Thursday June 25, 2009

LONDON: Sterling rose against the dollar on Wednesday as the US currency struggled ahead of the outcome of a Federal Reserve policy meeting and came under selling pressure against currencies perceived to be higher risk.

The pound was up on the day, but pared some gains against the dollar after Bank of England policymakers expressed doubts over how quickly the UK economy may recover, prompting some traders to take profits on earlier gains in the UK currency.

In testimony to the UK parliament, King said that he had genuine concerns about how quickly the UK economy will pick up from the recession. Other board members echoed this view, with Andrew Sentance acknowledging that he could not say how strong a recovery will be despite signs that the economy is stabilising.

"The overall tone is that it's too early to tell about a possible recovery, and that things are still uncertain," said Paul Robinson, chief sterling strategist at Barclays Capital in London. Other analysts said that comments from King that weakness in sterling was making the UK economy more competitive were nudging sterling lower.

Later in the day, the Fed is widely expected to quell recent speculation of a possible rise in interest rates this year, which analysts say may sting the dollar and benefit the pound. Traders shrugged off figures showing that UK retail sales in June fell at the same pace as the previous month. The CBI's distributive trades survey sales balance came in at -17, unchanged from May and in line with expectations.

By 1447 GMT, sterling traded 0.3 percent higher at $1.6507, after rising as high as $1.6605, not far from the year's high of $1.6664 hit early this month. The euro fell 0.7 percent to 84.85 pence, offering little lasting reaction to the BoE testimony. The dollar recovered early losses against the euro after the US currency was seen to be the biggest beneficiary of Swiss franc selling suspected by the Swiss National Bank on Wednesday.


(Reuters)

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Thursday June 25, 2009

LONDON: The interbank cost of borrowing three-month euros hit a record low on Wednesday after the European Central Bank lent nearly 450 billion euros in 1-year funds, providing a flood of excess liquidity to the market.

The cost of borrowing dollars also marked new lows before the conclusion of a US Federal Reserve meeting where the central bank is expected to hold its target for the federal funds rate - the rate banks charge each other for overnight loans - in the zero to 0.25 percent range.

The ECB said it will lend banks 442.24 billion euros ($612.8 billion) in its first one-year refinancing operation, marking its biggest ever liquidity injection and its latest step to get liquidity flowing in the wake of the financial crisis. Demand was above the expectations of traders in a Reuters poll, who forecast the ECB would allot 300 billion euros, and exceeds the previous record allotment of 348.6 billion in December 2007.

It is also significantly above the minimum required reserves that banks need to raise during the current maintenance period, by some 250 billion euros, according to Tullett Prebon's estimates, and the excess liquidity is likely to put downwards pressure on euro zone rates.

"This will put immediate downward pressure on short-end Eonia rates and drag three-month Euribor down towards the ECB's 1 percent refi rate level, though at a more gradual pace," said Tullett's head of G7 market economics Lena Komileva. The three-month London interbank offered rate for euros fell 2.6 basis points to 1.185 percent.

Overnight index swap rates (OIS) out to the three-month tenor marked new lows, short-dated bond yields also fell and Euribor rate futures rallied. Overnight Libor rates jumped, however, as banks which had scaled back participation in the ECB's weekly tender on Tuesday in anticipation of Wednesday's operation, sought cash to tide them over until the 1-year funds are transferred on Thursday.

The rate was fixed at 0.752 percent on Tuesday and it fell as low as 0.486 percent in May. The tender of 12-month funds slashed demand for the ECB's three-month funds and other shorter-term operations with banks taking just 6.4 billion euros in the ECB's latest three-month tender on Wednesday. London interbank offered rates on three-month dollars fell a third of a basis points to a record low of 0.60438 percent.


(Reuters)

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Thursday June 25, 2009

KARACHI: As a result of strong demand for dollars on the interbank market on Wednesday, the rupee fell sharply against the US currency and may breach the barrier of 82 in the near future, money experts said. On the interbank market the rupee lost 23 paisa in relation to dollar for buying at 81.55 and 25 paisa for selling at 81.60, dealers said.

