Technical indicators like the Relative Strength Index heading in the positive direction and momentum oscillator Directional Movement Index in the buy mode suggest one should be optimistic on the markets in the near term.
However, with foreign players selling in cash and index futures, fall in Nifty futures premium along with call writing at 3000 levels, analysts are advising market players to book profits in their long positions on Nifty around 2950-3000 levels to re-enter at lower levelsOn Friday, after a decline of 3.5 per cent in early trade, indices recovered sharply in the late trade. Nifty December futures closed at 2921.70, a premium of just 0.35 points from 8 points on Thursday. However, given the long build up in the midcap stocks suggests restoration of confidence in the market.
"This is a traders market. Players are directionless. Investors are going short in early trade and covering up shorts at late trade and vice-versa. If one can look through the technical chart for past few days, markets are making a doji candle-- suggesting market is waiting for a breakout to either side," said Sanjay Rao, analyst at Spark Advisory.
Call buying was observed at 2900 and 3200 strike while good amount of tussle can be seen at 3000 level. Bears unwound their written calls at 3100 strike. On the other hand, huge amount of put writing was observed from strike 2900 to 2700. The call build up was little lackluster while solid put writing was seen at lower levels. This indicates Nifty will remain volatile in a range but won't fall significantly from current levels.
3000 is a very crucial level and if Nifty decisively breaches this level on closing basis, one can again go long on Nifty. On the downside Nifty is likely to take strong support at 2800-2825 levels where we have seen aggressive put writing.
Put-call ratio of Nifty open interest rose sharply to 1.34 levels from 1.08 levels earlier last week. This rise in put-call ratio led by huge put writing at 2800 strike indicates market players expect 2800 to act as a very strong support for Nifty in near term.
"Nifty once again stopped the fall around the congestion zone of 2700-2800 to bounce back into early 2900. The confidence in the rally was visible in the put writing in near at the money strikes of 2700, 2800 & 2900 along with reduction in calls. However the over optimism depicted into put-call ratio of Nifty December futures of 1.41 might just hold the pace of increments approaching the hurdle around 3000," Motilal Oswal said in a report.
On weekly basis, overall open interest increased by whopping Rs 11,978 crore or 30 per cent to Rs 51,615 crore. Nifty futures added enormous 28 per cent in open interest and foreign players net bought index futures worth Rs 2002 crore. To be sector specific, long build up was seen in oil & gas, power, sugar and telecom sector.
Stock specific build up of long positions were observed in Balrampur Chini, Essar Oil, IDBI, JP Associates, Reliance Infra, Triveni Engineering and Voltas to name a few. Volatility index fell further to 49.43 per cent from 52.05 per cent in the week.
Monday, December 15, 2008
Thursday, December 11, 2008
Inflation drops to 8%
Inflation based on the wholesale price index (WPI) for the week ended November 29 dropped to 8% from 8.4% in the previous week due to lower prices of fruit and vegetables. A UTVi poll of eight analysts had seen inflation at 8%.
The official WPI for all commodities for the week ended 29 November, 2008 declined 0.04% to 233.6 (provisional) from 233.7 (provisional) in the previous week.
Inflation was at 3.89% during the corresponding week of the previous year.
The index for primary articles declined 0.2% to 249.9 (provisional) from 250.5 (provisional) for the previous week. The index for food articles group declined 0.4% to 244.7 (provisional) due to lower prices of fruit & vegetables and barley (2% each) and gram (1%). The prices of ragi, urad, bajra and maize (1% each) moved up.
The index for fuel, power, light and lubricants remained unchanged at its previous week's level of 345.
The index for manufactured products was also unchanged at its previous week's level of 203.1.
The government also revised the final index for the week ended 4 October, 2008 to 239.7 as against 239.6 (provisional), and the annual rate of inflation based on the final index stood at 11.49% compared with 11.44% (provisional) reported earlier.
The official WPI for all commodities for the week ended 29 November, 2008 declined 0.04% to 233.6 (provisional) from 233.7 (provisional) in the previous week.
