Report says Magna seeks only minority stake in Opel

VIENNA (Reuters) - Canadian car parts maker Magna International (MGa.TO) would only seek to buy 20 percent or less of General Motors' (GM.N) Opel unit, Magna chairman and owner Frank Stronach was quoted as saying on Tuesday.

In an interview with Canadian daily newspaper Globe and Mail, Stronach also said he had taken part in meetings of Magna executives with German politicians last week.

"They have an interest, they know we are one of the major suppliers, they know we make cars and thereby they'd like to see the best solution for Germany," Stronach told the paper.

The interview was published a day after the head of Italy's Fiat (FIA.MI) outlined to German officials his plan to create Europe's biggest car maker by combining Fiat's car business with General Motors' European operations and Chrysler.

Magna only late on Monday confirmed publicly that it was looking at Opel, which previously had been revealed only by German politicians who were part of the talks. But it did not provide any details of a possible deal.

Stronach said that the Opel approach broke with Magna's principle of not competing with the carmakers it supplies but the situation may leave him with no choice.

"I've always said our preference would be not to compete, but suppose some of our customers are broken? Then we might have no other choice," he told the Globe and Mail. link...

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White House links up on Twitter, Facebook, MySpace

President Barack Obama’s administration linked the official White House web site to various social sites like Twitter, Facebook and MySpace.

During his campaign for president, Obama had already shown himself to be attuned to new media like YouTube, and he took steps to continue use of a personal mobile device — specially secured — after being elected.

This move also gives ordinary people more ways to communicate with the White House through comments on the administration’s Facebook page. Some analysts mused that because the comments left on the Facebook page don’t appear directly on whitehouse.gov, the administration still maintains some protective distance from them.

“Because it’s not the White House’s site,” wrote blogger David Weinberger, any “trashy” or racist comments won’t appear on the official government site.

Twitter, based in San Francisco, is a “micro-blogging” service, and within a short time of joining the service on Friday, the White House already had thousands of followers.

Facebook, based in Palo Alto, started as a web site for college students. MySpace, based in Santa Monica, is now owned by Rupert Murdoch’s News Corp. link...

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Boston Globe Still Seeking Accord With Guild to Avoid Closure

The Boston Globe said it’s still trying to reach a cost-cutting agreement with its largest union after getting tentative accords with six other unions that brought it closer to avoiding a possible closure.

The Globe has agreements with unions representing mailers, drivers, pressmen and machinists, among others, Robert Powers, a spokesman for the newspaper, said in an e-mail, without providing further details. Members must vote on the proposals before they take effect.

New York Times Co., the Globe’s publisher, has asked unions to find $20 million in savings, half of it from the Boston Newspaper Guild, according to the union’s president, Dan Totten. The Guild submitted a new proposal with more than the $10 million in cuts, Totten said yesterday.

“It’s a game of chicken, not unlike what we just saw happen in the car industry,” Claire Gruppo, managing director of investment bank Gruppo, Levey & Co., said in an interview. “The entire newspaper is in a similar quandary.”

New York Times has been cutting jobs, reducing sections and seeking to sell its minority stake in the Boston Red Sox baseball team as advertising revenue slumped. The Globe may lose $85 million this year, Times Co. has said.

The Guild said it is awaiting a new time and date for resuming talks. The newspaper’s management had extended a May 1 deadline by two days after drawing closer to an accord with its 10 unions.

The union’s proposal includes cuts “across virtually all categories of compensation and benefits,” Totten said yesterday. The Guild represents about 600 newsroom employees.

Guild Talks

The New York-based publisher added 19 cents, or 3.5 percent, to $5.59 at 12:49 p.m. in New York Stock Exchange composite trading. The shares had lost 26 percent this year before today.

Catherine Mathis, a spokeswoman for Times Co., said in an e- mail yesterday that talks were ongoing. She said the publisher doesn’t comment on the specifics of internal negotiations.

The Guild has said that Times Co. had threatened to close the Globe if no agreement was reached. Yesterday, the Globe said it had prepared paperwork required under the Workers Adjustment and Retraining Notification Act for a possible closure of the Globe as soon as two months after the filing. Powers, the Globe spokesman, said the paperwork won’t be filed today.

Most U.S. newspapers, facing declining revenue amid the recession, hold little potential for a turnaround, Warren Buffett, whose Berkshire Hathaway Inc. is the largest shareholder of Washington Post Co., said on May 2.

