Nifty Gains 163 Points, Sensex rallies 500 points.....

It's a firm Friday as the Nifty rallies to 5800 on day one of the July series. Commodities and capital goods lead the upmove. The BSE Sensex is up 501.42 points or 2.66 percent at 19377.37, and the Nifty is up 147.15 points or 2.59 percent at 5829.50., gaining 123.65 points. About 1331 shares have advanced, 752 shares declined, and 132 shares are unchanged.

Jindal Steel (up 6.2 percent), BHEL (up 6 percent), Coal India (up 4.5 percent), Tata Motors and HDFC are lead gainers in the Sensex.

The FM clarifies that the government has only fixed output prices for gas and input prices for power and fertiliser will be fixed later. ONGC and Oil India come off highs due to fear of higher subsidy burden. Power and fertiliser companies get excited on the news.

Indian equity benchmarks extended gains in afternoon trade, rising more than 2.25 percent on further buying in index heavyweights like Reliance Industries and HDFC that gained 3.3 percent and 4 percent, respectively

Indian rupee rose above the 59.50 level, gaining 77 paise to 59.42 per dollar as against previous day's closing of 60.18 per dollar.

The appreciation seen in the Indian currency today is on the back of upbeat equity market, global risk-on sentiment and recent gas price hike

Govt approves hike in natural gas price to $8.4 per mbtu

Delivering a potential boost to the revenue of gas producers, the government has approved doubling of natural gas prices from the present $4.2 per million British thermal unit (mbtu) to $8.4 per mbtu from April 1, 2014. It is the first revision in gas prices in 3 years and will likely result in rise in power tariffs and fertilizer cost and will make CNG transportation more expensive. However, the price will still be lower than that of imported natural gas, which costs around $14.17 per mbtu.

The Cabinet Committee on Economic Affairs (CCEA) headed by Prime Minister Manmohan Singh approved Rangarajan panel formula for pricing of gas and would be applicable for next five years. As per the Rangarajan formula, long-term and spot liquid gas (LNG) import contracts as well as international trading benchmarks will be used to arrive at a competitive price for India. The natural gas prices will be revised on the quarterly basis and for the April-June quarter of 2014, it comes to $8.4 per mbtu.

Further, the new price will be uniformly applicable to all public and private sector producers alike. The increase in gas prices will directly benefit these local producers. Earlier, Oil minister M V Moily said that the revision in rates was a contractual requirement which will help remove policy uncertainties and spur investments, citing that the current rate of $4.2 per mbtu is uneconomical to produce gas from deep-sea fields.

Rupee strengthens by 32 paise to 59.95

The rupee strengthened by 32 paise to 59.95 against the dollar versus the previous close of 60.19 after the Reserve Bank of India data showed that the current account deficit slowed to 3.8 per cent in the quarter ended March 31, 2013.

Also, data showing the US GDP grew 1.8 per cent against 2.4 per cent during the same period a year ago has raised investors’ hopes that the Fed may remain cautious in scaling back its $85-billion monthly bond-buying programme.

However, the rupee remains vulnerable to dollar outflows due to global as well as domestic factors. Foreign institutional investors (FIIs) have been persistently paring their investments in the equity and debt markets, which is weakening the Indian currency.

The interbank call money rates opened higher at 7.30 per cent from their previous close of 6.9 per cent.

The benchmark 7.16 government security (G-Sec), which matures in 2023, opened higher at Rs 97.48 from the previous close of Rs 97.26. Yields softened to 7.52 per cent from 7.55 per cent.

The 8.15 per cent government security (G-Sec), which matures in 2022, opened higher at 102.85 from the previous close of Rs Rs 102.65. Yields softened to 7.7 per cent from the previous close of 7.77 per cent.

Sensex spurts 296 points on RBI data, firm Asian cues

Indian markets surged over 1.5 per cent in the opening session on Friday due to heavy buying by funds and retail investors led by RBI data amid firm Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was up 295.88 points (1.57 per cent) at 19,171.53 and the 50-share NSE index Nifty was up 94.3 points (1.66 per cent) at 5,776.65.

Positive data from the Reserve Bank of India (RBI) on the value of the country’s transactions with the rest of the world propped up the domestic sentiment.

The current account deficit is a key component of the value of transactions with the rest of the world. The deficit moderated to 3.6 per cent of gross domestic product (GDP) in the January-March quarter, on the back of an increase in exports and a marginal decline in imports.

Asian stocks rose for the third consecutive session, with the regional benchmark index paring the first quarterly slump in a year, amid signs the Japanese and US economies are improving and assurances on stimulus efforts by the Federal Reserve.

Japan's Nikkei average jumped 3.2 per cent to its highest in nearly four weeks, egged on by upbeat data showing consumer prices stopped falling in May and labour demand reached its strongest level in five years.

Japan’s Nikkei 225 rallied 422.09 points or 3.19 per cent to 13,635.64 and Hong Kong’s Hang Seng jumped 213.85 points or 1.05 per cent to 20,653.93.

US stocks had ended higher yesterday as reports showed consumer spending rebounded, pending home sales soared to the highest level since 2006 and jobless claims declined last week.

Fed Bank of New York President William C. Dudley said the central bank may prolong its $85-billion monthly bond-buying programme should the economy fail to meet the central bank's estimates.

Coal India shares hit all-time low

Coal India shares slumped to an all-time low on the BSE in early trade on Thursday.

The stock was trading at Rs 286.25, down 0.75 per cent. During intra-day, Coal India hit a low of Rs 285.25.

The stock has been under pressure, on fears the Cabinet may take a decision later today on the draft Bill for setting up the Coal Regulatory Authority.

Meanwhile, the signing of fuel supply agreements (FSA) between Coal India Ltd and its single-biggest buyer, NTPC will take place anytime soon.

The Coal India board, which met here on Wednesday, agreed to reduce incentives proportionately if the quality of coal was poor—with a gross calorific value of less than 3,100 calories. “This is a small amendment which we will make in our FSAs,” the CIL Chairman, S. Narsing Rao, said.

The FSAs may be signed in two weeks time once the matter is communicated to the individual CIL subsidiaries, he said.

Moreover, the Children's Investment Fund Management, which held 1.1 per cent of the equity in the state miner as of March 31, has been offlading its stake in the company. According to Reuters, it sold nearly 1.2 crore shares since April.

TCI has made public protests since the Centre last year forced Coal India to reverse a price hike.

It filed a writ petition in the Delhi high court and a lawsuit in the Calcutta High Court against Coal India's directors.

Investors in Gitanjali Gems lose over Rs 2,000 cr in just 4 days

Shares of Gitanjali Gems locked in lower circuit for forth day in a row, eroding over Rs 2,000 crore to its market value, on concerns that the recent drop in gold prices coupled with the Reserve Bank of India and restrictions by the government would hurt company's growth and earnings going forward.

The stock almost halved to Rs 263 from Rs 507 at the beginning of current week, have seen erosion of market capitalization of Rs 2,246 crore at Rs 2,418 crore on BSE. The company had m-cap of Rs 4,664 crore on June 21.

The Jewellery retailer has lost 60% or Rs 3,560 crore of its market value from its recent high of Rs 650 touched on April 23 this year.

Foreign institutional investors (FIIs), the largest non-pro
moter shareholders, are major losers, lost nearly Rs 450 crore in past four trading sessions. The overseas investors had raised their holdings in the company by 4.17 per cent points to 19.98% during January-March quarter, when the stock was trading at an average price of Rs 580.

Life Insurance Corporation of India has lost nearly Rs 100 crore, as the insurance giant hold 4.36% stake in the company at the end of March 2013 quarter.

Bodies corporate held 11.56% stake have seen value erosion of Rs 260 crore and individual public shareholders lost Rs 70 crore in past four trading sessions.

Walmart India chief Raj Jain quits

A townhall meeting called hastily this morning at Walmart India’s Gurgaon office was all it took to announce a leadership change at the company. Walmart Asia President & CEO Scott Price, who otherwise sits in the Hong Kong office, had called the meeting to inform India staff that country head Raj Jain “is no longer with the company”.

A statement issued soon after said quite the same, without elaborating on Jain’s exit or his next stop. However, it named Senior Vice-President Ramnik Narsey, who joined Walmart last month after quitting as India chairman & CEO of Australia-based Woolworths, as the interim India leader to replace Jain “with immediate effect”.