Inflation was at 3.89% during the corresponding week of the previous year.
The index for primary articles declined 0.2% to 249.9 (provisional) from 250.5 (provisional) for the previous week. The index for food articles group declined 0.4% to 244.7 (provisional) due to lower prices of fruit & vegetables and barley (2% each) and gram (1%). The prices of ragi, urad, bajra and maize (1% each) moved up.
The index for fuel, power, light and lubricants remained unchanged at its previous week's level of 345.
The index for manufactured products was also unchanged at its previous week's level of 203.1.
The government also revised the final index for the week ended 4 October, 2008 to 239.7 as against 239.6 (provisional), and the annual rate of inflation based on the final index stood at 11.49% compared with 11.44% (provisional) reported earlier.
Monday, December 08, 2008
Govt unveils Rs 30,700-cr stimulus package
The government on Sunday unveiled a Rs 30,700-crore fiscal stimulus package mainly comprising additional spending and excise duty cuts Global stimulus pkg
India battles crisis
Highlights of package
aimed at boosting consumption, the latest in a flurry of measures being rolled out by policymakers, keen to steer the economy away from a painful slowdown.
The government’s fiscal package, announced a day after the central bank cut a key interest rate, has Rs 20,000 crore in additional expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.
In addition, the government hopes to precipitate infrastructure projects worth Rs 100,000 crore through faster clearances of public-private partnership projects, and ensure their easier financing by way of a tax break on fund raising by the India Infrastructure Finance Company, a specialist lender to the infrastructure sector.
The government will also take steps to ensure that already budgeted expenditure of Rs 300,000 crore will actually be spent over the next four months of the current fiscal to end-March 2009, as it increasingly resorts to pump-priming to shore up the economy that continues to face headwinds from the global financial market turmoil.
These measures complement Saturday’s one percentage point cut in the repo rate cut announced by the central bank, and the refinance facilities for housing and small and medium industries that are designed to boost the flagging realty and manufacturing sectors.
Planning Commission deputy chairman Montek Singh Ahluwalia told reporters that the government would not hesitate in taking further expansionary measures if the economic situation worsened. The latest measures will lift the government fiscal deficit above its target of 2.5% of gross domestic product this year, Mr Alhuwalia said, adding that a higher fiscal deficit was tolerable in the current environment and was an appropriate “counter-cyclical” policy.
“It is a desirable step in times of external contraction.” The fiscal package drew a mixed response from industry. Car manufacturers reacted positively and promised to pass on the duty cuts to consumers, which will bring prices down by between Rs 8,000 and Rs 45,000. Public sector banks are expected to announce easier terms for housing, auto and personal loans on Monday.
“We were anticipating a package of Rs 70,000 crore. A few sectors such as steel, cement, construction and real estate need boost from the government,” said Assocham president Sajjan Jindal. The trade body is expecting another package of around Rs 30,000 crore in January.
“Given the extent of problems that are being faced by the industry, we hope that Sunday’s announcement is only part of the total fiscal package and more such measures will be seen in the near future,” said CII director general Chandrajit Banerjee.
An official statement said the government has been concerned about the impact of the global financial crisis on the Indian economy. The global crisis has already forced several developed economies into a recession, and hit India too. The economic growth this year is expected to ease to around 7%, down from the 9% average of the past three years.
Instead of cutting duties selectively, the government has cut the Cenvat or excise duty by 4% on all products barring petroleum products. The three major rate slabs of central excise duty, of 14%, 12% and 8%, will now stand at 10%, 8% and 4%, and Mr Ahluwalia said the government was hopeful that companies would pass on the benefit of the cuts to consumers.
This could give a fillip to domestic demand in sectors such as automobiles, consumer durables and cement that are most affected by the economic slowdown. The package provides Rs 1,450 crore to the export sector, which for the first time in five years saw a 12% drop in October. Exporters will get refunds of terminal excise duty, a lower interest rate of 7% for pre- and post-shipment credit for sectors such as handloom, textiles, leather, marine, gems and jewellery and small and medium enterprises.
