Stock Market News, Financial News - Mar 27, 2009

Heavy borrowing could pressure rates - officials

By Rajesh Kumar Singh and Manoj Kumar

NEW DELHI (Reuters) - India could overshoot its annual borrowing target in the 2009/10 fiscal year if more fiscal stimulus is rolled out to revive a slowing economy, and this will put pressure on interest rates, senior officials said on Friday.

Policy advisers also said the economy will fare significantly worse in 2009 than in the previous year, and more doses of fiscal and monetary policy may be needed to boost demand and lift growth.  (More ...)

Will Satyam be an albatross around Larsen's neck?

By Sumeet Chatterjee

BANGALORE (Reuters) - Larsen & Toubro is seen as the front-runner to acquire fraud-tainted outsourcer Satyam Computer Services Ltd but a potential purchase could bring more pain than gain.

Not only will the acquisition be a tricky one due to uncertainty about Satyam's accounts and potential legal liabilities from U.S. lawsuits but also it would distract Larsen from its main engineering and construction business.  (More ...)

Reliance signs gas deal with fertiliser firms

NEW DELHI (Reuters) - Reliance Industries on Friday signed deals with 12 fertiliser firms to sell about 15 million standard cubic metres a day (mmscmd) of gas from its block off the country's east coast. Supplies will start from mid-April, Reliance said. 

The firms will pay Reliance a marketing margin of 13.5 cents per million British thermal units (mmBTU) for the gas, said Satish Chander, Director General of Fertiliser Association of India. The margin is in addition to the government-set price of $4.2 per mmBTU for the gas.       (More ...)

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ADVFN World Daily Markets Bulletin (excerpts)

US Market

Stocks Moving Lower As Traders Cash In On Recent Gains

Stocks are showing notable weakness during mid-morning trading on Friday, as investors take profits from the recent rally and digest some mixed economic news. With the decline, the Nasdaq has once again slipped below the unchanged line for the year-to-date period.

On the economic front, the Commerce Department released its report on personal income and spending in the month of February. While the report showed an increase in spending that came in line with estimates, income fell by a little more than expected.

The report showed that personal spending rose 0.2 percent in February following an upwardly revised 1.0 percent increase in January. The modest increase in spending came in line with the expectations of economists.

At the same time, the Commerce Department said that personal income edged down 0.2 in February after a downwardly revised 0.2 percent increase in the previous month. Economists had been expecting a slightly more modest 0.1 percent decrease.

The final reading of the Reuters University of Michigan's consumer sentiment index for March was also released earlier, showing a revised reading of 57.3. Economists had expected the consumer sentiment index to be lifted to 56.8 from the mid-month reading of 56.6.

In other news, President Barack Obama is meeting today with the CEOs of JP Morgan, Citigroup, Goldman Sachs and other banks, as well as executives from industry associations, to discuss the economy and the administration's proposals to increase regulation of the financial system.

Additionally, President Obama will soon unveil the results of a federal examination of the restructuring plans from General Motors and Chrysler, a condition for the auto-makers to rece ive more government capital.

White House Press Secretary Robert Gibbs said the details would be announced before the President departs for the G20 Summit in London on Tuesday.

"The President, as part of viability plans from both GM and Chrysler, is required by the 31st to give an update on those plans and where our government sees them, and we'll be doing that also in the next few days," Gibbs said.

The major averages pulled back to new lows for the session in recent trading, but they have regained some ground since then. The Dow currently remains down 128.39 at 7,796.17, the Nasdaq is down 29.14 at 1,557.86 and the S&P 500 is down 13.55 at 819.31.

European Shares

Europe's top stocks have swung into the red in choppy trade on Friday, led lower by a weak energy sector. U.K.'s FTSE 100 Index is showing a loss of 0.9 percent, while the French CAC 40 Index and the German DAX Index are falling 2 percent and 2.1 percent, respectively.

Asia Markets

The Japanese stock market took a pause for breath Friday bringing to an end nine successive days of rises for the Topix index.
Nevertheless, the Nikkei 225 index reached its highest point since 9 January during the session before easing back to 8,626, down 9 points. Hong Kong's Hang Seng Index ended the day up 0.1 percent.

