Sensex crashes 601 points on heavy FII selling

Indian markets nosedived over 3.2 per cent at the pre-close session on heavy selling by FIIs as the rupee tumbled to a life-time low of 66.06 amid concerns that the Food Security Bill would raise the subsidy burden.

At 2.57 p.m., the 30-share BSE index Sensex was down 601.17 points (3.24 per cent) at 17,956.96 and the 50-share NSE index Nifty was down 194.10 points (3.54 per cent) at 5,282.40.

Barring IT, all other BSE sectoral indices were trading in the red.

Among them, banking, capital goods, power and PSU indices plunged the most by 5.42 per cent, 4.79 per cent, 4.34 per cent and 3.8 per cent, respectively. On the other hand, IT index was up 0.23 per cent.

Among 30-share Sensex, Sesa Goa (1.64 per cent), Infosys (0.64 per cent), Dr Reddy's (0.6 per cent) and TCS (0.4 per cent) were the only gainers, while the major losers were HDFC (8.35 per cent), HDFC Bank (8.28 per cent), BHEL (8.2 per cent), Jindal Steel (6.03 per cent) and NTPC (5.86 per cent).

The S&P BSE Sensex slipped over 600 points in intra-day trade led by profit-booking in rate-sensitive stocks, metals and FMCG stocks.

The Nifty index too slipped over 3 per cent in intraday trade to mark its worst fall since August 16. The index is now trading below its crucial psychological level of 5,300.

According to brokers, foreign funds remained net sellers as the rupee hit a new record level of 65.94 against the dollar.

They said the passage of the Food Bill in Lok Sabha raised fears that the Government might face more subsidy burden, leading to widening of the current account deficit.

European and Asian stocks were down as US Secretary of State John Kerry said President Barack Obama will hold Syrian Government accountable for using chemical weapons.

But the US durable goods data, which is an indicator of a longer trend, fell for the first time in four months. This gave rise to hopes that the US Federal Reserve will continue its act of pumping $85 billion bond-buying programme to resurrect the economy.

Stoxx 50 fell 43.46 points or 1.54 per cent to 2,777.99, FTSE 100 shed 50.20 points or 0.77 per cent to 6,441.90 and DAX declined 127.17 points or 1.51 per cent to 8,307.98.

Japan's Nikkei fell 93.91 points or 0.69 per cent to 13,542.40, Hong Kong's Hang Seng shed 128.30 points or 0.58 per cent to 21,877.00 and Australia's S&P/ASX 200 was up 5.81 points or 0.11 per cent at 5,141.22.

Empee Distilleries ties up with United Spirits for manufacturing IMFL

Chennai based Empee Distilleries has entered into an agreement with Bangalore based United Spirits for manufacture of Indian Made Foreign Liquor (IMFL) for distribution in Karnataka. The agreement entered with United Spirits will initially be for a period of three years.

The manufacturing will be undertaken at its unit in Arabhikothanur Village, Kolar district, Karnataka and will improve the top line and Bottom line growth of the Company.

Empee Distilleries started over two decades ago in a small way in Chennai for manufacturing Indian made foreign liquor (IMFL); it has now expanded substantially with state-of-the-art manufacturing facilities not only in Tamil Nadu but also in Kerala, Karnataka and Andhra Pradesh.

Gujarat plant delayed due to slowdown: Maruti

The country's largest carmaker Maruti Suzuki India (MSI) today said it will miss the target of commissioning its Gujarat plant due to the ongoing slowdown in the Indian automobile market.

"It is unlikely that we would be able to commission the Gujarat plant even by the end of FY16. The slowdown in the auto sector is very acute," MSI Chairman Chairman R C Bhargava told reporters after the company's 32nd Annual General Meeting (AGM) here.

When asked by when the company would like to start work and commission the facility, he said the company is trying to access the sales projections and would accordingly decide.

Last year, Suzuki Motor Corp Chairman Osamu Suzuki had visited the site in Gujarat where MSI plans to set up its third plant at an investment of Rs 4,000 crore.

