Oil drops towards $78 as dollar, economy in focus

Oil fell to around $78 a barrel on Tuesday, its fourth straight day of decline, as an index of consumer attitudes fell in October against analysts’ expectations.

U.S. crudefor December delivery fell 46 cents to $78.22 a barrel by 1413 GMT, after settling down $1.82 at $78.68 on Monday.

London Brent crude was down 44 cents at $76.82.

U.S. consumer confidence fell to lower-than-expected levels in October, down to 47.7 from a revised 53.4 in September against a news agency poll of analysts for 53.1 and its weakest since 47.4 in July.

”Underpinning everything, the big thing is what’s happening to the dollar. Even the very short term movements. It overshadows everything,” said David Morrison, market strategist at GFT Global.

Gunfire, explosions in central Kabul

Automatic weapons fire and explosions that began around 6:30 am to rock the centre of the Afghan capital Kabul on Wednesday have raised security concerns yet again in the politically incorrect country.

An international security firm confirmed that international troops and Afghan police had surrounded a guesthouse in the Shar-e-Now area of the city where thick smoke raised above offices and residential buildings.

One policeman on the ground, who did not reveal his name, said the Bachter Guesthouse had come under attack and that there had been a huge blast inside.

The area around the guesthouse, which appeared to be on fire, has been cordoned off by police.

Police jeeps with mounted machine-guns and fire engines were seen racing through the streets of the capital, an AFP photographer said.

A police jeep carrying a wounded person arrived at the Emergency Hospital in the commercial centre of town, he saw.

Police closed off main roads in the main shopping district of the city.

Heavy gunfire erupted at a guest house used by UN staff in Kabul early on Wednesday where 3 UN staff members so far reported to have been killed in shooting.

Afghan police confirmed the death of five people in the attack.

A Taliban spokesman claimed responsibility for the attack several hours later.

Kabul has been the scene of a number of massive suicide attacks in recent months and remains tense as a political crisis, sparked by a need to rerun the August presidential election, drags on.

Germany’s new centre-right govt to be sworn-in today

Germany’s three major political parties have signed an agreement to form a new centre-right coalition government in the country, four weeks after they won the absolute majority in the parliamentary elections.

Leaders of Christian Democratic Union, its Bavarian sister party Christian Social Union and the liberal Free Democratic Party last night signed 124-page agreement, paving way for the first centre-right government in 11 years.

Chancellor Angela Merkel, who is also the Chairman of the CDU, CSU Chairman Horst Seehofer and FDP Chairman Guido Westerwelle put their signature to the coalition agreement at a signing ceremony last night in the state representation of North Rhine Westphalia in Berlin.

The was also endorsed by the three parties at special party congresses held earlier in Berlin and in Munich.

Merkel will be re-elected as the chancellor for a second four-year term and her new 16-member cabinet will be sworn-in at the opening session of the newly-constituted 17th Bundestag, the lower house of parliament on Wednesday.

Speaking at the signing ceremony, Merkel expressed satisfaction that she finally achieved her goal of forming a new conservative-liberal government after four years of grand coalition with the Social Democratic Party (SPD).

RBI review in line with govt thinking: FM

Finance Minister Pranab Mukherjee said the RBI’s move to keep almost all rates unchanged is line with the discussions he had with the apex bank’s governor and the government’s thinking on fiscal and monetary policies.

“I had a discussion with the Governor RBI a few days back. We had discussions there would be no change in the rates and there has not been any substantial change,” Mukherjee told reporters after the monetary review.

The RBI kept key rates unchanged, while hiking Statutory Liquidity Ratio (SLR), the deposits that commercial banks are to park in government securities, by one percentage points to 25 per cent.

Mukherjee said,” Of course the assessment of the RBI on the whole the policy, which has been announced is in conformity with the government’s own thinking of both fiscal policy and monetary policy.”