Commodities

Oil and gold rise after gloomy GDP data
The worst US GDP data for 26 years sent investors scurrying for the safety of gold, pushing the April futures contract up to $940, up $4.20 on the day.

US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2% but better than consensus forecasts from economists of a 6.6% fall.

Meanwhile, the appeal of gold as a safe asset was further enhanced by news that the total number of US unemployed rose to a record 5.56m, although the dollar’s strength limited the extent of gold’s gains.

The oil price was also on the rise, with the April contract rising above $54 a barrel, reversing Wednesday’s losses when the Energy Information Administration revealed that crude inventories rose by 3.3m barrels last week.

Forex
Dollar dominant
US GDP data that was not as bad as feared prompted support for the greenback Thursday. Though US GDP fell by an annual rate of 6.3% in the final quarter of last year, worse than the initial read of 6.2%, it was still better than consensus forecasts from economists of a 6.6% fall.

Sentiment towards the dollar was also boosted by the relative success of the US Treasury’s auction of seven-year notes. The Treasury sold $24bn of notes at a yield of 2.384%.

The euro was out of favour after data from the European Central Bank (ECB) showed a slowdown in the growth of private sector lending. The aggregate value of loans was 4.2% higher in February than a year earlier, compared with a 5% year-on-year g ain in January. The figures are likely to add pressure to the ECB to cut interest rates some more this year, which will diminish the appeal of the euro.

Sterling also fell back in New York trading despite a good response to the sale of index-linked gilts due to mature in 2022, which was oversubscribed. The auction result came as a relief after the flop the previous day of the auction of 40-year gilts.

The pound fell back by almost a cent, to $1.4444 in New York, having earlier made headway in London trading, where it reached $1.4562. However, even in London the currency finished below its best levels of the day after UK retail sales data revealed a far bigger than expected 1.9% drop in sales from the previous month.

ADVFN World Daily Markets Bulletin - Mar 16, 2009

US Stocks at a Glance

Major Averages Remain Mixed In Mid-Morning Trading

Stocks are turning in a mixed performance in mid-morning trading on Monday, as traders react to Federal Reserve Chairman Ben Bernanke's 60 Minutes interview as well as some weaker than expected economic data.

In economic news, conditions for New York manufacturers got significantly worse in March, according to a report released by the New York Federal Reserve, with the index of activity in the state's manufacturing sector unexpectedly decreasing compared to the previous month.

Additionally, the Federal Reserve's industrial production report showed that industrial production fell by 1.4 percent in February compared to economists estimate of a 1.3 percent decline. The decrease reflected a steep drop in utilities output amid a swing to above-average temperatures.

In other news, Fed Chairman Ben Bernanke gave the first televised interview from a current Fed Chairman in 20 years. On 60 Minutes over the weekend, Bernanke reiterated that he sees the U.S. coming out of recession this year.

While he sees the recession ending before 2010, he noted that the unemployment rate would likely continue to climb, moving into double-digits before getting better. However, he pledged that another failure like Lehman Brothers would not be allowed to happen.

The major averages are currently stuck on opposite sides of the unchanged line, with the Nasdaq posting a notable loss. While the tech-heavy Nasdaq is down 9.77 at 1,421.73, the Dow is up 43.72 at 7,267.70 and the S&P 500 is up 6.48 at 763.03.

Canadian Market

Toronto Stocks Up For Fifth Straight Session - Canadian

Canadian stocks are in the green for a fifth straight session on Monday as strength in the mining and financial sectors has outweighed a drop in energy stocks.

The S&P/TSX Composite Index is up 63.03 points or 0.75% to 8,366.42. The index is on target for its best close in more than a month.

Mining stocks are up 3.25% to lead the way. Lundin Mining has rallied 6.7% after the company said it will remove its shares from from the New York Stock Exchange in a cost-cutting effort.

Financial stocks are up 2.8% as all of the big six banks are posting notable gains. Toronto-Dominion has climbed 3.5%, Scotiabank has added 3.3% and CIBC is up 3.2%.

