Q1 GDP disappoints at 4.4% vs 5.4%

PM today said GDP estimate at 5.5 for current fiscal was possible, fears of growth at 3% "unfounded"

First quarter Gross Domestic Product in FY14 stood at 4.4%.

C Rangarajan said today that going forward, "GDP numbers will impove".

Agriculture growth was recorded at 2.8% versus 2.9%. Rangarajan said, agriculture growth was expected to be better in the second half of the year owing to good monsoon season. Rangarajan pegged agriculture growth estimate at 4-5%.

Services sector grew by 6.6% versus 7.7% on year while the industrial sector only recorded 0.2% growth.

In the fourth quarter of 2012-13, the GDP had grown at 4.8% while in April-June period last year, GDP growth stood at 5.4%.

Manufacturing growth was recorded at -1.2% compared with -1% YoY in the numbers released today. However, Rangarajan also said that manufacturing growth was expected to pick up Q3 onwards.

The prime minister, today in Rajya Sabha, said that GDP estimate at 5.5% this fiscal was possible and that fears of numbers going down to 3% were ''totally unfounded".

Sentiments turned jittery in the markets intraday, after the Manmohan Singh said that the rupee's tumble is a "matter of concern" but is part of a needed adjustment due to India's large current account deficit.

Singh said that rupee depreciation will see upward pressure on inflation, but added that RBI will, however, work on containing it.

Moody's Analytics, the research and analysis wing of Moody’s had expected GDP growth for the first quarter to be at 4.5%. According to foreign brokerage Bank of America - Merrill Lynch (BoFA-ML), in the current economic situation, the first quarter economic growth was estimated at 4%.

Various analysts tracking the sector were also of the opinion that growth would remain subdued. CARE Ratings chief economist Madan Sabnavis had said that he expected the GDP growth at around 4.7%.

Soumya Kanti Ghosh, chief economic advisor at the State Bank of India expected the economy to grow below 5% level in the range of 4-7-4.8%.

Initial margin on gold futures raised to 5 percent

 The initial margin on gold futures was raised to 5 percent from 4 percent for domestic traders effective Monday, the market regulator said on Friday.

The Forward Markets Commission's (FMC) move comes after gold prices rose 18 percent to reach a record high earlier this week.

The FMC, which regulates the commodity futures market in India, also imposed an additional 5 percent margin on gold, silver and crude oil futures contracts from Monday.

The Multi Commodity Exchange, where most gold futures trading takes place in India, records a daily volume of 28.8 tonnes on an average.

Tata Consultancy Services trades in green on BSE

Tata Consultancy Services is currently trading at Rs. 2000.00, up by 53.85 points or 2.77% from its previous closing of Rs. 1946.15 on the BSE.

The scrip opened at Rs. 1940.10 and has touched a high and low of Rs. 2005.00 and Rs. 1930.50 respectively. So far 1, 91,000 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 1 has touched a 52 week high of Rs. 2,005.00 on 30-Aug-2013 and a 52 week low of Rs. 1,197.60 on 18-Dec-2012.

Last one week high and low of the scrip stood at Rs. 1969.00 and Rs. 1781.00 respectively. The current market cap of the company is Rs. 3, 91,444 crore.

The promoters holding in the company stood at 73.96% while Institutions and Non-Institutions held 21.57% and 4.47% respectively.

Tata Consultancy Services (TCS), a leading IT services, consulting, and business solutions organization, has declared that the Kolkata edition of TCS IT Wiz 2013 will be held on September 6 at the Science city - Grand Theatre in Kolkata. The event is open to all school students studying in class 8-12 including Pre University of Junior college students.

There is no entry fee. Each institution is allowed to send multiple teams of two-members each to participate. The TCS IT Wiz, the hunt for smart Tech Wizard will be held across 14 locations across the country - Ahmedabad, Bangalore, Bhubaneswar, Chennai, Coimbatore, Delhi, Hyderabad, Indore, Kochi, Kolkata, Lucknow, Mumbai, Nagpur and Pune. Entries have to be sent through the respective institutions on or before Sept 2 to TCS IT Wiz Coordinator.