Union newsroom workers at the New York Times newspaper reached a tentative agreement for a 5 percent pay cut last week that they said would help preserve as many as 80 jobs and save the publisher $4.5 million.

Times Co. imposed salary cuts of as much as 5 percent on almost all of its non-union staff through year end. link...

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Magna Bankruptcy Hearing Today

Attorneys for Magna Entertainment will be in U.S. Bankruptcy Court Monday, as the court considers its request to auction a number of its race tracks to pay off its creditors.

However, Pimlico, Laurel Park and the Bowie Training Center will not be among the tracks sold.

The Preakness Stakes is not on the list of assets to be sold.

Magna notified the court late Friday that it would not sell the Maryland properties. It did not give a reason, but in its court filing said it would explore "all alternatives with respect to the remaining assets."

Last month, Governor Martin O'Malley signed legislation that would allow the state to seize Pimlico, Laurel and the Preakness Stakes by eminent domain, if the company were to sell the tracks to a buyer who would move the race out of Maryland.

O'Malley Administration officials welcomed Magna's decision.

Magna will still sell Santa Anita Park in California, Remington Park in Oklahoma, Thistledown in Ohio and Portland Meadows in Oregon.

During today's hearing the judge will hear objections to the auction from PNC Bank, Wells Fargo Bank and the Bank of Montreal, who are arguing that the tracks may not be sold to the highest and most qualified bidders.

Bankruptcy attorneys representing the State of Maryland will attend the hearing, even though the Maryland tracks are no longer on the list of assets going on the auction block.

Magna is proposing that any bids be submitted by July 31, with the auction to take place in New York on September 8. link...

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Buffett Plays Down Hoopla, Hope

At an event that is typically filled with hoopla, Warren Buffett spent much of his company's shareholder gathering this weekend defending a rough year. And he didn't hold out much hope in the near term for better results in many of Berkshire Hathaway Inc.'s businesses.

"We will continue to do quite well in our insurance and utility operations. We won't do well in other operations," Mr. Buffett said.

But Mr. Buffett was upbeat about opportunities for Berkshire, saying he believes the company is well positioned to capitalize on current market turmoil. link...

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ADB sees 'mild recovery' next year

NUSA DUA - The Asian Development Bank (ADB) called Monday for a fundamental "rebalancing" of regional economies in response to the global crisis, while predicting a "mild recovery" next year.

Bank President Haruhiko Kuroda said the region would record only 3.4 percent growth this year but could expect a rebound to around 6.0 percent growth in 2010, as he opened the ADB's board of governors annual meeting in Bali.

"With strong national and regional efforts and a mild recovery expected in the global economy next year, developing Asia and the Pacific should bounce back to about 6.0 percent growth in 2010," he said.

"These are positive signs, therefore this should not be a time of despair."

He outlined a huge expansion in the ADB's lending plans to help stimulate developing economies across Asia, after shareholders agreed last week to triple the bank's capital base in response to the global downturn.

The bank will increase its overall lending assistance by more than $10 billion in 2009 and 2010, including three billion to meet "urgent needs stemming from the crisis," Kuroda said.

Some of that new lending would aim to help Asian economies boost domestic consumption and adjust to plunging demand for their exports to markets such as Europe and the United States.

"The transfer of savings from one part of the world to another worked well when advanced economies could absorb production from developing economies, but the current state of the global economy suggests that era has passed," he said.

"By rebalancing export-driven growth with a greater reliance on domestic demand and consumption, Asia can lead the way in charting a new, globally beneficial development course."

He also called for changes to the global financial architecture to give voice to the aspirations of Asia, where powerhouses like China and India are emerging as rivals to US dominance of the world economy.

Ten Asian countries plus China, Japan and South Korea agreed Sunday to set up a $120-billion regional emergency fund to help Asian economies out of crises, a move Kuroda applauded.

"It is... important to create a financial architecture that gives developing countries a voice more commensurate with their share of world output and trade," he said.

His comments echoed China's calls for a greater say in international economic decision-making at institutions such as the International Monetary Fund. link...

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Union Power

I see a lot of liberal blogs crowing that Obama's really taking it to the hedge funds who are holding out on the Chrysler bankruptcy. Hedge fund managers, you see, have a civic duty to lose large amounts of other peoples' money in order to ensure that the UAW makes as few sacrifices as possible in a bankruptcy.