There was talk, in hushed tones, of more exits and changes in the organisation as part of a clean-up act. But people in the know said there wouldn’t be any change so far as Walmart’s India commitment went. In fact, reacting to the development, Future Group Founder & CEO Kishore Biyani said: “It (Walmart) is a large organisation. Issues like these happen at such large firms.”

Many reasons to explain Jain’s departure had started floating since morning, though all were off the record. However, from what a company executive told Business Standard, it was clear the parting was “not amicable”.

Price, who had come to India earlier this week, had yesterday presided over a quarterly business review, which, it is learnt, was not attended by Jain. A source said, Jain had not been heard saying “bye” when leaving office on Monday evening, perhaps for the last time. Narsey is believed to have moved into Jain’s fourth-floor cabin yesterday, hours before the townhall announcement.

The world’s largest retail chain has lately been in the middle of several controversies, including an internal investigation into violations of the Foreign Corrupt Practices Act (FCPA), or anti-bribery laws, across markets like Mexico, India, Brazil and China.

As a fallout of that probe, Bharti-Walmart CFO Pankaj Madan, besides four others from the legal team, had been sent on leave. A source said the investigation might have been completed now, and many more heads might roll as part of a clean-up act. This information could not be independently verified.

Current account deficit drops sharply to 3.6% of GDP in Q4

India’s current account deficit (CAD) moderated sharply to 3.6 per cent of GDP in Q4 of 2012-13, according to the Reserve Bank of India (RBI) data released today.

CAD had touched a historically high level of 6.7 per cent of GDP in Q3 of 2012-13 as trade deficit narrowed.

During 2012-13, CAD stood at $87.8 billion (4.8 per cent of GDP) against $78.2 billion (4.2 per cent of GDP) during 2011-12.

Trade deficit narrowed to $45.6 billion in Q4 of 2012-13 from $51.6 billion in Q4 of 2011-12.

Merchandise exports, imports

Merchandise exports (Balance of Payment basis) increased 5.9 per cent in Q4 of 2012-13 compared with 2.6 per cent in Q4 of 2011-12, RBI said.

Further, merchandise imports recorded a marginal decline of 1 per cent in Q4 of 2012-13 against an increase of 22.6 per cent in Q4 of 2011-12.

Essentially, non-oil non-gold component of imports showed a decline, reflecting slowdown in domestic economic activity.

Net capital inflows

Net capital inflows under financial account moderated in Q4 of 2012-13 largely due to slowdown in net portfolio investment and net repayment of loans by banks and corporates.

However, net capital inflows were more than adequate to finance CAD, resulting in accretion of $2.7 billion to the foreign exchange reserves.

Metal price decline casts shadow on Hindustan Zinc's prospects.

The Hindustan Zinc Ltd (HZL) stock has recently come under fresh pressure after the slide in global prices of silver, zinc and lead. On Wednesday, the stock fell to its 35-month low before closing at Rs 97.90, taking the total decline in the month of June to 15.6 per cent. Earlier in April, the stock had fallen to its 52-week low of Rs 107 on the back of weak metal prices and overhang of stake divestment by the government. However, it rose to Rs 124 levels in May, helped by a strong performance in the March  quarter. Analysts had also hoped that rising volumes in silver would offset a large part of the weakness in metal prices. However, now, with silver prices showing no signs of bottoming and zinc and lead prices near their recent lows, concerns have cropped up again. Analysts, thus, expect the company’s earnings to remain muted in FY14 and FY15. In fact, looking at the weak market sentiments, they are not ruling out further pressure on the stock in the near term.

Weak metal prices add to worries
Global silver prices, which averaged $30 an ounce in FY13 and around $28 an ounce at the start of the June quarter, have slid below $20 an ounce at the end of the June 2013 quarter. Analysts at HSBC have already tweaked their average silver price estimates from $30 an ounce in FY13 to $23 an ounce in FY14. With silver prices currently hovering around $18, other analysts are not ruling out further weakness.

Additionally, zinc and lead prices remain weak. The average zinc price in the June quarter is about $100 lower than the average FY13 price of about $1,950 a tonne. Lead prices are also under pressure. Going ahead, analysts expect average zinc prices to hover around $1,950-1,980 a tonne and to cross $2,200-$2,300 levels only around FY15. For lead, they expect prices to remain at similar or slightly lower levels of $2,111 a tonne seen in FY13.

Volumes to provide some support
On the flip side, the company is seeing improvement in volumes. The company’s SK mine, which had seen a decline in mined metal output in the first half of FY13 leading to lower production of zinc (153,000 tonnes each in the first two quarters of FY13), has seen higher production thereafter. Thus, zinc production increased to 168,000 tonnes and 181,000 tonnes in the quarter ending December 2012 and March 2013, respectively. Silver production also increased to 100 tonnes in the March 2013 quarter from 62 tonnes in the December 2012 quarter, taking the total production to 321 tonnes in FY13, an increase of 35 per cent over 237 tonnes in FY12. For FY14, the company has guided for a 15 per cent growth in mined metal production to one million tonnes on the back of increased output from the Zawar, SK and Kayar mines. The net saleable silver production (after accounting for own consumption) is guided to grow 25 per cent year-on-year to 360 tonnes (analysts see it achieving 350-360 tonnes) from 288 tonnes in FY13. Among key monitorables is the grade of silver reserves at SK mine, which fell to 146 gm/tonne in FY13 from 161 gm/tonne in FY12.
Analysts at Kotak Securities say this may not have a negative impact on current production levels, but point out that a further decline in grades can put a cap on potential increase in silver volumes.

Rupee touchs new all-time intra-day low at Rs 60.34 a dollar.

Month-end dollar demand from importers resulted in the rupee touching a new all-time low on Wednesday against the dollar.

The rupee touched a low of Rs 60.34 breaching previous all-time intra-day low of Rs 59.98 hit last week.

At 3:15 pm, the rupee was trading at Rs 60.25 compared with previous close of Rs 59.65 per dollar. It had opened at Rs 59.73 per dollar. According to dealers the Reserve Bank of India (RBI) did intervene, but due to heavy dollar demand despite the intervention, the rupee weakened.
 Nifty closed at 5581.40 down by 27.70%, Sensex broke 109.33% down at 18519.82

Bajaj Auto falls as workers at Chakan plant go on strike.

The workers at the plant have been demanding an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 share.

Bajaj Auto  is trading lower by 1.5% at Rs 1,774 after the company said production at the company’s Chakan plant has been affected due to a labor strike.

The stock opened at Rs 1,783 and hit a low of Rs 1,760 on NSE. A combined 75,738 shares have changed hands on the counter till 1000 hours on NSE and BSE.

“The workers at the Chakan plant have stopped coming to work from June 25, 2013 following management’s refusal to concede to their demand,” Bajaj Auto said in a regulatory filing.

The workers at the plant have been demanding an option to subscribe to 500 equity shares of the company at a discounted price of Re 1 share, it added.

The workers union at the Chakan plant, Vishwa Kalyan Kamgar Sanghatana had earlier proposed for a stoppage of work from the morning shift of June 28, 2013.

The Chakan plant has an installed capacity of 1.2mn units (around 22% of the total installed capacity) and it manufactures products like Pulsar, Avenger, Ninja and KTM.

Gold drops to 3-year low on strong US data

Gold hit a near-three year low on Wednesday, falling for a seventh session out of eight, as strong US economic data boosted stocks and supported the Federal Reserve's plan to scale back its bond purchases in the next few months.

Bullion prices have been sliding since Fed Chairman Ben Bernanke laid out a strategy last Wednesday to wind down the bank's USD 85 billion monthly bond purchases on the back of a recovering economy.

Spot gold fell 1.4 percent to USD 1,258.54 an ounce by 0202 GMT. Gold for immediate delivery fell to USD 1,254.74 earlier - its lowest since September 2010, while Comex gold also fell to a near 3-year low of USD 1,254.6.

Gold's losses since the beginning of last week through Tuesday amount to 8 percent, or about USD 113 per ounce.

