quotemartial

PA U L S O T E L L I N I , chief executive of Intel, which saw record

profit and revenue at $3.39 bn and $11.46 bn respectively for Oct-Dec, riding on cloud-computing

NICKEL 25,750.0 $/tn +50.0

Indias economy is stuck with at least 10 headaches just when it looked like a challenger to China as the worlds fastest growing economy. From food prices that threaten stability to a worrying budget deficit, a welter of issues are haunting policy-makers again.

MUMBAI:

Spike in prices

Copious capital inflows

Foreign funds are causing a problem of plenty for India the only emerging economy which has not restricted foreign capital inflows. But these flows can go as fast as they come. What the country really needs is foreign direct investment (FDI)

Budget gaps
Policy uncertainties loom ahead of the budget, threatening the governments aim to rein in its deficit Runaway prices have upset the governments plans of implementing a carefully calibrated exit plan of the fiscal stimulus package set in motion during the world economic crisis. The plan was to fully withdraw the stimulus measures introduced to boost demand when the recovery in private demand both consumption and investment is sufficiently robust.

INFLATION DUE TO SUPPLY-SIDE BOTTLENECKS, SAYS ZOELLICK

HT Correspondent

gains and advanced by 20% to touch its upper limit on BSE. Defying the broad bearish market sentiment, the scrip reached the upper limit of R555.70 on BSE, and R557.50 also 20% up. More than 16 lakh crore shares of the company were traded.

HT Correspondent

letters@hindustantimes.com

PTI

Oil prices plunge to near $90 on US jobs

NEW YORK:

Oil prices fell to near $90 a barrel on Friday as a disappointing US jobs figure and a move by China to cool off economic growth dampened expectations of higher crude demand. By early afternoon in Europe, benchmark oil for February delivery was down $1.1 to $90.0 a barrel in electronic trading on the New York Mercantile Exchange. Brent crude was up 28 cents to $98.3 a barrel on the ICE Futures exchange in London.
REUTERS

Just when things seemed to be easing and India was raring to go in the high-growth league, the heat is on again. Food inflation has remained stubbornly high in the past few weeks, factory output growth has plunged to an 18-month low and the governments macro-economic managers are grappling for options to sustain growth while keeping prices under check. As if natural economic woes are not enough, we have seen the spectre of corruption scandals hurting governance and politics and in turn, policy-making. Last year, India was rocked by five major scamsfour of these in the last four months. India has slipped to 87th spot in Transparency International's latest ranking of nations based on the level of corruption, with the global watchdog asserting that perceptions about corruption in the country increased in the wake of the scam-tainted Commonwealth Games.
NEW DELHI:
CONTINUED ON PAGE 20

Food price inflation was at 16.9% at December-end. Food prices have knocked up prices of other goods. Weather problems in Australia, Argentina and Russia have hit global food and commodity prices, while oil prices are nudging $100 a barrel

letters@hindustantimes.com

NEW DELHI:

Industrial sluggishness
Indias industrial growth fell to 2.7% in November, the slowest in 18 months but an export uptick and strong consumer demand are encouraging.

Policy standstill
There have been no major policy decisions in recent months because policy-makers cannot agree on critical issues. Spats between ministers and a parliamentary logjam have hurt governance

Infrastructure crunch
Time and cost overruns have been a bane for Indias infrastructure projects. Equipment shortages, bad weather and delays in government clearances have resulted in major slippages in projects.

High interest rates

The RBI has raised key policy rates six times so far this fiscal year to cool prices. Costlier loans means costlier credit for consumers and higher expenses for manufacturers. Both could hit demand and growth. Most banks have hiked rates.

Inclusive growth conundrum

Not many innovative policy decisions have been taken in recent months to reach out to the poor, whose votes are vital for the Congress-led UPA. Consensus eludes proposed food security Act, while micro-finance institutions are mired in controversy.

Terror threats
Law and order and terror threats remain Indias key worry as an investment hotspot. Investment remains concentrated heavily in favour of few states.

World Bank Group president Robert B Zoellick said here on Friday that the high inflation in India has been caused more by bottlenecks on the supply side than by strong demand. As opposed to necessarily tightening monetary policy, I think the focus has to be on the increased production and productivity of agricultural products and thereby making the markets work more effectively, Zoellick said at a joint press conference with finance minister Pranab Mukherjee. Describing India as a global player and rising economic power, he said the high-level of growth in the country is helping the international economy recover from the crippling effects of recent financial turmoil. World Banks efforts are to bring the best development practices from around the globe to India and to share Indias experience and expertise with others. Infrastructure and agriculture are the key areas, which will help in solving the increasing food prices, said Zoellick. Mukherjee said India wants to reach a double-digit growth with moderate inflation and fiscal prudent policies.
CONTINUED ON PAGE 20