It allows labour-intensive medium, small and micro enterprises collateral-free lending on loans of Rs 50 lakh up to Rs 1 crore. Besides, the lock-in period for loans under an existing credit guarantee scheme are being cut to 18 months from 24, a move that will encourage banks to give more loans to the sector. RBI has already announced an increase in refinance facilities to SIDBI, which lends to small enterprises.
The housing and infrastructure sectors also received significant emphasis in the government package. To ensure that infrastructure projects are not starved of funds, the government allowed the India Infrastructure Finance Company to raise Rs 10,000 crore by way of tax-free bonds, giving it a larger pool of funds to refinance long-term loans to the sector. The power sector has been allowed duty-free import of naptha.
India battles crisis
Highlights of package
aimed at boosting consumption, the latest in a flurry of measures being rolled out by policymakers, keen to steer the economy away from a painful slowdown.
The government’s fiscal package, announced a day after the central bank cut a key interest rate, has Rs 20,000 crore in additional expenditure, an across-the-board 4% excise duty cut amounting to Rs 8,700 crore and benefits worth Rs 2,000 crore for exporters.
In addition, the government hopes to precipitate infrastructure projects worth Rs 100,000 crore through faster clearances of public-private partnership projects, and ensure their easier financing by way of a tax break on fund raising by the India Infrastructure Finance Company, a specialist lender to the infrastructure sector.
The government will also take steps to ensure that already budgeted expenditure of Rs 300,000 crore will actually be spent over the next four months of the current fiscal to end-March 2009, as it increasingly resorts to pump-priming to shore up the economy that continues to face headwinds from the global financial market turmoil.
These measures complement Saturday’s one percentage point cut in the repo rate cut announced by the central bank, and the refinance facilities for housing and small and medium industries that are designed to boost the flagging realty and manufacturing sectors.
Planning Commission deputy chairman Montek Singh Ahluwalia told reporters that the government would not hesitate in taking further expansionary measures if the economic situation worsened. The latest measures will lift the government fiscal deficit above its target of 2.5% of gross domestic product this year, Mr Alhuwalia said, adding that a higher fiscal deficit was tolerable in the current environment and was an appropriate “counter-cyclical” policy.
“It is a desirable step in times of external contraction.” The fiscal package drew a mixed response from industry. Car manufacturers reacted positively and promised to pass on the duty cuts to consumers, which will bring prices down by between Rs 8,000 and Rs 45,000. Public sector banks are expected to announce easier terms for housing, auto and personal loans on Monday.
“We were anticipating a package of Rs 70,000 crore. A few sectors such as steel, cement, construction and real estate need boost from the government,” said Assocham president Sajjan Jindal. The trade body is expecting another package of around Rs 30,000 crore in January.
“Given the extent of problems that are being faced by the industry, we hope that Sunday’s announcement is only part of the total fiscal package and more such measures will be seen in the near future,” said CII director general Chandrajit Banerjee.
An official statement said the government has been concerned about the impact of the global financial crisis on the Indian economy. The global crisis has already forced several developed economies into a recession, and hit India too. The economic growth this year is expected to ease to around 7%, down from the 9% average of the past three years.
Instead of cutting duties selectively, the government has cut the Cenvat or excise duty by 4% on all products barring petroleum products. The three major rate slabs of central excise duty, of 14%, 12% and 8%, will now stand at 10%, 8% and 4%, and Mr Ahluwalia said the government was hopeful that companies would pass on the benefit of the cuts to consumers.
This could give a fillip to domestic demand in sectors such as automobiles, consumer durables and cement that are most affected by the economic slowdown. The package provides Rs 1,450 crore to the export sector, which for the first time in five years saw a 12% drop in October. Exporters will get refunds of terminal excise duty, a lower interest rate of 7% for pre- and post-shipment credit for sectors such as handloom, textiles, leather, marine, gems and jewellery and small and medium enterprises.