As per the original plans, the company had planned to roll out 2.5 lakh cars annually by 2015-16 from the Gujarat plant. MSI is looking at a total annual capacity of 20 lakh units once the Gujarat plant goes on stream.

MSI at present has a total installed annual capacity of about 15 lakh units, which will go up to 17.5 lakh units by September this year when its third unit at Manesar goes on stream.

Bhargava said even the company's vendors have not started work at the site in Gujarat so far.

"Vendors have not started work at the Gujarat plant because we have not started our work there. They will start only when they know the timeline when we will start and complete our work there. There work and ours go side by side and they do not want their capital lying idle" he added.

Commenting on the current economic scenario, Bhargava said he expects the ongoing fiscal to be another tough year.

"All the indications are that the GDP will grow below 5 per cent, the rupee is at an all time low, we do not see any change in the fundamentals, the situation will remain as difficult as before" he said.

He added that the only positive factor so far in the year has been the excellent monsoon season and hoped that the upcoming festival season would also be able to spur some growth.

"Elections are also coming up and during elections there is a spurt in sales but these are only temporary, so the real thing is that we need to see what happens after election and it would depend on what kind of government comes into power, whether it can bring reforms to spur growth" Bhargava said.

Nifty breaches 5,300; Rupee falls past 66/USD

The rupee weakened against the dollar in late trades on Tuesday due to month-end dollar demand, said currency dealers.

Markets slumped further in the afternon session this Tuesday on back of Rupee's free-fall amid growing concerns over the widening current account deficit after Congress-led UPA government approved Food Security Bill.

The rupee weakened against the dollar in late trades on Tuesday due to month-end dollar demand, said currency dealers.

The currency fell to 66 per US dollar compared with Monday's close of Rs 64.31 on the Interbank Foreign Exchange .

At 1:55PM, the 30-share Sensex was down 570 points at 17,988 and the 50-share Nifty slipped 181 points at 5,296.

Rupee breaches 66/dollar

Benchmark 10-year bond yield was trading up 13 basis points on the day at 8.47%.

The rupee breached the 66 per dollar mark on Tuesday to hit a record low, as a steep decline in the domestic share market following the approval of the food security bill in the lower house of Parliament hurt sentiment.

It had recouped some losses after the RBI sold dollars via state-run banks, starting at Rs 65.90 levels. But, the intervention could not prevent it from breaching the 66 level.

The currency hit a new low of 66.0750/dollar.

The benchmark 10-year bond yield was trading up 13 basis points on the day at 8.47%.

CCI sets 60- day deadline to clear 36 mega infrastructure projects

In a move to boost the infrastructure development in the country and to enhance business sentiment in a slowing economy, the Cabinet Committee on Investment (CCI) headed by Prime Minister Manmohan Singh, has set a 60- day deadline for ministries to clear 36 mega infrastructure projects including 28 power plants that were stuck due to delay in sanctions.

The government had set up the CCI, to clear the bottlenecks holding back big infrastructure projects. Recently, the CCI cleared the proposal of setting up two hydro power projects in Arunachal Pradesh. The panel has so far cleared 171 projects worth Rs 1.69 lakh crore.

Further, in order to speed up the implementation of infrastructure projects, the government has also set up special cell, special project monitoring group, which is meant to supplement CCI's efforts and has been tasked with monitoring the progress of projects cleared earlier by CCI. 

Further, a web-based information system has also been put in place wherein firms can provide details of their project as well as the issues that are restraining smooth implementation of projects. Meanwhile, for the 12th Five Year Plan (2012-17), the government has set the $1-trillion investment target for the infrastructure sector.

Gold price hits record high of Rs. 32,526/10gm

Gold price hit its all-time high of Rs 32,526 per 10 grams Tuesday on sustained buying as rupee plunged to its new record low of 66 against the US dollar.

At the Multi Commodity Exchange (MCX), gold for delivery in October gained further by Rs 650 to Rs 32,526 per 10 grams as against its previous close of Rs 31,876.

On Monday, gold traders kept to the sidelines waiting resumption of imports, even as prices hit their highest level in more than nine months.

