The Hindu Business Line : Weekly News Round-up

The rupee opened last Monday at 40.64/65 and fell to a low of 41.76 during the week. At those levels, the rupee got support due to dollar selling by large corporates such as L&T and exporters and it closed at 41.59/60 last Friday.

The rupee got hit due to heavy demand from oil refiners as the price of global crude continued to bubble touching $125 per barrel.

The sentiment for the rupee was also affected following a quarter per cent cut in US interest rates.

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Crude prices have appreciated by 100 per cent in last one year. On May 7, crude oil on NYMEX traded at $123.53 a barrel, double the price of $61.55 a barrel exactly a year ago. Crude soared even higher last Friday crossing $125 a barrel.

A week ago it was $113.50 and a month ago $109.05. This extra-ordinary price increase has sent ripples across the global economy.

Oil prices zoomed due to instability in Iraq and disruptions in Nigeria amid growing global fuel consumption.

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Turnover on the commodity exchanges took a severe beating last Monday after the Finance Minister, Mr P. Chidambaram's statement that the Government was weighing the option to suspend futures trading in some more products.

Turnover on MCX plunged 55 per cent to Rs 1,938 crore, while on NCDEX it fell 6 per cent to Rs 1,471 crore.

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The steel industry last Wednesday agreed to reduce prices of all primary steel products to contain inflation.

Producers will cut prices of flat steel by Rs 4,000 per tonne while in the case of long products like re-rolled bars and other structural products, prices would be reduced by Rs 2,000 per tonne.

However, global steel prices continued their upward march even as the Indian steel companies are finding it hard to pass on the increase in raw material cost to the end consumer.

Over the last fortnight, hot rolled coil prices in the US have gone up $94 per tonne to $1,097, while cold rolled coil rose $76 per tonne to $1,194.

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Italian super-bikes maker Ducati Motor Holding announced its entry into the Indian market with its high-end motorcycles priced in the range of Rs 15-50 lakh.

Ducati is entering the Indian market through partnership with Precision Motor India Pvt Ltd, which would import its bikes.

The company plans to sell 50 units in the first year through its dealerships in Delhi, Mumbai, Bangalore, Chennai and Hyderabad.

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Inflation rose to 7.61 per cent for the week ended April 26 as against 7.57 per cent the previous week.

Promising more administrative steps to check the price rise in the economy, Mr Chidambaram said that after having persuaded steel producers to reduce prices and placing a ban on futures trading in four more commodities - gram, soya oil, potato and rubber - the Government was also in the process of persuading cement producers to rollback prices.

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Rising oil prices and high inflation figures hammered stocks over the entire week, dragging the benchmark indices down by almost 5 per cent from last Friday's close.

The market had shown a brief turnaround on IT bellweather Infosys' fourth quarter results and the Sensex went on to touch a high of 17,735 on May 5 before the trend reversed.

The Sensex lost 863 points during the week, falling steeply by 4.90 per cent from a high of 17,600 to 16,737 on Friday. The Nifty fell 4.69 per cent to 4,982.60 from last week's close of 5,228.2. *************************************************************

Compiled by M J Madhavan
Podcast by A. Srirengarajan and S.Vasudevan