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Japanese economy grows 3.5% in Q4

Tokyo, March 12: Japan's economy grew at a brisk 3.5% annualised pace in the fourth quarter of 2007, showing unexpected resilience in the face of growing fears of a US recession, official figures showed Wednesday.

Investors reacted positively to the robust fourth-quarter growth, which was only slightly weaker than an initial estimate of a 3.7% expansion in the three months to December.

While business investment held up better than expected, the report failed to completely erase concerns about the outlook for the world's second largest economy.

The worry is that Japan's export-led recovery could stall if US economic troubles deepen, hitting demand for Asian goods.

Gross Domestic Product (GDP) grew by 0.9% compared with the previous quarter, unchanged from the initial estimate, the Cabinet Office said.

Financial markets had been braced for an even weaker performance after a finance ministry survey showed a 7.7% year-on-year fall in capital spending in the three months to December.

"The figure was not revised down as much as the market had feared," said Daisuke Uno, chief strategist at Sumitomo Mitsui Banking Corp (SMBC).

The stronger-than expected-growth report helped to lift investors' spirits.

Japanese stocks closed up 1.6%, helped by a powerful rally on overseas markets after major central banks moved to pump hundreds of billions of dollars into the financial system to ease a global credit squeeze.

"Capital investment was not revised down as much as markets had expected, which signals it remains strong alongside robust exports," said Norio Miyagawa, economist at Shinko Research Institute.

"However, there remains a gap between stronger exports and a slump in household consumption," he added.

The government said corporate capital investment in new equipment and factories increased by 2% quarter-on-quarter, down slightly from an initial 2.9% rise.

Private and household consumption both grew by a tepid 0.2%.

The Japanese economy is gradually rebounding from recession in the 1990s but consumer spending has remained sluggish, raising worries that the export-led recovery could be hit hard by a global slowdown.

Despite the better than expected GDP data, concerns about the health of the world's second largest economy have grown amid fears of a US recession that could hit Japanese exports and corporate earnings.

With the sub-prime crisis hitting the US economy, "Japan is not in a situation where we can be optimistic. An economic slowdown here cannot be avoided," said Miyagawa of Shinko Research.

Analysts said that the Bank of Japan, which is engulfed in a political row over the appointment of its next Governor, may be forced to cut its already super-low interest rates this year to stave off a slump.

"Markets are pricing in more than a 30% likelihood that the BoJ will cut rates this year," said Tomoko Fujii, chief economist for Bank of America in Tokyo.

But she said a recession here still seemed unlikely

"Chinese growth will continue to support the Japanese economy and Japan's banking sector does not face the problems of its US counterpart," said Fujii.

The government also reported that Japan's current account surplus grew 8.1% in January from a year earlier to 1.24 trillion yen as exports grew and income on overseas investments rose.

The figure was ahead of market expectations for a surplus of about 1.21 trillion yen.

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Wall Street slips on rethink of Fed plan, oil over $110
13 Mar, 2008, 0303 hrs ....................

NEW YORK: US stocks fell on Wednesday as optimism receded about the Federal Reserve's latest initiative to ease credit market strains, while a jump in oil prices to a record above $110 a barrel raised fears of further strains on corporate profits.

Financial shares dragged indexes lower a day after the market posted its best day in five years. Tuesday's gains came in response to a coordinated effort by central banks to free up credit markets that have nearly ground to a halt in the wake of the US housing meltdown.

Wednesday's session opened higher but the rally gradually lost steam over doubts about the long-term impact of the central bank actions. Bank of America dropped 1.8 percent to $37.03, while Citigroup fell 1.3 percent to $21.21. An S&P index of financial shares lost 2.1 percent.

Oil hitting a record $110.20 a barrel didn't help matters, pulling down shares of transport companies and others sensitive to rising energy costs. The Dow Jones Transportation Average fell 1.6 percent. The Dow industrials would have dropped further if not for a 3.6 per cent gain to $75.25 by Caterpillar Inc.

The world's largest maker of construction and mining equipment raised its revenue forecast in anticipation of strong overseas spending on infrastructure. But the main focus remained a plan led by the U.S. Federal Reserve to expand a lending program and accept as collateral a broader base of securities, including mortgage bonds whose value has dropped as the housing bubble burst.

"One bold move by the Fed doesn't solve all the problems and all the issues," said Georges Yared, chief investment officer at Yared Investment Research in Wayzata, Minnesota. "People are trying to assess how the Fed's move will begin to benefit corporate earnings and move the banks along to start loaning money." The Dow Jones industrial average shed 46.57 points, or 0.38 percent, to 12,110.24.

The Standard & Poor's 500 Index slipped 11.88 points, or 0.90 percent, to 1,308.77. The Nasdaq Composite Index dropped 11.89 points, or 0.53 percent, to 2,243.87. In the broader market, the telecom and health-care sectors dragged. Shares of top US phone company AT&T Corp slid 2.1 percent to $35.32 on the New York Stock Exchange. Shares of Humana, one of the biggest Medicare plan providers, plummeted 13.7 percent to $40.88 after the company cut its first-quarter earnings forecast nearly by half. Other health-care companies' shares also fell, with UnitedHealth Group Inc's stock falling 4.1 percent to $36.68.

Humana's lower outlook came a day after a gloomy forecast from rival WellPoint Inc sent the entire health insurance industry reeling. On Tuesday, the Dow and Nasdaq rang up their biggest daily percentage gains since March 2003 after the Fed said it was expanding a lending program and will a broader range of securities, including mortgage bonds, as collateral.