Here's the thing: hedge fund managers don't care what the public thinks. The public isn't allowed to invest in them. And the holdouts are, basically definitionally, not direct beneficiaries of federal largesse.

No, hedge funds care what rich people think. And if you were a rich people, how would you react to the news that a hedge fund manager who had a senior lien had refused to allow his claim to be treated like unsecured debt in a bankruptcy? Would you be outraged and pull your money? Remember that as a rich people, you could have donated large sums to the UAW, or the US government, if you wanted to.

This might well be good publicity for the holdouts. I'd certainly rather put my money in with Oppenheimer than with someone manager who is going to toss his fiduciary duty to the winds and make large tax-free gifts to the United Auto Workers. But then, I'm not very patriotic.

Which brings us to the real question, which is, when did it become the government's job to intervene in the bankruptcy process to move junior creditors who belong to favored political constituencies to the front of the line? Leave aside the moral point that these people lent money under a given set of rules, and now the government wants to intervene in our extremely well-functioning (and generous) bankruptcy regime solely in order to save a favored Democratic interest group.

No, leave that aside for the nonce, and let's pretend that the most important thing in the world, far more interesting than stupid concepts like the rule of law, is saving unions. What do you think this is going to do to the supply of credit for industries with powerful unions? My liberal readers who ardently desire a return to the days of potent private unions should ask themselves what might happen to the labor movement in this country if any shop that unionizes suddenly has to pay through the nose for credit. Ask yourself, indeed, what this might do to Chrysler, since this is unlikely to be the last time in the life of the firm that they need credit. Though it may well be the last time they get it, on anything other than usurious terms. link...

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ADB to set up $3 bln fiscal spending fund

NUSA DUA, Indonesia (AFP) — The Asian Development Bank said on Saturday it will establish a three-billion-dollar fund to boost developing member countries' fiscal spending capacity amid the global economic crisis.
ADB president Haruhiko Kuroda announced plans for the new facility at the bank's annual meeting on the Indonesian island of Bali, saying it would provide short-term loans more quickly and more cheaply than existing programmes.
The Countercyclical Support Facility is subject to approval by the lender's board of governors, who will meet here Monday and Tuesday to discuss the impact of the global downturn on Asia's developing economies.
"The CSF will provide emergency loans faster and cheaper than under ADB's existing special loan facilities," Kuroda said.
"I believe this will be a very welcome initiative to assist faltering economies and, most importantly, protect the poor from the worst impacts of the crisis."
The announcement comes just two days after the board agreed to triple the ADB's capital base, from 55 billion dollars to 165 billion, allowing the bank to boost lending support in the crisis.
In a report released at the press conference on Saturday, the bank revealed plans to increase its overall lending assistance by more than 10 billion dollars in 2009-2010.
That would bring total ADB assistance during the year to about 32 billion dollars, compared with about 22 billion dollars in 2007-2008, it said.
"The crisis support will include project investments, quick-disbursing policy-based loans, guarantees, and new initiatives designed to address specific crisis needs," the bank said in a statement.
"ADB will also expand its support through grants for policy analysis and capacity building."
The bank has said gross domestic product growth in developing Asian countries is projected to decline to just 3.4 percent this year from 9.5 percent in 2007.
At the lower rate more than 60 million extra people in the region will remain in extreme poverty than would have done if the higher rate had been maintained.
Governments across the region have boosted spending and slashed interest rates in a bid to stimulate domestic demand to offset crashing external demand for their exports from Europe and the United States.
But the ADB fears the task may be beyond the capacity of some countries and Saturday's announcement is part of plans to help poorer member states cope with the crisis.
"A number of governments in the region have boosted spending to spur domestic consumption to counter falling offshore demand, but not all governments are able to do so," it said.
"Moreover, with the global downturn likely to be deeper and longer than previously expected, economies in the region are likely to come under increased pressure."
Critics however said the massive increase in the bank's capital base had to come with tighter monitoring of the social and environmental impacts of its lending projects link...