"We've pushed past the USD 1,270 level seen last week. That's a key technical level so we are going through a whole bunch of stop losses," said Victor Thianpiriya, commodities analyst at Australia and New Zealand Banking Group.

Silver fell over 2 percent to its lowest since August 2010.

The Fed said it would wind down bullion-friendly bond purchases from later this year, and end purchases by mid-2014 depending on the economic recovery.

Data on Tuesday showed US consumer confidence jumped in June to its highest level in more than five years, while sales of new U.S. single-family homes rose to their highest level in nearly five years in May.

Govt approves Rs 650 cr penalty on Bharti Airtel

Telecom Minister Kapil Sibal is learnt to have approved levying of Rs 650 crore penalty on Bharti Airtel for violating roaming norms in 13 service areas between 2003 and 2005.

"The Minister has approved penalty of Rs 650 crore on SLD (subscriber local dialing) matter," a Telecom Ministry official told PTI.

An internal committee of Department of Telecom had alleged that Bharti Airtel had continued to route national and international calls as local calls (SLD) under a scheme till 2005 despite being told to stop it in 2003.

This caused loss to the government exchequer and state-run Bharat Sanchar Nigam Ltd (BSNL), it said. The official said "demand notice will be issued this
week".

SBI to turn aggressive against defaulting firms.

The mounting burden of bad loans has forced State Bank of India (SBI) to change the way it deals with defaulting companies. To ensure promoters of these companies make timely payments, SBI has decided to turn aggressive in filing winding-up petitions against them.

SBI Chairman Pratip Chaudhuri said the bank would be more active in filing such suits, one of the ways to ensure improvement in repayment behaviour.

A senior SBI official said compared to other banks, SBI was slow in filing and following up on winding-up cases. He added feedback suggested legal pressure worded in case promoters had resources, but were avoiding timely payments.

In 2001-12 and 2012-13, the level of SBI’s impaired assets showed an upward bias, a reflection of the state of the economy. The bank also recorded unprecedented delinquencies. The deterioration was the most severe in sectors such as paper & plastics, iron & steel, textiles, engineering goods and transport.

As of March-end, the bank’s gross non-performing assets (NPAs) stood at 4.75 per cent, while net NPAs stood at 2.1 per cent.

  The bank also has a large portfolio of restructured loans, for which risks of slippages are much higher than that in the case of standard loans.

In March, total restructured assets stood at Rs 43,111 crore. Of this, Rs 32,228 crore was in the standard category, while Rs 10,883 crore was in the NPA segment.

As of March-end, provisioning for NPAs stood at Rs 11,368 crore. The bank’s provision coverage ratio, or the sum set aside to cover bad loans, stood at 66.58 per cent.

SBI’s gross NPAs declined from Rs 53,458 crore (5.3 per cent) in the quarter ended December to Rs 51,189 crore (4.75 per cent) in the quarter ended March. In 2012-13, Rs 10,119 crore was upgraded from NPAs to standard assets, while cash recovery in NPA accounts stood at Rs 4,766 crore. Recovery for written-off accounts stood at Rs 1,066 crore.

Titan Industries plans to increase its product line.

Titan Industries is planning to introduce a wide range of products suited for the emerging lifestyle, after entrenching its presence in watches and Jewellery segments over the past 25 years. It is looking at various segments ranging from textile to writing instruments, mobile phones, musical instruments, educational accessories to kitchen equipment among others.

The entity is relying on innovation to a large extent and has been actively moving in various innovations from across its workforce. It has established an Innovation School of Management (IScM) to look after the objective of creating the ability to innovate and making it a culture among its employees.

ICICI Bank for more branch expansion.

India’s second biggest bank, ICICI Bank Ltd is looking for foreign expansion by opening branches in Australia, South Africa and Mauritius. The largest private sector lender is also looking to open a full-fledged branch in China, where it already has a representative office, managing director and CEO, Chanda Kochhar said during the bank’s 19th annual general meeting (AGM) here.

“Under the bank’s foreign expansion plans, we will open branches in Australia, South Africa and Mauritius. We have sought Reserve Bank of India (RBI)’s clearance and the same is awaited,” said Kochhar addressing the shareholders in Vadodara on Monday. “We already have a representative office in China, where we will open a full-fledged branch,” she said.

As on March 31, ICICI Bank had the largest number of foreign branches, 10, among private sector banks in India. The bank also has three subsidiaries and eight representative offices located in different countries, RBI data showed.

Commenting on the domestic branch network, Kochhar maintained bank will expand its branch presence in the non-banked areas of the country. “We will open 350 new branches in India. About 200 of these will be in non-banked areas. The pace of branch network expansion will be much faster over the next three years,” said managing director and chief executive officer Chanda Kochhar at its 19th annual general meeting here.

She said they’d also applied to the Reserve Bank of India for permission to open branches in Australia, South Africa and Mauritius. And, she said, they wished to upgrade the representative office in China to a full branch. As on March 31, ICICI had 10 branches abroad (the largest among private sector banks in India), three subsidiaries and eight representative offices in different countries.

Tata Steel mulling stake sale in group cos.

Tata Steel currently holds stake in a number of companies could sell stake to its parent, Tata Sons
Tata Steel is mulling stake sale in some of its group companies, including Tata Motors in a bid to raise Rs. 72 bn, said reports. Reeling under debt load and lowering steel prices, Tata Steel could sell stake to parent company, Tata Sons, to ease pressure on its balance sheets. Money raised by way of stake sale could be used for company's expansion plans in Odisha.

The company plans to invest a massive Rs. 420bn in Odisha plant in two phases. The company's European operation are under pressure owing to low demand. Recent currency slide and cost overruns has raised the company's projected expenditure in the first from 190bn to Rs. 240bn.

India's steel production grew at a mere 1.5% in May this year compared to the global growth rate of 2.6% according to a latest report by a global industry body.

Tata Steel currently holds 5.6% stake in Tata Motors, 51% stake in Tata Sponge, 73.4% on Tinplate India. Tata Steel could offload this stake, said reports.

Stocks in Spotlight.....

Indraprastha Gas (IGL), the supplier of compressed natural gas (CNG) in Delhi and neighbouring areas, has increased the price of CNG by 5% after a weaker rupee made imports costlier. The new consumer price of CNG is Rs 41.90 per kg in Delhi and Rs 47.35 per kg in Noida, Greater Noida and Ghaziabad.

Tata Steel is reportedly looking at the option of selling stakes in various group companies, including Tata Motors, in an attempt to raise Rs 7200 crore. Tata Steel owned 5.46% in Tata Motors as on 31 March 2013, apart from stake in other Tata Group companies.

Videocon Industries will be watched on reports the company will apply for banking licence today, 25 June 2013.
Shree Cement on Monday, 24 June 2013, said that the company has lighted up its clinker manufacturing unit having capacity of 6,000 ton per day (TPD) at Bangur City, Ras in Pali distraction of Rajasthan on 20 June 2013.
SMS Pharmaceuticals said that as on 20 June 2013, it has bought back 11.18 lakh shares of the company for Rs 29.78 crore, which represents 64.06% of the total buyback size of Rs 46.50 crore.
Goa Carbon turns ex-dividend today, 25 June 2013 for the dividend of Rs 2.50 for the financial year ended 31 March 2013.
Birla Corporation turns ex-dividend today, 25 June 2013 for the final dividend of Rs 4.50 for the financial year ended 31 March 2013.
Indo Rama Synthetics turns ex-dividend today, 25 June 2013 for the dividend of Re 1 for the financial year ended 31 March 2013.
Jamna Auto turns ex-dividend today, 25 June 2013 for the final dividend of Rs 2 for the financial year ended 31 March 2013.

JP Associates down 8% on shelving cement unit sale plan

Shares of Jaiprakash Associates  declined over eight percent to Rs 52.85 after its cement arm (Jaypee Cement) shelved plan to sell its Gujarat unit on  not getting right price.

Jaypee Cement was looking to sell its 4.8 metric tone cement plant and the valuation of the deal was estimated at over Rs 4000 crore.

Simultaneously, its subsidiaries-Jaiprakash Power Ventures andJaypee Infratech also tanked 15 percent and 6 percent following this news.

The cement plant sale was aimed at reducing the firm's debt pile. Also, the deal was likely to be carried out at USD 150 a tonne. It is also learnt that the company was in talks with the Birla Group/s cement subsidiary for the transaction.