Text: Gaurav Choudhury/Icons: Abhimanyu Sinha

Tata Motors global sales up 21% in Dec

Tata Motors said its global sales increased by 21% in December 2010 to 90,294 units on robust demand for commercial vehicles but sales of luxury brands from Jaguar Land Rover remained flat. JaguarLand Rover sales were at 21,353 units during December, up just 1% from a year ago, Tata Motors said. Of this, Land Rover sales rose 4% while Jaguar fell 10%, it said.
NEW DELHI:
PTI

HDFC Q3 NET PROFIT UP 33% AT R891 CRORE

HT Correspondent

letters@hindustantimes.com

Super Religare Labs expects IPO soon

Religare Laboratories (SRL) on Friday said it expects to come up with its initial public offer (IPO) in the next couple of months. The company said it plans to invest R100 crore in 2011 to add 40 laboratories. We are preparing for it (IPO). It should happen in the next couple of months, SRL CEO Sanjeev K Chaudhury said.
PTI

NEW DELHI: Super

MUMBAI: Leading home loan provider HDFC on Friday announced a 33% growth in its profit at R891 crore in the quarter-ended December 2010 over the corresponding quarter last year on the back of a strong R167-crore profit booked on sale of investments. The company also saw its income rise by 16% at R3,149 crore during the quarter as a result of growth in disbursements. The incomes from operations stood at R2,705 crore in the quarter ended December 2009. The companys net profit witnessed a thrust as a result of treasury profits.

HT Correspondent

Sensex sinks again, 8.3% lost in nine sessions

letters@hindustantimes.com

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R 667.95

Todays close

R641.55

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Ill winds continued to blow through the bourses on Friday, with the Bombay Stock Exchange (BSE) benchmark Sensex ending below the 19,000mark the NSE Nifty below the 5,700 mark for the first time in four months. Market sentiments remained weak on account of rising inflation and expectation of a hike in interest rates by RBI later this month. The Sensex closed the day 1.7% below its previous close to 18,860 and the broader Nifty by by the same proportion to close the day at 5,654. The markets were volatile during the days trading, with the Sensex touching an intraday high of 19,447 and sinking to a low of 18,811 during the day. The Sensex has lost 1,700 points or 8.3% over the last nine trading sessions and has had a
MUMBAI:

19,192.82 18,860.44
3:30 pm

Todays close

9:00 am

weak beginning in the new year. Weak IIP numbers that were announced earlier in the week and the continuing rise in overall inflation impacted the market sentiments. Clearly, the Indian economy is confronting a few headwinds and one needs to be careful in the near term till there is more clarity, said Amar Ambani, head of research at India Infoline. The biggest losers of the day were the BSE real estate and banking indices, falling 2.8% and 2.6% respectively. Among Sensex companies Tata Motors and HDFC Bank fell the most and lost 4.6% and 4.2% respectively.

JP Morgan profit beats expectations

NEW YORK: JP

Morgan Chase & Co reported higher-than-expected quarterly earnings, helped by narrowing losses on bad loans that allowed it to release $2 billion in reserves. JPMorgan, the first of the major United States banks to report earnings for the fourth quarter, said profit increased to $4.8 billion, or $1.12 a share, from $3.3 billion, or 74 cents a share, a year earlier. Revenue increased 6% to $26.7 billion.
REUTERS

Saving grace: Indians fare better in money management

HT Correspondent

S A F E T Y PAY S

letters@hindustantimes.com

IN CONTROL

Hyundai launches Grandeur

South Koreas Hyundai Motor said it aims to sell 100,000 units of the redesigned Grandeur luxury sedans, which it launched on Thursday, globally this year. Hyundai launched the new model in South Korea on Thursday, and plans a gradual global rollout.
SEOUL:
REUTERS

managing finances, Indians are ahead of citizens of United States, Japan, South Korea and some other developed countries, says the ING Consumer Resourcefulness Survey. Also, Indians turn out to be the second, out of 10 leading nations in the world, to have a basic financial literacy level (55%), just behind the Japanese. The survey shows that Indians are better at managing their finances than most of the other countries in the survey, including being better prepared for their various life stages, especially retirement, said Uco Vegter, chief marketing and strategy officer, ING Life . However, they do tend to get lost in

MUMBAI: When it comes to

55% 87%

of the Indians have basic financial literacy. of Indian households have an emergency fund versus 33% globally

sourcing good advice to become better at money. The survey, conducted by ING Group, in association with the research consultancy firm Epiphany, was car-

ried out among 5,000 consumers across 10 nations. Majority of Indian consumers have shown better skills in managing their household financial budget and are confident of facing any financial impediments in future, as compared to citizens of 9 other countries, said the survey. The survey shows a staggering 84% Indians prefer buying life insurance products compared to 54% globally and a similar percentage of Indians believe in maintaining a household budget with focus on savings. Indians are much risk averse in case of borrowing money. While average Indians manage their finances in a much organised manner, they borrow money in case of needs such as buying a home (50%) and a car (43%).