To clear the oil payments, the importers' thrust increased for dollar, buying in a big way in last days of the final closing session of the out-going fiscal year, analysts said. The payments for oil are so high and all at a time when the prices were touching the high mark of 147 dollars per barrel, they remembered. As a result of increased rush for dollars, it is most likely that the greenback may hit the high mark at 82 in the coming days, they added. In these days the importers are buying above 50-70 million dollars per day to meet their payment requirements, they said. On the third day of Asian trade dollar sat on steep losses, after tumbling sharply against euro and other majors, as the market got set for the Federal Reserve to dampen expectations for higher interest rates.

Policy makers at the Fed began their two-day meeting on Tuesday and many expect they will want to play down expectations of higher interest rates that have built in the market, for fear these will choke an economic recovery.

Open Market Rates: Against the direction on the interbank market, the rupee gained versus dollar, rising 10 paisa for buying at 81.30 and 30 paisa for selling at 81.60, they said. The rupee followed the same pattern, soaring versus euro rising Rs 1.65 for buying at Rs 113.25 and Rs 2.15 for selling at Rs 114.25, they said.

Open Buying Rs 81.30
Open Selling Rs 81.60

Interbank Closing Rates: Interbank Closing Rates For Dollar On Wednesday.

Buying Rs 81.55
Selling Rs 81.60

(BRecorder)

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Thursday June 25, 2009

BEIJING: China will try every possible means of increasing fiscal revenue this year, while working to ensure that government money is not wasted, Finance Minister Xie Xuren said on Wednesday, according to state media. Xie made the comments in a work report delivered to China's legislative body, the official Xinhua news agency said.

China has pledged to cut taxes and pump money into local projects to stimulate economic growth, which is adding strain to China's fiscal situation. China has targeted a 950 billion yuan ($139 billion) fiscal deficit for this year, a hefty increase from 2008's actual fiscal deficit of 180 billion yuan.

Xie reiterated that the government would spend less on cars, overseas travel and office buildings and spend more welfare, but he did not give detailed numbers. Nation-wide fiscal revenue was up 4.8 percent in May from a year earlier at 656.9 billion yuan, reversing a downward trend in recent months.


(Reuters)

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Thursday June 25, 2009

GENEVA: United States Trade Representative Ron Kirk is looking forward to working closely with his new Indian counterpart after a series of encouraging meetings, Kirk said on Wednesday. His comments indicated that one of the most troubled relationships in international trade diplomacy was improving, clearing one obstacle to a deal in the World Trade Organisation's (WTO) long-running Doha round talks.

"These are very difficult negotiations and even though they take years to complete I think sometimes interjecting new blood, new urgency, new ideas can breathe impetus to get us over the top," the former Dallas mayor, himself confirmed in the job only since March, told Reuters.

"I have had a number of opportunities already to meet with the new Indian trade minister, Anand Sharma. I'm very encouraged by what I've heard from him and look forward to continuing to work with him," Kirk said. Kirk was talking on the sidelines of the annual ministerial meeting of the Organisation for Economic Co-operation and Development (OECD), where he was due to meet Sharma, appointed last month, and other trade ministers over the next two days.

Negotiations on technical details of the Doha round have been continuing in Geneva among officials since December, when WTO Director-General Pascal Lamy decided at the last minute against calling in ministers to push for an outline deal because he judged the necessary political will was still not there.

But in recent weeks several ministers have called for a resumption of high-level talks on Doha, launched in the Qatari capital in late 2001 to help developing countries prosper through more trade. A meeting of trade ministers in Paris on Thursday hosted by Australia is expected to give further momentum, and Sharma has suggested calling key ministers together in India in September to try and clinch a deal.


(Reuters)

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Thursday June 25, 2009

BEIJING: China on Wednesday rejected US and European charges that its restrictions on raw materials exports violate international trade rules, saying that its policies were in keeping with WTO regulations. The European Union and the United States said on Tuesday they were taking a complaint to the World Trade Organisation over China's export curbs on some industrial raw materials used in steel, cars, microchips, planes and other products.