India is likely to re-start imports this week after the Reserve Bank of India (RBI) clarified a new rule that brought the flow of gold into the world's top gold consumer to a stand-still at the end of July.

CRISIL to sell 49% stake in IISL for Rs 100 crore

CRISIL will be selling its equity stake in India Index Services & Products (IISL), comprising 6, 37,000 equity shares of face value Rs. 10 each and representing 49% of the total equity share capital of IISL, its Joint Venture with National Stock Exchange of India (NSE). The above stake will be sold to NSE Strategic Investment Corporation for a total consideration of Rs 100 crore.

CRISIL is a global analytical company providing ratings, research, and risk and policy advisory services. The company’s majority shareholder is Standard and Poor’s (S&P). S&P, a part of The McGraw-Hill Companies, is the world’s foremost provider of credit ratings.

SREI Infrastructure Finance raises Benchmark Rate by 50 bps to 18.00% p.a.

SREI Infrastructure Finance has hiked its benchmark rate by 50 basis points (bps), from 17.50% per annum to 18.00% per annum with effect from September 01, 2013. The company’s asset liability management committee after reviewing the cost of borrowing decided to increase its benchmark rate. It had last increased its SBR in September 2011 by 75 basis points.

SREI Infrastructure Finance’s businesses include infrastructure equipment leasing and finance, infrastructure project finance, advisory and development, insurance broking, venture capital, capital market and Sahaj e -Village.

Rupee breaches 65 a dollar mark a day after House passes food bill

The rupee weakened to 65 to the dollar in opening trade on Tuesday, not far from its record low of 65.56 reached last week, as the Lok Sabha cleared the food security bill that would cost about Rs. 1.3 lakh crore to the exchequer.

At 10.30 am the rupee was trading at 65.33 against a dollar, below its close of 64.30/31 on Monday.

The bill, which seeks to provide foodgrains at highly subsidised rates to an estimated 810 million people across the country, is a key part of the ruling UPA government's strategy to win a third term.

However, analysts say the new legislation, entailing massive government expenditure, will only widen deficit and fuel inflation.

India's benchmark 10-year bond yield dropped 4 basis points at open to 8.30% as the Reserve Bank of India announced an open market purchase of bonds but soon edged higher, tracking weakness in the rupee.

   The slide comes hours ahead of a crucial debate on the state of the Indian economy in Parliament on Tuesday.

In the wake of the rupee's depreciation and doubts over revenue increase targets, the government has repeatedly asserted it will meet the fiscal deficit target of 4.8%.

Global ratings agency Fitch on Monday had said India's fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet the fiscal deficit target.

A strengthening dollar overseas and late weakness in local stocks also put pressure on the rupee, a forex dealer said.

NALCO surges on the buzz of inking 5-yr fuel supply agreement with MCL

National Aluminium Company (NALCO), a Navratna PSU of Ministry of Mines, has reportedly signed a long term fuel supply agreement with Mahanadi Coalfield (MCL). As part of the pact, MCL will supply 47.16 lakh tonnes of coal to NALCO’s captive power plant at Angul and 873,324 tonnes of coal for its steam cum power generation plant, at Damanjodi.

The agreement, which is for a period of five years from 2013 to 2018, was signed on August 21, 2013.

The company’s total alumina sale during first quarter ended June 2013 stood at 2.83 lakh tonnes (LT) as against 2.53 LT in the first quarter of the previous fiscal. As regards metal sales, the company sold 0.85 LT in Q1 as against 1.02 LT in the corresponding period of previous year.

Indian exports' share declines to 17.3 percent of GDP in 2012-13

The share of exports in the country's gross domestic product (GDP) has declined marginally to 17.3 percent in 2012-13 from 17.6 percent in 2011-12. Commerce and Industry Minister Anand Sharma said that marginal decline in exports’ share is attributable to the ongoing global economic crisis, which led to contraction in international demand.