NHPC Dhauliganga power station plant sinks....

  Damages at Dhauliganga Power Station due to flood in River Kali

NHPC Ltd has informed BSE that due to cloud burst and unprecedented high flood in Uttarakhand, the water has entered into the Dhauliganga Power Station (280 MW) of NHPC Limited and submerged all the system on the early hours of June 17, 2013. The generation from the plant has been stopped and efforts are being made to restore the generation at the earliest. In addition to this the water has caused damage to various ancillary structures of the project like roads, residential and non-residential buildings. The communication and power supply has been fully disrupted in the power house, dam, colony and other project areas. The extent of damage is being worked out.
   The Scrip is down by 1.37%, trading at Rs.17.85.

Gold imports may fall by more than half to 150 tonnes in July-Sept

Gold imports are expected to more than halve to about 150 tonnes in the coming July-September quarter, against the projected 350 tonnes in the current quarter, due to sluggish demand, says an industry official.

“We expect gold imports to be in the range of 120-150 tonnes in July-September period of this year,” Bombay Bullion Association President (Emeritus), Suresh Hundia, told PTI.

He said gold imports in the April-June quarter are expected to be around 350 tonnes.

The country had imported 160 tonnes of gold in July-September period of last fiscal.

Gold imports in the coming quarter would decline on likely weak demand, which would be a relief to the government, that is facing current account deficit, he said.

“There would be hardly any demand in July and September, and imports are likely to be about 40 tonnes in each month,” he said, but added that demand would pick up in August with the start of festival season.

Gold imports in India, the world’s largest consumer, will also depend on good monsoon, global prices and rupee situation, he added.

In the April-June quarter of 2013-14, total gold imports could reach 350 tonnes, and much of it has already been shipped in April and May at 142 tonnes and 162 tonnes, respectively, he said, adding the overseas purchase of gold in the current month may not exceed 50 tonnes.

Asked if recent curbs have reduced gold imports, Hundia said: “Demand will drive gold imports even if shipments are made costlier by raising Customs duty to 8 per cent and other measures. Demand for gold will shoot up if global prices fall sharply and rupee strengthens in the coming months.”

All India Gems and Jewellery Trade Association Regional Chairman (North) Vijay Khanna too said restrictions on gold imports have not reduced overall gold imports, rather it has encouraged illegal shipments.

Till last week, global prices of gold were up by 1.63 per cent to $1,298 per ounce, while the yellow metal’s rates in the national capital stood higher by Rs 260 per 10 grams at Rs 27,640.

NDMC meeting this week on Taj auction

The New Delhi Municipal Council (NDMC) is set to discuss the proposed auction of the Taj Mahal hotel, Mansingh Road, at its next meeting on Thursday.

It had earlier decided to convene a meeting to discuss this issue after Indian Hotels Company (IHCL), which operates the hotel, filed an injunction suit in the high court here against the impending auction. IHC's two-year lease extension ends in October. NDMC has to give its reply to IHC's plea in the court by July 18.

The civic body is yet to decide whether it plans to go ahead with the finalisation of the auction details or stop all action till the matter remains in court. Senior officials said the first right of refusal would be given to IHC, which was enough to protect its interest in the property. IHC, in its plea, has claimed to have equity in the property and, so, cannot be treated as any other lessee.

It has cited its long relationship with NDMC for grant of a stay in the auction process.

It has said the company shares its revenue with NDMC as rent every year for managing the property, built on the civic body's land. Indian Hotels said it had a right to seek an extension of the lease because it "built a permanent structure" and invested in development of the area.

The 33-year lease agreement ended in October 2011, after which NDMC decided on an auction instead of renewing the lease. Thereafter, the civic body had given a lease extension to the company.

The Taj group pays NDMC 10.5 per cent of its gross revenue annually as rent and it is expected the proposed auction could result in a substantial increase in the figure. NDMC had appointed Ernst & Young as consultant to advise on the course of action on the lease.

Sahara freeze order gets Sebi Rs 52 cr in cash, investments

Market regulator Securities and Exchange Board of India (Sebi) has been able to get hold of cash and investments totalling about Rs 52 crore and details of 450 acres of land so far through its attachment orders against the Sahara group entities.

In a high-profile case involving refund of Rs 24,000 crore to the bondholders of two Sahara companies, Sebi had passed orders for attachment of various properties and freezing of accounts in February, after the entities failed to deposit the entire money. The cash totalling Rs 23 crore, received from various banks pursuant to these orders, has been invested in a term deposit for now, while investments worth about Rs 28 crore in mutual funds and demat accounts have also been frozen, sources said. After passing its attachment orders, Sebi informed all banks, depositories, mutual funds and non-banking financial companies (NBFCs), among others, about the matter and also requested the Reserve Bank of India (RBI) to direct the chiefs of the banks to transfer the money of Sahara firms to a designated Sebi account.

Sebi had also approached the collectors of as many as 600 districts to request them not to permit the Sahara entities and persons concerned from any sale or transfer of properties attached by the regulator. As a result, the district collectors and revenue officers from various parts of the country have provided Sebi with details of 450 acres of land belonging to Sahara, sources added.

The regulator had already asked the Supreme Court's permission to appoint an Officer on Special Duty and other officers to deal with the objections and claims relating to the property to be sold and for conducting the sale of the property to garner funds for refunding the investors' money.

Sahara has so far deposited Rs 5,120 crore with Sebi towards the refund and claims that this amount is more than sufficient to meet the liabilities towards its bondholders since the group has already paid close to Rs 20,000 crore directly to the investors.

The money was raised by Sahara Housing Investment Corporation and Sahara India Real Estate Corp from about 30 million investors, through issuance of certain bonds. However, these claims have been disputed by Sebi before the Supreme Court, which is expected to resume hearing the case next month. Meantime, Sebi has begun the process of refunding the money to genuine investors after verifying their credentials. A pilot study conducted by Sebi for ascertaining the genuineness of investor documents filed by Sahara, however, found close to 99 per cent of the bondholders were untraceable, said sources. Under this programme, Sebi sent redemption notices inviting claims to 21,000 bondholders but it received less than 300 claims, currently under examination.

While more than 7,000 notices returned undelivered, there was no response in respect of over 13,000 notices. Sebi will refer these case to Sahara for further verification, sources said. Last month, Sebi began inviting claims from Sahara bondholders in a prescribed format and has said it would directly transfer the refund money to the bank accounts of the genuine investors and they can not get the money without having a bank account.

The apex Court last month told Sebi to begin refunding the money from Rs 5,120 crore deposited with it so far, while the matter would be heard further by the apex court on July 17.

Ministry seeks Rs 10,830 cr for power reforms scheme in 12th Plan

The Power Ministry is seeking an extension of Restructured Accelerated Power Development and Reforms Programme for the 12th and 13th Five-Year Plan period to strengthen the distribution sector.

The Government launched this programme in the 11th Plan with an objective of reducing distribution losses.

If extended, the scheme would cost Rs 10,830 crore in the 12th Plan and Rs 11,897 crore in the 13th Plan. The Cabinet Committee on Economic Affairs is likely to discuss the issue on Friday, a Power Ministry official told Business Line.

In order to implement the programme, the Union Government would facilitate loans of Rs 50,000 crore to States. Of this, Rs 31,577 crore would be converted to grant.

During the 11th Plan, projects worth Rs 5,242.64 crore covering 1,401 villages in 29 States and Union Territories have been sanctioned.

The R-APDRP programme is divided into two parts. The first part includes projects for establishment of baseline data and implementing IT applications, billing and customer care services, among others.

The second part includes projects that strengthen the distribution network.

Sensex down 30 points on weak Asian cues

Indian markets opened the session on Friday marginally in the red on sustained selling by funds and retail investors in select stocks owing to weak Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was down 30.42 points (0.16 per cent) at 18,688.87 and the 50-share NSE index Nifty was down 23.4 points (0.41 per cent) at 5,632.50.

Asian stocks hit a fresh 9-1/2-month low, with the regional benchmark index heading for its biggest two-day decline since September 2011, amid concern that the Federal Reserve will reduce stimulus and China’s economic slowdown may deepen as a cash crunch worsens.