It allows labour-intensive medium, small and micro enterprises collateral-free lending on loans of Rs 50 lakh up to Rs 1 crore. Besides, the lock-in period for loans under an existing credit guarantee scheme are being cut to 18 months from 24, a move that will encourage banks to give more loans to the sector. RBI has already announced an increase in refinance facilities to SIDBI, which lends to small enterprises.
The housing and infrastructure sectors also received significant emphasis in the government package. To ensure that infrastructure projects are not starved of funds, the government allowed the India Infrastructure Finance Company to raise Rs 10,000 crore by way of tax-free bonds, giving it a larger pool of funds to refinance long-term loans to the sector. The power sector has been allowed duty-free import of naptha.
Friday, December 05, 2008
U.S. Job Losses Probably Reached 26-Year High as Economy Sank
U.S. employers probably cut jobs in November at the fastest pace in a quarter century as the yearlong recession engulfing the world’s largest economy deepened, economists said before a report today.
Payrolls shrank by 333,000 workers last month, the biggest drop since July 1982, according to the median estimate in a Bloomberg News survey. The jobless rate may have jumped to 6.8 percent, the highest level since 1993.
Job losses are likely to keep cascading into next year as the collapse in credit and slump in spending hurt companies from General Motors Corp. to Citigroup Inc. and AT&T Inc. President- elect Barack Obama, confronting what he called a “crisis of historic proportions,” announced a plan last week to save or create 2.5 million jobs in two years.
“The pace of contraction has really picked up,” said Julia Coronado, a senior economist at Barclays Capital Inc. in New York. The labor market “is in a severe deterioration phase. Job cuts are across the board.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Payroll estimates of the 73 economists surveyed ranged from losses of 220,000 to 470,000. The jobless rate last month probably rose from 6.5 percent in October.
The 11th consecutive drop in payrolls would follow a 240,000 decline in October and bring the number of jobs eliminated so far this year to more than 1.5 million. Factories probably accounted for about a third of the decline in jobs last month, according to the survey median.
Jobs, Recession
The employment slump was a key factor in determining the start of the recession. The National Bureau of Economic Research, the arbiter of U.S. business cycles, announced this week that a contraction began in December 2007, the month payrolls peaked.
At 12 months, the recession is already the longest since the 16-month slump that ended in November 1982.
Other reports have indicated the labor market is deteriorating. The Institute for Supply Management’s gauge of employment at service industries dropped last month to the lowest level since records began in 1997. Its index for manufacturing jobs fell to a 17-year low.
The declines prompted John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, to raise his forecast for the November payroll loss to 450,000.
First-time jobless claims, a government measure of firings, have held over half a million in each of the last four weeks, the longest stretch since 1982.
More Pessimism
As economic data for last month deteriorated, economists at Goldman Group Inc. were among those marking down estimates for gross domestic product and boosting forecasts for unemployment. The economy will shrink at a 5 percent annual rate this quarter and decline at a 3 percent pace in the first three months of 2009, Goldman’s chief U.S. economist Jan Hatzius said in a note.
Goldman forecasts the jobless rate will climb to 9 percent by late 2009.
The employment report, the second issued since Obama was elected president on Nov. 4, is likely to add to pressures on policy makers to craft additional stimulus measures. Obama named a team that includes New York Federal Reserve Bank President Timothy Geithner as Treasury Secretary-designate and former Fed Chairman Paul Volcker as head of a new White House panel aimed at reviving the economy.
“It’s time to not just address the immediate economic threats but to start laying the groundwork for long-term prosperity,” Obama, 47, said Dec. 3 as he announced former energy secretary Bill Richardson as his nominee for Commerce Secretary. “The most significant issue that we are facing right now is how do we put people back to work.”
Auto Slump
U.S. automakers have been particularly hard hit as sales last month dropped to the lowest level in 26 years. The top executives of General Motors, Ford Motor Co. and Chrysler LLC this week appealed to Congress for as much as $34 billion in government assistance.