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U.S. manufacturing contraction slows in April, ISM says

The closely watched ISM purchasing managers' index rose to 40.1% from 36.3% in March. It's the highest since September, when the global financial crisis intensified.
Generally, readings below the 50% mark show most firms think business is still getting worse.
The rise over 40% "shows a significant improvement," said Norbert Ore, chairman of the Tempe, Ariz.-based ISM's survey committee. "While this is a big step forward, there is still a large gap that must be closed before manufacturing begins to grow once again."
During this recession, output in manufacturing has fallen at the fastest pace since the end of World War II in the mid-1940s, according to separate data from the Federal Reserve. See full story.
"The ISM index suggests continued weak production," wrote John Silvia, chief economist for Wachovia. "Growth is not expected to return anytime soon."
"We need to view the move with caution," wrote Merrill Lynch economists Drew Matus and David Rosenberg. "The uncertainty surrounding the auto sector seems likely to crimp activity and could drive this series sharply lower in the near term."
Notably, the price of copper, one of the most economically sensitive commodities, rose for the second straight month. Prices of other metals continued to fall.
The April reading of 40.1% was better than the 39.1% expected by economists. The ISM gauge, which has been below 50 for 15 straight months, bottomed at a 28-year low of 32.9% in December.
Only one of 18 major manufacturing industries -- miscellaneous manufacturing -- was growing in April, the ISM's data showed.
None of the major subindexes showed any growth in April, but they all improved from March.
The new orders index rose to 47.2% from 41.2% in March. Six industries reported growth in orders.
The production index also rose, increasing to 40.4% from 36.4% in March. Three industries reported higher production in April.
The employment index rose 34.4% from 28.1% in March.
The inventory index gained to 33.6% from 32.2%, a slower pace of inventory liquidation.
In other reports released Friday, consumers' sentiment bounced higher in April on optimism about President Barack Obama's policies and the rally in the stock market, Reuters and the University of Michigan reported. Their index rose to 65.1 in April, the highest since September, from 57.3 in March. link..

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U.S. to Release Stress-Test Results on May 7

WASHINGTON -- The Federal Reserve and Treasury Department plan to release results of their tests assessing the health of the country's 19 largest banks on Thursday, later than had been previously planned.

Regulators are expected to disclose potential loss estimates for each individual bank, a government official said.
In addition, the results will be tallied across the banks to give the public a better picture of the health of the banking industry. U.S. officials will disclose the loss estimates for certain loan categories and the banks' ability "to absorb those losses" under more-adverse economic scenarios.

The results were pushed back several days as federal regulators and the banks have continued to debate the results. Several banks, including Bank of America Corp. and Citigroup Inc., have challenged the government's findings.

The results are expected to show that several banks may need more capital, or a higher quality of capital, in order to continue lending if the economy worsens through 2010. Government officials have said that any requirement that a bank improve its capital standing does not mean the government thinks the bank is going to fail. In fact, the government has said it would not allow any of the 19 banks undergoing the test to fail.

In order to improve their capital standing, banks will have the option of raising capital from private investors, borrowing more capital from the government, or converting existing government investments into common stock.

Exactly how the stress tests would be unveiled has been unclear since February, when the Obama administration announced plans to conduct a thorough exam of the banking industry's ability to continue lending under tough economic conditions. A smooth release is a critical component of the effort, which is designed to restore confidence in banks.

Government officials originally hoped to release the results on May 4, but that plan was delayed as the discussions with banks intensified. The plan now is to release the results late in the afternoon on May 7. link..

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U.S. Michigan Consumer Sentiment Index Rises to 65.1

Confidence among U.S. consumers rose more than forecast in April to its highest level since before the collapse of credit late last year unleashed a financial panic that sent the economy into a freefall.

The Reuters/University of Michigan final index of consumer sentiment rose to 65.1 from 57.3 in March, the biggest gain in more than two years. The index reached a three-decade low of 55.3 in November.

Record-low mortgage rates, cheaper gasoline and surging stock prices are providing some relief to the beleaguered American consumer in the face of mounting unemployment and tumbling home prices. Improved confidence may keep consumers spending, helping pull the economy out of its slump in the second half of the year.

“Consumers are noting the better financial-market conditions and that’s removing some of the panic that had ensued last fall,” said Dean Maki, co-head of U.S. economic research at Barclays Capital Inc. in New York. “Consumers are becoming less anxious, and therefore a bit more willing to spend.”

An industry survey showed manufacturing in the U.S. shrank in April at the slowest pace in seven months after a collapse in inventories helped orders and production steady. The Institute for Supply Management’s factory index rose to 40.1 last month, higher than forecast, from 36.3 in March. Readings less than 50 signal a contraction.