Commerce Minister said that economic slowdown in developed economies and sovereign debt crisis in Europe have adversely impacted demand for our various sectors’ exports including exports of engineering goods, gems and jewellery, textiles, electronic goods and iron ore among others. By adding further, Anand Sharma added that except 2012-13, the share of exports in the GDP of the country has shown a consistent rise and increased to 17.6 percent in 2011-12 from 15.7 percent recorded in 2010-11.

In the previous fiscal, Indian exports declined by 1.76% to $300.6 billion which were the first ever decline since 2009-10. Presently, there is a need to boost exports in order to contain country’s high current account deficit (CAD), which widened to a record high of 4.8 percent of GDP in the previous fiscal. Further, high CAD also remained main factor behind the fall in domestic currency value, which recently depreciated to a record high of over 65 per dollar. Meanwhile, the government is doing all efforts to boost country’s export and has recently announced a slew of measures including sops for Special Economic Zones (SEZs) and extension of the popular EPCG scheme to all sectors to boost shipments.

REC set to open issue of tax-free bonds on August 30

State-run Rural Electrification Corporation (REC) is all set to open issue of tax-free bonds on August 30. With this issue, the company will garner Rs 3,500 crore and will use the issue proceeds for lending purposes.

The company will issue the bonds in three different tenures- 10-year, 15-year and 20-year. The tax-free coupon rate on these bonds will be at 8.01%, 8.46% and 8.37% for 10-year, 15-year and 20-year respectively. Meanwhile, retail investors will be offered 8.26%, 8.71% and 8.62% respectively.

The said issue will have a reservation of 40% for retail investors, while 20% each for high-net-worth individuals (HNIs), corporates and qualified institutional buyers (QIBs).

The lead managers to the issue are ICICI Securities, A K Capital Services, Axis Capital and Edelweiss Financial Services.

Titagarh Wagons surges on cancelation of demerger plan

Titagarh Wagons is locked in upper circuit of 10% at Rs 99.40, in otherwise weak market, on reports that the company has scrap plans to demerge its coach manufacturing business into a new company, following sluggish order flow for wagons from Railways.

Wagon and railway coach-maker Titagarh Wagons has decided to scrap plans to restructure business which included separating the coach division, the PTI reports suggests quoting Umesh Choudhary, managing director of the company.

In November, the board of Titagarh Wagons approved demerger of rail coaches division into an existing subsidiary of Titagarh Wagons. The subsidiary was to allot 12 equity shares to the equity shareholders of Titagarh Wagons for every 100 shares held by them.

Asian stocks unsettled by Syria jitters; oil rises

Heightened geopolitical tensions coupled with uncertainty over whether the US Federal Reserve will begin to withdraw stimulus next month were likely to keep investors sidelined

 Asian stocks slipped on Tuesday, while Brent crude held near a five-month high after the United States signalled possible military action against the Syrian government over a suspected chemical weapons attack.

Heightened geopolitical tensions coupled with uncertainty over whether the US Federal Reserve will begin to withdraw stimulus next month were likely to keep investors sidelined, analysts said.

MSCI's broadest index of Asia-Pacific shares outside Japan dipped 0.4%, reversing Monday's rise. Tokyo's Nikkei fell 0.7%, while the safe-haven yen edged higher.

"There's some possibility of another volatile day if speculators decide to attack the market, as the volume is likely to remain very low," said Mitsushige Akino, chief fund manager at Ichiyoshi Asset Management.

"Most investors, I would say 90% of players, would prefer to wait and see today."

US Secretary of State John Kerry, in the most forceful reaction yet to last week's gas attack outside Damascus, said President Barack Obama "believes there must be accountability for those who would use the world's most heinous weapons against the world's most vulnerable people.

His comments saw US stocks end 0.4% lower in light volumes. The risk of supply disruption lifted Brent crude above $111 a barrel to a five-month high. It last traded up 0.4% at $111.10.

Major currencies mostly marked time, although the Mexican peso and Brazilian real came under fresh pressure.

Highlighting the turbulent times many emerging markets are enduring, Brazil's finance minister said the Fed has communicated its plans to reduce monetary stimulus "poorly", prompting some of the wild swings in the value of currencies and stocks in emerging market economies.