Japan’s Nikkei 225 was down 62.13 points or 0.48 per cent at 12,952.45 and Hong Kong’s Hang Seng plunged 309.45 points or 1.52 per cent to 20,073.42.

Fed Chairman Ben Bernanke had said on Wednesday that the central bank will stop its $85-billion monthly bond-buying programme later this year as the economy has improved. But he also said that Fed will withold from tapering if the economic conditions deteriorate.

Short-term joy for exporters, long-term pain for importers

The falling rupee is good news for exporters in the short run as they get more for every dollar earned despite some hedging by large businesses. However, the high volatility in the currency is affecting business decision making, say exporters. “The situation is so volatile that exporters have not been able to finalise their future orders,” says Ajay Sahai, Director-General of the Federation of Indian Export Organisations (FIEO).

Some exporters also complain about buyers asking for discounts every time the rupee falls. “Importers have been asking for discounts. Volatility coupled with speculation will impact business sentiment,” says Apparel Export Promotion Council Chairman A. Sakthivel.

Small exporters reap the maximum benefits when the rupee falls. However, they are the ones who are hit hardest when the currency rises.

Speaking to reporters earlier this week, Commerce Secretary S.R. Rao said: “Most contracts for exports and imports take place over a three-six month period. The fluctuating rupee is not good (for) business.”

Exporters agree but don’t seem to mind as long as the general direction of the rupee movement is southwards.

The rupee has made imports dearer and is adding to the strain in the current account.

Although the rise in prices of imported inputs is more than compensated by gains made in exporting the final product, the country’s trade account takes a hit every time the rupee depreciates as the rising cost of crude imports widens the deficit.

“Every Re 1 depreciation increases the crude cost by Rs 400 crore per month and by Rs 5,000 crore annually,” says P.K. Goyal, Director (Finance), Indian Oil.

How the rupee fared against world currencies

The rupee on Thursday plunged by a whopping 130 paise to hit life-time low of 60 against the US dollar in early trade on the Interbank Foreign Exchange on strong demand for the American currency from banks and importers.

Besides, dollar's strength against major currencies overseas on comments by Federal Reserve Chairman Ben Bernanke that the central bank may scale back its monetary stimulus programme later this year weighed on the domestic unit, dealers said.

RBI halts bond trading as prices crash

The sharp slide in the value of the rupee wrecked havoc in bond markets where gilt prices fell sharply anticipating a selloff by foreign institutional investors. Ironically, this happened on a day the Reserve Bank of India auctioned bond quotas to foreign institutional investors.

The fall in bond prices was so sharp that it triggered off circuit filters forcing a halt in trading. However, trading was restored after the Fixed Income and Money Market Dealers Association (Fimmda) sought RBI's permission to resume trade. The sharp fall in bond prices compelled NTPC to shelve its Rs 1,000 crore bond issue as yields rose much higher than anticipated.

The fall in bond prices would be a big negative for bank earnings. Banks which have been under pressure from non-performing assets and higher provisioning requirements had hoped to fall back on trading profits and write-back of excess depreciation provided on government bonds. However, the recent fall in prices has wiped out all gains, raising the prospect of making additional provisions for depreciation.

Sensex tanks 500 points; Nifty falls 150 pts on US Fed comments

The S&P BSE Sensex hit a fresh intraday low on Thursday as selling pressure intensified with the gap-down opening of European peers. The global markets rattled in trade after the US Federal Reserve Chairman Ben Bernanke said that the Fed could begin to taper down its key stimulus program later this year.

At 01:50 pm, the 30-share index was at 18,758.60, down 487.10 points or 2.53 per cent. It touched a high of 19,069.20 and a low of 18,744.36 in trade today.

The Nifty was at 5,666.60, down 155.65 points or 2.67 per cent. It touched a high of 5,755 and a low of 5,660.05 in trade today.

The S&P BSE Midcap Index was down 1.77 per cent and the S&P BSE Smallcap Index declined 1.65 per cent.

The S&P BSE Realty Index was down 4.79 per cent, the S&P BSE Metal Index was 4.57 per cent lower, the S&P BSE Bankex declined 3.73 per cent and the S&P BSE Power Index was down 3.03 per cent. 

Jindal Steel (7.73 per cent), DLF (7.27 per cent), Hindalco (6.52 per cent), Jaiprakash Associates (6.39 per cent) and Tata SteelBSE -5.52 % (6.17 per cent) were among the top Nifty losers. 

Sun Pharmaceuticals (1.12 per cent) and Ambuja Cements (0.16 per cent) were the only index gainers. 

The European markets, as expected, opened with a gap-down on concerns of gradual withdrawal of US bond program. The FTSE 100 was down 1.66 per cent, the CAC 40 was 2.34 per cent lower and the DAX declined 1.94 per cent. 

Tourism Finance Corporation rises on plans to seek banking licence

 Tourism Finance Corporation of India has rallied 10% to Rs 24.65 in otherwise weak market after the public sector financial institutional said that it is submitting application for securing a bank licence after its board approved the same.

“In terms of the approval by the board of directors, is submitting application with Reserve Bank of India (RBI) for banking licence” Tourism Finance Corporation of India said in a regulatory filing.

The company is promoted by a clutch of public sector institutions, including IFCI, SBI and Life Insurance Corporation of India.

The stock opened at Rs 24.75 on NSE and has seen a combined 205,897 shares changing hands on the counter in early morning deal son NSE and BSE.

Falling rupee hurts debt market

The falling rupee might continue to keep foreign investors away from Indian debt in the near future. In the past month, these investors sold debt of Rs 18,345 crore ($3.19 billion) and the trend is likely to continue until the rupee shows stability. It has plunged 7.1 per cent in the past month and is near its all-time (intra-day) low of Rs 60.06.

As compared to debt, equities have witnessed lower selling pressure. Foreign investors have sold equity of only Rs 1,374 crore in June. Global uncertainties have seen them taking a breather from buying Indian equities lately and lack of buying from domestic institutions has resulted in lacklustre markets. Foriegn institutional investors (FIIs) are said to be taking a wait and watch approach, looking for cues from the Fed's meeting tomorrow.    

But it's the redemptions in the debt segment that has the government worried. Bond experts say the biggest factor which has driven away foreign investors has been the volatile rupee. The cost of holding domestic bonds has increased, as foreign investors pay more towards higher hedging due to the rising foreign exchange risk. Foreign investors also see payouts from their Indian domestic holdings shrink when the rupee falls.

Indian debt yields are higher than in other emerging markets but the high returns might not be attractive enough against a falling rupee. Says Kaustubh Kulkarni, head of local currency debt, Standard Chartered India: “The current market dislocation is temporary and is happening due to volatility in the forex market. The rupee movement can significantly dent a bond investor's profit.”

Emerging market bonds have seen sharp redemptions of about $4.5 billion in the past month as investors worry the liquidity provided by the US Fed through its quantitative easing could taper off. Treasury yields in the US have increased, sparking a further exodus from emerging markets.  The difference in yields between the US 10-year Treasury and the Indian 10-year G-sec has reduced from 5.46 per cent to 5.09 per cent in the past month.

This has led to foreign investors rebalancing their debt portfolios towards developed markets. They were also sitting on large bond gains due to the cut in interest rates in domestic markets. Says Kulkarni: “Foreign investors had made a decent amount of profit on the corporate bond front and this is why they rebalanced. It's a relative value play that bond investors are looking at, after seeing forward yields and local bond yields.”

India's debt market share is less than five per cent of emerging markets’ debt; the impact of selling Indian debt in the local market has hardly affected yields.

Shares seen opening lower on Fed statement

Indian stocks are likely to open lower tracking weak global cues.  

Benchmark US share indices ended 1 per cent lower on Wednesday after the Fed said that it would start curtailing its monetary stimulus measures if the economy  continues to recover.

Japan’s  Nikkei was trading lower on Thursday tracking overnight losses on Wall Street after the Fed suggested that it would tone down its stimulus . The Nikkei was down 0.9 per cent while Straits Times was down 1.4 per cent and Kospi Composite eased 1.3 per cent.

At 8:10 hrs Indian Standard Time the SGX Nifty was down 70 points at 5,745. Meanwhile, investors are eyeing China factory data to be released later today.