By arguing that the export taxes and quotas keep a lid on Chinese firms' costs, the WTO complaint takes the view that they are essentially a subsidy and distort competition for chemical, steel and non-ferrous metal producers outside China. The latest WTO case comes as Washington and Brussels look for China's co-operation in pulling the world economy out of a slump. It could add to recent friction over military modernisation, Internet controls and United States' own economic policies.

-- China agrees to WTO consultation process over complaint

-- Complaint may become another irritant in Sino-US ties

-- China requests WTO panel on its poultry exports to US

"The main objective of China's relevant export policies is to protect the environment and natural resources. China believes the policies in question are in keeping with WTO rules," the Ministry of Commerce press office said in a mildly-worded response. "Following the WTO procedures for dispute resolution, China will appropriately handle the request for consultations."

The case is an unusual one, since most WTO complaints argue that a country restricts imports through taxes or other barriers, or otherwise subsidises or protects domestic firms. Export taxes or quotas are thus rarely a concern. China's massive industrial overcapacity, its low labour costs and efficient infrastructure mean that Chinese goods are spilling out into world markets, threatening profit margins, jobs, and the very existence of some sectors in Europe and the United States.

The complaint does not name other items on which China also imposes export taxes, for example steel products or semi-finished aluminium, which it would otherwise export in even greater amounts, at lower prices. China's reasons for restricting exports are varied.

They stem from an effort to limit unbridled expansion in hot sectors, often by private companies, that has strained electricity supplies, added to rampant pollution, driven up the cost of raw materials and ruined profits for more established Chinese firms. Chinese officials argue that the export restrictions, which are tweaked regularly, help stabilise supply to world markets.

China is likely to defend itself by turning the spotlight on similar restrictions by other countries, as well as by arguing that there is no violation, said an official who advises the Ministry of Commerce on WTO strategy. "China will strongly question the motive of this case," the official said. "A lot of countries have this type of export restriction, for instance restrictions on the export of raw logs, allowing only processed wood to be shipped instead."

He noted that the United States restricts exports of certain types of technology. Indeed, Beijing regularly points out that its trade surplus would be smaller if Washington permitted the sale of dual-use high-technology gear that it fears China could used for military as well as civilian purposes.

In another sign of friction, China on Tuesday took to the next level a complaint it has brought against the United States, by requesting that the WTO set up a panel of judges to rule on US laws limiting imports of Chinese cooked poultry, the Commerce Ministry said.

The materials in the export complaint include bauxite, the raw material for aluminium, coke, used in steelmaking, and strategic minor metals used in alloys, ceramics and cell phones. China generally imports raw materials, but it is a major source of these items. For instance, it produces 70 to 80 percent of the world's magnesium, which carries a 10 percent export tax.


(Reuters)

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Thursday June 25, 2009

NEW YORK: The world's rich lost nearly 20 percent of their total wealth in 2008 as volatile markets wiped out two years of growth, a Merrill Lynch study showed on Wednesday. The total value of the wealth of people with net assets of more than $1 million, excluding their main home and consumables, dropped to $32.8 trillion - below 2005 levels, the 13th annual Merrill Lynch World Wealth Report showed.

The number of people with more than $1 million in net assets fell 14.9 percent, while the number of people with fortunes of more than $30 million fell by a quarter, the study showed.


(Reuters)

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Thursday June 25, 2009

MOSCOW: Russia's once-booming economy will shrink by 7.9 percent in 2009 as it reels from the global economic crisis, a sharper contraction than previously expected, the World Bank said Wednesday. "Real economy and social impact on Russia was also larger than anticipated a few months ago.

And Russia's real GDP (gross domestic product) in 2009 is likely to contract about 7.9 percent," the World Bank said in a report. In its previous report on Russia, published in March, the Washington-based development lender had forecast that GDP would drop 4.5 percent.

Meanwhile the Organisation for Economic Co-operation and Development (OECD) estimated in a report Wednesday that Russia's economy would contract by 6.8 percent this year and then grow 3.7 percent next year. The Paris-based body, to which Russia does not belong, said: "Russia is suffering a severe recession, but the rebound in commodity prices and the expected effects of policy stimulus point to some recovery through 2009 and into 2010."