The winners of the Tech Wizard from each of these 14 locations will contest for the 'Smart Tech Wizard 2013' title in the mega finals to be held in December.

JSPL tanks over 12% as government initiates inquiry

Jindal Steel & Power Ltd plunged a little over 12 per cent in trade on Friday, after media reports suggested that the government has initiated an enquiry against NaveenJindal-led company.

According to a PTI report, the company is allegedly selling coal from its captive blocks in Chhattisgarh.

At 12:30 p.m.; Jindal Steel & Power company recouped some of the losses and was trading 6.4 per cent lower at Rs 227.95. It has hit a low of Rs 236.05 and a high of Rs 246.50 in trade today.

"The coal ministry has formed an inter-ministerial committee headed by Advisor coal and comprising members from power and steel ministries to probe misuse of coal by JSPL from its blocks in Chhattisgarh," said the PTI report.

A top coal ministry official said the probe has been initiated after complaints from several sections of the society alleging illegal sale of coal in Chhattisgarh by the group.

Jindal Power & Steel Ltd has refuted the charges, said the PTI report.

"The coal from all our captive mines are used in respective end use plants. There is no diversion of any coal from any mine whatsoever. The allegations are completely baseless," the report added quoting company's director external affairs Manu Kapoor.

Sensex trades flat in pre-noon session

 A benchmark index of Indian equities markets was trading at 38.81 points or 0.21 percent up during the pre-noon trade Friday.

The banking index (bankex) and healthcare sector showed good buying trends, while selling pressure was observed in the metal and oil and gas sectors.

The 30-scrip sensitive index (Sensex) of the S&P Bombay Stock Exchange (BSE), which opened at 18,424.72 points, was trading at 18,439.85 points in the pre-noon session, up 38.81 points or 0.21 percent from the previous day's close at 18,401.04 points.
The Sensex touched a high of 18,632.23 points and a low of 18,283.74 points during the trade so far.
The S&P BSE bankex surged by 120.18 points and the healthcare index went up by 89.58 points. However, the metal index dropped by 107.83 points and oil and gas index slipped by 74.95 points.
The wider 50-scrip Nifty of the National Stock Exchange (NSE) was also trading flat at 9.60 points or 0.18 percent up at 5,418.65 points.

Reliance bags government’s nod to invest $4 billion in D-6 block

Reliance Industries (RIL) along with its associates in the KG-D6 block - BP Plc and Niko Resources - have got government’s nod in order to invest $4 billion in the R-Series gas-field in the block. It has revised the earlier investment of $3.18 billion to $4 billion as input costs have gone up. This discovery is expected to hold an in-place reserve of 2.2 trillion cubic feet of gas, while recoverable reserves are estimated at 1.191 trillion cubic feet of gas.

RIL is an oil refining, petrochemicals and upstream (mainly natural gas at present) company. It has two highly complex refineries with combined capacity of 1.24 million barrels per day and domestic proved reserves of 660 million barrel of oil equivalent as at end-March 2013.

LIC increases stake in Yes Bank to 7.38%

Life Insurance Corporation (LIC) has reportedly increased its stake in Yes Bank to 7.38%. As on June 30, 2013, the insurance behemoth held 4.68% stake in the bank. The promoters' holding in the bank stood at 25.64% while institutions and non-institutions held 61.71% and 12.64% respectively.

The bank reported a rise of 38.15% in its net profit at Rs 400.84 crore for the first quarter, as compared to Rs 290.14 crore for the same quarter in the previous year. Total income from operation of the bank increased by 30.61% to Rs 2839.97 crore for the quarter under review as compared to Rs 2174.44 crore for the quarter ended June 30, 2012.

Will not meet rupee decline with capital control: PM

Says CAD will be below $70 bn this year

Prime Minister Manmohan Singh today said that the rupee fall was a matter on concern but the government will not meet the rupee decline with capital control measures.

The rupee's tumble is a "matter of concern", he said, but is part of a needed adjustment due to India's large current account deficit.

The depreciation will have a positive impact on export competitiveness in coming months, he told the Parliament.