Economists projected the Michigan sentiment index would rise to 61.9, according to the median of 52 estimates in a Bloomberg News survey. Forecasts ranged from 57.3 to 63.

Expectations Improve

The expectations gauge -- which more closely predicts the direction of consumer spending -- rose to 63.1 from 53.5 in March. A measure of current conditions, which reflects Americans’ perceptions of their financial situation and whether it’s a good time to buy expensive items such as cars, increased to 68.3 from 63.3.

Consumers in today’s report projected an inflation rate of 2.8 percent over the next 12 months, compared with 2 percent in the March survey.

Over the next five years, Americans also expected a 2.8 percent rate of inflation, compared with the 2.6 percent forecast in March. These figures are tracked by Federal Reserve policy makers.

Christina Romer, head of the White House’s Council of Economic Advisers, yesterday told lawmakers that “glimmers of hope” for an economic recovery were emerging. Still, she added, “in the short run, we are still in for more bad news.”

Consumer Spending

Consumer spending rose at a 2.2 percent pace in the first quarter following its longest slump in nearly three decades, the government said this week. Still, economists surveyed by Bloomberg in the first week of April forecast spending will slump at a 0.5 percent rate in the second quarter before picking up in the second half.

Consumers last month were buoyed by a 29 percent surge in the Standard & Poor’s 500 Index from March 9 lows. Lower gasoline prices, mortgage rates at historic lows and tax refunds are also supporting consumers in the face of numerous headwinds.

Rapid passage of President Barack Obama’s record $787 billion recovery plan, along with announcement of the government’s strategy to boost ailing banks and limit home foreclosures may also be boosting sentiment.

Even so, consumers continue to grapple with falling home prices and concerns over mounting job losses after the longest recession in five decades already claimed 5.1 million jobs. Economists surveyed by Bloomberg forecast unemployment will rise another percentage point to 9.5 percent by the end of the year.

Many Americans are spending their cash with caution. Walgreen Co. Chief Executive Officer Gregory Wasson on April 14 said revenue in April might rise as consumers continue to buy necessities at the second-largest U.S. drugstore chain.

“Non-discretionary items such as staples, food, paper goods and so forth, we are still seeing pretty healthy increases,” Wasson said in an interview. “The consumer is still full of angst out there.” link...

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BofA's Lewis may be voted out of chairman role: report

Bank of America Corp Chief Executive Kenneth Lewis may be forced to give up his role as chairman but is set to win re-election to the bank's board by a wide margin, the Wall Street Journal said.

Citing people familiar with the preliminary results of shareholder votes ahead of the bank's annual meeting on Wednesday, the newspaper said a proposal that would force Lewis to give up his seat as chairman was too close to call.

The paper said that as of Tuesday, with about 75 percent of shares outstanding counted, slightly more than 50 percent favored splitting the chairman and CEO positions.

"We expect he will be CEO, a director and we hope chairman," BofA spokesman Robert Stickler told the paper adding that the bank would respect the shareholders' decision.

Separately, the Journal said BofA may have to raise billions of dollars of fresh capital after preliminary results of a stress test from U.S. regulators.

Pension funds and other investors controlling more than 172 million shares of BofA, or 2.6 percent of the total, have said they intend to vote for a boardroom shake-up, the paper said, citing its own tally.

A BofA spokesman did not immediately return a Reuters email seeking comment. link..

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Sun fails to shine for Sun Microsystems

Sun Microsystems reported its revenues dropped by 20 percent in its third quarter, and made a net loss of $201 million on revenues of $3.27 billion.
That compares unfavourably to the same period last year, when Sun turned in a net loss of $34 million on revenues of $3.27 billion.
Financial gentlemen believe that concerns about the future of Sun Microsystems may have caused corporations to stop buying kit. Last week Oracle said it would buy the firm for $7.4 billion, following earlier attempts by IBM to snap up the struggling firm.
But it's more likely that Sun Microsystem, like many another technology corporation, is suffering from the Credit Crunch Blues. Purse strings everywhere are tied in a tricky knot with corporations counting their pennies until things become a little clearer worldwide.
What's particularly worrying for Sun is that it's high end systems which use SPARC RISC chips fell by almost a third during the firm's third quarter.

While Sun also sells systems based on X86 architecture, sales of these sort of systems also fell by a fifth. But that's in line with statements made by AMD's CEO Dirk Meyer, who said in a financial conference call recently that few corporations and large organisations are prepared to spend on server systems right now. link...