The World Bank said that the unemployment rate in Russia could rise to 13 percent and the poverty rate could reach 17.4 percent by year's end, amid declining industrial production and an unfavourable global environment. The jobless rate was 9.9 percent in May, the last month for which figures are available, according to state statistics agency Rosstat.

Russia has been badly hit by the global economic crisis despite early claims by officials that the country would be an "island of stability" amid the turmoil engulfing the rest of the world. Since last summer Moscow's stockmarkets have plunged and the Russian ruble has slid in value against the dollar as prices for the country's main export commodities - oil, gas and metals - have collapsed.

The economic strains threaten to undermine the government of Prime Minister Vladimir Putin, who during his 2000-2008 presidency achieved widespread popularity as Russia enjoyed stronge growth. The World Bank warned that one of the signature achievements of the Putin years, the rise of the middle class, would be set back by the crisis.

The bank forecast that the size of the Russian middle class, measured in terms of household consumption, would drop by 6.2 million people, from 55.6 percent of the country's population to 51.2 percent. On the bright side, the bank said government stimulus funds and a recent rebound in oil prices could help propel Russia back to growth next year.

"The large stimulus package, gradual recovery of oil prices and lower inflation could bode well for the second half of the year, and the Russian economy could return to modest growth in 2010," it said. "But given the weak global demand, external environment for Russia will continue to be difficult over the next 18 months."

The bank also urged Russia to work towards reducing its dependence on oil and gas exports, saying it should "accelerate structural reforms aimed at raising productivity and improving diversification and competitiveness."

Wednesday's World Bank and OECD reports come a day after the Russian state statistics agency revealed that GDP had contracted by a dramatic 11 percent in May compared with the same month last year. Natalya Orlova, an analyst with Moscow-based Alfa Bank, said the grim GDP figures for May were due, at least in part, to the fact that the government stimulus had yet to achieve its intended effect.


(AFP)

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Thursday June 25, 2009

SEOUL: The International Monetary Fund is likely next month to upgrade its growth outlook for South Korea and other emerging Asian economies as stability begins to return, a senior IMF economist said Wednesday. "We haven't finalised the new numbers (for emerging markets).

But it is very likely that many of the numbers are going to be revised upward on average by about one percentage point," Olivier Blanchard, senior IMF economic counsellor, told a conference co-hosted by the Seoul government and the World Bank. The economies due for an upgrade include South Korea, Thailand and Indonesia, Blanchard was quoted by Yonhap news agency as saying, adding that the outlooks for China and India will probably be maintained.

In April the IMF downgraded South Korea's 2010 growth projection to 1.5 percent from 4.2 percent earlier, while maintaining its forecast for this year of a 4 percent contraction. "The downgrade was due to a decrease in exports... but the fiscal stimulus and monetary policies taken by the authorities are taking effect, while the deprecation of the (local) currency helped," Blanchard said.


(AFP)

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Thursday June 25, 2009

ISLAMABAD: Pakistan will seek quota of 3.5 million tons liquefied natural gas (LNG) from Qatar during the two-day negotiations starting on Thursday. LNG, to be imported from Qatar, would be used for power generation and industrial production, mainly the textile sector. Negotiations with Qatar Gas will also be held for import of LNG.

Qatar is one of the largest LNG producers of the world, operated by the state-owned Qatar Gas Company. LNG is one of the fastest growing fuels in the world and, due to high demand, its supply has been under stress. The Sui Southern Gas Company (SSGC) is already working to establish an LNG terminal in the country.

A delegation of Petroleum Ministry, led by Advisor to Prime Minister on Petroleum and Natural Resources, Dr Hussain, is in Doha to discuss import of LNG from Qatar. G A Sabri, Special Secretary Ministry of Petroleum, is also accompanying the Advisor. Talking to Business Recorder from Doha, Asim said that Pakistan requires a quota of 3.5 million tons LNG from Qatar, to be utilised for power generation and industrial units, including textile.

About the cost of LNG to be imported from Qatar, he said that it would be equivalent to the price of furnace oil but it would result in fuel diversification in the country, and added that it would also prove an environment-friendly fuel. He said that import of LNG from Qatar would ensure regular fuel supply to industrial units and power plants at a time when the furnace oil prices shot up in the international market.