Ensign Energy Services has declined 2.7% after the provider of energy drilling services reported fourth-quarter net income of C$73.83 million, or C$0.48 per share, compared with C$72.56 million, or C$0.48 per share, a year ago.

Energy stocks have dropped 0.5% as crude oil is down $1.63 to $44.62 after the Organization of Petroleum Exporting Countries agreed to leave output unchanged.

Enbridge is up 1.2% after the company said it agreed to sell its indirect 24.7% stake in the Oleoducto Central pipeline to Colombian oil and gas firm Ecopetrol SA for about US$400 million.

In other corporate news, Agrium is up 0.5%. The agricultural nutrients maker Monday said it commenced an exchange offer for all outstanding shares of CF Industries Holdings, Inc.

Sino-Forest Corp. is up 1% after the commercial forest plantation operator,reported fourth-quarter net income of $95.5 million or $0.51 per share, up from $55.5 million or $0.30 per share in the same period last year.

YM BioSciences Inc. is down 1.5%. The company announced the enrollment of the first patient into its multinational trial of nimotuzumab for the treatment of patients with non-small-cell lung cancer.

On Friday, the index added 21.12 points or 0.25% to end at 8,303.39. This marks the first finish above 8,300 since Feb. 17.

European Shares

FTSE hits new high for March
Market Movers
techMARK 1,145.85 +2.89%
FTSE 100 3,846.38 +2.47%
FTSE 250 6,278.27 +1.88%

The sun is shining on London’s leading stocks today with the FTSE 100 rising above the level it had sunk to at the end of February for the first time this month. Sentiment has been boosted by an interview given by Federal Reserve chairman Ben Bernanke on US TV Sunday night in which he said the US recession could end this year if the government’s medicine for the ailing banking sector works.

Barclays is sharply higher after it confirmed weekend reports that talks are underway with a number of parties over a sale of iShares, its exchange-traded funds business. The bank also confirmed it is holding talks with HM Treasury and FSA regarding its potential participation in the UK's Asset Protection Scheme. Barclays added that its businesses overall have had a strong start to 2009.

Rexam is another stock with a double-digit percentage rise under its belt after Credit Suisse upgraded the stock to “out-perform” from”neutral”.

Oil stocks are moderately lower after OPEC’s decision over the weekend not to cut output quotas. In contrast, heavy oil users such as Thomas Cook, British Airways and FirstGroup attract support on expectations that the OPEC decision will head off a resurgence in oil prices.

Rio Tinto is lower on weekend comment that some of its big shareholders are intent on scuppering the refinancing deal with Chinalco.

Bus and rail group Stagecoach's trading since the end of October has been on track to meet management expectations. The UK bus division has seen 9% like-for-like (LFL) revenue growth in the 44 weeks to 1 March 2009, while the UK rail division (excluding East Midlands Trains) saw 6.7% LFL growth. In North America, the company has seen 6.8% LFL growth in the 10 months to 28 February 2009.

Shares in industrial property group Brixton surged after the property group reassured the market it was compliant with its banking covenants at the end of 2008, despite a sharp deterioration in its financial position. The firm reported a pre-tax loss of £768.8m for the year, compared with a profit of £58.2m the previous year. Net asset value per share fell 47% to 290p.

Many market observers were expecting Brixton to accompany its results with a rights issue or some other form of fund raising but the company said it was still considering a wide variety of options aimed at strengthening its balance sheet.

Insulation and building materials supplier SIG is another company considering a range of options, including a potential equity raising. Reports at the weekend suggested SIG had spoken to investors about a possible £250m-£300m rights issue at a heavy discount to the current share price. Full-year results are due tomorrow, though it is unclear if a cash call will accompany the figures.

A consortium led by Interserve has been named as Selected Bidder by Sandwell Council for a big schools development project under the government’s Building Schools for the Future initiative.

Gulf of Mexico-focused oil and gas explorer and producer Leed Petroleum posted a large increase in production over 2008 and said it was in a strong position to continue growing. The firm posted a pre-tax income of $3.6m on revenues of $15.1m, as it ramped up production at its Eugene Island field.

Hopes of a big contract for Aero Inventory have been dashed as the company said it had withdrawn from discussions with a major airline having been unable to agree on satisfactory commercial terms for the proposed deal.