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GLOBAL MARKETS: European Stocks Seen Just Up, Eyes On Banks

LONDON (Dow Jones)--European stocks are expected to open modestly higher, supported by an almost flat close on Wall Street, even though traders remain cautious ahead of details of the capital requirements of the U.S. banks and the impact on the global economy should further injections be required.

"Financial stocks are going to remain squarely in focus after yesterday's reports of more capital being required at Citigroup and Bank of America," said Matt Buckland, a trader at CMC Markets. "The outlook for the sector as a whole remains far from encouraging."

Nonetheless, he ...
link...

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UPDATE: SAP 1Q Earnings Miss Mkt Views, Confirms '09 Outlook

FRANKFURT (Dow Jones)--German business software company SAP AG (SAP) Wednesday reported first-quarter sales and earnings that fell short of analysts' forecasts due to restructuring charges and challenging economic conditions, but it confirmed its outlook for 2009.

"While visibility for software revenues remains limited, we continue to take the necessary steps to protect our margin in this tough operating environment," SAP Co-Chief Executive Leo Apotheker said in a statement.

SAP's earnings were hit by EUR160 million in restructuring charges ...

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Taiwan Shares End Lower On Swine Flu Concerns, Profit-Taking

-Concerns that the spread of swine flu would hit travel demand and weigh on the Taiwan economy sent local shares to their lowest close in two weeks Monday.

Investors also took profit on local stocks following the signing of financial cooperation agreements between Taiwan and China over the weekend.

The Weighted Price Index of the Taiwan Stock Exchange fell 175.72 points, or 3.0%, to 5705.05. It was the lowest close for the index since it ended at 5667.80 on April 9.

Turnover totaled NT$136.80 billion, down from the previous session's NT$144.88 billion. There were 419 gainers, 1,850 decliners, and 64 closed unchanged.

Traders said stocks will likely stay weak Tuesday.

"We already expected stocks to correct this week after the Chiang-Chen meeting and ahead of earnings, and now this unexpected negative (swine flu) came out, so stocks will fall more tomorrow," said Alex Huang, vice president at Mega Securities.

Ta Ching Securities manager Daniel Liu said if the index falls below the 20-day moving average of 5700 Tuesday, "it is certain it will test 5500 support."

P.K. Chiang, chairman of Taiwan's semiofficial Straits Exchange Foundation and Chen Yunlin, head of its Chinese counterpart, the Association for Relations Across the Taiwan Straits, signed agreements Sunday on closer financial cooperation, and more than doubling cross-strait direct flights.

But traders said all the positive catalysts from the meeting have already been priced in.

"There were no positive surprises that came out of the meeting," said a sales trader at ABN Amro, who declined to be named.

Taiwan's financial subindex advanced 41.8% from the close on March 2 through Friday, and the transport index rose 38.8%, compared with a 32.9% gain in the main board index.

Cathay Financial Holding fell 5.6% to NT$34.50 and Chinatrust Financial Holding dropped 6.9% to NT$14.10.

Tourism and airline stocks bore the brunt of the declines Monday on concerns swine flu would hit travel and tourism, but biotechnology and pharmaceutical shares rose. link....

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Sensex on a roll, hits six-month high of 11,329

MUMBAI: The market sustained its weekly gaining streak for the seventh straight week as the benchmark Sensex settled at a six-month high of 11,329.05 at the weekend on several positive developments amid on-going Parliamentary elections in the country.

Passing through a bearish mode in the initial three days, the signs of improvement in economy and a fresh rate cut by Reserve Bank on April 21 with inflation ruling virtually at zero level boosted the market sentiment after midweek.

In the week to April 25, the Bombay Stock Exchange 30-share barometer bounced from its weekly low of 10,715.66 and ended with a net gain of 305.96 points, or 2.78 per cent, over its last weekend's close.

Similarly, the National Stock Exchange 50-share Nifty also jumped by 96.35 points, or 2.85 per cent, to end the week at 3,480.75 from its last close. Brokers said Foreign Institutional Investors (FIIs) remained the net buyers in the week and are expected to step up their activity in the coming days as the April series of derivatives expires on Thursday.

They said bull operators are likely to cover their shorts or rollover Nifty positions in the next series in the light of possibility of further reduction in interest rates as the inflation was at 0.26 per cent for the week ended April 11, 2009.