Free from Maoist clutch Delhi-bound Rajdhani resumes journey

The Bhubaneswar-Delhi Rajdhani Express, which along with 667 passengers was held at ransom by suspected Maoists, resumed its journey last night after combined security forces took control of the train, ending a five-hour detention drama near Jhargram in West Midnapore district.

Ushered by a pilot engine up to Jamshedpur, the train under heavy security, left Banstala halt for Jamshedpur on its way to Delhi at 2150 hrs following thorough check of tracks by a bomb disposal squad and security clearance that took about two-and-a-half hours.

Additional Director General of Police (Railway) Dilip Mitra said all the passengers besides the drivers of the train were safe and unhurt.

There was no exchange of fire between the security forces and suspected Maoists, though earlier a constable was injured in a gun battle with them when a police party had tried to reach the spot, barriered by thick woods, the ADG said.

A relief train reached the spot with food and water for the Rajdhani passengers, who had been through a high tension ordeal.

There was also a medical team to provide treatment in case any passenger fell sick.

India against militarisation of space: Naik

Air Chief Marshal P V Naik on Tuesday said India was against the militarisation of space but the country should aim to be the front-runner in the field of aerospace.

“I don’t think as a nation we are for militarisation of space. In fact, the entire world is against this. We need to leave airspace alone militarily,” he said when asked about China’s plans to launch a space station in the near future.

The IAF Chief was speaking at a CII event in New Delhi.

“A sovereign country can do whatever it wants and there is very little that you and I can do. Our aim should be to be the front-runner in everything including space. We should aim towards that,” he said, adding that India has the expertise in the aerospace sector.

On the possibility of the involvement of IAF aircraft in anti-piracy operations, he said, “In areas where it is possible, it can easily be done. In far away areas, you naturally would not have the support.”

Asked if the IAF had earmarked any such areas, he said, “You see the piracy-prone areas and draw your own conclusions. Wherever it is possible and air effort is required, definitely it will be made available but air effort by itself cannot do much except for providing information.”

The IAF chief said the force was looking towards inducting armed Unmanned Aerial Vehicles and if they are to be developed indigenously or procured from foreign sources.

Naik said that the force was looking to procure UAVs “which can be controlled from thousands of miles and should be capable of carrying a range of sensors to penetrate deep forests and bad weather depending on the tactical and strategic requirement.”

Commenting on the recently held joint exercises — CopeIndia and Yudhabhyas — with the US armed forces, he said, “I think Indian Air Force and Indian Army need to plan their exercises better so that they are separated a little bit more because same troops and same aircraft are involved”.

ACM Naik stressed on the need for strengthening the domestic industry for contributing towards the defence forces’ needs in the domains of metallurgy, UAVs, turbine blades, communication equipment and simple microchips.

RBI raises SLR by one percentage point to 25 percent

The Reserve Bank has raised statutory liquidity ratio (SLR), the portion of deposits that banks are required to keep in government securities, by 100 basis points to 25 percent.

The RBI, however, kept other key rates and ratios like repo, reverse repo and cash reserve ratio unchanged.

The decision to raise SLR, in the second quarterly review of the credit policy, is aimed at reducing liquidity and fighting the inflationary expectations, which has started building up, especially in the case of food items.

The central bank kept repo-rate at which banks borrow from RBI in exchange of government bonds at 4.75 per cent, reverse-repo at which the apex bank accepts deposits from banks at 3.25 per cent and Cash Reserve Ratio (CRR), the portion of cash banks park with the Reserve Bank, at 5 per cent – all unchanged.

Taking a cue from RBI’s monetary policy stance, banks are unlikely to hike their auto, home and education loans in the near term.

However, credit flow to commercial real estate may be affected as the RBI raised the requirement for banks to keep the money aside while lending to this sector from 0.40 per cent to one per cent.

It means banks will have to keep Re one aside for every Rs 100 lent to commercial real estate against 40 paise now.

“In view of large increase in credit to commercial real estate sector over the last one year and the extent of restructured advances in the sector, it would be prudent to build cushion against likely non-performing assets,” Subbarao said.