Emerald Energy, the oil explorer focused on South America and the Middle East, is awash with cash after a strong trading performance in 2008. Net cash flow from operations tripled to $64.7m from $21.6m in 2007. Cash and cash equivalents at the end of 2008 stood at $74m, up from $40m at the end of 2007, after the company saw profit before tax soar from 2007’s level of $8.59m to $52.45m.

FTSE 100 - Risers
Barclays (BARC) 89.70p +21.05%
Rexam (REX) 269.75p +12.75%
Prudential (PRU) 287.75p +10.35%
London Stock Exchange Group (LSE) 449.25p +9.24%
Thomas Cook Group (TCG) 229.00p +7.64%

FTSE 100 - Fallers
Tullow Oil (TLW) 762.00p -1.68%
Kazakhmys (KAZ) 318.50p -1.55%
Amec (AMEC) 540.50p -1.10%
Rio Tinto (RIO) 2,060.00p -0.82%
RSA Insurance Group (RSA) 135.00p -0.74%

FTSE 250 - Risers
Brixton (BXTN) 17.50p +18.64%
SIG (SHI) 135.50p +15.32%
Intermediate Capital Group (ICP) 228.00p +11.76%

FTSE 250 - Fallers
Gem Diamonds (GEMD) 155.00p -3.73%
Wellstream Holdings (WSM) 388.25p -3.54%
Brit Insurance Holding (BRE) 188.50p -3.33%

Asia Markets

Indian market continues winning streak

Monday, the Indian market recovered from its day's lows to end sharply higher for the day. While easing fears about the U.S. banks and net buying by foreign funds on Friday helped the market open firm, investors took profits in early trading amid a mixed trend in the Asian markets and an uncertain outlook for the global economy.

However, stocks bounced back later in the afternoon after the European markets opened on a positive note. The higher US index futures, which pointed towards a firm opening on Wall Street Monday and the strengthening of the rupee to near a two-week high also improved investor sentiment.

The BSE Sensex opened at 8,794 and slipped to the day's low of 8,697 in early trading. The index since then bounced back sharply and closed near the day's high at 8,944, up 187 points or 2.13% over the previous close. Meanwhile, the S&P CNX Nifty rose 58 points or 2.13% to 2,777.

Second-line stocks also showed significant gains. The broad-based BSE 500 index, the small-cap and the mid-cap indexes advanced around 2.20% each. On the BSE, the market breadth was extremely positive, with gainers outnumbering decliners by 1611 to 847.

Stocks across the sectors received good support. Realty, oil/gas and banking stocks were the top gainers.

Jaiprakash Associates (up 8.96%), Mahindra & Mahindra (up 8.48%), Ranbaxy Laboratories (up 6.82%), Reliance Communication (up 6.74%), DLF (up 6.16%), ICICI Bank (up 4.52%), State Bank of India (up 3.65%)and Sterlite Industries (up 3.52%) were some of the prominent gainers.

Twenty-five out of 30 Sensex stocks finished in positive territory, while Sun Pharma, Maruti Suzuki, Grasim Industries, Infosys and Reliance Infrastructure ended in the red.

Aviation stocks surged higher after data released by the Civil Aviation Ministry showed a marginal improvement in domestic passengers traffic for February. Kingfisher climbed 9.83%, JetAirways jumped 17.16% and SpiceJet gained 3.15%.

Realty stocks showed handsome gains, leading the rally. Among the major gainers in this space, Mahindra Life jumped 22.03%, Akruti City soared 19.50%, Parsvnath climbed 6.17% and DLF added 6.16%.

Stocks of oil-exploration companies closed mixed after crude oil price fell about 2.5 percent in Asian trading on Monday. Reliance Industries gained 3.45% and ONGC advanced 1.32%, but Cairn moved down 0.21%.

On the other hand, state-owned oil firms, namely HPCL surged up 8.30%, BPCL jumped 4.40% and IOC added 2.96%.

Commodities

Oil falls by nearly $1 a barrel
Crude oil futures fell nearly $1 on speculation that oil cartel OPEC will not announce further output cuts at its weekend meeting in Vienna.