Among the major currencies, the dollar index was a tad softer at 81.326 as the euro firmed 0.1% to $1.3381. Against the yen, the greenback edged 0.3% lower to 98.17.

Investors bought gold following data showing a big drop in orders for US durable goods in yet another set of disappointing economic figures.

The data has raised some doubts over whether the Fed will next month start to dial down stimulus, which has kept US interest rates near record lows and increased the allure of hard assets.

Spot gold traded at $1,403 an ounce, having scaled an 11-week peak of $1,406.01 on Monday. It has now rallied more than $200 since the end of June when prices troughed at three-year lows.

Canara Bank to achieve 17-18% growth in total loan book this fiscal

Canara Bank, a leading nationalized bank is expected to achieve 17-18% growth in its total loan book this fiscal against the current national average of 16%. The bank had achieved credit growth of 16.4% in the previous fiscal, when the industry average was at 14.9%. Its agriculture, MSME sector and retail loan portfolio is expected to increase significantly, at around 35%. The lender is likely to achieve infrastructure loan growth beyond 10%, while corporate sector loans too may grow at a relatively slower pace at 12-15%.

On standalone basis, the bank has posted a rise of 2.17% in its net profit at Rs 792.07 crore for the quarter ended June 30, 2013 as compared to Rs 775.24 crore for the same quarter in the previous year. Total income has increased by 14.65% at Rs 10507.88 crore for quarter under review as compared to Rs 9165.47 crore for the quarter ended June 30, 2012.

NTPC’s 500 MW Unit-II of Vallur Thermal Power Project becomes operational

NTPC’s joint venture - NTECL’s 500 MW Unit-II of 1500 MW Vallur Thermal Power Project is declared for commercial operation with effect from August 25, 2013. With this the total commercial capacity of Vallur Thermal Power Project has become 1,000 MW and that of NTPC Group total capacity has become 40,184 MW. NTPC Tamil Nadu Energy Company (NTECL) is a joint venture (JV) between NTPC and TANGEDCO.

NTPC is the largest power generating company in the country. It has also diversified into hydro power, coal mining, power equipment manufacturing, oil & gas exploration, power trading & distribution.

Lok Sabha approves $20 billion Food Security Bill

The Lok Sabha approved a plan worth nearly $20 billion on Monday to provide cheap grain to the poor, a key part of the ruling Congress party's strategy to win re-election.
Under the plan, the government will sell subsidised wheat and rice to 67 percent of its population of 1.2 billion. India is home to a quarter of the world's hungry poor, according to United Nations data, despite being one of the biggest food producers and experiencing years of rapid economic growth.
The vote broke a long stalemate in parliament, potentially clearing the way for several reforms aimed at spurring the flagging economy which the government hopes to pass in an extended session that ends on September 6

Faced with an unruly parliament, Prime Minister Manmohan Singh's coalition government last month resorted to an executive order to implement the programme, which his Congress party hopes will help win it a third consecutive term in power. The next election is due by May.
The Rajya Sabha upper house must now approve the decree before it becomes law.

'NATIONAL SHAME'

In a foretaste of the battle for votes to come, the main opposition party says the welfare scheme, which expands an existing cheap food programme covering 218 million people, is still too narrow to tackle widespread malnutrition among India's millions of poor.
The house passed the bill only after nearly nine hours of debate and the inclusion of amendments that government sources could lead to an additional requirement of about 3 million tonnes of grain.
Singh said last year that the child malnutrition in India, where almost 50 percent of children are underweight, was a "national shame". Despite that, some critics have dubbed the new plan a waste of public money at a time when growth has been steadily slowing.
The main opposition Bharatiya Janata party (BJP), which already runs a successful food handout programme in Chhattisgarh state, voted for the bill. It had earlier criticised it for making food more expensive and failing to provide enough nutrition.