The GDP growth projection for FY’10 has been pegged at 6 per cent, same as earlier, assuming a modest decline in agriculture production and a faster recovery in industrial production,” the RBI said.

On inflation, the RBI said, “the base effect, which resulted in negative WPI-inflation till August, is now expected to work in the reverse direction accentuated by high food prices.”

The RBI projected inflation to reach 6.5 per cent with upward bias by this fiscal end.

After remaining below one per cent for five consecutive weeks and at sub-zero levels for 13 weeks in a row, the wholesale-price based inflation rose to 1.2 per cent as on October 10 on account of increasing food prices.

Surging food prices, global trend in commodity prices and domestic demand-supply imbalances, are expected to escalate the headline inflation in the months ahead, the central bank said, adding that it will “keep a vigil on inflation” and was prepared “to respond swiftly and effectively to stabilize inflation expectations”.

Quoting its inflation expectation survey for households, the apex bank said that while inflationary expectations will remain contained, a majority of the respondents expect inflation rate to increase over the next three months as also over the next year.

With a view to pushing financial inclusion in the country, the Reserve Bank has proposed to allow banks to appoint kirana/medical shop owners, petrol pump owners, PCO operators, retired teachers, agents of small savings schemes of GOI, insurance companies and authroised functionaries of well-run SHGs as banking correspondents.

Besides, banks will be allowed to collect reasonable service charges from customers under their Board-approved policy for delivering services through BCs, the RBI said, adding, “it will review the working of the BC scheme after a period of one year.”

PM to inaugurate Anantnag-Qazigund rail link on Wednesday

Prime Minister Manmohan Singh will inaugurate on Wednesday the train service between Anantnag-Qazigund section which will connect the Kashmir valley to the rest of the country and is expected to make an important speech on the dialogue his govt has promised to the state.

Singh, who is undertaking a two-day visit to the state, the first during his second tenure, will flag off the new train service on the 18-km line which will link the valley with Srinagar and other important places.

He will address a public meeting after the inauguration in which he may speak on the dialogue with all shades of opinion in the state.

Home Minister P Chidambaram had recently said that the government would hold talks with every section of political opinion in the state through “quiet dialogue, quiet diplomacy” to find a political solution to the Kashmir problem that may be “unique”.

Several Union Ministers including Ghulam Nabi Azad, Farooq Abdulah, Mamata Banerjee and Chief Minister Omar Abdullah will attend the inaugural ceremony.

With the opening of the line, the Railways have completed 119 km long Qazigund-Baramulla section of the Kashmir rail project.

The section has about 113 minor and major bridges of which the 435 metre long Veith river bridge is the longest.

Besides reviewing various ongoing projects with ministers and senior officials in the state, Singh will meet leaders of political parties.

He will also meet Central Reserve Police Force and other para military forces and address a press conference on Thursday before returning to the national capital.

PMO sources said there were no plans on the cards for the Prime Minister to meet any separatist leader

Rajdhani Express hostage drama ends; All Passengers are safe

The hostage drama of the New Delhi-Bhubaneswar Rajdhani Express ended on Tuesday evening when Central forces secured the train which was stopped by Maoists near Midnapore in West Bengal.

Home Minister P Chidambaram said all the train passengers and the drivers of the Rajdhani Express are fully under control of the central government.

He said CRPF and state police have reached the spot and the area has been secured.

He added that Centre has rushed a train to bring the passengers to Delhi.

Maoists had earlier kidnapped the driver K Anantha Rao and assistant driver K J Rao at Banstala, 10 km from Jhargram station. They are now in police custody.

Earlier Railway Minister Mamata Banerjee today met Home Minister P Chidambaram and discussed the Maoist violence in West Bengal, especially in view of the abduction of a driver and co-driver of the Rajdhani Express.

Talking to reporters later, the Railway Minister demanded Central intervention in West Bengal.