It would also help accelerate the economic growth that is hurt by power and gas shortage, the Advisor said, adding that Pakistan also needs to secure energy for future growth. According to the working of Petroleum Ministry, Pakistan requires additional gas supply for at least five years when there is likelihood of Iran-Pakistan (IP) gas pipeline becoming operational.

Qatar produces around 1,600 million cubic feet natural gas per day, which is transferred to plants known as 'the trains', which are 300 metres long and the trains process the natural gas into the exportable liquefied natural gas (LNG). LNG production started in Qatar in 2005 and Qatar Gas exports 10 million tons per annum LNG. Qatar Gas Company plans to expand capacity in 2010 to 42 million tons per annum.



(BRecorder)

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Thursday June 25, 2009

KARACHI: A big income tax evasion of around Rs 335.87 million by some 117 textile units in raw cotton import during last eleven months has been detected. Sources told Business Recorder on Wednesday that 117 members of All Pakistan Textile Mills Association (Aptma) imported raw cotton without paying income tax of around Rs 335.87 million at the time of import.

They said that raw cotton was earlier exempted from payment of income tax through SRO 567(I)/2008 dated June 11, 2008, which was uploaded by the Income Tax Wing (ITW) of the Federal Board of Revenue (FBR) on the PaCCS system. However, this exemption was not approved by the Parliament. Hence, income tax @ 1 percent became leviable on raw cotton from July 1, 2008, under finance bill 2008.

But, ITW did not remove the SRO against the relevant entry in the PaCCS system. Consequently, the system kept on allowing exemption on import of raw cotton, providing huge losses to the national kitty, sources said. They said that raw cotton containing PCI code 52.01 is not exempted from IT and textile manufacturers have to pay 1 percent IT at the time of its import.

They said that the error was detected by the Directorate-General of Post Clearance Audit, Customs, while analysing data of imports of various items. They, however, said the concerned authority issued the letters to all such importers and requested them to make payment, but they shunned the issue.

They said that Aptma was of the view that SRO 567(I)/2008 was still not annulled. Hence, withholding tax under section 148 of Income Tax Ordinance could not be recovered on cotton import.

They said that Aptma has also tabled the issue in a meeting summoned by FBR chairman with the hope to get amnesty in this connection. But, they added that FBR chairman has decided to adjust the leviable amount with IT refunds and the remaining amount, if any, would be paid by the textile millers in the next fiscal year.

They said the Regional Tax Office (RTO), Karachi has expressed reservations on the said decision, saying that whole amount should be paid in current fiscal year. They added that RTO has sent a letter to the FBR chairman in this regard, asking him to revisit the decision.


(BRecorder)

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Thursday June 25, 2009

WASHINGTON: The United States will ask major industrialized nations to expand their economic support for Pakistan at this week's meeting of G8 foreign ministers in Italy to help the South Asian anti-terror ally deal with the ‘enormous humanitarian challenge’ to provide relief to millions of displaced people.

Undersecretary for Political Affairs William Burns will represent the US at a series of meetings on Pakistan and Afghanistan in the Italian city of Trieste from June 25-26 in advance of the G8 summit in July.

"We'll put a particular focus at this meeting on what they can do to help Pakistan, in particular, to bolster Pakistan's civilian government and its efforts to combat Taliban and extremists," a senior State Department told journalists at a briefing about US participation in the meeting, also to be attended by Britain, Canada, France, Germany, Italy, Japan and Russia.

"The EU (European Union) had a conference on Pakistan I believe it'll be its first one in history - last week and came up with a significant amount of money, I think $100 million, getting us towards the goal of $500 million for Pakistan. That's an important contribution of a nonmilitary sort, the likes of which we'll be looking to build on at the G-8 meeting," the official added.

US Special Representative for Pakistan and Afghanistan Richard Holbrooke and Pakistani and Afghan foreign ministers will also attend the meetings.

The official noted that the Italians are convinced that this is a global problem and can only be dealt with globally. The official expected an open dialogue on the challenges that in Afghanistan and Pakistan at the meetings.