Singh said the current account deficit was "unsustainably large" and to remedy this there needed to be a reduction in demand for gold and oil imports.

He added that CAD will be below $70 bn this year.

Singh said that government will do whatever is needed to rein in fiscal deficit at 4.8%.

Singh said that rupee depreciation will see upward pressure on inflation, but added that RBI will work on containing it.

PM added that government will do more to improve the fundamentals of the economy.  But he said that he expected H1 GDP growth to be relatively soft.

Wipro wins Rs 680 crore contract from US based company

Wipro, a leading global information technology, consulting and outsourcing company has reportedly received a $100 million (Rs 680 crore) technology outsourcing contract from a US based healthcare services company. This contract will be spread over 5 years and the company will provide infrastructure management including consolidating the client's multiple data centres.

Wipro is a leading Information Technology, Consulting and Outsourcing company that delivers solutions to enable its clients do business better.

Idea Cellular to get new telecom licenses from DoT

Idea Cellular is likely to receive new telecom licenses from DoT, that had earlier refused to accept guidelines related to 3G roaming pacts in the unified license. This new license agreement between DoT and Idea may also incorporate certain clauses proposed by Idea. The telecom operator had earlier refused to sign new telecom permit (Unified Licence) as it barred operators from entering into 3G intra-circle roaming agreement.

Currently, both the companies have agreed to follow the court order with respect to implementation of norms related to 3G roaming pacts in new licenses and the same has been approved by Minister of Communications and IT Kapil Sibal.

IT shares extend rally, TCS, HCL Tech at new high

BSE IT index has surged 28% in past two months as compared to 4.2% fall in S&P BSE Sensex.

Shares of information technology (IT) companies continue at their upward march on expectation of rupee depreciation will benefit margins of IT services companies.

Most of the frontline stocks such as Tata Consultancy Services (TCS) and HCL Technologies are trading at their record high, while Wipro, Tech Mahindra and Infosys are quoting at their 52-week high on the BSE.

In past two months, the BSE IT index has outperformed the market by surging 28% after the Indian rupee (INR) depreciated by nearly 13% against the US dollar (USD). The benchmark S&P BSE Sensex has dipped 4.2% during the same period.

Rupee depreciation theoretically benefits margins of IT companies as a large proportion of costs are in rupees, while revenues are largely in foreign currency.

'Given the sharp depreciation in the INR vs USD from 60 levels last quarter to current rates of 68, we think avenues for reinvestment will progressively reduce and margins/ earnings will show improvement, even for companies that did not show benefits in the last leg,'” said Nomura Financial Advisory and Securities in a note.

Cummins India soars as its parent company plans to hike its stake

Cummins India is currently trading at Rs. 394.45, up by 12.75 points or 3.34% from its previous closing of Rs. 381.70 on the BSE.

The scrip opened at Rs. 379.10 and has touched a high and low of Rs. 415.00 and Rs. 379.10 respectively. So far 100339 shares were traded on the counter.

The BSE group 'A' stock of face value Rs. 2 has touched a 52 week high of Rs. 550.00 on 09-Jan-2013 and a 52 week low of Rs. 365.05 on 28-Aug-2013.

Last one week high and low of the scrip stood at Rs. 393.00 and Rs. 365.05 respectively. The current market cap of the company is Rs. 11061.67 crore.

The promoters holding in the company stood at 51.00% while Institutions and Non-Institutions held 35.69% and 13.31% respectively.

Cummins India’s parent, Cummins Inc, is planning to increase stake in its Indian subsidiary to 75% from 51% via open offer. Further, this move is significantly expected to improve Cummins India’s cash flow. Meanwhile, as of June 13, 2013, while, promoters held 51% stake of the company, Institutional and Non-institutional investors held 35.69% and 13.31% of company's stake respectively.

Cummins Inc, the parent company of CIL, is engaged in design, manufacture, distribute and service engines and related technologies, including fuel systems, controls, air handling, filtration, emission solutions and electrical power generation systems. The company has customer presence in more than 160 countries through its network of 550 company-owned and independent distributor facilities and more than 5,000 dealer locations.