Armed activists of a Maoist-backed group today stopped the Bhubaneswar-Delhi Rajdhani Express and held up the prestigious train for several hours in a hostage-type situation in a jungle area in West Midnapore district but all 1,200 passengers were safe.

The train was secured after dusk by CRPF and the state police who were rushed to the spot where it was under the control of the activists of the People’s Committee against Police Atrocities(PCPA), five hours after the dramatic incident that started at about 2.30 PM.

“The train is safe and passengers are safe,” said Home Minister P Chidambaram, who monitored the situation closely in New Delhi.

There is no sign of any adversary at the scene, he said. The train left Bhubaneswar at 9 AM.

The PCPA was demanding among other things the release of their jailed leader Chhatradhar Mahato which was firmly rejected by West Bengal Chief Minister Buddhadeb Bhattacharjee.

The demand was also scrawled on the bogies.

Officials said the activists fled the scene after the arrival of the security personnel.

There was some exchange of fire at a spot a little away from the scene in which one civilian driver was injured, they said.

The activists believed to be around 400 in number ordered the two drivers of the train to alight and not to take it forward after they brought it to halt placing a tree branch on the tracks at Banstala, 10 km from Jhargram station.

Preliminary reports said the two drivers were abducted. The drivers are safe, Banerjee said.

Eyewitnesses said the activists did not harm the pasengers and several red flags were near the tracks.

Armed with axes, swords, bows and arrow, the activists attacked the air-conditioned train with stones and smashed the glass panes and forcibly opened the doors as passengers panicked.

2004 grenade attack was conspiracy to kill Hasina: report

The grenade attack on Prime Minister Sheikh Hasina in 2004 was a conspiracy to kill her using banned Harkatul Jihad (HuJI) which was hatched by opposition BNP leaders at the office of party chief Khaleda Zia’s son, according to a media report in Dhaka today.

The ‘Daily Star’ in an investigative report said the “chilling conspiracy” to kill Hasina was hatched at Hawa Bhaban, the office of Zia’s elder son Tarique Rahman.

“On August 14, 2004 nine people sat at Hawa Bhaban to discuss a recommendation coming from a series of meetings in the past where Hasina’s Awami League was branded as the archenemy for the country and Islam and it was recommended that she must die.

“(The then Junior Home Minister) Litfuzzaman Babar, deputy minister Abdus Salam Pintu, Prime Minister’s political secretary Harris Chowdhury, a fugitive killer of Sheikh Mujibur Rahman, a top Jamaat-e-Islami leader, two Huji founders and a leader of Al Markajul Islami found no reason to disagree,” it said.

On 15th August, the same group sat again at the same venue to fix the way to accomplish the mission when the “fugitive killer suggested Hasina be attacked at her home, on road or at a rally”.

“They settled for a rally, just six days away . . . Now it was time they chose weapons. ‘Grenades are no problem,’ said Babar,” the report claimed.

Hasina narrowly escaped with injuries in the attack at a party rally in Dhaka but 24 people were killed crippled nearly 400 others in the assault.

The Daily Star said the report was based on a “highly privileged document” it obtained and information collected by a reporter from investigators and intelligence officials.

Today’s report comes three months after a court ordered a fresh probe into the grenade attack.

After the attack, Babar had declared a Taka 1 crore reward for disclosing the names of the people or groups responsible saying that “the government has decided to announce the reward since it gives highest priority to the matter”.

An investigation was earlier conducted under the direct supervision of Babar and 20 people including a vagabond, a student and an Awami League activist were arrested but none of them were found guilty in the subsequent investigations.

The report came as Criminal Investigation Department on Monday sought to remand Babar, already behind bars for the 21st August, 2004 grenade attack on Hasina, in custody for 10 days under a court order for interrogation.

“We have got vital information and evidence regarding his involvement in the 21st August grenade attack following the confessional statements of some other suspects,” CID superintendent Abdul Kahhar Akand told newsmen on Monday.

Babar is currently serving 17 years of imprisonment for possessing weapons illegally.