Reports suggest OPEC is under pressure to keep oil prices lower to help an economic recovery. Since September the group, which controls about a third of the world’s oil production, has reduced production by 4.2m in an attempt to stem falling oil prices.

According to reports the group has an 81% compliance rate of reaching its reduction target.

US light crude oil for April delivery fell 78 cents to settle at $46.25 a barrel on the New York Mercantile Exchange. In a volatile week for oil prices crude registered gains of 1.6%.

Gold prices rose above $930 an ounce amid strong demand for ETF holdings. The precious metal has endured a bumpy ride in recent weeks with prices rising above $1,000 an ounce and then falling quickly to profit taking.

Traders say demand for gold will slow as it inches towards the $1,000 level again and as demand for safe haven assets eases as investors reassess the economic outlook. COMEX gold for April delivery rose $6.10 to settle at $930.10 an ounce.

Silver for May delivery rose 27 cents to $13.22 an ounce while April platinum advanced 40 cents to $1,063.60 an ounce.

Forex

Euro broadly higher
Demand for the dollar’s safe haven qualities faded on Friday with renewed risk appetite boosting the euro and sterling.

The single market currency also benefited from Thursday’s decision from the Swiss central bank to stop the Swiss franc's advance against the euro.

The euro consolidated gains against the greenback on Friday and early in the session hit a two-week high against the dollar before easing slightly. The euro also gained around 0.4% to 126.43 yen.

The euro has recently been under pressure by concern about the euro zone’s exposure to bad debt in Eastern European banks.

The dollar rose against the broadly weaker Japanese currency after a report showed the US trader gap narrowed to its smallest level since October 2002. The yen’s attractiveness as a safe haven currency has been fading as traders mull the country’s deepening economic troubles.

Sterling took its cue from buoyant markets on Friday and investors turned to riskier currencies. The pound rose about 0.50% to $1.4005 after reaching a six-week low against the US currency earlier in the week at $1.3653.

The UK currency was also boosted as the Bank of England continues will its quantitative easing plans, which is hoped will stimulate lending.

Stock Market News, Financial News - Mar 16, 2009

Bharti to recast business in April '09

NEW DELHI (Reuters) - Bharti Airtel Ltd, India's top mobile operator, will restructure its businesses next month as it looks to expand beyond voice telephony, the Economic Times reported on Monday.

The newspaper said Bharti would expand its three divisions to nine to focus on mobile commerce, Internet, enterprise business and small and medium business.  (More ...)

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iGate says Satyam bid below current market price

MUMBAI (Reuters) - U.S.-based iGate Corp's bid for fraud-hit Satyam Computer Services will be well short of the current market price, its chief executive told a television channel on Monday.

"I mean what we have picked up in terms of the financial, I do believe our bid will be quite a bit south of the 90 cents a share, which is currently the market price of Satyam," Phaneesh Murthy said on CNBC-TV18.  (More ...)

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Rupee off 2-week high as importers buy dollars

MUMBAI (Reuters) - The rupee retreated after climbing to its strongest in more than two weeks early on Monday, as importers bought the U.S. dollar but gains in regional currencies and local shares should support.

At 10:20 a.m., the partially convertible rupee was at 51.60/62 per dollar, after touching 51.33, its highest since Feb. 27. It had closed at 51.48/50 on Friday.  (More ...)

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US recovery to begin in 2010: Bernanke

Federal Reserve Chairman Ben Bernanke suggested in a taped interview on Sunday that the US recession could last most of the year and said the biggest risk was that the political will needed to fix the fractured financial system could be lacking.

"This (economic) decline will begin to moderate and we'll begin to see a leveling off," Bernanke said when pressed during an interview on the CBS program "60 Minutes" about whether he sees the recession ending this year.  (More ...)

Stock Market News, Financial News - Mar 2, 2009

India manufacturing shrinks for fourth month in Feb

MUMBAI (Reuters) - Indian manufacturing activity shrank for a fourth straight month in February as the global downturn hurt demand and soured business sentiment, a survey showed on Monday.

The ABN AMRO Bank purchasing managers' index (PMI), based on a survey of 500 companies, rose to a seasonally adjusted 47.0 in February from January's 46.7.

