Fed keeps interest rates unchanged, signals fewer future hikes

 The U.S. Federal Reserve kept interest rates unchanged on Wednesday and signaled it still planned to raise rates twice in 2016, though it said slower economic growth would crimp the pace of monetary policy tightening in future years.

The central bank's decision to stick with its 2016 rate path, however, appeared shakier, with six of its 17 policymakers projecting just one increase this year. Only one Fed policymaker had done so when economic forecasts were last issued in March.

A sharp slowdown in U.S. hiring in May had fueled doubts about the strength of the labor market going into the Fed's two-day policy meeting. Fed Chair Janet Yellen acknowledged the need to see clear signs of economic strength before lifting rates.

"We do need to make sure that there's sufficient momentum," Yellen told a news conference.

The Fed also said the economy would grow only 2 percent this year and in 2017, 0.1 percentage point lower than previously forecast for each year.

It also cut its longer-term view of the appropriate federal funds rate, its benchmark lending rate, by a quarter point to 3 percent and indicated it would be less aggressive in raising rates after the end of this year.

Yellen was not clear on whether a rate increase could come at the next policy meeting in late July or whether the central bank would wait for a slew of firmer data as it headed into its September meeting.

Clinton wins final primary, set for poll battle with Trump

 Washington, Jun 15 (PTI) Hillary Clinton today crushed her rival Bernie Sanders in the Democratic party's last presidential primary here in the US capital, setting the stage for an epic race against controversial Republican opponent Donald Trump in November.

Clinton, 68, a former Secretary of State and a former Senator from New York, is the first women to become a presidential candidate of a major political party in US electoral history.

Clinton received 78.9 per cent of the votes while Sanders could garner only 21.1 per cent.

The result heralds the start of an epic race to the White House between Clinton and brash real estate tycoon Trump who celebrated his 70th birthday today.

"We just won Washington, DC ! Grateful to everyone who voted," Clinton tweeted though Sanders is yet to drop out of the race as the two met today.

Clinton secured enough delegates to clinch the Democratic presidential nomination last week, but Sanders declined to drop out and pledged to give every voter a chance to decide between the two candidates.

Sanders privately met Clinton at the Capital Hilton, just after she won the final contest on the Democratic calendar.

The meeting came as the Vermont senator has begun signalling that his campaign is soon to close, though Sanders' aides say he is not expected to immediately endorse Clinton.

"Sanders and Secretary Clinton met in Washington...and had a positive discussion about how best to bring more people into the political process and about the dangerous threat that Donald Trump poses to our nation," said Michael Briggs, Sanders' spokesman, in a statement.

"Sanders congratulated Secretary Clinton on the campaign she has run and said he appreciated her strong commitment to stopping Trump in the general election," it said.

It added that the two discussed a variety of issues where they are seeking common ground: substantially raising minimum wage; real campaign finance reform; making health care universal and accessible and making college affordable and reducing student debt.

"Sanders and Clinton agreed to continue working to develop a progressive agenda that addresses the needs of working families and the middle class and adopting a progressive platform for the Democratic National Convention," the statement said.

Clinton now has 2,800 delegates out of 4,763 delegates.

Sanders has 1,832 delegates in his kitty.

Ending the primary elections on a winning note puts the former first lady on a sound footing ahead of the general election in November and the Democratic Party's convention in Philadelphia in July.

Govt unveils civil aviation policy, scraps 5/20 norm

 New Delhi, Jun 15 (PTI) In a major reform of the aviation sector, government today scrapped the 5/20 overseas flying norm for domestic carriers in its new civil aviation policy while capping fares at Rs 2,500 for one-hour flights and imposing a "small levy" on passengers towards regional connectivity fund.

The new policy which got approval from the Union Cabinet was aimed at ease of doing business for airline operators, and "affordable, convenient and cheaper" travel for fliers at large, Civil Aviation Minister Ashok Gajapathi Raju told the media.

As part of the policy, the ministry will come out with initiatives to develop new airports, separate regulations for helicopters and measures to boost skill development in the aviation sector.

Airlines will also get tax incentives for operating on unserved routes under the regional connectivity scheme.

The government has scrapped the decade-long controversial 5/20 norm and now any domestic airline can fly overseas provided they deploy 20 planes or 20 per cent of their total capacity for domestic operations.

There has been a high decibel debate over the continuance of 5/20 norm--whereby only local airlines having at least five years of operational experience and a fleet of minimum 20 aircraft are allowed to fly overseas.

About the decision to scrap the rule, Union minister Ravi Shankar Prasad said, "A questionable legacy has been thrown into the dustbin." 

Amid concerns over an earlier proposal to auction additional bilateral rights, the government has also decided that a final call on additional rights would be taken by a committee headed by the Cabinet Secretary.

