Sensex recovers 110 points in opening trade

MUMBAI: The BSE benchmark Sensex today recovered by almost 110 points in the opening trade, with finance and other sector stocks rising on emergence of buying by funds and retail investors at prevailing low levels amid better trends on other Asian bourses.

The Sensex, which had lost 208.82 points in the previous session, rose by 109.74 points, or 0.60 per cent to 18,259.61 level, with banking, realty, auto and metal sector stocks leading the recovery.

Similarly, the broad-based National Stock Exchange index Nifty moved up by 36.40 points, or 0.66 per cent, to 5,483.05 points.

Market analysts said bargain buying by funds and retail investors at select counters, after sharp losses in the previous session helped stocks to trade at moderately higher levels.

Banking sector stocks, which faced selling pressure after the Reserve Bank of India yesterday announced a hike of 25 basis points in key short-term lending and borrowing rates were back in green on select buying.

State Bank of India, the country's largest state-run lender, was trading 0.19 per cent higher at Rs 2623.10 a piece, while ICICI Bank was up by 0.50 per cent to Rs 1,017.50 a share.

In key Asian indices, the Japan's Nikkei rose by 3.05 per cent and Hong Kong's Hang Seng gained by 0.70 per cent in the morning trade today.

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Govt likely to go slow on Jaitapur N-plant

NEW DELHI: An amber light is flashing on the proposed Jaitapur nuclear power plant with the project expected to proceed only after apprehensions raised by the Japanese tsunami in the public mind have been thoroughly assuaged.

The widely televised and reported struggle of Japan's nuclear establishment in containing overheating nuclear cores at the Fukushima power plant have rung alarm bells in India with environment minister Jairam Ramesh calling for more reviews and the Maharashtra government striking a cautious note as well.

Official sources said the state government is keen that the plant's detractors do not gain the upper hand and give political traction to opposition to the Jaitapur project. It is felt that the project will move forward only after the dust raised by Japan's nuclear crisis settles.

India's nuclear establishment, including former atomic bosses, argue that the elevation of 25 metres at Jaitapur makes the site safe even if a 7-metre tsunami like the one that hit north Japan were to occur. It is also said the probability of a tsunami off India's west coast is minuscule. (Read: Reactors in India four times safer, says Russia)

Nuclear experts also say that the failure to cool the core of the reactors – the reason for the crisis at Fukushima – will not happen at Indian plants where safeguards have factored in such situations. Prime Minister Manmohan Singh has also ordered a thorough review. (Read: Safety review begins at Kalpakkam)

But images of the radiation laden steam clouds arising from four tsunami-struck nuclear reactors in Japan have made the political leadership wary of the costs of a disaster. Jaitapur is in a seismically active zone and the effects of a massive quake are not predictable. A swift cost-benefit analysis indicates a wait and watch approach.

It will be left to the nuclear agencies to respond to popular fears as well as scientific data put out by activists before the state government takes the next step. Local queries on why the plant was not being moved to constituencies represented by political bigwigs if it was such a boon are harder to answer while forceful measures will be avoided.

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India abstains on resolution authorising use of force in Libya

UNITED NATIONS: India, along with four other members of the UN Security Council, abstained from the voting on a resolution that approves a no-fly zone over Libya and authorises "all necessary measures" for protecting civilians there from Col Muammar Gaddafi's forces.

Ten of the 15-member body voted in favour of the resolution, but five nations -- China, Russia (which have veto power) and non-permanent members India, Germany and Brazil -- abstained from voting.

"This resolution calls for far-reaching measures but we never got answers to very basic questions," Indian envoy to UN Hardeep Singh Puri said. "This entire exercise has been based on less than complete information."

China's top diplomat in the UN Li Baodong also had similar apprehensions. "Many of those questions failed to be clarified or answered," Li told UNSC after the vote.

Last week, the Arab League called for a no-fly zone to be established in Libya and the resolution, co-authored by Britain and France, was tabled by Lebanon on Tuesday.

"We cannot let these war-mongers do this," Alain Juppe, the French foreign minister, told the Security Council. "We have very little time... we should not arrive too late."

But, India and other members of the Council voiced concerns about the absence of specific details on creating a no-fly zone as well as the lack of clarity on the source of assets for its implementation.