The BJP's likely candidate for prime minister, Narendra Modi, said in a letter to Singh on August 7 that the scheme would effectively reduce allowances for very poor families and make them spend more on food, because entitlements would be calculated per individual rather than per family.
He said families below the poverty line would now have to spend an extra 85 rupees per month to keep eating the same amount of rice and wheat.
The expanded subsidy is a pet project of Congress leader Sonia Gandhi, who led the party to victory in the last two elections on the back of populist programmes such as a rural jobs plan and a $12.5 billion farmer loan waiver passed just before the 2009 general election.
In a dramatic development, Gandhi, widely seen as the country's most powerful politician, had to be led out of parliament during the debate. She was admitted to a New Delhi hospital after complaining of chest pain, television channels said.

Lok Sabha clears food Bill

Questions raised on the programme's financing but almost all parties support

The Congress-led United Progressive Alliance (UPA) government on Monday succeeded in getting its ambitious food security Bill passed in the Lok Sabha by voice vote.

The Bill, which seeks to entitle 67 per cent of the country’s population — about 800 million people — to subsidised food, was passed after a six-hour debate in a late-evening sitting of the lower house. The Opposition, and even the Samajwadi Party (SP), which renders outside support to UPA, raised several questions — on future availability of food, financing of the ambitious programme and its long-term impact on farming practices in the country — but stopped short of opposing the Bill.

Food Minister K V Thomas said the food security programme, which would require 62 million tonnes of foodgrain a year, would entail a burden of Rs 1,30,000 crore on the exchequer. The Bill would have a one-year time period for implementation.

When the Bill was taken up in the Lok Sabha, Congress President Sonia Gandhi said it was a “historic opportunity” for all parties to rise above political differences and help wipe out hunger and malnutrition from the country.

The Bharatiya Janata Party (BJP), the main Opposition, called the Bill more of a “vote security” than food security. But it did not oppose it. UPA allies, including the Nationalist Congress Party (NCP), that were said to have reservations about the provisions of the Bill did not cite those explicitly.

The Janata Dal United (JD-U), which had expressed serious reservations two years ago, as it had differences with the Centre on how the poor were enumerated, did not offer any opposition, either, perhaps acknowledging the changed political realities. B Mahtab, a leader of the Biju Janata Dal (BJD), flagged availability issues, while the All India Anna Dravida Munnetra Kazhagam (AIADMK), opposing the Bill, said the Tamil Nadu government was already providing subsidised foodgrain to the state’s poor. The Bill would only impose a stiffer financial burden on the state, AIADMK said.

SP has on many occasions gone public with its reservations on the Bill. Its chief Mulayam Singh Yadav urged UPA to summon all state chief ministers and consult them before going ahead and implementing the food security programme.    

Thomas acknowledged it was not a “perfect legislation” and there would be loopholes in implementation that would need to be plugged. Assuring members that the “federal” system would be protected at all costs, he said “the success of the Bill will depend on how the Centre and states go hand in hand”.

Gandhi emphatically appealed to all parties to pass this crucial Bill, saying: “It’s time to send out a big message that India can take responsibility of ensuring food security for all Indians.”

Negating the naysayers who had expressed doubts on India having the resources and capability to implement the Bill, Gandhi stressed: “The question is not whether we have resources to implement food Bill; we have to mobilise resources anyhow.”

Acknowledging that there were leakages within the current public distribution system, she asked all states to strengthen it. She added that flaws in landmark schemes like the integrated child development services and mid-day meal — all part of the food security programme — need to be rectified.

She also used the occasion to recapitulate the list of rights UPA had given the country in its two terms — the right to information “sometimes to our disadvantage”, the National Rural Employment Guarantee Scheme, the right to education and the forest rights. The Food Security Bill was another “legal entitlement” to the people, she added. Later in the evening, even as voting on her pet legislation was on, Gandhi had to leave the House due to poor health. She was admitted to the All-India Institute of Medical Sciences.

BJP stalwart Murli Manohar Joshi, who opened the debate for the Opposition, said: “This is a vote security Bill, not food security Bill,” adding that there were flaws in the Bill that needed to be rectified. He asked: “What is adequate food? Is it going to be based on purchasing power, calorific value or nutrition?”