According to technical experts, the 20-DMA is at 5,918, while the 50-DMA is at 5,914. One should wait for a clear breakout from the consolidation range of 5,740-5,870 before taking a fresh position. Today, the Nifty is likely to seek support around 5,805-5,790, while face resistance around 5,840-5,855..

Eurocopter and Ramco sign partnership agreement to offer cloud-based maintenance information systems for helicopters.

The board of S Mobility has approved buy back through open market purchase through Stock Exchange mechanism at a price not exceeding Rs. 75/- per share for an aggregate amount not exceeding Rs. 60 crores.

Tata Steel has signed a 5-year contract with Safran Group to supply them aerospace steels.

Cadila Healthcare’s US arm has lost a patent infringement battle after a US court ruled in favour of Japan’s Takeda Pharma for Cadila’s  proposed generic gastric relief drug.

Wipro is understood to have bagged a large IT outsourcing five year contract worth around $500 million from Citigroup.

Telecom shares hit 52-week highs, Nifty ends in Green.

Shares of telecom companies are trading higher for the third straight day with Reliance Communications and Idea Cellular hitting 52-week highs after the Telecom Regulatory Authority of India (TRAI) reduces ceilings for national roaming calls and SMS.

The sector regulator also permitted flexibility to telecom service providers to customise tariffs for national roaming subscribers via Special Tariff Vouchers (STVs) and Combo Vouchers.

Analyst at Edelweiss Securities believes that this announcement as a positive as earlier TRAI had proposed abolition of national roaming charges in view of its intent of moving towards One Nation-Free Roaming.

Among the individual stocks, Reliance Communications made a high of Rs.130.10. The stock has rallied 20% in past three trading sessions compared to a 0.19% drop in benchmark Sensex.

Idea Cellular made gave a high of Rs.150.65, extending its 4.4% rally in past two days.

Bharti Airtel and Tata Teleservices (Maharahastra) were trading higher in the range of 1-3%.
Nifty closed at 5822.25 up by 8.65%.
 Hindalco, SesaGoa, Ambuja Cement, Jindal steel,Tatasteel were among the top gainers.

Tata Coffee commissions new instant coffee plant at Theni

 Tata coffee Limited today commissioned its premium coffee extraction plant at Instant Coffee manufacturing facility at Theni in Tamil Nadu. The new extraction plant, set up with an investment of Rs 80 crore, will help Tata Coffee position its Freeze dried coffee product at premium levels and increase its overall capacity by 30%.

Tata Coffee’s Instant Coffee Division is located 170 kms from Tuticorin port. This facility is a 100% EOU (Export Oriented Unit) with an installed capacity of 4,000 tons per annum. The plant produces and exports spray dried, agglomerated and freeze dried instant coffee. The new extraction plant will add 2,000 tonnes to the existing capacity.
With this, the installed capacity of Tata Coffee’s instant coffee production has gone up to 8,500 tonnes per annum. The company exports over 90% of its instant coffee to Russia, SE Asia, Korea, Japan and Central Europe among other markets.

Freeze dried coffee retains aroma better and gives excellent flavor, colour and appearance to the coffee. The company has also installed a fully automated packaging unit and supplies its instant coffee to several private labels in export markets.

Tata Coffee’s other instant coffee manufacturing plant is located in Hyderabad. The company imports green coffee from around the world and processes at these two plants.

Benign US Inflation Raised Hopes for Longer QE

The focus today is the FOMC meeting and the post-meeting press conference. Wall Street soared as weaker than expected inflation data should give the Fed more room to further stimulus. The DJIA and the S&P 500 indices rose +0.91% and +0.78% respectively. ECB President Draghi stated that the central bank is open-minded on non-standard measures. In the commodity sector, the front-month contract for WTI crude oil price added +0.69% while the Brent crude contract gained +0.52%. Gold slipped further with the benchmark Comex contract dropped to as low as 1360.2, a level not seen on May 23, before ending the day at 1366.9, down -1.17%.

Fed Chairman Ben Bernanke signaled at the Congress' Joint Economic Committee in May that the central bank "could take a step down in the next two meetings" if economic data warrants. His comments resulted in turbulent market reaction although later watered down by other policymakers. The key economic data the Fed is watching are mostly employment and inflation. The May's employment report showed that US payrolls increased +175K, up from the addition of +149K in the prior month. The jobless rate climbed modestly higher to 7.6%. Inflation has remained benign. Headline CPI in May rose +0.1%, following 2 consecutive months of contraction in April and March. On annual basis, inflation rose +1.4% from +1.1% in April. Core CPI stayed unchanged at +1.7% during the month. The Fed would only consider tapering when the number of payrolls reaches an average monthly rate of at least 175K while core inflation stopped moderating further.

Glenmark Generics receives final ANDA approval for Riluzole Tablets, 50mg

             Glenmark Generics Inc., USA the subsidiary of Glenmark Generics Limited has been granted final abbreviated new drug approval (ANDA) from the United States Food and Drug Administration (U.S. FDA) for Riluzole Tablets, 50mg. The Company will commence shipping immediately. Riluzole is indicated for the treatment of amyotrophic lateral sclerosis. Based on IMS Health sales data for the 12 month period ending March 2013, Riluzole garnered sales of USD 64 million.Glenmark’s current portfolio consists of 86 products authorized for distribution in the U.S. marketplace and 52 ANDA’s pending approval with the U.S. FDA. In addition to these internal filings, GGI continues to identify and explore external development partnerships to supplement and accelerate the growth of the existing pipeline and portfolio. 

            Glenmark Generics Limited (GGL) is a subsidiary of Glenmark Pharmaceuticals Limited (Glenmark) and aims to be a global integrated Generic and API leader. GGL has an established presence in North America and developing an EU presence. It primarily sells its FDF products in the United States ("US") and the European Union ("EU"), as well as its oncology FDF products in South America. The Company supplies APIs to customers in approximately 80 countries, including the US, various countries in the EU, South America and India.

Gujarat annual Plan fixed at Rs 59,000 cr

After Andhra Pradesh, Gujarat has raised the issue of pricing and availability of coal and natural gas in a meeting with the Planning Commission. The annual plan for the Gujarat has been fixed at Rs 59,000 crore, higher by 15 per cent from the previous year.

GAS, COAL PRICING

According to sources, Gujarat Chief Minister Narendra Modi, in his meeting with Deputy Chairman of the Planning Commission, Montek Singh Ahluwalia, asked why State utilities of Gujarat have to pay more for the gas and coal produced in the State.

Modi also point out that the Gujarat units are given priority in the allocation of these locally produced fuels. But, ironically, units from outside the State get fuel not only at a cheaper price, but also on priority. Montek is understood to have said that the Planning Commission will take up these issues with the concerned departments. At the same time, he is also believed to have said that price revision of gas and coal can provide a solution to this issue.

After the meeting, Modi announced that Planning Commission has approved Rs 59,000 crore plan for Gujarat, compared to the Rs 58,500 crore sought by the State. However, he sparred with the Centre over social sector development in the State, as he countered the Planning Commission’s assessment that lot more needs to be done.

In the presence of Modi, Ahluwalia said Gujarat needs to do more in social sectors. “There was a lot of discussion on the social sector. I think generally it has been our view that Gujarat needs, in order to bring its social sector performance up to the economic size, to have some special attention to this area,” he remarked. When his turn came, the Gujarat Chief Minister retorted back saying the State spends 42 per cent of its budget on social sector with a moto of “Sabka Saath, Sabka Vikas.”

Bharti Airtel’s arm enters into tie-up with J&K Bank

Bharti Airtel’s subsidiary - Airtel M Commerce Services (AMSL), has entered into a tie-up with Jammu and Kashmir Bank to offer ‘airtel money’ services through the bank’s 800 Khidmat Centres across the state. Through airtel money, the users can load cash on their mobile devices and spend it to pay utility bills, recharge mobile phones, shop at merchant outlets and transact online.

Besides, this alliance marks a unique joint commitment by both the companies towards taking the power of ‘airtel money’ to the masses and further promotes the nation’s financial inclusion agenda.

J&K Bank has taken the Khidmat Centres e-governance project to make information and knowledge reaches all corners of the state as well as to ensure growth for both urban and rural sections of the society.