"Passing a resolution is an interactive process...if countries have doubts...you try to remove them," Puri said. "I'm afraid that the two countries leading the process (UK and France) did not make the required effort."

Susan Rice, US envoy to the UN, clarified that it was impossible to answer all the questions given that the Council had to act quickly. "We spent many hours going over these issues," she told reporters.

The current resolution also calls for an immediate ceasefire, which Russia had earlier proposed as a smaller resolution. But it never came to a vote because key countries felt that only a ceasefire resolution lacked teeth and would not deter Gaddafi.

Vitaly Churkin, the Russian envoy, warned "outside force" could destabilise the Middle East and North African region and described the resolution as "unfortunate and regrettable."

The action came as the Libyan leader threatened to launch the final attack to push out rebels from Benghazi, the second largest city of the country. "We are coming tonight," Gaddafi has told rebel forces. "There won't be any mercy."

The resolution, however, excludes "a foreign occupation force of any form on any part of Libyan territory," at it rules out deploying troops on the ground.

It also widens previous sanctions by imposing asset freezes for seven more of Gaddafi's supporters and five more entities including key state-owned Libyan companies.

Resolution 1970, adopted on February 26, slapped sanctions on the Libyan regime, including an arms embargo, an asset freeze and travel ban on Gaddafi and his loyalists, and a referral to the Hague-based International Criminal Court.

However, Manjeev Singh Puri, India's deputy envoy to the UN, told the Security Council the international community had to "mitigate and not exacerbate" the situation, and widening sanctions could hurt the economic interest of the Libyan people.

Meanwhile, media reports from the ground suggested that news of the UN resolution had been welcomed in Benghazi. Celebratory gunfire rang out in the city and imams at mosques shouted "God is greatest, God is greatest."

Ibrahim Dabbashi, Libya's deputy envoy to the UN who had turned against Gadhafi, called for the resolution to be implemented "immediately." But, he did not see his Indian counterpart's concern valid - "It has nothing to do with the Libyan people."

Mark Lyall Grant, the UK envoy to the UN, welcomed the vote and "Today's resolution puts the weight of the Security Council squarely behind the Libyan people."

Grant's sentiment was echoed by Rice who said, "Today the Security Council has responded to the Libyan people's cry for help."

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Food inflation down marginally at 9.42% in week ended Mar 5

NEW DELHI: Food inflation fell to a three- and-a-half-month low of 9.42 per cent for the week ended March 5 as prices of potato and pulses declined.

The drop in inflation, which is still not in comfort zone, is viewed as a breather for the government grappling with high price rise of essential commodities.

Food inflation in the previous week was 9.52 per cent. After remaining in double digit for several weeks, food inflation came down to single digit in the last week of February.

This is the lowest rate of food price rise for the week ended November 27 last year when it was 8.69 per cent.

The food inflation was 20.59 per cent in the comparable period in 2010.

During the week under review, prices of potato went down by over 9 per cent year-on-year, while that of pulses fell by 3.05 per cent.

The government had earlier exuded confidence that the expected record crop of wheat and pulses will help stabilise the rise in prices of food items. Food inflation remained in the double digits for most of 2010.

However, for the week ended March 5, prices of other food items continued to rise.

Cereal prices went up by 3.88 per cent year-on-year, while rice became dearer by 2.75 per cent. Price of wheat also rose marginally by 0.69 per cent on an annual basis.

While there has been drop in potato prices, vegetables on a whole became dearer by 8.71 per cent on annual basis. Onion was expensive by 6.65 per cent.

During the week under review, fruit prices rose by 19.39 per cent year-on-year. Milk also became dearer by 7.16 per cent.

Egg, meat and fish prices went up by 13.10 per cent on an annual basis.

Meanwhile, prices of non-food articles went by 23.03 per cent year-on-year. While fuel and power became dearer by 12.79 per cent, petrol became costly by 23.14 per cent.

The headline inflation in the country has remained above 8 per cent since February 2010. According to latest data, the overall inflation in February this year was 8.31 per cent.

The RBI in its quarterly review today revised upwards the inflation forecast for March-end to 8 per cent from 7 per cent projected earlier.

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