LIC's 30% equity cap may not be notified soon

 IRDA said that the regulatory oversight on LIC is quite comprehensive to the extent that it requires monitoring both prudential and market conduct operations of LIC

  Life Insurance Corporation of India (LIC) may be required to wait for some more time before they are allowed by the insurance regulator to invest up to 30% of equity of a company. With international financial agencies raising concerns over the insurance regulator’s incomplete oversight of LIC, industry experts said that the cap may not be raised very soon.

The Insurance Regulatory and Development Authority (Irda) had recently increased the equity cap for insurers from 10% to 12% and 15%, depending on the size of the controlled fund of an insurer. LIC is allowed to invest 15%.

Since the 10% cap on equity investment in a company by an insurer came into force in 2008, LIC had been lobbying for this relaxation, as it has exhausted the limit in various blue-chip stocks. LIC has sought an increase to have more headroom while transacting in good scrips. However, the former Irda chairman J Hari Narayan had clearly said that LIC would have to adhere to the existing limits for other insurers.

“Though the finance ministry officials may have given an informal nod to LIC to go up to 30% in equity investment, it is unlikely that Irda will notify this immediately. If they do, the regulator is likely to face criticism from international bodies for preferential treatment,” said a senior insurance consultant.

International Monetary Fund (IMF) in one of its detailed assessment reports on India’s adherence to Insurance Core Principles had said that the current uncertainty regarding Irda’s control of its funding and budget, its incomplete oversight of LIC, and the reserve powers of the central government to direct its activities all potentially detract from the supervisor’s powers and independence.

Responding to these concerns, IRDA had said that the regulatory oversight on LIC is quite comprehensive to the extent that it requires monitoring both prudential and market conduct operations of LIC. “Though LIC Act excludes the applicability of certain provisions of Insurance Act, 1938, nevertheless there is no dilution on the regulatory oversight on LIC,” it said.

In an interview to Business Standard LIC Chairman S K Roy had said that they were hopeful of getting a solution for raising equity exposure cap in a single company.

“We are still engaging with the regulator and we are hopeful that we will get a solution to this sooner than later. We don't want to be seen to be non-compliant and that is why we are engaging. We have made a representation and it is being actively considered,” he had said.

Coal India hits new low on government stake sale plan

The government has selected seven banks to manage the 5% stake sale in the company.

Coal India  has dipped nearly 5% at Rs 238, also its record low since listings, in early morning deals on BSE, on reports that the government has selected seven banks to manage the sale of a stake in the company.

The government has hired Goldman Sachs, Bank of America Merrill Lynch, Deutsche Bank, Credit Suisse and Indian investment banks SBI Capital, JM Financial and Kotak Mahindra Capital for the sale of a further 5% stake in the world's largest coal miner, the Reuters report suggests.

At the current market price, the Coal India stake sale will raise about Rs 7,900 crore for the government, added report.

The stock opened at Rs 250 and has seen a combined around 53,000 shares changing hands on the counter in early morning deals on BSE and NSE.

Macquarie Bank sells 19.40 lakh shares of Aurobindo Pharma

Macquarie Bank has sold 19,40,000 shares of Aurobindo Pharma through an open market transaction. The shares were sold at an average price of Rs 180.97 on National Stock Exchange (NSE) on August 29, 2013.

Aurobindo Pharma manufactures generic pharmaceuticals and active pharmaceutical ingredients. The company’s robust product portfolio is spread over 6 major therapeutic/product areas encompassing Antibiotics, Anti-Retrovirals, CVS, CNS, Gastroenterologicals, and Anti-Allergics, supported by an outstanding R&D set-up.

L&T Hydrocarbon bags orders worth Rs 807 crore

L&T Hydrocarbon, a brand of Larsen and Toubro (L&T) has secured new orders worth Rs 807 crore for the supply of cracking furnace modules and parts, supply of equipment, EPC execution of cryogenic ethylene package, civil, structural, mechanical, electrical & instrumentation for petrochemical complexes of oil companies in India. Fabrication and assembly work for all the modules and equipment will be done at Lars modular fabrication facility at Hazira near Surat.