A forecast by the Meteorological Department of a near normal monsoon as well as better-than-expected fourth quarter earnings announced by some key corporates also provided fillip to the market sentiment.

India's third-largest software services exporter Wipro, which announced results during the week, registered a sharp rise of 13.71 per cent over the week. Reliance Infra, too, gained 12.28 per cent after the company came out with quarterly results.

The trading volume improved significantly during the week. The total weekly business volume was nearly Rs 25,000 crore on the BSE while on the NSE, it grew to Rs 71,630 crore.

Among the sectoral indices, the BSE-Metal shot up by 374.11 points or 5.51 per cent, the BSE-Tech by 109.52 points or 5.41 per cent, the BSE-Realty by 90.08 or 4.16 per cent and the BSE-IT by 94.66 points or 3.85 per cent.

The BSE-100 index rose by 175.74 points or 3.12 per cent and the BSE-500 index firmed up by 123.64 points or 3.06 per cent. The Dollex-30 and Dollex-200 indices were also quoted higher at 1,865.07 and 448.74 respectively as against the last weekend's le vel of 1,816.16 and 435.51.

The S&P CNX Defty shot up by 67.95 points to 2,419.70 and the CNX Nifty Junior also rose by 268.40 points to 5,386.40. - PTI link...

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IMF, World Bank meet as signs of recovery seen

WASHINGTON (AFP) — Top IMF and World Bank officials hold annual meetings Saturday and Sunday in the shadow of the worst global slump since the 1930s but with perhaps the first signs of recovery peeping through.
A banking crisis that started in the United States in mid-2007 has spread like wildfire to push the world deep into a recession which the IMF said earlier this week would see the global economy contract 1.3 percent this year.
The IMF forecast marked a dramatic downgrade of previous estimates and set the tone for the meetings of the top steering committees of the 185-member International Monetary Fund and its sister institution the World Bank.
But on Friday, the Group of Seven major economies said the worst might finally be over -- although the outlook remained clouded and difficult.
"Recent data suggest that the pace of decline in our economies has slowed and some signs of stabilization are emerging," a G7 statement said.
"Economic activity should begin to recover later this year amid a continued weak outlook and downside risks persist."
The G7 -- Britain, Canada, France, Germany, Italy, Japan and the United States -- said they were "committed to act together to restore jobs and growth and to prevent a crisis of this magnitude from occurring again."
US Treasury Secretary Timothy Geithner, the G7 host, said that "without underestimating the challenges we still face, there are signs that the pace of deterioration in economic activity and trade flows has eased."
He too cautioned against any simple optimism that the worst global slump since the 1930s would be over quickly.
"We are right to be somewhat encouraged but we would be wrong to conclude that we are close to emerging from the darkness that descended on the global economy (in September)," he said in a statement.
A subsequent meeting of the Group of 20, which includes the G7 and developing countries such as Brazil, China, India and Russia, ended without a statement.
The financial crisis was sparked by a credit boom based on the US subprime or higher risk home loan market which collapsed in mid-2007 as weaker borrowers could not keep up payments when the economy began to slow.
Many banks were heavily exposed and in order to limit their losses, cut lending, causing the economy to slow.
An already bad situation turned much worse with the collapse of giant US investment bank Lehman Brothers in September, tightening the screw in a global credit crunch which has plunged the world economy into recession.
The more positive G7 tone follows data showing that the downturn is easing but many officials remain reluctant to give the all-clear, warning that more bad news is to come which could blight any "green shoots" of recovery.
Others also warn that recovery or not, the human cost of the crisis is very high, still rising and should not be forgotten.
On Friday, a World Bank/IMF report said the crisis means up to 90 million more people will remain trapped in extreme poverty this year while the chronically hungry could top one billion.
"Our belief is that the crisis is far from over," IMF chief Dominique Strauss-Kahn warned Thursday.
"The beginning of the recovery has to come from the United States and will come from the United States," Strauss-Kahn said, calling for greater efforts to restore the banking system to health.
"You never recover before you complete the cleaning up of the balance sheet of the financial sector ... The recovery in 2010 relies a lot upon the effort that still has to be made in this domain so, I'm again asking on the eve of these meetings for more effort to be made in this direction."
The IMF estimates that the US, European and Japanese banks will have acknowledged only a third of their losses on soured assets between mid-2007 and 2010, with the total losses put at some four trillion dollars. link...