Increased oil, coal output and restraining gold consumption can contain CAD: FM

In order to  increase production and contain the current account deficit (CAD), Finance Minister P Chidambaram said, the country should get its policies and priorities right as long-term measures and the only way to contain CAD is to increase the domestic production of oil & coal and restrain the consumption of gold.

Chidambaram said the main reason for India's large CAD is that the country has huge dependence on import of certain items like oil, coal and gold. Touching a record high of 6.7% of GDP in the third quarter of 2012-13, India’s CAD is likely to be around 5% in the 2012-13 fiscal. Further, high CAD is also impacting the domestic currency, which recently fell to its lifetime low level of over 58.90 against dollar.      However, as per the apex bank - RBI, India can sustain CAD of around 2.5%.

However, finance minister is of view that India continues to remain a desired destination for FDI and FII, despite recession in major economies. By adding further he said, in spite all probability the government was able to finance the CAD and also added around $3 billion to the forex reserves in 2012-13 and expressed confidence that in 2013-14 also CAD will be financed without dipping into reserves.

Gold could rule flat, pausing for US Fed meet.

Gold prices on domestic and futures market are likely to rule flat on Tuesday as the market looks for direction from a key meeting of the US Federal Reserve. But investors continue to be bearish, further paring their holdings in electronic formats on gold exchange-traded funds.

The US Federal Reserve meets on Tuesday with speculation rife of an imminent paring of pumping cash into the economy. The US Fed buys treasury and other bonds worth $85 billion every month. The speculation has already resulted in the dollar gaining. The movement of the rupee against the Greenback will also have a say on how gold behaves since a weak rupee results in commodities such as gold, crude oil and vegetable oils turning costlier.

In early Asian trade in Singapore, spot gold ruled at $1,384.72 an ounce, while gold futures maturing in August quoted at $1,384.
In the domestic market on Monday, gold for Jewellery (99.5% purity) slipped to Rs 27,840 for 10 gm and pure gold (99.9% purity) to Rs 27, 985.

On MCX, gold August contracts could range between Rs 27,800 and Rs 27,900.
Meanwhile, holdings in the SPDR Gold Trust, the biggest gold-backed exchange-traded product, dropped to 1,003.17 tonnes on Monday, the lowest in 52 months.

Crude Oil

Fears that stockpiles in the US could be lower are likely to drive crude oil up in almost all markets on Tuesday.

It was reflected in early Asian trade where Brent crude for delivery in August was up at $105.59 a barrel, while Western Texas Intermediate crude July contracts rose to $97.84 a barrel.

Oils and Oil-seeds

The oils and oilseeds complex will head lower despite Malaysia reporting higher exports. This is because the weather in the US is conducive to planting more soyabean, while Indian monsoon’s progress is seen positive for soyabean and other oilseeds.

Chicago Board of Trade soyabean for delivery in November quoted at $12.90 a bushel, while crude palm oil in Bursa Malaysia Derivatives Exchange to be delivered in August rose to 2,475 ringgit ($784.5) a tonne in early trade.

Grains complex

Though wheat and corn (industrial maize) slipped last night on favourable weather for the US crop, in early trade CBOT wheat for delivery in September rose to $6.85 a bushel, while corn for delivery in December quoted at $5.40 a bushel.

Rubber

With Thailand, Indonesia and Malaysia, the top three rubber producing nations, not able to decide on curbing exports, rubber is headed lower on fears of supply glut.

On the Tokyo Commodity Exchange, rubber for delivery in November fell to 235 yen or Rs 144 a kg.

Nikkei turns down as market wary ahead of Fed outcome.

Japan's Nikkei average reversed early gains on Tuesday, underscoring the volatility that has roiled the market lately, as investors awaited the outcome of a Federal Reserve meeting for clues on whether it will continue to support the US economy.
 By the midday break, the Nikkei slipped 0.7% to 12,941.80 after trading as high as 13,139.48. It climbed 2.7% on Monday, lifting the index out of a bear market.
 Many investors have been cutting their long Japanese equities and short yen positions on concerns that the Fed will scale back its stimulus this year and after the Nikkei had rallied more than 80 % from mid-November to its 5-1/2 year peak hit on May 23. Since then, trading in Japanese equities has been extremely volatile.

Disappointment over a growth strategy unveiled by the Japanese government recently and worries over slowing growth in China have also contributed to the market tumult.

Underscoring the volatility, since May 23 the Nikkei has had 15 sessions where intraday swings exceeded 2.5%, compared with 16 such trading days for the year up to May 22 and four such days in the whole of 2012. The U.S. S&P 500 only has had one such trading day in 2013, and the Euro STOXX 50 index has 11.

WABAG BAGS INR 262 CRORE ORDER FROM NEPAL.

 VA TECH

WABAG LIMITED, a leading Indian MNC, in a joint venture with Pratibha Industries Limited has won an INR 262 crore order from Melamchi Water Supply Development Board, Nepal. The scope of work comprises
construction of Water Treatment Plant at Sundarijal, Nepal which will
have an initial capacity of 85 MlD and will be designed to be expanded to 170 MlD, and to 510 MLD
at a later stage. The water treatment plant at Sundarijal is part of the Melamchi Water Supply
Project, under the auspices of the Melamchi Water Supply Development Board (MWSDB). The
project has been funded by the Japan International Cooperation Agency (JICA).This Project will treat
water from the Melamchi River and discharge the treated water through pipeline upto battery limits.

  The WABAG Group represents a leading multinational player with a workforce of over 1,500 and has
companies and offices in more than 20 countries. It disposes over unique technological know-how,
based on innovative, patented technologies and long-term experience.

Sensex up 139 points,Capital goods, healthcare stocks major gainers.

Though RBI Governor D. Subbarao played safe keeping the CRR and repo rate unchanged, the stock market took the shock in its chin as it was more or less anticipated.

The Reserve Bank of India, in its mid-quarter monetary policy review, has kept the repo rate unchanged at 7.25 per cent and cash reserve ratio at 4 per cent. It has also left the reverse repo rate unchanged at 6.25 per cent.

At 1.25 p.m., the 30-share BSE index Sensex was up 82 points (0.43 per cent) at 19,259.93 and the 50-share NSE index Nifty was up 25.4 points (0.44 per cent) at 5,833.80.
On the BSE, capital goods and healthcare stocks were the major gainers and were up 1.07 per cent and 0.86 per cent, respectively, followed by consumer durables 0.84 per cent and auto 0.81 per cent.

On the other hand, metal and PSU stocks lost investors' support and were down by 0.16 per cent and 0.12 per cent, respectively.

Among 30-share Sensex, M&M, Sun Pharma, Bharti Airtel, HDFC and BHEL were the top five gainers, while the top five losers were Tata Motors, Hindalco, Sterlite, Dr Reddy's and TCS.

No change Policy....RBI keeps the rates unchanged.

Reserve Bank of India (RBI) keep the cash reserve ratio (CRR) of scheduled banks unchanged at 4.0
per cent of their net demand and time liabilities; and
 keep the policy repo rate under the liquidity adjustment facility (LAF)  unchanged at 7.25 per cent.
 Consequently, the reverse repo rate under the LAF will remain unchanged at  6.25 per cent, and the marginal standing facility (MSF) rate and the Bank Rate at 8.25 per cent.

Nifty slips 33 points down trading at 5775, Sensex losses 80 points.

Points considered in Policy:
Global economic activity has slowed and risks remain elevated, most recently on account of uncertainty over policies of systemic central banks. On the domestic front, macroeconomic conditions remain weak, hamstrung by infrastructure bottlenecks, supply constraints, lacklustre domestic demand and subdued investment sentiment. Inflation has moderated as projected. However, upside pressures on the way forward from the pass-through of rupee depreciation, recent increases in administered prices and persisting imbalances, especially relating to food, pose risks of second-round effects.

Global growth has been patchy and uneven. Among advanced economies (AEs), during Q1 of 2013, growth in US and Japan improved while that in the euro area contracted. Growth in most emerging and developing economies (EDEs) has been relatively resilient, although in some large emerging economies, sluggish external demand and stalled domestic investment are dragging down economic  activity. Inflation has been easing in the AEs due to weak demand conditions.
EDEs, however, present a mixed picture: inflation remains elevated in the BRICS except China. Commodity prices, other than the price of crude, have generally softened in recent months.