L&T Hydrocarbon provides complete design-to-build engineering and construction solutions for the oil & gas sector. In-house expertise, extensive experience and collaborations with strategic business partners enable it to deliver end-to-end solutions for every phase of a project - from front-end design engineering through fabrication, project management, procurement, construction and installation up to commissioning.

L&T’s Manufacturing Fabrication Facility at Hazira caters to business opportunities on the west coast of India and the Gulf. The facility has a major heavy manufacturing complex with captive Toad-on' and `Ro-Ro' jetties. Its mega-sized capabilities, its waterfront facility and relative proximity facilitate the shipping out of over-dimensioned equipment.

Jayant Agro shines on entering into JVA for investing in Vithal Castor Polyols

Jayant Agro Organics, India’s leading castor oil and castor based derivatives manufacturers, Mitsui Chemicals Inc, Japan and Itoh Oil Chemicals Company, Japan have together entered into a Joint Venture Agreement (JVA) for investing in the equity shares of Vithal Castor Polyols in the ratio 50:40:10 respectively. The joint venture will be focused on manufacturing Castor Oil based Polyols through Vithal Castor Polyols. The details of the project are being worked out.

Jayant Agro Organics is a 100% export oriented unit (EOU unit) and leading the castor based industry in India. The company has people with vast experience in castor oil and its derivatives manufacturing – delivering much more than molecules, converting the molecules to products for markets and turning ideas into solutions. Great solutions are the results of inspiration, hard work, dedication and team work.

Mitsui Chemicals’ business portfolio includes petrochemicals, basic chemicals, polyurethanes, functional polymeric materials, functional chemicals, and films & sheets.

Itoh Oil Chemicals Company, established in 1946, the leading castor oil speciality manufacturing company in Japan with products ranging from castor oil, its derivative and various speciality chemicals derived from castor oil.

Birla Sun Life MF introduces Fixed Term Plan - Series HU (30 days)

Birla Sun Life Mutual Fund has launched the New Fund Offer (NFO) Birla Sun Life Fixed Term Plan - Series HU (30 days), a close ended income scheme. The NFO opens for subscription on Aug 30, 2013, and closes on Sep 3, 2013. No entry load or exit load will be applicable for the scheme. The minimum subscription amount is Rs. 5,000 and in multiples of Rs.10 thereafter.

The scheme’s performance will be benchmarked against CRISIL Liquid Fund Index and its fund manager is Kaustubh Gupta.

The investment objective of the scheme is to generate income by investing in a portfolio of fixed income securities maturing on or before the duration of the scheme.

Tata Steel Europe plans to launch 30 new products

In a bid to widen its customer base, Tata Steel Europe is planning to introduce as many as 30 new products this fiscal year. The company has identified nine market sectors, including automobile, lifting and excavating, packaging, energy and power, and rail.

Tata Steel’s European plants have a production capacity of 17.9 million tonnes (mt).

Tata Steel Europe is a multinational steel-making company headquartered in London, United Kingdom and a wholly owned subsidiary of Tata Steel.

Sesa Goa drops on profit booking

Sesa Goa lost 2.29% to Rs 188.10 at 09:21 IST on BSE, with the stock declining on profit booking after surging 25.9% in prior four trading sessions.

Meanwhile, the S&P BSE Sensex was down 67.29 points or 0.37% at 18,333.75
On BSE, 2.52 lakh shares were traded in the counter as against average daily volume of 5.27 lakh shares in the past one quarter.

The stock hit a high of Rs 189.20 and low of Rs 182.40 so far during the day. The stock had hit a 52-week high of Rs 205.40 on 7 January 2013. The stock had hit a 52-week low of Rs 119.45 on 31 July 2013.
The stock had outperformed the market over the past one month till 29 August 2013, surging 53.39% compared with the Sensex's 6.08% fall. The scrip had also outperformed the market in past one quarter, advancing 21.37% as against Sensex's 8.67% fall.