"If we're all working together, and I think there's a significant amount of common interest in Pakistan in bolstering the Pakistani government and in providing more resources for its fight against the Taliban and other extremists, and for finding money.

"And I hope this meeting will help us work towards that goal for the tremendous challenge of IDPs in Pakistan. There's an enormous humanitarian challenge and the international community will need more resources to deal with that. And all of these countries coming together who have an interest in all of these same things: bolstering the government, fighting extremists, and dealing with the humanitarian situation, we hope we'll be able to coordinate the efforts better with a chance to talk about it."

Questioned if the US would be looking for humanitarian aid and military aid or both, the official replied:

"We'll be looking for all of the ways in which countries will be able to help bolster the government and contribute towards these goals."

Pakistan says it needs more than $ two billion for relief and rehabilitation for more than three million people displaced from Swat and other valleys in the wake of anti-Taliban offensive launched about two months ago.


(APP)

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Thursday June 25, 2009

KARACHI: President Asif Ali Zardari said here on Tuesday that the National Finance Commission (NFC) Award would be announced this year. Talking to senior journalists at the Bilawal House he said the government is trying its level best to develop the country. He made it clear that his government believes in trade, specially regional trade and not in aid.

President Zardari said that a balanced budget has been presented for the fiscal year 2009-10.

He said there was a lot of room to increase the country’s exports, which were below the potential at 24 billion dollars, which can be increased to 200 billion dollars.

He stated that we would have to attain progress not only for the present generation, but also for the coming generations.

President Asif Zardari said that the democracy has been fostered in the country. Mohtarma Benazir Bhutto gave her life for the cause of democracy and he also went to jail for this cause, he added.

He said that in 10 months the public opinion as well as the world opinion is in favour of Pakistan.

He stated that a consensus has been developed with regard to the war on terror and the people own this war.

He said that with the good wheat support price the government has managed to enhance its yield.

President Zardari was optimistic that the water problem would also be resolved.

With regard to electricity, he pointed out that Shaheed Mohtarma Benazir Bhutto during her government had come up with a good Independent Power Producers (IPPs) policy for generating 14,000 MW and out of that 4,000 MW was installed.

The subsequent governments did not take advantage of this policy and an electricity supply gap emerged in the country, he added.

About Karachi Electric Supply Corporation (KESC), the President said that during his previous visit to Karachi he held a meeting with KESC officials. They are trying to solve the problem and if KESC did not deliver then the government would have no choice but to take it over.

He also pointed out that Shaheed Mohtarma Benazir Bhutto during her tenure had given the idea of laying the gas pipeline from Iran.

To a question, President Zardari said that he would announce a package for Lyari.

He said that after the budget session, the Prime Minister would hold a meeting with local government ministers of the provinces to decide about the local bodies system.

He said that it augurs well that PPP, MQM and ANP have formed a coalition government.

Sindh Chief Minister, Syed Qaim Ali Shah and Provincial Minister for Information, Shazia Marri were also present on the occasion.


(APP)

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Thursday June 25, 2009

LONDON: European stock markets posted solid gains on Wednesday in line with Wall Street where investors were cheered by an unexpected rise in US durable goods orders.

In London the FTSE 100 index closed at 4,279.98 points, up 1.18 percent, while in Paris the CAC 40 rose 2.18 percent to finish at 3,184.76. The Frankfurt Dax added 2.74 percent to reach 4,836.01 points.

Elsewhere there were gains of 2.54 percent in Brussels, 3.12 percent in Milan, 2.39 percent in Amsterdam, 2.88 percent in Milan and 2.29 percent on the Swiss Market Index.

US stocks opened in positive territory Wednesday after a report of a jump in durable goods orders in May, but the market remained cautious awaiting the conclusion of the Federal Reserve policymaking meeting.

The Dow Jones Industrial Average was up 1.16 percent at 8,419.49 at mid-day while the tech-dominant Nasdaq had risen 2.19 percent to 1,803.63.

A government report before the opening bell showed orders for US long-lasting manufactured goods surged unexpectedly in May, pointing to recovery in the embattled sector amid the prolonged recession.

The Commerce Department said durable goods orders rose a seasonally adjusted 1.8 percent in May from April. Most analysts had projected a decline of 0.9 percent.

