Millennium Post

FDI in services slid 60% to $1.59 billion in April-December 2013

The services sector, which includes banking, insurance, outsourcing, R&D, courier and technology testing, had received FDI worth $4.04 billion in the April-December period of 2012, according to data with the Department of Industrial Policy and Promotion (DIPP). An industry expert said foreign investors are waiting for the next government.

‘Worldwide, foreign investors are eagerly waiting for elections. They want to take a call after the formation of the new government,’ said Krishan Malhotra, head of the tax division at corporate law firm Amarchand & Mangaldas.

The month-long general election will start on 7 April, with polls staggered over nine stages. With the drop in FDI in services, overall foreign inflows in the country dipped by 3 per cent to $22 billion during the nine-month period. Investments of $22.78 billion were made in April-December 2012.

The services sector contributes over 60 per cent to India's GDP. Other sectors where inflows have declined include construction development, metallurgical industries and hotel and tourism.

Foreign investment is considered crucial for India, which needs about $1 trillion in the five years ending March 2017 to develop infrastructure such as ports, airports and highways and boost growth.

A decline in foreign investment could affect the country's balance of payments and the rupee.

Sensex breaches 22,000 for first time; Nifty hits new lifetime peak

The benchmark Sensex on Monday briefly breached the 22,000 mark for the first time and then managed to end at a new record close with modest gains of 15 points, extending the rally to the fifth session, on the back of continued overseas investor interest linked to upcoming polls.
Capital goods, realty, banking and refinery segments gained while IT, pharma, teck and metal counters fell.

The BSE 30-share barometer resumed nearly 100 points lower on the back of weak Asian cues but later moved between positive and negative territory. It ended at a new closing high of 21,934.83, a rise of 15.04 points or 0.07 per cent.

This surpassed the previous closing high of 21,919.79 set on last Friday. The Sensex registered alltime high of 22,023.98 on Monday. In five days, the Sensex has gained 988 points.

The wide-based 50-issue CNX Nifty of the NSE also edged up by 10.60 points, or 0.16 per cent, to record its closing high of 6,537.25. It also touched a new intra-day peak of 6,562.20, surpassing previous lifetime peak of 6,537.80 hit on Friday. Sensex constituents including HDFC Bank, L&T, RIL, M&M, SBI, Maruti Suzuki and HUL notched up handsome gains. TCS, Infosys, Tata Motors, ITC, Sun Pharma, ICICI Bank, Dr Reddy's Gail India, Tata Steel, Wipro, Coal India fell.

Foreign institutional investors (FIIs) bought shares worth a net Rs 2,577.44 crore on last Friday, as per provisional data from the stock exchanges.

Upcoming data like IIP, CPI for urban and rural India and WPI will dictate the future trend, traders say.

‘Positive global cues, optimism ahead of upcoming elections and FIIs buying is leading to sustained momentum,’ said Nidhi Saraswat, Senior Research Analyst, Bonanza Portfolio.

Asian stocks closed lower as weaker-than-estimated Chinese trade and inflation data stoked concern over the outlook for the world's second-largest economy. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea and Taiwan closed lower between 0.46 per cent and 2.86 per cent.

Rupee rises to 7-month high of 60.85 per $ on heavy FII inflows

Continuing its upward sprint for the fifth trading session in a row, the Indian rupee rallied by 22 paise to close above 61-mark at more-than 7-month high of 60.85 against the Greenback following stable equities amid heavy capital inflows. Sustained dollar selling by exporters and some banks also enhanced the rupee sentiment while rise in the dollar value overseas could not able to stem the rupee surge. The main rupee supporter, FIIs bought shares worth $438.25 mln last Friday as per Sebi data, taking a total to almost $2.9 bln in the current month so far. The rupee commenced lower at 61.26 a dollar from last weekend’s close of 61.07 at the Interbank Foreign Exchange (Forex) market and immediately touched a low of 61.34 on early hesistancy in local equities. It later bounced back to a high of 60.79 before ending at 60.85 -level not seen since 6 August, 2013 when it had closed at 60.77— showing a rise of 22 paise or 0.36 per cent. In straight five sessions, it has flared up by 1.19 paise or 1.92 per cent. Pramit Brahmbhatt, CEO, Alpari Financial Services, (India) said, Rupee traded weak in the morning session but as the day progressed it appreciated and closed on a positive note. It strengthened to a seven-month high backed by the heavy foreign inflows into both equities and debt.
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