The large-cap company has equity capital of Rs 86.91 crore. Face value per share is Re 1.
Shares of Sesa Goa were on a roll recently. The stock surged 25.9% in four trading days to Rs 192.50 on 29 August 2013 from a recent low of Rs 152.90 on 23 August 2013. Shares gained 9.39% to Rs 167.25 on 26 August 2013 ahead of the stock's entry in the BSE Sensex pack. Shares gained 15.1% in three trading days since the stock's entry in the BSE Sensex pack from 27 August 2013.
Meanwhile, Sesa Goa after market hours on Thursday, 29 August 2013 said that the company's board of directors at its meeting held on Thursday, 29 August 2013 approved allotment of equity shares to the shareholders of Sterlite Industries (India) (Sterlite), The Madras Aluminium Company (MALCO) and Ekaterina (Ekaterina) pursuant to the Schemes of Amalgamation and Arrangement.
Shares of Sesa Goa were included in the 30-share benchmark S&P BSE Sensex from 27 August 2013. Sesa Goa replaced Sterlite Industries (India) in the Sensex following the scheme of amalgamation between the two Vedanta group firms whereby Sterlite Industries (India) was merged with Sesa Goa. As per the swap ratio, every equity shareholder of Sterlite holding 5 equity shares of the company will be entitled to be issued 3 shares of Sesa Goa. Shares of Sterlite Industries (India) settled at Rs 90.20 on Monday, 26 August 2013, its last trading day.

Sesa Goa's consolidated net profit fell 57% to Rs 414.30 crore on 79.1% decline in net sales to Rs 360.66 crore in Q1 June 2013 over Q1 June 2012.
Sesa Goa is India's leading producer and exporter of iron ore in the private sector with operations in the states of Goa and Karnataka in India and a large integrated project site in Liberia, West Africa.

SBI raises interest rate on bulk deposits by up to 1.5pc

State Bank of India (SBI) on Thursday raised interest rates by up to 1.5 per cent on bulk deposits of over Rs 1 crore. The interest rate for bulk deposits for the tenors 7-60 days will be 9 per cent.

Fixed deposits between 61 days to less than one year will be 8.25 per cent, SBI statement said.

The new rates would be effective from August 31, it added.

The bank had last revised interest rate on fixed deposits over Rs 1 crore on June 7.

As per the existing rate structure, the bank is paying interest rate of 7.5 per cent on term deposits of 7-180 days.

Crude prices cool down on easing Syrian pressure

Crude oil futures cooled down on Thursday as an US led attack on Syria appeared less imminent after the UK parliament voted against military strikes. Also, the UN Security Council's permanent members failed to agree to a proposal for any military action against Syria. Crude prices have soared in last session on speculation that a US military attack in Syria may engulf the oil-rich Middle East and threaten global supply.

Benchmark crude oil futures for October delivery declined $1.30 or 1.2 percent to close at $108.80 a barrel after trading in a range of $110.07 and $108.60 a barrel on the New York Mercantile Exchange. In London, Brent oil futures for October delivery were down by 1.18% at $116.40 a barrel on the ICE.

LIC raises stake in SBI to 13.26%

Life Insurance Corporation (LIC) has raised its stake in the country’s largest bank State Bank of India (SBI) by 2.86% to 13.26%. The insurance behemoth has acquired 19.57 lakh shares from open market for Rs 49.15 crore.

Post acquisition, the equity share capital of the LIC has increased to Rs 684.03 crore from Rs 634.88 crore. Before the acquisition, LIC’s stake in the bank was 10.4 per cent.

SBI reported a 13.6 per cent fall in standalone net profit to Rs 3,241.08 crore for the first quarter ended June of 2013-14 due to a rise in bad loans and increased provisioning.

South Korea Industrial Output Falls In July

South Korea's industrial production shrank in July after a brief expansion in the preceding month, showing still weak growth momentum in the economy, government data showed Friday.
Industrial output fell a seasonally adjusted 0.1% in July from the previous month, following a revised 0.6% increase in June, according to Statistics Korea.

From a year earlier, the reading in July rose 0.9%, compared with a revised 2.5% fall in June.
The leading indicator, a closely watched reading predicting economic conditions, rose to 100.8 in July from the prior month's 100.5. Readings over 100 indicate conditions will get better.