The report "helped boost sentiment, soothing some concerns that the recent rally in the equity markets may have gotten ahead of the economic reality," said analysts at Charles Schwab & Company in a note to clients.

However, with the conclusion of Wednesday's Federal Open Market Committee meeting, "traders may be treading relatively cautiously in early action."

The FOMC is seeking to steer monetary policy amid tentative signs of recovery from recession.

Economists expected the Fed to maintain its near-zero interest rate policy.

US stocks made a modest pullback after data showed new home sales during May hit an annualized rate of 342,000 units, below the 360,000 unit consensus forecast.

Given the revisions to the prior month, new home sales were down 0.6 percent month-over-month. They were expected to increase 2.3 percent.

Miners were among the day's big winners in London, with Anglo American surging 10.17 percent to 1,829 pence after Swiss rival Xstrata said it would still try to convince it of the advantages of a merger. Anglo American on Monday spurned the proposal.

Elsewhere in the sector Lonmin added 7.05 percent to close at 1,214 pence while Rio Tinto rose 5.55 percent to 2,131 pence.

In Paris the finance sector, which suffered losses earlier this week on renewed fears for economic recovery prospects, bounced back.

The BNP Paribas bank added 4.46 percent to finish at 45.86 euros while rival Societe Generale gained 3.16 percent to close at 39.46 euros.

Banks were also in demand in Frankfurt, where Deutsche Bank rose 6.60 percent to 42.85 euros and Deutsche Borse rose 2.85 percent to 56.61 euros.

Steel makers ThyssenKrupp and Salzgitter, bolstered by the durable goods data from the United States, rose 6.31 percent to 18.04 euros and 4.60 percent to 62.72 euros respectively.

In Asian stock markets on Wednesday, Tokyo rose 0.43 percent as a weaker yen and gains among commodity-related stocks helped the market to recover some of the previous day's heavy losses.

Hong Kong share prices closed 2.02 percent higher on Wednesday, as investors grabbed bargains in property firms after a heavy fall in the previous session.


(AFP)

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Thursday June 25, 2009

NEW YORK: Oil prices fell on Wednesday in choppy trading as the dollar strengthened and the United States reported mixed energy inventory data.

New York's main futures contract, light sweet crude for delivery in August, shed 57 cents from Tuesday's close to end at 68.67 dollars a barrel.

The price of London's Brent North Sea crude for August delivery fell 47 cents to 68.33 dollars per barrel.

Traders said prices were dictated by the dollar, which rose after the US Federal Reserve's policy-making body concluded a two day meeting with a consensus to maintain virtually zero interest rates to stimulate the world's largest economy from prolonged recession.

Around 1830 GMT, the euro fell 1.3938 dollars from 1.4078 dollars in late New York trading on Tuesday.

A strong US currency makes oil priced in dollars more expensive for holders of other currencies. The Federal Open Market Committee also said that "economic conditions are likely to warrant exceptionally low levels of the federal funds rate for an extended period."

Analysts said the Fed was holding to its aggressive course to stimulate the recession-bound economy despite the growing notion of "green shoots."

The market also digested data from the US Department of Energy on Wednesday showing crude stockpiles dropping 3.8 million barrels in the week ending June 19, steeper than the 1.3 million barrels expected by most analysts.

Inventories of gasoline, or petrol, jumped by 3.9 million barrels compared to expectations of a climb totalling one million barrels.

"The numbers virtually cancel each other out," said Sucden analyst Robert Montefusco, pointing to the fact that in nominal terms the fall in crude inventories virtually matched the increase in gasoline stockpiles.

John Kiduff of MF Global said the market remain concerned about demand. "The outsize increase in gasoline inventories ahead of what used to be the high of the driving season is obviously weighing on the market," he said.

The market also remain gripped by post-election violence in key crude producer Iran.

Riot police blocked protesters from gathering in Tehran on Wednesday, witnesses said, as Iran's supreme leader warned he will not back down in the face of unrest following the disputed presidential vote.

"In the recent incidents concerning the election, I have been insisting on the implementation of the law and I will be (insisting). Neither the system, nor the people will back down under force," Ayatollah Ali Khamenei said.

