The Daily Indian

Food inflation dropped to 17.81 per cent towards the end of February, but fuel inflation shot up due to a hike in excise and customs duty in the Budget.

Food inflation declined by 0.06 percentage points during the week ended February 27 from 17.87 per cent in the previous week.

Though a range of essential items still continue to be expensive, the rate of price rise has been falling for some time now. The declining trend, if sustained, would buttress the government’s confidence that prices will start easing from April onwards.

On year-on-year pulses were dearer by 33.38 per cent, slightly lower than over 35 per cent in the previous week, while potatoes turned costlier by 22.46 per cent. Onion rose by just 2.98 per cent.

Overall vegetable prices shot up by 15.61 per cent, while milk prices were up 15.31 per cent and fruits 11.77 per cent.

The budgetary announcement of a hike in excise and customs duty on petrol led to an increase in its prices by six per cent on weekly basis.

On yearly basis, petrol prices rose 16.82 per cent.

The rupee hit its highest in nearly two months, boosted by stronger regional peers and expectations of robust dollar inflows related to a share sale.

The partially convertible rupee ended at 45.375/385 per dollar, slightly off 45.345 hit late in the session, which was the highest since Jan. 11. It had closed at 45.6250/6350 on Tuesday.

There seems to be further appreciation on the cards. First support will be 45.2600 tomorrow, if that’s taken out then 44.80,” a trader at a foreign bank, who did not wish to be named, said.

Dealers said they expect a good response to the follow-on share sale in state-run NMDC, India’s largest iron ore producer, which runs from March 10 to 12.

They said custodian banks were seen selling dollars to participate in the share sale and this move brought the rupee to around 45.42.

They later sold dollars on expectations that local shares would advance further.

Foreign fund flows play a crucial role in determining the direction for the local sharemarket and also for the rupee. Since the middle of February, foreigners have purchased a net $2.6 billion worth of shares.

The BSE Sensex dropped 0.3 percent on Tuesday, mirroring weak global markets, with Reliance Industries and Tata Motors leading the decline.

The 30-share BSE index closed 0.29 percent or 50.06 points lower at 17,052.54, after testing six-month closing highs in the previous session. Nineteen of its components lost ground.

World stocks inched lower from the previous day’s six-week high as investors grew cautious after a recent rally in riskier assets.

The main BSE index is still up 4.9 percent since the budget announcement on Feb. 26, which pushed for fiscal consolidation and left higher consumption power in the hands of individuals.

Prices of Moong dal,Sugar declined, while rest all other commodities remained unchanged in the wholesale foodgrains market here today. Moong dal and Sugar went down by Rs.

100 per quintal to Rs.7,700 and Rs.

3,200 from Previous rates of Rs.7,800 and Rs.

3,300. Thoor dal,urad dal,gram dal,wheat,maida and Sooji prices unaltered from their previous levels.

Following are the today’’s rates per quintal: Thoor dal Rs 6,500,urad dal Rs 6,000, moong dal Rs 7,700, gram dal Rs 2,500,sugar Rs 3,200, wheat Rs 1,700, maida (90 kgs) Rs 1,700 and sooji (90 kgs) Rs 1,800.

ITC Ltd said that hike in cigarette prices was inevitable due to imposition of excise duty on tobacco in the Union Budget for 2010-11.

“Increase in cigarette prices is inevitable,” spokesperson of ITC Najeeb Arif told PTI.

He said that while the effective rates of taxation on cigarettes prior to the Budget announcement was 190 per cent, it (the budget) had imposed another 17 per cent excise duty hike.

Arif said the company had not yet made the increased invoice and stocks at the old price were still available in the market.

The company did not divulge on which brands the company would effect a price hike.

Meanwhile, many cigarette dealers in central Kolkata said that they had run out of stock for some brands like Gold Flake.

The price rise was necessitated after evaluating the impact on excise hike on costs, he said.

India’s annual food price inflation based on wholesale prices rose slightly to 17.87% for the week ended Feb 20 from 17.58 the week before, as per official data released Thursday.

The government’s decision to hike auto fuel prices has resulted in fears that food prices could rise further in the coming months.

Both houses of parliament had Wednesday witnessed stormy scenes as opposition members demanded a rollback of the fuel price hikes, saying they would have a cascading effect on the already high prices of essential commodities.

The BSE Sensex snapped a 3-day winning streak on Thursday as weak global markets prompted investors take profits, while a firmer rupee and an expected increase in wages hit export-focused outsourcers.

The 30-share BSE index closed down 0.2 percent, or 28.31 points, at 16,971.70, with half of its components declining, after rallying 4.6 percent over three sessions.

Japanese automaker Nissan Motor Co. is recalling about 540,000 pickup trucks, sport utility vehicles and minivans to fix problems with brake pedals and fuel gauges.