The Ann Arbor, Michigan-based Center for Automotive Research projects that a collapse of GM would lead to job losses totaling 2.5 million, including 1.4 million people in industries not directly tied to manufacturing. Chrysler yesterday announced it had cut 5,000 jobs last week.
Service companies are also slashing staff. AT&T, the largest U.S. phone company, will cut 12,000 jobs, striving to trim expenses as the U.S. economy falters, the Dallas-based company said in a statement yesterday. Citigroup said last month is plans to eliminate 52,000 jobs worldwide.
Payrolls shrank by 333,000 workers last month, the biggest drop since July 1982, according to the median estimate in a Bloomberg News survey. The jobless rate may have jumped to 6.8 percent, the highest level since 1993.
Job losses are likely to keep cascading into next year as the collapse in credit and slump in spending hurt companies from General Motors Corp. to Citigroup Inc. and AT&T Inc. President- elect Barack Obama, confronting what he called a “crisis of historic proportions,” announced a plan last week to save or create 2.5 million jobs in two years.
“The pace of contraction has really picked up,” said Julia Coronado, a senior economist at Barclays Capital Inc. in New York. The labor market “is in a severe deterioration phase. Job cuts are across the board.”
The Labor Department’s report is due at 8:30 a.m. in Washington. Payroll estimates of the 73 economists surveyed ranged from losses of 220,000 to 470,000. The jobless rate last month probably rose from 6.5 percent in October.
The 11th consecutive drop in payrolls would follow a 240,000 decline in October and bring the number of jobs eliminated so far this year to more than 1.5 million. Factories probably accounted for about a third of the decline in jobs last month, according to the survey median.
Jobs, Recession
The employment slump was a key factor in determining the start of the recession. The National Bureau of Economic Research, the arbiter of U.S. business cycles, announced this week that a contraction began in December 2007, the month payrolls peaked.
At 12 months, the recession is already the longest since the 16-month slump that ended in November 1982.
Other reports have indicated the labor market is deteriorating. The Institute for Supply Management’s gauge of employment at service industries dropped last month to the lowest level since records began in 1997. Its index for manufacturing jobs fell to a 17-year low.
The declines prompted John Silvia, chief economist at Wachovia Corp. in Charlotte, North Carolina, to raise his forecast for the November payroll loss to 450,000.
First-time jobless claims, a government measure of firings, have held over half a million in each of the last four weeks, the longest stretch since 1982.
More Pessimism
As economic data for last month deteriorated, economists at Goldman Group Inc. were among those marking down estimates for gross domestic product and boosting forecasts for unemployment. The economy will shrink at a 5 percent annual rate this quarter and decline at a 3 percent pace in the first three months of 2009, Goldman’s chief U.S. economist Jan Hatzius said in a note.
Goldman forecasts the jobless rate will climb to 9 percent by late 2009.
The employment report, the second issued since Obama was elected president on Nov. 4, is likely to add to pressures on policy makers to craft additional stimulus measures. Obama named a team that includes New York Federal Reserve Bank President Timothy Geithner as Treasury Secretary-designate and former Fed Chairman Paul Volcker as head of a new White House panel aimed at reviving the economy.
“It’s time to not just address the immediate economic threats but to start laying the groundwork for long-term prosperity,” Obama, 47, said Dec. 3 as he announced former energy secretary Bill Richardson as his nominee for Commerce Secretary. “The most significant issue that we are facing right now is how do we put people back to work.”
Auto Slump
U.S. automakers have been particularly hard hit as sales last month dropped to the lowest level in 26 years. The top executives of General Motors, Ford Motor Co. and Chrysler LLC this week appealed to Congress for as much as $34 billion in government assistance.
The Ann Arbor, Michigan-based Center for Automotive Research projects that a collapse of GM would lead to job losses totaling 2.5 million, including 1.4 million people in industries not directly tied to manufacturing. Chrysler yesterday announced it had cut 5,000 jobs last week.