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PIA pilots agree to end go-slow: govt

KARACHI (AFP) — Pilots of Pakistan International Airlines (PIA) Thursday agreed to end their go-slow protest over pay which had forced the flag carrier to cancel dozens of flights, the government said.
After negotiations with pilots and PIA management at the defence ministry in Rawalpindi, near Islamabad, both sides had agreed to revert to a normal schedule, the government said in a statement.
"The talks were held in cordial atmosphere. The issues were discussed at length. Both sides came to a mutual agreement," it said.
"As a result of these talks the PIA flights will revert to the normal, schedule and both sides will deliberate and conclude a working agreement with in the stipulated time frame," it said.
PIA spokesman Sultan Hassan said earlier losses had reached nearly six million dollars over the past six days as the pilots, who were protesting over pay, employed various disruptive tactics such as calling in sick just before flights.
"So far 16 international and 11 domestic flights have been cancelled due to pilots' go-slow protests," he told AFP.
"It has caused us 450 million rupees (5.584 million dollars) loss so far and the losses could increase if the situation persists further," Hassan said.
The go-slow affected hundreds of passengers destined mainly for Europe, prompting protests by stranded travellers at Lahore and Islamabad airports.
Members of PIA's senior management who are qualified pilots were forced to man the planes in a bid to mitigate cancellations.
"Our senior general managers are also operating the flights to avoid delays and cancellations," Hassan said.
The Pakistan Airlines Pilots Association (PALPA) said it wanted pay rises of at least 35 percent raise for the pilots. The airline said raising the salaries would cost 640 million rupees (7.941 million dollars).
PIA has suffered huge losses of 930.694 million dollars over the past five years, company officials say, but sinking fuel prices have helped to arrest the decline.
"After suffering 72 billion rupees in five years we have just came to a situation of break-even now," Hassan said.link...

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Sensex ends 194 pts up on heavy buying in late trade

Shrugging off a listless start and a subsequent fall, the market rallied smartly and ended on a high note today with participants picking up bank, capital goods, automobile, power and telecom stocks in a frenzied manner.

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Global cues were not any encouraging today and report cards from India Inc too were any significantly impressive. Asian markets struggled today. But European bourses displayed strength despite the UK economy shrinking more than what was forecast earlier, suffering its biggest contraction in nearly three decades.

The positive trend in European markets and hectic short-covering ahead of April series derivatives contracts aided the rally this afternoon.

Stockometer

The Sensex, which drifted down to 11,070.33 in early trade and rose to a high of 11,362.88 in the final hour, ended the session at 11,329.05 with a sharp gain of 194.06 points or 1.74%. The Nifty closed at 3480.75, up 57.05 points or 1.67% over its previous closing mark. The NSE benchmark touched a low of 3402.90 and a high of 3491.35 today.

Bank stocks led the charge up north this afternoon and mirroring strong gains posted by key stocks in that space, the Bankex rose 2.77% today. The Consumer Durables and Capital Goods barometers moved up by 2.32% and 2.04% respectively. BSE Teck, Auto, Power, Oil & Gas, Metal and Realty gained 1% - 2%.

The Pharma index BSE HC and BSE PSU advanced by 0.89% and 0.81% respectively. The IT index gained a little over a quarter per cent while BSE FMCG ended with a small gain.

From the Sensex pack, Ranbaxy Laboratories (down 2.4%), Hindustan Unilever (down 0.85%), Tata Steel (down 0.7%) ended with sharp losses. NTPC, Wipro and Infosys Technologies closed marginally lower.

Mahindra & Mahindra gained a little over 7% today. Jaiprakash Associates ended with a gain of over 6%. Grasim Industries (5.7%), Bharti Airtel (5.5%), ACC (4.9%), Reliance Infrastructure (3.75%), Reliance Communications (3.6%), Tata Power (3.4%) and State Bank of India (3.35%) rallied sharply.

Tata Motors, Tata Consultancy Services, HDFC, Larsen & Toubro, ICICI Bank and Sterlite Industries gained 2% - 3% today. DLF, HDFC Bank, Sun Pharmaceuticals, Reliance Industries and BHEL also closed with impressive gains. Hindalco, ITC and ONGC ended with small gains. Maruti Suzuki, despite a sharp fall in net profit, bounced back from lower levels and ended with a modest gain. link..

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