But persistent concerns about the economy's health cooled off the market's earlier attempt to extend the rally into a second day. Trading was moderate on the New York Stock Exchange, with about 1.56 billion shares changing hands, below last year's estimated daily average of roughly 1.9 billion, while on Nasdaq, about 2.12 billion shares traded, slightly below last year's daily average of 2.17 billion. Declining stocks outnumbered advancing ones by a ratio of about 5 to 3 on the NYSE and by 4 to 3 on Nasdaq.

Delhi metro stations to be Wi-Fi enabled before Commonwealth Games
13 Mar, 2008, 0418 hrs IST....................
NEW DELHI: With an aim of giving Delhi hi-tech infrastructure ahead of the 2010 Commonwealth games, the Delhi government has decided to make all the metro stations Wi-Fi enabled.

At places of tourist interest, railway stations, hotels and at Games locations, Wi-Fi kiosks would be set up. “We are exploring the feasibility of launching the Wi-Fi services at all metro stations ahead the 2010 Commonwealth games. This would enable tourists to get wireless net access on laptops or palmtops,” said an official in IT department of Delhi government.

Currently, the state IT department is working on its Wi-Fi pilot project at Connaught Place, South Ex I-II and Nehru place. These faciliteis would be ready by August this year.

The Delhi government has identified bidders including internet and telecom players such as MTNL, Net4 India, Spectranet, Tulip IT Services and Microsense for these projects. Gemini Communications and Velocis Systems have also emerged prospective bidders. Request For Proposals (RFP) will now be invited later for implementing these projects.

According to sources, Wi-Fi at these hotspots may be free of charge and service providers will garner revenue through advertising.

Japanese shares down 2.0 per cent by lunch
13 Mar, 2008, 1036 hrs IST.............

TOKYO: Japanese share prices fell 2.03 per cent in morning trade on Thursday on renewed jitters about a credit crunch, a weak dollar and surging oil prices, dealers said.

The yen rose to a 12-year high against the ailing dollar, ratcheting up the pressure on the overseas earnings of Japanese companies.

The benchmark Nikkei-225 index dropped 261.08 points to 12,600.05 by the lunch break. The broader Topix index of all first-section shares lost 27.97 points or 2.23 percent to 1,227.16.

Decliners outnumbered gainers 1,347 to 266, with 97 issues unchanged. Volume fell to 826 million shares from 945 million on Wednesday morning. Investors were reassessing Tuesday's move by the US Federal Reserve to inject 200 billion dollars into stressed money markets, which had triggered a strong rally on Asian stock markets on Wednesday.

"Investors seemed to be sceptical over the effectiveness of the Federal Reserve's liquidity plan. Also, they were concerned about the yen's rise and high oil prices," said Toshio Sumitani, senior strategist at Tokai Tokyo Research Center.

The dollar was bid as low as 100.95 yen in Tokyo morning trade, the lowest level since December 1995 and down sharply from 101.79 yen in New York.

Volume remained thin as some investors retreated to the sidelines ahead of Friday's special quotation (SQ) settlements of futures and options contracts.

In Tokyo exporters were lower on worries the higher yen will hurt their profits.

Toshiba Corp. lost 13 yen or 1.8 per cent at 721 after the Nikkei newspaper reported that the electronics giant is expected to miss its profit forecasts for the fiscal year ending this month due to its exit from next-generation DVD.

Other major exporters were weaker. Toyota Motor dropped 150 yen or 2.8 per cent to 5,260 yen, Honda Motor fell 105 yen or 3.4 per cent to 2,965, and consumer electronics giant Sony gave up 110 yen or 2.5 per cent at 4,370.

Financial stocks fell across the board as investors cashed in profits from recent gains.

Mizuho Financial Group plunged 27,000 yen or 6.5 per cent to 386,000 and Sumitomo Trust & Banking tumbled 43 yen or six percent to 676.

Indices fall 3 pc in opening deals
13 Mar, 2008, 1034 hrs ..................

MUMBAI: Shares opened 1.58 per cent down on Thursday and quickly extended losses to more than 3 per cent, spooked by weak Asian markets.

At 9:56 a.m., the 30-share BSE index was down 3.02 per cent or 486.48 points at 15,641.50. The 50-issue NSE index was down 3.04 per cent at 4,723.80.

Geojit launches online analysis for 200 BSE scrips
12 Mar, 2008, 2211 hrs IST................

MUMBAI: Retail stock broking firm Geojit Financial Services has launched an online technical analysis module for top 200 BSE scrips and Nifty index.

"At a given point of time, a client can view a scrip, its support and resistance levels, directional scenarios and a complete technical analysis," Geojit Financial Services Managing Director C J George said in a statement here today.

The module will help investors when there is uncertainty in markets, by giving access to independent research, it said.

The analysis include technical signals and trading preferences and is being offered at no cost to the company's clients, the release said.

Geojit has Rs 10,000 crore worth assets under management and a country wide network of over 400 branches.

The company, in which French banking group BNP Paribas is the single largest stake holder, has business tie-ups in Bahrain and Oman.

stock market under selling pressure.

Essar Oil to raise USD 2bn

Mumbai, March 13: Ruias-promoted Essar Oil on Thursday said it will raise 2 billion dollars (about Rs 8,094 crore) through securities for the proposed expansion of its refining and exploration capacity.

The shareholders at the extraordinary general meeting has approved the raising of over Rs 8,000 crore by issuance of foreign currency convertible bonds (FCCBs), global depository receipts and other securities, Essar Oil informed the Bombay Stock Exchange.

Further, the total amount borrowed by the board of directors would not exceed Rs 30,000 crore, the filing said.

Essar Oil is mulling various capital raising options to meet the fund requirement for its refining capacity expansion, exploration activities, marketing network and strengthening of working capital, the company had earlier said.

Shares of the company were trading at Rs 216.50, down 9.32 per cent in the afternoon trade on the BSE.