Taking swift action to inject about Rs 60,000 crore into the cash-strapped system, the Reserve Bank on Friday announced an additional 1 per cent cut in mandatory requirements for banks to keep cash with the central bank over and above 0.50 per cent reduction announced earlier.
With this, a total 1.50 per cent cut in cash reserve ratio (CRR) to 7.50 per cent will come into effect from October 11.
India, US sign landmark 123 Agreement
India and the US on Friday operationalised the "path-breaking" bilateral nuclear deal as they signed the 123 Agreement in Washington, with New Delhi insisting that the accord is "legally-binding" on both sides.
External Affairs Minister Pranab Mukherjee and US Secretary of State Condoleezza Rice put the final seal on the agreement at an impressive ceremony held in the Benjamin Franklin Room of the State Department, culminating a crisis-ridden process initiated on July 18, 2005 in Washington during Prime Minister Manmohan Singh's visit for talks with US President George W. Bush.
"Both India and the US Administration have now completed all our internal procedures to be able to sign this path breaking agreement," Mukherjee said after signing the agreement, paving the way for entry of American companies into the Indian nuclear market after three decades.
PM rules out immediate cut in fuel prices
Ruling out an immediate reduction in petrol and diesel prices, Prime Minister Manmohan Singh has said the government will wait till public sector oil companies break-even on fuel sales before considering such a move.
International crude oil prices have slid from an all-time high of $147 to $60 a barrel, but public sector oil companies continue to make losses on sale of diesel, domestic LPG and kerosene.
"When we see that the Indian oil companies are able to sustain a reduction that will be the right (time for such a) decision," he told reporters on way back from his three-day maiden visit to the energy-rich Gulf region.
Though Indian Oil Corp, Bharat Petroleum and Hindustan Petroleum have started making profit on sale of petrol, they lose about Rs 155 crore per day on sale of other three products.
Oil companies have to bear a very heavy burden (and) there are limits to which government can go on subsidising," he said.
Government compensates half of the revenue loss on fuel sales through oil bonds and one-third of the losses are borne by cash-rich firms like ONGC.
Yet, IOC posted its largest-ever net loss of Rs 7,047.13 crore in July-September quarter. BPCL posted a net loss of Rs 2,625.17 crore in the second quarter on top of Rs 1,066.70 crore in April-June, while HPCL reported a loss of Rs 888.12 crore in Q1 and another Rs 3,218.92 crore in Q2.
"If prices keep on going down, we can explore these possibilities (of reducing prices)," the prime minister said.
Oil firms make a profit of Rs 4.12 a litre on petrol but lose Rs 0.96 on every litre of diesel, Rs 22.40 per litre on kerosene and Rs 343.49 per LPG cylinder.
Rupee reacts downward by 12 paise
The Indian rupee slid by 12 paise to 47.50/51 in line with the equity markets against the greenback in late morning deals on Tuesday.
The domestic unit moved in the range of 47.46 and 47.65 per dollar before being quoted at 47.50/51 on the Interbank Foreign Exchange (Forex) market.
It resumed sharply lower at 47.63/64, following the weakness in global equity markets.
At 10.30 am, the Indian benchmark Sensex was down by nearly 338 points or 3.21 per cent, while most of the Asian indices also quoted in the red.
Fall in global crude oil prices near $ 60 a barrel attracted oil refiners to buy dollars to meet their import requirements, which also weighed on the rupee.
Market participants are still wary about the recovery in sluggish world economy and expect more capital outflows in the near future, despite last week's net purchases.
Firmer dollar against most of the major rivals also dampened the rupee sentiment.
RIL, Infosys on Global Dow index
Four Indian companies - Mukesh Ambani-led Reliance Industries, IT bellwether Infosys, telecom major Bharti Airtel and steel giant Tata Steel - have been included in a new global stock index of 150 firms, The Global Dow, launched on Wednesday by index provider Dow Jones Indexes. Other companies in The Global Dow include world's largest steelmaker ArcelorMittal, financial services giant Citigroup, technology firm Apple, American retailer Wal-Mart Stores, search engine major Google and Japanese bellwether Sony. The Global Dow would measure the performance of 150 stocks of companies that are established global leaders as well as those poised for future global leadership.
"The turmoil of recent weeks has highlighted, among other things, how the global economy has converged, and the continuing rise to prominence of emerging countries."
"The Global Dow will recognise smaller, vibrant companies in emerging markets and in promising new sectors as the new corporate forerunners alongside their more established peers," said managing editor of The Wall Street Journal and Editor-in-Chief of Dow Jones & Company Robert Thomson in a statement.
The components of the index were selected by editors of Dow Jones & Company based on parameters like the companies' size, reputation and importance in the global economy.
According to the statement, the largest three components by float-adjusted market capitalisation in The Global Dow are American oil giant Exxon Mobil Corp., FMCG major Procter & Gamble Co and diversified conglomerate General Electric Co.
