Repo rate hike and weak Asian markets to impact Indian market

Asian stocks fell on Thursday (June 12), driving the region`s benchmark index to a 10-week low, as financial companies and commodities producers slumped on concern faster inflation and slow growth.

Babcock & Brown, Australia`s second-largest securities firm, plunged to a three-year low. BHP Billiton, the world`s largest mining company, dropped in Sydney.

Japanese benchmark index Nikkei tanked 321.78 points, or 2.27%, to trade at 13,861.70.

Hong Kong`s index Hang Seng fell 516.98 points, or 2.22%, to trade at 22,810.62.

China`s Shanghai Composite lost 38.06 points, or 1.26%, to trade at 2,986.18.

Taiwan`s Taiex index lost 193.44 points, or 2.32%, to trade at 8,152.15.

Singapore`s Straits Times fell 56.94 points, or 1.87%, to trade at 2,989.83.

South Korea`s Kospi index fell 28.18 points, or 1.58%, to trade at 1,753.49. (8.20 a.m., IST)


Indian ADRs end weak

US stocks slumped on Wednesday (June 11) on concerns that inflation will further pinch consumers and lead central banks to raise interest rates.

The Dow Jones industrial average fell 205.99 points, or 1.68%, to 12,083.77. The NASDAQ composite fell 54.93 points, or 2.24%, to 2,394.01.

The yield on the benchmark 10-year Treasury note, which moves opposite its price, fell to 4.07% from 4.11% late Tuesday.

Indian ADRs ended on a negative note, barring Dr Reddy`s that ended marginally higher.

ADR Watch - Jun 11, 2008
Indian ADRs	USD($)	% Gain/(Loss)
Dr Reddy`S Laboratories	16.14	0.88
Mahanagar Telephone Nigam	4.40	(1.12)
Infosys Technologies	44.89	(1.84)
Tata Motors	11.75	(2.25)
Satyam Computer Services	25.32	(2.99)
Sterlite Industries (India)	18.29	(3.23)
Wipro	12.69	(3.28)
H D F C Bank	80.55	(3.77)
Tata Communications	20.26	(4.07)
I C I C I Bank	32.63	(4.51)
Patni Computer Systems	11.69	(5.5)

Oil leaps to USD 136.38 a barrel

Oil prices climbed on Wednesday (June 11) on a weak dollar and supply concerns

Light, sweet crude for July delivery rose USD 5.07 to settle at USD 136.38 a barrel on the New York Mercantile Exchange (NYMEX).

July gasoline futures rose 14.65 cents to settle at USD 3.4658 a gallon. The retail price of a gallon of regular gas rose 0.9 cent to a new record of USD 4.052.

July heating oil futures rose 16.24 cents to settle at USD 3.9748 a gallon at the NYMEX.

In London, July Brent crude rose USD 4 to settle at USD 135.02 a barrel on the ICE Futures exchange.

July natural gas futures rose 22.5 cents to settle at USD 12.66 per 1,000 cubic feet.

Home, auto loans likely to be costlier

Consumer, home, auto and other loans could become costlier with the Reserve Bank of India hiking its short-term lending rate to banks by 0.25% to 8% in the face of surging inflation.

Announcing the increase from 7.75%, the central bank said the decision was taken with a view to contain inflationary expectations as the rate of rise in prices touched a 45-month high of 8.24%.

The inflation is expected to climb over 9% once hike in petroleum prices gets reflected in the official wholesale price index.

The move to increase repo rate, at which the central bank gives short term money to banks in exchange of government securities, has been taken for first time this fiscal.

Unexpected repo rate hike of 25 basis points by the Reserve Bank of India will have an impact on the market, opined Suresh Iyer, technical analyst at Asit C Mehta.