Service companies are also slashing staff. AT&T, the largest U.S. phone company, will cut 12,000 jobs, striving to trim expenses as the U.S. economy falters, the Dallas-based company said in a statement yesterday. Citigroup said last month is plans to eliminate 52,000 jobs worldwide.
Tuesday, December 02, 2008
Actis mops up $2.9 bn; India to get $1 bn
Here’s some good news amid the havoc wreaked by the terrorists in Mumbai. Leading private equity firm Actis has closed a $2.9-billion private equity fund, of which about $1 billion is likely to be invested in Indian companies over the next four years.
Actis’ success bucks the trend among funds that have generally been finding it difficult to raise growth capital.
The Actis Emerging Markets 3 fund was targeting a corpus of $2.5 billion and managed to raise $400 million more. This indicates that global investors are confident about growth prospects in emerging economies such as India, Latin America, South East Asia and Africa.
“Actis has been a consistent private equity investor in India for more than 10 years. Over this period, Actis has worked with promoters and management teams to create value for their businesses. This fund-raising is an endorsement of our investment track record,” said Actis partner and South Asia head JM Trivedi.
Actis’ plan to invest $1 billion in India over the next three to four years will bring hope to many companies as the current liquidity crisis had restricted borrowing options for corporates, particularly those in the real estate sector. Also, with valuations coming off highs seen in the two-year equities boom, private equity funds are keen to invest. The broader Sensex has fallen 57% since its peak in July.
The UK-based private equity firm, which was spun off from CDC, was in the news recently after Nilgiri’s Dairy — where Actis has a controlling equity stake — sold its hospitality business as part of a strategy to exit non-core businesses.
The private equity firm was also among the first to introduce the concept of management buyouts in India when in 2005, it sold off the international trading business division of ICI India, which it had acquired earlier.
Actis’ $2.9-billion fund is one of the largest dedicated emerging market private equity funds to close this year and doubles the amount raised by the same firm in 2004.
The investors include a diversified group of 100 investors from across the world, including a number of first-time investors in emerging markets. An Actis statement says that the fund will be used to build a diversified portfolio of between 30 and 40 investments across China, India, Africa, Latin America and South East Asia, typically investing a minimum of $50 million of equity capital in buyout and growth transactions.
However, other private equity firms that compete with Actis say the fund-raising underlines how emerging market buyout groups are able to find money from investors, while US and Europe-oriented funds are finding it very difficult.
A number of private equity firms that have recently had year-ending meetings in the US have received strict directives to focus only on existing transactions and cut costs; there has been a significant slowdown in the number of deals too.
Actis’ success bucks the trend among funds that have generally been finding it difficult to raise growth capital.
The Actis Emerging Markets 3 fund was targeting a corpus of $2.5 billion and managed to raise $400 million more. This indicates that global investors are confident about growth prospects in emerging economies such as India, Latin America, South East Asia and Africa.
“Actis has been a consistent private equity investor in India for more than 10 years. Over this period, Actis has worked with promoters and management teams to create value for their businesses. This fund-raising is an endorsement of our investment track record,” said Actis partner and South Asia head JM Trivedi.
Actis’ plan to invest $1 billion in India over the next three to four years will bring hope to many companies as the current liquidity crisis had restricted borrowing options for corporates, particularly those in the real estate sector. Also, with valuations coming off highs seen in the two-year equities boom, private equity funds are keen to invest. The broader Sensex has fallen 57% since its peak in July.
The UK-based private equity firm, which was spun off from CDC, was in the news recently after Nilgiri’s Dairy — where Actis has a controlling equity stake — sold its hospitality business as part of a strategy to exit non-core businesses.
The private equity firm was also among the first to introduce the concept of management buyouts in India when in 2005, it sold off the international trading business division of ICI India, which it had acquired earlier.
Actis’ $2.9-billion fund is one of the largest dedicated emerging market private equity funds to close this year and doubles the amount raised by the same firm in 2004.
