Crude oil seen sliding towards $50 per barrel

MUMBAI: With global stock markets and data releases giving a tame scenario for global growth, crude oil is seen heading towards $50 a barrel.

International benchmark December contract on the New York mercantile Exchange is currently trading near $61, after briefly breaching $60. Domestic November future on MCX is trading closer to Rs 2980 per barrel.

According to Praveen Singh, research analyst, Sharekhan Commodities, weak equity markets as well as negative outlook for global growth are the key factors that give a negative outlook for crude oil prices. “While $62-60 range was seen as a key support, a breach on the downside can take prices further to $50. This could correspond to a price range of Rs 2500-2450 for domestic prices," he added.

Barring occasional pullbacks, all asset classes including stocks and commodities have largely continued down moves. On Tuesday, December futures rallied as high as $71.77 ahead of the US presidential election result. However, in the last two sessions, prices have given away more than 13 percent as further rate cuts from Bank of England as well as European Central Bank failed to provide any support to negative market sentiment.

“It is evident from the recent data releases that global growth is expected to decline significantly. While this would weigh on crude oil demand, investment demand has also dried out due to the liquidity crunch,” said Harish Gallipeli, research head, Karvy Comtrade.

According to the International Monetary Fund's latest report released on Thursday, it now expects 2009 global economic growth of 2.2 percent, down 0.8 percent from the forecast it gave in October. Prospects for global growth have deteriorated over the past month and developed economies will likely contract for the first time since World War II, it said.

"In this backdrop, international crude oil prices have a potential to decline towards $50 if a support of $55 is breached," said Harish.

Earlier on Monday, the European Commission said that the economic growth in the euro zone is expected to slump to 0.1 percent in 2009. It also said that region's GDP could shrink for three consecutive quarters this year and cut its forecast for full-year 2008 growth to 1.2 percent from 1.3 percent previously. Comments from UK policy makers also continue to reflect that the country might already have entered a recession.

Meanwhile, traders await the release of US October non-farm payrolls later Friday. The employment report is expected to be crucial for financial markets since another decline in the payroll would be a tenth consecutive contraction in the job market of the world's biggest economy. The unemployment rate is also expected to surge further from September's rise to 6.1 per cent, its highest gain in five years.

Source: http://timesofindia.indiatimes.com/Business/Intl_Business/Crude_oil_seen_sliding_towards_50_per_barrel/articleshow/3685957.cms

PM's Economic Advisory Council expects GDP to grow by around 7%

NEW DELHI: In the face of the global economic downturn, Chairman of the Prime Minister's Economic Advisory Council Suresh Tendulkar today said he expects India's GDP to grow this fiscal by around 7%.

The Prime Minister's Economic Advisory Council (PMEAC) had forecast an economic expansion by 7.7% in its June review.

"We will have a relook at our projections in January. My gut feeling is it could be 7%, one or two percentage points here and there," Tendulkar told reporters here on the sidelines of a Planning Commission review meeting on the country's macro-economic situation.

The Reserve Bank of India, in its latest policy review on October 24, projected the GDP growth of 7.5-8%.

"That (7% growth) should not worry us. We will still be recording second highest growth rate (in the world)," PMEAC Chairman said.

India recorded an economic growth of 9% in 2007-08.

Source: http://timesofindia.indiatimes.com/PMs_Economic_Advisory_Council_expects_GDP_to_grow_by_around_7/articleshow/3688899.cms?TOI_latestnews

PM may meet Obama at G-20 summit next weekend

WASHINGTON: India's political leadership will have its first engagement with US President-elect Barack Obama only ten days from now when Prime Minister Manmohan Singh visits Washington for the G-20 economic summit convened by President Bush.

Bush has said he will take the new president-elect into confidence over any initiatives his lame-duck administration may make of the financial crisis roiling the world. Obama's victory means the Republican administration will have to factor in Democratic views on the matter.

Singh and Obama could not meet when the Indian prime minister visited US in September at the height of the presidential campaign. But Obama wrote Singh a letter expressing regret at not being able to meet him and offered condolences on the terrorist attack in Delhi and on the Indian Embassy in Kabul.

More strikingly, Obama said in his letter that the nuclear agreement was "only as a beginning of a much closer relationship between our two great countries," and he would like to see US-India relations "grow across the board to reflect our shared interests, shared values, shared sense of threats, and ever burgeoning ties between our two economies and societies."

Obama -- more likely his campaign managers acting in his name -- has shown a keen eye and appreciation of events in India, issuing statements on such developments as Field Marshal Sam Manekshaw's death and the launch of Chandrayaan.

In lighter moments, he has joked about his ability to make 'daal' and of feeling like a 'desi' who carries a Hanuman figurine as a good luck charm.

But in the serious business of geo-politics, Obama has shown a sure touch, not crossing any red lines that might offend New Delhi's notoriously thin-skinned establishment. He supported the Bush-Rice conceived US-India Civilian Nuclear Agreement despite initial reservations planted by the non-proliferation lobby and reiterated his support in his letter to Singh in September.

A more recent remark on resolving the Kashmir issue caused a kerfuffle in New Delhi among political parties ever ready to score points, but it caused greater consternation in Islamabad, which believes the solution he has in mind is based on freezing the current status quo.

In any case, there is little likelihood of any dramatic moves in bilateral ties between Washington and New Delhi in the next six months given that when Obama takes office on January 20, India will be entering the election mode.

One idea germinating in political and diplomatic circles is to have Rahul Gandhi attend Obama's Inauguration event to familiarize the new administration with India's young leadership, which is frequently overshadowed by its geriatrics.

India's ministers and mandarins are weighing the implications of the Obama win after the unexpected warmth between Washington and New Delhi during the final years of the Bush presidency culminating in the nuclear deal. Diplomats broadly say they don't expect any sea change in ties with a shift in administration or government in either country.

"So much also depends on the cabinet-level appointments he makes," one diplomat tasked with monitoring the developments in Washington told ToI. "Within the two Bush terms there was a world of difference in ties when Condi Rice became Secretary of State compared to when Colin Powell was in office."

The Indian-American community too -- largely Democrat-oriented despite the recent dalliance of the wealthier ones with Republicans -- is ecstatic. Although older desi Democrats initially backed Hillary Clinton, plenty of younger Indian-American Democrats were smitten by the Obamania and worked on his campaign, including some gearheads who handled the technology aspects of his campaign.

Even Indian-American Republican supporters celebrated Obama's win although they had invested time, energy and money on behalf of McCain.

"This is a joyous occasion not only for African Americans but for all minorities," said Dallas realtor Ashok Mago, a Republican activist from Bush's home state. "Under Obama administration relations between USA and India should continue to strengthen because these are based on mutual values and interests."

Mike Ghouse, an Indian-American who runs a inter-faith initiative out of Texas, said he had tears in his eyes as he saw Obama ride to victory. "A sense of safety permeated through my body," he said. "I know everything is going to be alright."

Source: http://timesofindia.indiatimes.com/

Three militants killed in Poonch

Poonch: Three militants were killed when security forces on Saturday foiled an infiltration bid along the line of control (LoC0 in Sabjian area of Poonch district in Jammu and Kashmir, defence sources said here.

Troops noticed a group of militants sneaking into Indian side via CRP Dhok area of Sabjian sub-sector in Poonch district in wee hours, they said.

Border Security Force (BSF) and army deployed in the area challenged the militants who opened fire, the sources said, adding the troops also retaliated.

Three militants have been killed in the exchange of fire, they said. Meanwhile, a Naib Subedar was injured in the encounter and hospitalised.
Source: www.mid-day.com