A reading above 50 signals economic expansion while a figure below 50 suggests contraction. Manufacturing makes up about 16 percent of India's gross domestic product.  (More ... ) 

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ICAI hunts for skeletons in boards where independent directors quit

By JAYANT SINGH, Indian Express Finance

The sudden spate of independent directors quitting the boards of several listed companies following the Satyam Computer scam has sent warning signals buzzing at the Institute of Chartered Accountants of India (ICAI). Sensing a possibility of numerous skeletons in the closet, the apex regulatory body for accounting and auditing professionals has started dispatching letters to those companies where such directors have quit over the past one-and-a-half months, notifying them that the Institute will soon initiate investigation into their balance sheets.

"There has to be something wrong if so many independent directors quit suddenly after the Satyam issue came to light. It's for the best that we pre-empt the problem before another such case comes up," ICAI president Uttam Prakash Agarwal told The Indian Express. (More...)

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Drug Hits

Financial Express

The buzz emerging from the research laboratories of Indian pharmaceutical companies is hard to miss. Glenmark Pharmaceuticals is expected to launch its new molecule called Crofelemer for its anti-diarrhoea drug by 2010. Crofelemer, that was in-licensed by Glenmark in July 2006, was originally developed by the US-based Napo Pharmaceuticals. Currently, it is going through Phase III trials in the US.

Ranbaxy Laboratories achieved a significant landmark recently in its collaborative research programme with GlaxoSmithKline (GSK). It has commenced Phase I human clinical trials on the lead compound for treatment of respiratory inflammation. Ranbaxy could receive over $100 million in potential milestone payments for a product developed by it and subsequently launched by GSK in multiple indications and up to double digit royalties on worldwide net sales.

"Several research programmes are being pursued within the Ranbaxy-GSK alliance against anti-infective, respiratory and oncology indications," says Ramesh Adige, president, Ranbaxy Laboratories. Ranbaxy and Merck are also working together for discovery of antibiotics and antifungal drugs.  (More ... )

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Rupee extends drop on outflow concerns

MUMBAI (Reuters) - The rupee extended its drop to hit a record low of 52 against the dollar on Monday on heightened concerns of rising foreign funds outflows while arbitrage play between the onshore and offshore markets hurt.

At 9:51 a.m., the partially convertible rupee was at 51.76/79 per dollar. It had closed at 51.10/12 on Friday.

The rupee traded at 52 per dollar according to Reuters data, which dealers said was a miss hit and the deal could be reversed with the counter-party later in the day. They said the low was around 51.8 per dollar.

Market news, Financial news - Feb 17, 2009

Rupee at two-week low as shares falter

MUMBAI (Reuters) - The rupee fell to its lowest in more than two weeks on Tuesday on expectations foreigners would dump more local shares, while a stronger dollar overseas also dampened sentiment.

At 10:15 a.m., the partially convertible rupee was at 49.08/09 per dollar, its lowest since Feb. 2, and 0.5 percent weaker than its Monday's close of 48.84/85.

"There are no inflows into stocks, the supply is also lower due the U.S. holiday yesterday," a senior dealer at a private bank said. "The emerging market currencies are also weaker."

Financial markets and banks in the United States were closed on Monday for the Presidents Day holiday.

Indian shares fell 2 percent early, extending losses after falling 3.4 percent on Monday in its biggest slide in two weeks, with a drop across world markets and a budget that had little to help industry hurting sentiment.

Foreign fund withdrawals from stocks this year have already reached around $965 million. In 2008, outflows of more than $13 billion had pushed the rupee down 19.1 percent.

Traders also tracked the dollar's performance against overseas currencies for direction. The dollar index, a gauge of the U.S. unit's performance against majors, was up more than 1 percent.

The euro fell to its lowest in more than two months against the dollar and tumbled against the yen on Tuesday, pressured by concerns about recession in eastern Europe and the knock-on effect on European banks.