Most of the recalled vehicles are in the US, with smaller numbers scattered across the globe.

The brake pedal recall affects 179,000 vehicles in the US and about 26,000 in the Middle East, Canada, Russia and several other countries.

A pin in the pedal assemblies on certain 2008 to 2010 Nissan Titan pickups, Infiniti QX56 and Nissan Armada Sports Utility Vehicles, and some 2008 and 2009 Nissan Quest minivans can come loose and cause reduced braking force, Nissan said Tuesday in a statement.

No injuries or crashes have been reported, the company said. Customers with loose brake pedals should contact their dealer.

Nissan blamed the problem on a manufacturing defect by a parts supplier. Dealers will inspect the vehicles for loose pins and repair them if necessary.

The company said in a statement that all vehicles now on sale do not have the problem.
Nissan also is recalling 419,000 vehicles in the US and 53,000 elsewhere because gas gauges can show fuel left in the tank when it’s actually empty.

The recall affects 2005 through 2008 Nissan Titan, Armada and Infiniti QX56s as well as Nissan Frontier pickups and Pathfinder and Xterra SUVs produced between January and March 2006 and between October 2007 and January 2008.

Due to a problem with a sensor inside the fuel tank, the gauges can show gas tanks a quarter full when they are in fact empty.

Nissan suggests keeping a half-tank of gas in the vehicles until the gauges can be repaired, eliminating the risk of running low on fuel.

Owners of vehicles in both recalls will be notified when to bring their cars and trucks in for repairs. In materials distributed to dealers, Nissan said the brake pedal recall begins on March 22, while the fuel-gauge recall will take place in two groups, one beginning March 22 and the other starting in April.

About 130,000 vehicles are covered by both recalls.

The Bombay Stock Exchange benchmark Sensex surged up by a whopping 243 points, or 1.47 per cent, in the opening trade on Tuesday on capital inflows by foreign funds, driven primarily by a rally on global bourses.

The 30-share index, which had gained 175.35 points in the previous session on Friday, rose by 243.55 points to 16,673.10 points with metals, auto and oil & gas sectors leading the rally.

The wide-based National Stock Exchange index Nifty also went up by 74.10 points, or 1.26 per cent to 4,996.40 points, inching towards the psychological 5,000-points level.

Stock brokers said trading sentiments were helped by an overnight gain in the US markets and cut in surcharge on corporate tax in the Budget, triggering widespread buying.

The BSE metal sector index rose the most with a gain of 1.86 per cent at 16,707.27 with stocks of Sterlite Industries rising by 2.70 per cent to Rs 802.10, Hindalco by 2.14 per cent to Rs 164.70, Tata Steel by 2.25 per cent to Rs 586.55, JSW Steel by 2.04 per cent to Rs 1,092.90 and Tata Motors by 7.36 per cent to Rs 763.40.

Indian stock markets, which were in stasis for much of this week, reacted positively to the budget, with a benchmark index breaking free to close 237 points higher than its previous weekly close.

The 30-share sensitive index (Sensex) of the Bombay Stock Exchange (BSE) moved up 237.92 points or 1.47 percent to end Friday at 16,429.55 points, 237 points above its previous weekly close at 16,191.63 points.

The broader S&P CNX Nifty of the National Stock Exchange (NSE) too posted gains to end the week at 4,922.3 points, up 77.4 points or 1.57 percent.

Broader market indices, however, ended the week in the red with the BSE midcap index closing 0.54 percent down and the BSE smallcap index 1.67 percent lower.

“Though it is not possible to keep everyone happy, the finance minister has done a commendable job. This was evident from the way markets reacted to the announcements,” said Jagannadham Thunuguntla, the equity head for brokerage firm SMC Capitals.

“The budget did help in breaking from the side-ways movement, but it is not going to help much going forward. A lot of the budget news has been factored in and one should not expect a major rally,” he added.

The top gainers during the week included Hindalco (up 7.7 percent), Maruti Suzuki (up 6.8 percent), L&T (up 6.2 percent), Hero Honda (up 5.5 percent) and ICICI Bank (up 5 percent).

Among top losers were ITC (down 6.5 percent), Reliance Communications (down 2.8 percent), Tata Power (down 2.2 percent), Hindustan Unilever (down 2.2 percent) and Reliance Industries (down 0.6 percent).

Data with markets watchdog Securities and Exchange Board of India (SEBI) showed that foreign funds were net buyers during the week, having bought scrips worth $313.56 million.

Benchmark indices in the US ended slightly lower this week with Dow Jones industrial average dipping 0.8 percent, the Standard and Poor’s 500 Index 500 down 0.4 percent and the Nasdaq composite falling 0.3 percent.