Eye on Mahindra & Mahindra

Shares of Mahindra Forgings Ltd and Mahindra Composites Ltd may continue to trade with positive momentum. The promoter-Mahindra Group-announced a share swap under which it will hand control of its domestic components business to the Spanish company. The Spanish company announced an open offer, which is at a premium to Friday’s closing price of the target companies.
Mahindra & Mahindra is an Indian automobile manufacturing corporation,It is one of the largest vehicle manufacturers  by production in India.

MNM trading at Rs.968, opens at Rs.961.20 up by 2.29% from Friday's closing Rs.947.45,
Mahforg trading at Rs.69.25 up by 3.66%  from Friday's closing Rs.66.85,
Mahincomp is locked under upper circuit of  Rs.34.45.

Central banks could hold sway over markets

Actions of two central banks could determine the direction of Indian stocks in the week ahead. While the Reserve Bank of India (RBI) decision on policy rates is likely to set the tone for domestic stocks this week, the outcome of the US Fed’s two-day meet ending Wednesday — which could give some clarity on its monetary policy outlook — could have wider implications on  global financial markets.

   Hopes of a policy-rate or repo rate-cut by RBI have diminished following the recent decline in the rupee against the dollar. So, if the Indian central bank keeps the repo rate (at which it lends to banks) intact, markets would not be disappointed, said fund managers.

 After RBI’s meeting, investors will closely watch the US Federal Open Market Committee meeting. If Fed chairman Ben Bernanke signals that the US central bank might cut down its bond buying programme known as Quantitative Easing 3 (QE3), it could weigh down sentiment in emerging market equities including India’s. The liquidity from QE3 has made its way to equity and bond markets worldwide.

       Investors, however, think RBI might cut the cash reserve ratio (CRR) — the minimum amount banks need to hold with the central bank, to ease liquidity.

“A CRR cut of 25 bps is what some quarters of the market are looking forward to,.“With the declining rupee situation, high current account deficit numbers, markets are not expecting a repo rate cut.”

Gold futures trade lower on global cues

Gold futures showed a negative trade on MCX as speculators offloaded their positions driven by weak trend in domestic market. Further, as investors sold off worrying about an early end to the Federal Reserve's massive bond-buying stimulus on the back of strong U.S. data, put pressure on the Gold futures. However, the prices found some support from weakness in the US dollar, as dollar-priced commodities became less expensive to investors holding other currencies.

The contract for August delivery was trading at Rs 27681.00/10 GRMS, down by 0.31% or Rs 85.00 from its previous closing of Rs 27766.00/10 GRMS. The open interest of the contract stood at 14347 lots

The contract for October delivery was trading at Rs 27868.00 /10 GRMS, down by 0.32% or Rs 89.00 from its previous closing of Rs 27957.00/10 GRMS. The open interest of the contract stood at 1344 lots on MCX.

Bond yields ease tracing lower than expected May inflation data

Pre WPI data Scenario:

Bond yields eased in early deals tracing a stronger rupee and higher US treasuries. However, yields will likely be biased up as the Reserve Bank of India is unlikely to cut rates as the recent sharp rupee fall has sparked renewed concern about the current account deficit. Meanwhile, the yields gyrated in range-bound for today’s trading session as dealers awaited headline inflation, which probably held near the central bank's comfort level of 5 per cent last month.

On the global front, US Treasuries were firm in Asia on Friday as traders took the view that any end to the Fed's bond buying programme will be gradual and that no rates hikes were imminent. Meanwhile, Brent futures slipped on Friday from near $105 a barrel with ample US inventories and a poor demand outlook weighing on prices, after bouncing more than 3 percent in the last two sessions off this week's low.

Back home, the yields on 10-year 7.16% - 2013 bonds were trading 1 basis point lower to 7.32% from its previous close of 7.33% on Thursday.

The benchmark five-year interest rate swaps were trading 1 basis point lower at 7.00% from its previous close of 7.01% on Thursday.

Post WPI data Scenario:

In a sharp reaction to the surprisingly lower inflation figures for May, bond yields edged lower on enlarged rate cuts hopes. Lower industrial growth and inflation data, strengthens the case for rate cut in RBI’s monetary policy slated next week.

Providing RBI the much needed room for slashing rates, India's main inflation gauge, surprisingly slowed down further to 4.7% for the month of May, as compared to 4.89% (Provisional) for the previous month of April, which was its lowest level since 2009.

The yields on 10-year 7.16% - 2013 bonds were trading 1 basis point lower to 7.32% from its previous close of 7.33% on Thursday.

May WPI softens further to 4.7% v/s 4.89% in April; March inflation revised downwards to 5.65%

In a big surprise, the annual rate of inflation, based on monthly WPI, slowed down further to 4.70% (Provisional) for the month of May, 2013 (over May, 2012) as compared to 4.89% (Provisional) for the previous month and 7.55% during the corresponding month of the previous year. Build up inflation in the financial year so far, was 0.88% compared to a build-up of 1.80% in the corresponding period of the previous year. However in a pleasant surprise, March inflation figures were revised downward to 5.65% from 5.96%.

Manufactured products, which carry weight of 64.97% in the index, rose by 0.3% to 149.1 (Provisional) from 148.7 (Provisional) for the previous month. The index for 'Food Products' group rose by 0.8% to 167.1 (Provisional) from 165.8 (Provisional) for the previous month. The index of Fuel & Power, which has weight of 14.91%, declined by 1.3% to 192.0 (Provisional) from 194.6 (Provisional) for the previous month due to higher price of electricity (13%) as price of other items such as LPG (12%), coal (10%), aviation turbine fuel (6%) and petrol (5%) declined.

The index of Primary Articles, having weight of 20.12% too rose by 0.6% to 229.3 (Provisional) from 228.0 (Provisional) for the previous month. The index for 'Non-Food Articles' group declined by 0.6% to 208.5 (Provisional) from 209.7 (Provisional) for the previous month, while the index for 'Minerals' group declined by 2.4% to 346.5 (Provisional) from 355.0 (Provisional) for the previous month.

However, it remains to be noted the widening divergence between WPI and CPI remains the matter of concern. Annual rate of inflation, based on the consumer prices index (CPI), declining for third straight month grew above the expectation of sub 9% figure at 9.31% in May, as against 9.39% in April.

Meanwhile, the sharp downtick in March inflation figures, core wholesale price index, or inflation that excludes volatile food and fuel prices, which is estimated to have risen by 2.4% from a year earlier, easing from an annual 2.77% rise in April, also provides the central bank with some room to cut policy rates by 25 basis points in its Policy review on June 17. The Reserve Bank of India (RBI), so far, has obliged the street with rate cuts for three times, with the latest being the one on May 3. Drawing comfort from 3-year low inflation, RBI, in its ‘Monetary Policy Statement 2013-14’, reduced repo rate by 25 basis points from 7.5% to 7.25% with immediate effect, its lowest since May 2011.

CAD likely to remain at 4% in Q4 FY13: Raghuram Rajan

As per the Chief Economic Advisor Raghuram Rajan, the country’s Current Account Deficit (CAD) is likely to be around 4 percent of the gross domestic product (GDP) for the fourth quarter of FY13. The CAD, which represents the difference between the export and import of goods, services and transfers, widened to a record high of 6.7 percent in the third quarter of FY13 on the back of rising oil and gold imports and is expected to be around 5 percent for the previous financial year. Meanwhile, the high CAD is impacting the rupee value, which has hit 58.50/$ level recently.

   India’s gold imports touched 162 tonnes in May, while in April, it were around 100-120 tonnes, higher than the average monthly import level of 70-80 tonnes. Further, the recently released World Gold Council (WGC) report highlighted that India’s gold imports in April-June quarter of 2013 may increase by 200 percent y-o-y to around 300-400 tonnes, which would be almost half the imports of whole of 2012. However, to curb the gold import, the government has been taking steps regularly, including raising import duty. Further, the RBI too had put in place regulations under which gold can only be imported on a consignment basis to meet the genuine demands of Jewellery exporters. It has also increased margin money to 100 Percent.