Sensex down 74 points amid mixed Asian cues

Domestic markets fell over 0.4 per cent in the opening session on Friday on sustained selling by FIIs amid mixed Asian cues.

At 9.15 a.m., the 30-share BSE index Sensex was down 74.31 points (0.4 per cent) at 18,326.73 and the 50-share NSE index was down 40.1 points (0.74 per cent) at 5,368.95.

Asian shares were trading mixed and oil prices fell as fears eased of an imminent Western military strike against Syria.

Dollar remained steady around a three-week high against a basket of currencies after upbeat US growth data.

India’s Q1 GDP data today; likely to remain below 5%

The sense of crisis building around the rupee's precipitous fall is likely to deepen on Friday with the release of data expected to show India's economy slowing to dangerously low levels.

A dearth of investment lies at the heart of India's economic malaise. Little improvement is expected any time soon, with investors doubting whether Prime Minister Manmohan Singh's minority government can force through bold reforms with an election due within eight months.

Economic growth virtually halved in two years to 5 percent in the fiscal year that ended in March -- the lowest level in a decade -- and most economists surveyed by Reuters in the past week expect 2013/14 to be worse.

"The economy appears to be entering a tailspin as business confidence collapses under the weight of rapid rupee depreciation, rising energy costs, sharply tightening financial conditions and policy confusion," BNP Paribas said in a note on Wednesday.

The withdrawal of funds from emerging markets as investors re-adjust portfolios in anticipation of higher U.S. interest rates has caused tremors from Brasilia to Jakarta. But the weight of India's current account and fiscal deficits has seen the rupee sink faster than most currencies.

However much Finance Minister P. Chidambaram protests that the market's move is overdone, investing in a currency that has lost around 20 percent since May would be a test of bravery that even India's richer diaspora living abroad could flunk.

In the eight sessions through Tuesday, investors pulled out USD1 billion from India stocks. Total net outflows from stocks and bonds have totaled USD7.4 billion since May.

Thank heavens for a good monsoon, which should boost rural income and perk up flagging consumer demand, because without it the economy would be looking a lot worse than it already does.

India's statistics office is due to release GDP data for the June quarter at 1730 IST on Friday, bringing down the curtain on what has probably been the worst week for the rupee in nearly 17 years.

The GDP print is likely to be fittingly gloomy.

A Reuters poll of 36 economists showed India's gross domestic product (GDP) expanded 4.7 percent year-on-year in the quarter to June, near decade lows on an annual basis and a tad under the 4.8 percent growth in the previous three months.

GOING DOWN

Raghuram Rajan, the much-vaunted former chief economist at the International Monetary Fund chief economist, is set to take over as governor of the Reserve Bank of India next Thursday, but so long as the rupee remains under attack he will find it hard to lower interest rates to encourage growth.

With inflation moving back above 5 percent, the upper limit of the central bank's perceived comfort zone, its hands are even more tightly tied.

"With RBI set to sustain, even extend, recent monetary tightening, we now expect the palpable downside risks facing the Indian economy to largely crystallise over the next 6-9 months," said BNP Paribas.

The French bank has cut India's growth forecast to 3.7 percent for this fiscal year, which would be the lowest since 1991/92.

That is nowhere near good enough for a country with India's demographics. It has a population of 1.2 billion and a per capita income of around USD1,000.

Chidambaram warned on Tuesday that the economy needs to be averaging 8 percent growth to generate jobs for the increasing numbers of youth joining the workforce, but it is about far more than jobs.

With nearly 270 million people living in poverty, India is a vastly different kind of economy.

On Tuesday, parliament approved a Food Security Bill that critics fear will push up a fiscal deficit that at nearly at 5 percent of GDP is among the highest among major economies.

LOST REPUTATION

With enough foreign exchange reserves to cover six months of imports and relatively low levels of sovereign foreign debt, India's situation is less acute than it was in 1991 balance of payments crisis.

But, once lionised as the finance minister whose liberalisation of the economy rescued it from that crisis, Prime Minister Singh is now widely criticised for having feet of clay during his nine years at the helm.

His government has loosened rules for foreign investors, but it has failed to introduce the tax and labour reforms that Singh has long advocated.