The new measures are expected to benefit about 220 millions passengers in the next five years. .

India lauds the spirit of the citizens of Cote D'ivoire for swiftly pursuing national reconciliation and uniting to look forward to better days, says President

The President of India, Shri Pranab Mukherjee received Key and Parchment of city of Abidjan from Mr. Robert Beugré Mambé, Governor of Abidjan today (June 15, 2016). The Key presentation is a symbolic conferment of Honorary Citizenship of Abidjan. Honorary Citizens are members of Committee of Wise Men of City advising effective functioning of the administration of the City. 

Speaking on the occasion, the President said as the world's largest democratic and secular Republic, India sees the city of Abidjan as a melting pot of diverse ethnicities and religions. He was happy that Abidjan, after suffering extensive damage during the recent civil war, has regained its past splendour. Today, it is, once again, a symbol of national unity and solidarity and has developed into an important commercial hub. India lauds the spirit of the citizens of Cote d'Ivoire for swiftly pursuing national reconciliation and uniting to look forward to better days. 

The President said that he accepted the honorary citizenship bestowed by city of Abidjan in the name of the people of India – and as a valued symbol of the friendship of the people of Cote d’Ivoire and people of India. 

Along with presentation of the keys of the city of Abidjan, President Pranab Mukherjee was conferred the Honorary citizenship of the city of Abidjan. The President was invited to join the community of traditional DOUGBO CHIEFS with the distinction of being for them an advisor. In this context he was offered clothing to match the status. This cladding comprised of a large traditional loincloth with a light outfit underneath matching shoes, a special cap, with a bracelet, traditional necklace, a cane representing his authority and a fly-whisk. Each of these elements plays a specific role in within the function of a traditional Leader. With this novel status, he was conferred a new name: ASSI TO which means the path, the way, the example. 

Africa, we stand by you, says President

The President of India, Shri Pranab Mukherjee addressed the Indian Community Reception in Accra, Ghana yesterday (June 13, 2016). 

Speaking on the occasion, the President said that his visit to Africa was to convey the message that India stands by Africa. He told the Indian community that India's partnership and friendship with Africa are abiding and enduring. India will continue to work with Ghana and other countries of the continent for mutual benefit and progress. 

The President said that the ten thousand strong Indian community in Ghana is a vibrant amalgam of individuals from different walks of life. Each one of them has a story to tell - that inspires others towards greater things and motivates an entire generation. Their contributions have, no doubt, been valued and appreciated by the friendly people of Ghana. He said that looking at the Indian Community in Ghana, the people of Ghana could see a microcosm of the Indian diversity and plurality. 

The President said that India's trade with Africa is over US$70 billion and investments about US$35 billion. The 3rd India-Africa Forum Summit in New Delhi in October last year provided a medium to long-term vision for India's cooperation with Africa. The Indian Diaspora in Africa will have an important role to play in accomplishing some of the objectives of this vision. 

He said that the efforts of the Indian Community in Ghana is complementing many foreign policy measures taken by the Government of India to assist the friendly countries in Africa, including Ghana. India has extended over US$400 million of concessional credit to Ghana in the last few years for various projects. EXIM bank is also providing funding for a railway project. India-Ghana bilateral trade has reached US$3 billion and Indian investments in this country are estimated at around US$1 billion. These giant strides would not have been possible without the active role of the Diaspora. They had become force multipliers of India's growing economic strength. The President thanked them for their commitment. 

The President congratulated all of them for making India proud through their contributions to the socio-economic development of Ghana. He called upon them to actively take part in various programmes which the Government of India has embarked upon such as Digital India; Stand-Up India; Start-Up India; Smart Cities; Swatch Bharat etc. 

India's May retail inflation hits near 2-year high on surging food prices

New Delhi : India's annual consumer price inflation INCPIY=ECI accelerated to a near two-year high of 5.76 percent in May, driven by surging prices of food products such as pulses and sugar, which could dampen hopes of a rate cut at least during the next monetary policy review in August.

After leaving rates unchanged last week, Governor Raghuram Rajan said the Reserve Bank of India, which has targeted inflation at 5 percent by March 2017, was looking for room to reduce interest rates, but there were concerns over upward pressure on food and commodity prices.

Economists polled by Reuters had expected annual consumer prices, which the RBI closely tracks to set its interest rate policy, to be up by 5.52 percent in May, compared with an upwardly revised 5.47 percent in April.

Food inflation picked up to 7.55 percent in May from an upwardly revised 6.40 percent in the previous month, as prices of vegetables, sugar and pulses rose between 11 percent and 32 percent from a year earlier.