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Nikkei falls to almost 3-mth low, exporters sold

TOKYO (Reuters) - Japan's Nikkei stock average fell 0.8 percent on Tuesday, hitting its lowest point in almost three months, with exporters such as Panasonic Corp slipping as the yen clawed slightly higher against the dollar. Chip-related shares that advanced last week, such as Advantest Corp, extended losses, but their slide was countered by continued gains for general contractors such as Obayashi Corp after a brokerage upgrade.

Honda Motor Co gained on solid demand for its Insight hybrid.

But most investors were focused on restructuring plans that General Motors Corp and Chrysler LLC are required to submit by Tuesday showing how they can be made viable after receiving $13.4 billion in emergency aid.

"Basically, everyone wants to see how this goes, with a failure to meet the deadline likely to lead to selling," said Yumi Nishimura, deputy general manager at the investment advisory section at Daiwa Securities SMBC.

"Although the possibility certainly exists that they may end up filing for bankruptcy, the market has not factored this in."

Though the Nikkei largely brushed off Monday data showing the Japanese economy's worst quarterly contraction in 35 years, sentiment is likely to remain subdued, market players said.

"There's no question that the environment remains quite grim, and this dark situation will be with us for a while," said Hiroichi Nishi, general manager at the equity division of Nikko Cordial Securities.

The benchmark Nikkei shed 64.02 points to 7,686.01 after earlier falling as far as 7,654.65, its lowest since November 21, 2008. The broader Topix shed 1.2 percent to 760.63.

The dollar edged down against the yen to 91.72 , pressuring exporters. Investors dislike a stronger yen as it eats into exporter profits when repatriated.

Canon Inc lost 2.1 percent to 2,365 yen and Panasonic shed 1.6 percent to 1,076 yen. Sony Corp fell 1.4 percent to 1,677 yen.

Advantest fell 2.4 percent to 1,319 yen and Tokyo Electron 2 percent to 3,410 yen. Kyocera Corp edged 0.4 percent lower to 5,740 yen.

But Honda climbed 0.7 percent to 2,215 yen after Japan's No.2 automaker said orders for the new Insight -- its first real attempt at selling gas-sipping hybrid cars in big volumes -- have exceeded 10,000 units since it unveiled the car earlier this month.

A Honda spokeswoman said the car's low price and fuel efficiency helped contribute to the solid demand.

Obayashi rose 3.9 percent to 428 yen and Shimizu Corp climbed 2.1 percent to 382 yen, extending gains made on Monday after Nomura Securities upgraded them to "buy" from "neutral."

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India fiscal deficit worrying, to review rating - S&P's

MUMBAI (Reuters) - Standard and Poor's plans to review India's domestic debt rating after the government's interim budget on Monday forecast increased borrowing and a higher fiscal deficit, a senior official at the rating agency said.

Rising outstanding federal debt and a worsening fiscal deficit outlook are worrying factors, Takahira Ogawa, a credit analyst at Standard & Poor's in Singapore told Reuters in a telephone interview.

"The federal debt as a percentage of GDP and the rising fiscal deficit are two significant factors which are constraining ratings and that is something which also may pull them lower," he said, after the budget was presented.

Acting Finance Minister Pranab Mukherjee said the fiscal deficit for the fiscal year ending March would be 6 percent, compared with a budgeted estimate of 2.5 percent. It expects 2009/10 fiscal deficit at 5.5 percent.

Standard and Poor's rates Asia's third-biggest economy's local currency rating at "BBB - minus", or the lowest investment-grade level, with a stable outlook.

Fitch has a similar rating but with a negative outlook while Moody's pegs it at one notch lower at speculative grade.

"We will review the ratings after the fresh announcement but there is no specific timeline for that," Ogawa said.

India's fiscal deficit is one of the highest in the world and two stimulus packages announced in recent months to shore up sagging growth have put pressure on finances while tax collections have slowed sharply.

Fitch said last week the government's total outstanding debt would reach 77.9 percent of GDP this year and said these levels were "outliers" among sovereign countries rated at the BBB level.

"While we understand the need for the government to take fiscal steps to boost the economy, India needs to take significant and widespread reforms to move towards fiscal discipline in the medium term for ratings to improve," Ogawa said.

(For comprehensive coverage of the interim budget please click http://in.reuters.com/news/globalcoverage/budget2009)