Nik's Diary
The Indian markets opened in the green today, tracking positive opening in most of the Asian markets as stocks moved higher to take back some losses made yesterday, when investors reacted to news that a bailout for Cyprus would include a tax on bank deposits. A bailout of Cyprus announced over the weekend included a controversial proposal to levy tax of up to 10% on all the country's bank accounts, sparking widespread public anger and fears of a run on some banks in the region. US stocks moved lower over the course of the day yesterday as markets responded to news of a bailout agreement for Cyprus that raised concerns about a run on the Mediterranean island's banks. Cyprus' parliament has postponed a vote on the proposed bailout, which has generated significant opposition, as it is seen to unnecessarily tax deposit holders. Meanwhile, the National Association of Home Builders released a report showing an unexpected drop in US homebuilder confidence in the month of March with Wells Fargo Housing Market Index coming in at 44 as against 46 in February. Meanwhile Indian markets fell yesterday, in tandem with the global sell-off in equities and commodities as an unusual bailout proposal for Cyprus fuelled concerns that Europe's debt crisis may deepen. However, shares ended off their day's lows, as hopes of a rate cut by the RBI at its mid-quarter policy review to be announced today helped to limit the downside.
Markets nervous ahead of Cyprus’ vote on bailout package
Asian markets tumbled on Monday and the euro sank as Eurozone fears returned on news that Cyprus was planning to tax bank depositors as part of a controversial bailout. Wall Street also provided a weak lead, with the Dow seeing its first loss after a 10-day rally as data pointed to ongoing softness in the US economy.Tokyo fell 2.71 percent, or 340.32 points, to end at 12,220.63, Sydney slipped 2.05 percent, or 104.8 points, to 5,015.4, a two-week low, while Seoul ended 0.92 percent lower, sliding 18.32 points to 1,968.18. Hong Kong lost 2.00 percent, or 449.75 points, to end at 22,083.36 and Shanghai shed 1.68 percent, or 38.39 points, to 2,240.02.Investors have been spooked by news that Cyprus agreed to a levy of up to 10 percent on bank depositors as part of a deal with fellow Eurozone countries and international creditors in order to qualify for a $13 billion bailout. Deposits of more than 100,000 euros ($129,000) will be hit with a 9.9 percent charge and 6.75 percent for anything below that threshold. The proposal must still be passed by parliament. President Nicos Anastasiades said in a televised address Sunday the tax was the “least painful” option for the recession-hit island and vowed to try to persuade the Eurogroup to “limit the impact on small depositors”. While bank customers have voiced dismay and anger at the plan, global markets were jolted amid fears it could reignite the Eurozone debt crisis and hit confidence in other troubled countries such as Spain and Italy. In early European trading shares in London, Paris and Frankfurt slumped between 1.5 percent and 2.0 percent.“The feeling is that the euro crisis could be back and that you could see full on contagion, that’s why you’re seeing the market reaction today,” said Shane Oliver, head of investment strategy and chief economist at Amp Capital in Sydney. “But I suspect that we are going to hear reassurances from other countries that Cyprus is different and that this plan will not be put in place elsewhere,” he told Dow Jones Newswires.On currency markets the euro fell to $1.2933 and 122.75 yen from $1.3075 and 124.61 yen in New York Friday. The dollar dropped to 94.88 yen from 95.26 yen, although it received some measure of support from expectations that the new leaders of the Bank of Japan will unveil a fresh round of monetary easing to jumpstart the economy. The Dow on Wall Street finished down 0.17 percent, the first time in nine days it did not set a fresh record, while the S&P 500 lost 0.16 percent after moving within a whisker of its own all-time high. The tech-heavy Nasdaq dropped 0.30 percent. Dealers went into sell mode after the University of Michigan Consumer index took a surprising dive to 71.8, its lowest since the end of 2011 and down from 77.6 in February. Analysts had expected a gain. Oil prices fell, with New York’s main contract, light sweet crude for delivery in April, dropping $1.18 to $92.27 a barrel in the afternoon and Brent North Sea crude for May delivery shedding $1.50 to $108.32. Gold was at $1,604.62 an ounce at 0810 GMT compared with $1,592.60 late Friday.In other markets: Taipei fell 1.47 percent, or 116.15 points, to 7,811.34.Taiwan Semiconductor Manufacturing Co. was 2.4 percent lower at Tw$100.5, while leading smartphone maker HTC rose 2.3 percent to Tw$240.0. Manila fell 1.78 percent, or 118.42 points, to 6,536.18.Philippine Long Distance Telephone slipped 1.8 percent to 2,790 pesos and SM Investments plunged 4.2 percent to 1,033 pesos. Wellington fell 1.05 percent, or 46.03 points, to 4,341.02.Fletcher Building eased 3.83 percent to NZ$8.80 and Contact Energy was down 1.25 percent at NZ$5.52 but Telecom rose 2.24 percent to NZ$2.28. Source: thenews
Bharti Airtel can continue offering 3G services till 8 May: Delhi HC
Telecom major Bharti Airtel has got interim relief till May 8 from the Delhi High Court which stayed the government order asking the firm to immediately stop 3G services in select regions. The court has stayed the execution of a department of telecommunications (DoT) order to immediately stop 3G mobile services by companies where they do not own licences. The court also let the telco continue its 3G roaming pacts until the next hearing, scheduled for May 8.The order was challenged by Bharti Airtel whom the department had asked to stop offering the services in seven zones where it was doing so through sharing of the airwaves with service providers which had the licences for those zones. The Delhi High Court also said Airtel would not immediately need to pay the penalty. The court has, however, asked the operator to maintain a separate account for its 3G revenue. DoT will invoke a bank guarantee if Bharti loses the case. This is the second time the High Court has come to the operator’s rescue. Last year, Airtel had challenged a similar order from the DoT after which the court directed the department to take action only after hearing out the operator. The case relates to the 3G auctions for airwaves in 2010 where no company had won the band for pan-India. As the companies began to roll out their services it meant they had to use each other’s spectrum. Last year, the DoT sent show-cause notices to Airtel, Vodafone and Idea Cellular among others, asking them to stop providing 3G mobile data services through roaming pacts outside their licensed zones as it deemed the pacts “illegal”. The government sold 3G airwaves in an auction in 2010 that attracted much higher bids than expected, and no single company managed to get spectrum for all of the country’s 22 zones. The government passed an order, asking telecom companies to stop offering 3G services beyond their licensed circles or zones under mutual roaming agreements. Several telecom companies — including Airtel, Vodafone, Idea, Aircel and Tata Teleservices — had filed petitions in the Telecom Disputes Settlement and Appellate Tribunal (TDSAT), challenging the December 23, 2011, directive of DoT to scrap their intra-circle roaming pacts within 24 hour .DoT is currently preparing separate notices for Vodafone and Idea Cellular in this regard and court’s final judgment will impact these players as well. Source: Firstpost
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