The investors include a diversified group of 100 investors from across the world, including a number of first-time investors in emerging markets. An Actis statement says that the fund will be used to build a diversified portfolio of between 30 and 40 investments across China, India, Africa, Latin America and South East Asia, typically investing a minimum of $50 million of equity capital in buyout and growth transactions.
However, other private equity firms that compete with Actis say the fund-raising underlines how emerging market buyout groups are able to find money from investors, while US and Europe-oriented funds are finding it very difficult.
A number of private equity firms that have recently had year-ending meetings in the US have received strict directives to focus only on existing transactions and cut costs; there has been a significant slowdown in the number of deals too.
India's exports shrink for first time in 3 years
India's exports in October shrank an annual 12.1 percent, the first year on year decline in nearly three years, as slowing output at home and troubled economies in key overseas markets slashed demand.
Overseas sales in the month plunged to $12.82 billion from $14.59 billion in 2007, and analysts said tight credit conditions had added to the woes of exporters.
"Two things contributed to fall in exports -- one, the global slowdown, and second very tight credit conditions during the month," said D.K. Joshi, principal economist with domestic rating agency Crisil.
Economists predicted exports may fall short of 20 percent growth in the 2008/09 fiscal year, way below a target for the 12 months of 25 percent expansion.
Exports recorded their last contraction in November 2005, when they fell an annual 11.4 percent.
High borrowing costs and frozen credit as the global economic crisis spilled into Indian markets have slowed economic activity.
Growth in imports also eased sharply to 10.6 percent in October from a scorching 43.3 percent growth the month before as oil prices tumbled and industrial activity slowed.
Imports in October stood at $23.36 billion, helping the trade deficit narrow slightly to $10.54 billion in October compared with $10.63 billion in September, data showed on Monday.
Palaniappan Chidambaram, who on Sunday was shifted from the Finance Ministry to the internal security portfolio following the Mumbai attacks, said last week he was considering help for top export sectors, including textiles, vehicles and jewellery.
Exports during April to October were up 23.7 percent at $107.8 billion from a year earlier.
"The fall in export growth in October is an aberration which will correct in subsequent months. But we won't attain 20 percent plus growth for this fiscal year," added Crisil's Joshi.
Oil imports still rose 22 percent during the month from a year earlier to $7.96 billion despite a slump in crude prices from their July peaks.
For April-October, the trade deficit stood at $73 billion, much higher than $45.64 billion a year ago.
Overseas sales in the month plunged to $12.82 billion from $14.59 billion in 2007, and analysts said tight credit conditions had added to the woes of exporters.
"Two things contributed to fall in exports -- one, the global slowdown, and second very tight credit conditions during the month," said D.K. Joshi, principal economist with domestic rating agency Crisil.
Economists predicted exports may fall short of 20 percent growth in the 2008/09 fiscal year, way below a target for the 12 months of 25 percent expansion.
Exports recorded their last contraction in November 2005, when they fell an annual 11.4 percent.
High borrowing costs and frozen credit as the global economic crisis spilled into Indian markets have slowed economic activity.
Growth in imports also eased sharply to 10.6 percent in October from a scorching 43.3 percent growth the month before as oil prices tumbled and industrial activity slowed.
Imports in October stood at $23.36 billion, helping the trade deficit narrow slightly to $10.54 billion in October compared with $10.63 billion in September, data showed on Monday.
Palaniappan Chidambaram, who on Sunday was shifted from the Finance Ministry to the internal security portfolio following the Mumbai attacks, said last week he was considering help for top export sectors, including textiles, vehicles and jewellery.
Exports during April to October were up 23.7 percent at $107.8 billion from a year earlier.
"The fall in export growth in October is an aberration which will correct in subsequent months. But we won't attain 20 percent plus growth for this fiscal year," added Crisil's Joshi.
Oil imports still rose 22 percent during the month from a year earlier to $7.96 billion despite a slump in crude prices from their July peaks.
For April-October, the trade deficit stood at $73 billion, much higher than $45.64 billion a year ago.
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