Retail inflation has more than halved since November 2013, thanks to a crash in global commodity prices as well as subdued rural demand. It had hit 7.03 percent in August 2014.

Analysts fear an increase in the cost of petrol and diesel by more than 5 percent since May 1, and in prices of foods such as sugar and milk in the last month, could further heat up prices.

"While there are some seasonal factors at play, structural mismatches are also evident in the rise in protein inflation," said A. Prasanna, economist at ICICI Securities Primary Dealership.

"We stick to our call of no more rate cuts in this financial year."

The government has also hiked taxes by 0.5 percentage point on services such as telecoms, travel and eating out from June 1.

Monday's data comes on the heels of a 0.8 percent contraction in industrial production INIP=ECI in April.

Asia's third largest economy grew 7.9 percent in the quarter to March, outpacing China's 6.7 percent growth, and is projected to expand by around 7.75 per cent in the current fiscal year that started on April 1.

New Delhi expects good rainfall between June and September, after two years of drought, to boost growth and tame prices of food items that account for nearly half of the consumer price index.

The monsoon, which delivers 70 percent of annual rainfall, is critical for India's 263 million farmers and crops such as rice, cane, corn and cotton because nearly half of farmland lacks irrigation.


(Additional reporting by Rajesh Kumar Singh, Neha Dasgupta in NEW DELHI, Abhirup Roy in Mumbai; Editing by Douglas Busvine and Kevin Liffey)

Ghana seeks civil nuclear cooperation with India

Accra, Jun 13 (PTI) Ghana today sought India's cooperation in civil nuclear energy in an attempt to harness clean and sustainable energy to shift its energy mix which is at present focused on traditional energy sources.

The issue came up for discussion during the talks between President Pranab Mukherjee and his Ghanaian counterpart John Dramani Mahama today.

After the talks, the two sides signed three MoUs including the waiver of visa for diplomatic and official passports, establishment of a joint commission to periodically monitor various aspects of multidimensional relationship, and helping in training of Ghanaian Foreign services.

"In the new areas, it came for the first time...Ghanian President specifically mentioned that since India is leader in nuclear energy they want to look at having a civil nuclear cooperation with India," Secretary (Economic Relations) Amar Sinha said.

The two sides discussed new model of doing business on how to go beyond government to government and lines of credit modes of investment.

"They said they would want to cooperate with India to see if they can also use the nuclear energy route. They will examine what are the possibilities, what human and national resources are required," Sinha said.

They said it will be evaluated, discussed and then anything can be said on how to move ahead on the issue.

"They are signatory to COP 21 (Paris Climate deal) and want to move towards clean energy as present energy mix is based on fossil fuels," Press Secretary to President Venu Rajamony said. .

Saina clinches second Australian Open title

 Sydney, Jun 12 (PTI) Indian ace Saina Nehwal received a huge boost ahead of the Rio Olympics as she clinched her second Australian Open title after defeating China's Sun Yu in a thrilling three-game final of the Super Series badminton tournament here today.

The 26-year-old from Hyderabad eked out a 11-21 21-14 21-19 over the World No. 12 Sun in a fighting summit clash that lasted an hour and 11 minutes here.

London Olympics bronze medallist, Saina, who had beaten two world champions -- Thailand's Ratchanok Intanon (2013) and China's Yihan Wang (2011) in the quarterfinals and semifinals --, thus clinched her maiden title of the season and pocketed a cheque of USD 56,250.

It is Saina's second Australian Open victory, having clinched the title in 2014 as well. It ended a rather long title drought for the celebrated Indian, whose previous title before today was at the India Super Series in New Delhi in last year.

Saina had defeated Sun five times in the last five outings but she faced a tough challenge against the 22-year-old Chinese, who took just 18 minutes to wrap up the opening game at the Sydney Olympic Park.

Sun dished out a fast-paced game, which Saina failed to break initially. The Indian struggled with the length of the shuttle and committed a few unforced errors early on as the duo moved together till 4-4.

Saina missed a couple of points at the net and also hit wide to allow Sun a lead of 7-4. The Indian failed to connect and reach for a few returns which allowed Sun to extend the lead at 10-5. At the break, Sun lead 11-6 when Saina's backhand return failed to cross the net.

Two wide returns by Sun helped Saina narrow the gap but the Chinese kept engaging her in fast rallies, not allowing her to play her own game.

The Indian also faltered in judging the shuttle at the backline three times to see Sun lead 17-10.

With Sun covering the court well, the margin of error was nil for Saina and she eventually conceded the opening game after losing a video referral following a wide shot.

After changing sides, the second game started on an even-keel as the duo were locked 4-4 again. Sun used her deceptive shots to wriggle out of tricky situations and also covered the front court well to lead 6-4.