It was the latest indication that the clerical regime will not brook dissent over the re-election of President Mahmoud Ahmadinejad despite a wave of public demonstrations and complaints that the June 12 election was rigged.

And in a sign security forces are wasting no time to put down protests, a large presence of riot police and Islamist Basij militiamen stopped a crowd of several hundred people trying to assemble outside the Iranian parliament building, according to a witness.

Analysts are concerned that a worsening of the crisis could cause the Iranian government to cut off oil supplies or block the Strait of Hormuz -- a vital passageway for oil tankers.

Crude oil futures plunged from record high points of more than 147 dollars in July 2008 to about 32 dollars in December as the economic downturn ravaged energy demand but the market has since clawed back ground on recovery hopes.


(AFP)

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Thursday June 25, 2009

NEW YORK: The Dow fell for the fourth day and other indexes ended well off the day's highs on Wednesday after the Federal Reserve reiterated concerns about the economic outlook at the end of its policy meeting.

Technology shares sustained some strength, bolstered by stronger-than-expected quarterly results from software maker Oracle Corp.

The Fed, as expected, left the benchmark fed funds rate at almost zero, and said it would continue its program of purchasing US government bonds and mortgage-related debt.

Stocks pulled back after the Fed did not suggest in its statement that it sees any notable recovery any time soon.

"The Fed is a little more downbeat than the market has been ... that they're emphasizing the weakness is a touch disappointing to me and to the markets," said Jim Awad, managing director at Zephyr Management in New York.

Before the release of the Fed's statement, all three major stock indexes were solidly higher, with the Nasdaq up more than 2 percent. Investors were encouraged by a stronger-than-expected report on monthly durable goods orders, which pointed to increased economic demand.

The Fed's words on the economic outlook were mixed. The central bank said the economy was likely to remain weak for a time, but the contraction's pace was slowing.

The Dow Jones industrial average was down 23.05 points, or 0.28 percent, at 8,299.86. But the Standard & Poor's 500 Index was up 5.84 points, or 0.65 percent, at 900.94. The Nasdaq Composite Index was up 27.42 points, or 1.55 percent, at 1,792.34.

Oracle's results boosted other technology shares and helped drive the PHLX semiconductor index up 1.7 percent. Oracle shot up 7 percent to $21.26 and ranked among the Nasdaq's top advancers.

"You had the good durable number, the good Oracle number that kind of got things going," said Stephen Massocca, managing director of Wedbush Morgan in San Francisco.

Data before the opening bell showed new orders for durable goods, which are long-lasting US manufactured products such as refrigerators and washing machines, increased by a much stronger-than-expected 1.8 percent in May, and the median price of new homes hit its highest level since December, even though sales slipped, economic data showed.

The broad S&P 500 index is up 33.2 percent from a 12-1/2-year closing low on March 9, but it had soared as much as 40 percent during the spring rally.

Trading volume was below average on the New York Stock Exchange, with only about 1.10 billion shares changing hands, under last year's estimated daily average of 1.49 billion, while on the Nasdaq, about 2.16 billion shares traded, below last year's daily average of 2.28 billion.

Despite the Dow's lower finish for the day, advancing stocks outnumbered declining ones on the NYSE by a ratio of nearly 3 to 1. On the Nasdaq, about three stocks rose for every two that fell.


(Reuters)

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Thursday June 25, 2009

ISLAMABAD: State Minister for Finance and Economic Affairs Hina Rabani Khar has said that the government has decided to bring all the sectors into tax net within next three years. Talking to private news channel, she said the government has brought two sectors Real Estate and Services-into tax net during current budget.

However, she said still there are some sectors which are out of tax net.

She said the government accepted suggestions proposed by the parliamentarians in the budget debate in the National Assembly.

To a question she said the Carbon Tax will replace existing PDL adding it is not a new tax on petroleum product.

Minister further said carbon tax will make the petroleum prices transparent. “Every body will now know the exact amount of percentage tax on per litre of petrol. It will not hike price of petrol.”

According to estimate the government will gain about 120 billion rupees from carbon tax, she added.



(APP)

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