News from India - Gold, Oil, Sensex , and The Rupee

India's gold demand was low on Thursday as buyers waited for prices to ease further from their recent highs or stabilize to be able to make purchases, dealers said.

"There is a little bit of buying from those in dire need," said Ajit Shinde of Magna Projects Pvt Ltd in Kolkata, a large wholesaler. "But it should pick up for the festivals."

Shinde said for the time being, his clients, mostly in Kolkata, were willing to wait for a fall to 8,900 rupees per 10 grams.

Dealers in banks said demand was low with people hoping for a fall to $700 an ounce in overseas markets.

Foreign spot gold was down from Tuesday's 16-month high of $714.20, as the dollar, with which gold usually has an inverse relation, recovered against other currencies. It also eased on investor caution ahead of a U.S. interest rates meet next week.

Rupee / US Dollar Forex , Gold in India, and The Sensex index A slightly stronger rupee helped lower Indian gold prices, but not enough to inspire many buyers, dealers in banks said.

The country's biggest lender State Bank of India today led banking stocks on an upward trajectory on the bourses amid expectations the US Fed may cut interest rates, which can encourage capital flows into Asia. As many as 14 of the 18 banking stocks rose, lifting the segment index by 102.17 points to settle at 8,081.94 points. The index hovered in a range of 8,123.91 and 8,000.92 points. Marketmen said hopes of a rate cut by the US Federal Reserve, which might boost capital flows into Asia, helped strengthen sentiments on the stock exchanges. They said reports of SBI planning to raise Rs 10,000 crore also bolstered trading in banking stocks, especially that of the state-run lender. The SBI scrip gained Rs 51.70 or 3.18 per cent to pegged at Rs 1,675.85. ICICI Bank, the country's second-biggest lender, fell by 0.1 per cent to Rs 883.85. Scrips of three other lenders Federal Bank, Indian Overseas Bank and Yes Bank also declined. The other good performer in the segment was Kotak Mahindra Bank, which climbed up by Rs 24.75, or 3.31 per cent, to close at Rs 772.50 on heavy buying by funds.
The government appears set to approve Reliance Industries'' pricing formula for the gas it plans to produce from July next year, with minor changes. The Empowered Group of Ministers (eGoM), which had its third meeting today morning was near unanimous on the need to honour the government's commitment allowing marketing and price freedom to investors investing in oil and gas hunt, official sources said. Sources said, the government was likely to tweak the Reliance formula so that the price of gas is calculated in dollar alone, a move that will bring down 4.33 dollar per million British thermal unit price proposed by Reliance to about 4.2-4.22 dollar per mBtu. While no Minister attending the meeting commented on the deliberation, Petroleum Minister Murli Deora only said, the decision would be announced by External Affairs Minister Pranab Mukherjee. Sources said, the eGoM left the final decision on Pranab Mukherjee who will go on a five-day foreign visit tomorrow afternoon. Fertilizer Minister Ram Vilash Paswan, sources said, wanted a guarantee of gas supplies to fertilizer and steel plants.