Instead, policy flip-flops, high-profile tax disputes and numerous regulatory hurdles have stymied investments to a point where many firms find it easier to invest overseas than at home.

"India's fundamentals have deteriorated steadily under the missteps of Singh, his aides and the central bank," Morgan Stanley said in a research note on Wednesday.

Singh and Chidambaram over the past year cut budget busting fuel subsidies, sped up the clearances for infrastructure projects and relaxed rules for foreign investments into a swathe of industries. But most analysts view their actions so far as too little, too late.

Dismal earnings from India's heavily indebted corporates suggest consumer demand is weak. Manufacturing activity has virtually stagnated, hitting merchandise exports and widening the trade deficit.

At nearly USD90 billion India's current account deficit is the third largest in the world. Chidambaram has pledged to narrow it to USD70 billion this fiscal year.

Exports might benefit from the rupee's descent, but it will exacerbate the oil import bill, increase fuel subsidy costs and pump up inflation. It appears to be a vicious circle.

The rupee could recover if growth attracted investment, but the trends are going the wrong way, with the June quarter expected to mark a third consecutive quarter below five percent.

"Expectations about economic growth are already rock bottom. But if the GDP data undershoots them, it could prompt more weakness in the rupee," said Mark Williams, chief Asia economist at Capital Economics in London.

Japan’s jobless rate falls to 3.8% in July

Japan’s unemployment rate declined to 3.8 per cent in July for the second straight month of decline amid an economic recovery, the government said on Friday.

The jobless rate for women declined to 3.3 per cent from 3.5 per cent in June, while unemployment for men edged up to 4.2 per cent from 4.1 per cent, the Ministry of Internal Affairs and Communications said.

The number of unemployed people dropped by 330,000 from a year earlier to 2.55 million, falling year-on-year for the 38th consecutive month, the ministry said.

Medical and social services added 230,000 jobs to employ a total of 7.41 million, and wholesalers and retailers saw an increase of 120,000 jobs to 10.53 million, while the construction industry eliminated 310,000 positions to 4.72 million, the ministry said.

Analysts said that government figures didn’t reflect Japan’s employment problems as one of the country’s most crucial issues in the past decade has been unstable forms of employment, especially among women and young people.

In 2012, the proportion of temporary and part-time workers in the labour force hit a record high of 35.2 per cent for the third straight year of rise, the government said.

The availability of jobs, measured as a ratio of job offers per job seekers, rose 0.02 points from the previous month to 0.94 in July for the fifth consecutive month of increase, the Ministry of Health, Labour and Welfare said.

Japan’s industrial output rises 3.2 % in July

Japan’s industrial production rose a seasonally adjusted 3.2 per cent in July from the previous month for the first increase in two months, the government said on Friday.

The figure, which was below the 3.7 per cent rise predicted by analysts surveyed by the Nikkei business daily, followed a 3.1 per cent fall in June.

The Ministry of Economy, Trade and Industry maintained its basic assessment, saying “industrial production shows signs of picking up at a moderate pace.” The index of production at factories and mines stood at 97.7 against a baseline of 100 for 2005, the ministry said.

General machinery, electronic parts and devices and transport equipment industries contributed to the bulk of the rise in July, the ministry said.

Manufacturers surveyed by the ministry expected industrial output to edge up 0.2 per cent in August and rise 1.7 per cent in September.

The index of industrial shipments climbed 1.3 per cent in July from the previous month to 94.9, and that of industrial inventories rose 1.5 per cent to 108.6, the ministry said.

Lok Sabha passes land acquisition bill

The ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Bill, 2012’ seeks to give a fair deal to farmers

The Lok Sabha has debated and passed two land-mark laws; the food bill and an updated version of the 19th-century legislation governing land acquisition.

The ‘Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation & Resettlement Bill, 2012’ seeks to give a fair deal to farmers losing their land, especially multi-crop land, to industrial needs.
But industry complained the law would push cost and timeframe for setting up new enterprises.
The bill was passed with 216 votes in favour and 19 against.
381 amendments were moved to the bill, of which 166 were official ones, says report.