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from Global Investing:

Will gold’s glitter dim in India?

Indians have reacted to the latest gold prices falls by --- buying more gold. And why not? Aside from Indians' well known passion for the yellow metal (yours truly not excluded) gold has by and large served well as an investment: annual returns over the past five years have been around 17 percent, Morgan Stanley notes.

Now, gold's near 20 percent plunge this year has wiped some $300 billion off Indians' gold holdings, Morgan Stanley estimates in a note (households are believed to own about 15,000 metric tonnes of gold). So is the gold rush in India over?

Possibly. Indian gold imports have doubled to around 3 percent of GDP in the past five years. That rise is partly down to greater wealth which translates into more wedding jewellery purchases. But the more unpleasant side of the equation is India's inflation problem. Look at the following charts from MS that shows how negative real interest rates have encouraged savings in gold rather than financial instruments:

 



Signs now are that inflation is ebbing -- wholesale price growth in March slowed to the slowest in more than three years. The fall in oil and industrial metals prices, if sustained, should see this process continue. The government has also been slashing spending to bring its huge budget deficit under control. Morgan Stanley writes:

from Global Investing:

India’s deficit — not just about oil and gold

India's finance minister P Chidambaram can be forgiven for feeling cheerful. After all, prices for oil and gold, the two biggest constituents of his country's import bill, have tumbled sharply this week. If sustained, these developments might significantly ease India's current account deficit headache -- possibly to the tune of $20 billion a year.

Chidambaram said yesterday he expects the deficit to halve in a year or two from last year's 5 percent level. Markets are celebrating too -- the Indian rupee, stocks and bonds have all rallied this week.

from Global Investing:

Mali risks in focus

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The international focus is on  gold-producing country Mali after days of French air strikes on al-Qaeda-linked Islamist rebel strongholds in the north of the West African country. France expects Gulf Arab states will help an African campaign against the rebels,  and a meeting of donors for the Mali operation is due at the end of the month. West African defence chiefs are meeting today to approve plans to speed up the deployment of 3,300 regional troops.

Mali isn't normally on the radar screens of international portfolio investors, with little external debt and no developed capital markets.

from Money on the markets:

Metal stocks struggle in trade

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Metal companies fared badly at the bourses on Monday, causing the BSE Metal Index to drop nearly 2 percent.

Iron ore firm Sesa Goa ended as the top loser in the index, dropping more than 6 percent to 401.55 rupees. Gujarat NRE Coke shares slipped 4.3 percent.

from Money on the markets:

Metal index ends as top sectoral loser

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The BSE Metal index dropped 2 percent on Wednesday and was the top sectoral loser, with all components ending in the red.

Top counters like Tata Steel and Hindalco were the top losers in the metal index and the Sensex.

from Money on the markets:

Metal stocks rally

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It was a good day at the bourses for metal stocks, with the BSE Metal Index gaining 4.2 percent in a broader market that jumped over 400 points.

All stocks in the metal index closed in the green, with Gujarat NRE Coke and Sesa Goa leading the pack with gains of over 7 percent each.

from Money on the markets:

Market ends weak, Sensex slips over 1 pct

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INDIAThe Sensex ended the week on a negative note, slipping over 1 percent, but still managed to post its 14th consecutive weekly rise.

Profit-booking continued in a market that has risen sharply since early March, dragging the benchmark down by 174 points to 15,274.

from Money on the markets:

Sensex ends flat in choppy trade

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The Sensex jumped nearly 50 points on Friday to end at 10,048.49, driven mostly by increasing optimism worldwide.

Gains however were capped by profit-booking in a market that has recovered considerable ground after Satyam unveiled the country's biggest corporate fraud in early January.

from Money on the markets:

Sensex sheds 0.4 pct, but gains 2.4 pct on week

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MARKETS-SOUTHASIA-STOCKSThe Sensex ended 35 points lower on Friday on profit-booking ahead of the weekend.

The top benchmark losers included Tata Motors, which slipped 6.2 percent, ICICI Bank, which was down 4.5 percent, and L&T which lost 4 percent.

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