Saina grabbed a couple of points to draw level and with Sun sending the shuttle outside twice, the Indian led 10-8.

She entered the interval with a three-point lead when Sun hit the net.

The Chinese grabbed two quick points after the break but Saina continued to break the pace by playing few attacking shots and drawing the Chinese close to the net with deceptive strokes. The result was Saina leading 17-12.

With Sun hitting the net, Saina grabbed six game points and converted the first after the Chinese found the net again.

Stocks pricey, Sensex may correct to 26k by year-end: HSBC

Mumbai, Jun 12 (PTI) Recent market rally may have resulted in upward outlook revision by brokerages, but HSBC feels Indian equities are overpriced and Sensex is in for a correction, which may slump to 26,000 by the end of 2016.

"We expect the Sensex to correct to 26,000 by 2016-end.

This expectation is largely due to high valuations and expectations of risk aversion due to uncertainty related to some of the global events like European politics and the US Fed's move," HSBC Equity Strategist for Asia-Pacific Devendra Joshi told PTI here.

He added that on the domestic front, any poor distribution of the monsoon, estimated to be above normal this year, can be a deal-breaker.

Citing his conversations with foreign investors, the Hong Kong-based Joshi said there are also concerns surrounding the valuations in the country at present.

"We feel that the current valuations make India expensive and they will have to come down to increase investor interest," he said, adding that Indian equities are trading at over 17 times one-year forward earnings as against an earnings growth of around 14 times.

For investor interest to grow, the gap between the two numbers has to narrow, he emphasised.

The BSE's 30-share Sensex hit a 7-month high last week, prompting brokerage Ambit Capital to raise its year-end target to 29,500 by the end of the fiscal.

Morgan Stanley has a 'bull case target' of 30,000 by March 2017.

The Sensex closed at 26,635 on Friday, after a low of 22,494 on February 29.

On its contrary call, Joshi said HSBC had cut India to 'underweight' in May 2015 due to high expectations when everybody was gung-ho about the country. It revised up the outlook to 'neutral' last month.

Joshi acknowledged that there are positive factors at play, including a growth and reform-oriented dispensation and margin improvement.

He singled out inflation as a factor to watch out for, adding that any movement in the reading, which surprised on the upside in April, may lead to action by RBI with a bearing on investor confidence.

On the continuation of Governor Raghuram Rajan as the head of RBI, he said "the incumbent does command respect" but its calls on the country will not be affected much by turn of events on this front.

"He (Rajan) definitely adds to the investor confidence and would like to see him continue for the second term. But as for our call on India, it mainly depends on fundamental factors, including economic growth, earnings, valuations and investor holdings," Joshi said.

Rajan's current term is set to end in September and speculations are rife about his continuation in the post.

"Govt to take own course on 2nd term to RBI Guv"

Bengaluru, Jun 11 (PTI) Government would take its "own course" on giving a second term to Reserve Bank of India Governor Raghuram Rajan and deliberations and discussions in public domain would not decide it, Union Law Minister Sadananda Gowda said today.

Gowda also said he is not aware of the reported formation of a selection committee by the government to shortlist candidates for the post of RBI Governor.

"I am not aware of why the committee has been formed, and how the selection (of RBI Governor) will be done. I am really not aware," he told PTI here.

Gowda's response came when he was asked if setting up of the committee to shortlist candidates for RBI Governor's post meant that government would not give a second term to Rajan.

The Union government, as per some media reports, had formed a selection committee headed by Cabinet Secretary P K Sinha for shortlisting candidates for RBI Governorship.

The issue of giving a second term to Rajan has generated much debate in public domain after BJP MP Subramanian Swamy launched an attack against him and wrote to Prime Minister Narendra Modi to remove him.

Gowda, however, said the government has its ways and means to decide on whether Rajan should be given the second term as the RBI Governor or not.

"Deliberations and discussions in public domain will not decide the issue. The government has its own ways and means of how it should process it - whether to continue, not to continue (Rajan). The government will take its own course," he said.

Stepping up his campaign against Rajan, Swamy, in a letter to Modi, had urged him to "terminate" his services "effective immediately" or when his term ends in September because he was "mentally not fully Indian".

In yet another salvo at Rajan, Swamy had yesterday alleged that the former IMF chief economist had planted 'a time bomb' in the Indian financial system that will explode in December.

Swamy last month had also written yet another letter to Modi, seeking Rajan's ouster for keeping interest rate high.

Asked to comment on whether Rajan's discontinuance as RBI Governor would affect the Indian market and flow of foreign investments, Gowda said, "There are positive and negative talks, but how this (Rajan issue) has to be done properly, and for that reason they might have decided to take the feedback across the country.