Rupee opens higher by 5 paise at 66.77/$

Indian Rupee today opened at 66.77 against the dollar,higher by 5 paise in early trade on Tuesday. On the global front, US markets were closed and Asian markets are mixed. Oil prices cooled in anticipation of economic growth data from the eurozone due later this week. The global nervousness is visible in most indices and IMF recently said downside risks to the outlook have increased, particularly for emerging market economies. The Indian currency movement will be in focus after the rupee hit a fresh two-year low to close at 66.82 against the dollar on Monday. The foreign institutional investors (FII) have sold Indian shares worth US$3.3bn since 10th August. In 2014, FIIs had pumped US$13.4bn into Indian equities and for the year till 10th August, their net purchases stand at US$7.4bn.

Indian rupee ended at 66.82, weaker by 33 paise on Monday. The currency touched a high and low of 66.98 and 66.07 respectively.  The Reserve Bank of India’s (RBI) reference rate for the dollar stood at 66.74 and for Euro stood at 74.27 on September 07, 2015. While, the RBI’s reference rate for the Yen stood at 55.93, the reference rate for the Great Britain Pound (GBP) stood at 101.3649.

In Wait For a Bottom

Wall Street closed overnight while in Europe the Stoxx-600 was up 0.6 per cent. On the data front, German industrial production for July was weaker than expected.

Oil prices were down close to 4 per cent in thin holiday trade. Yesterday in Asia, Shanghai A-Shares closed down -2.5 per cent, Japan's Nikkei closed up 0.4 per cent. This morning, Asian markets are looking mixed at best - a few are higher. The big global cue is the U.S. Fed meet next week.

Coming to our trading session, the SGX is indicating a mildly higher start. But as we have seen many times in the recent past, merely a higher start is of little comfort. A 'bullish' market should ideally have a flat-lower start which is then bid up steadily for the rest of the session and not the opposite - that is a higher start which gets sold into. Rupee has continued to slide as well and is now getting close to the year-end forecast of many economists.

On the Nifty, 7500 strike puts have nearly $600 million worth of open interest. Also today, PM Narendra Modi will chair a meeting with top industrialists & policy makers. Agenda of the meeting is - 'Recent Global Events - Opportunities for India'. Focus will remain on the sound bytes coming out of the meet.

You are here:HomeMarket Gold Holds Near 2-1/2-Week Low as US Rate Outlook Weighs

Singapore: Gold steadied on Tuesday after a four-day losing streak, but the metal wasn't too far from a 2-1/2-week low as it struggled to find direction amid uncertainty over a looming U.S interest rate hike.

Fundamentals

* Spot gold ticked up 0.1 per cent to $1,120.61 an ounce by 0048 GMT. It slid to $1,116.20 on Monday, its lowest since August 19.

* U.S. gold dipped 0.1 percent to $1,120.10.

* Investors had been awaiting Friday's U.S. jobs report to gauge the strength of the economic recovery and whether it would prompt the Federal Reserve to hike rates at its policy meet later this month. But the data failed to provide adequate clarity regarding a Fed move amid volatility in financial markets.

* Bullion traders have said gold will likely be under pressure until the Fed policy meet on September 16-17 due to persistent uncertainty. Gold prices have been dented this year by expectations the Fed will hike rates for the first time in nearly a decade.

* Gold has failed to find a strong safe-haven bid despite the recent weakness in stocks due to worries over the Chinese economy. It has also failed to pick up cues from trading activity in the dollar, showing that gold is struggling to find direction outside of U.S. monetary policy.

* In other industry news, the value of China's gold reserves stood at $61.8 billion at the end of August, up from $59.24 billion at the end of July, the People's Bank of China said on its website.

* The economic crisis in Russia has persuaded a co-owner of Polyus Gold to consider a $5.4 billion buyout, which could end the top Russian gold producer's premium listing in London after just three years, say three sources close to the possible deal.

* The South African Reserve Bank said on Monday there were no talks among central bankers about upgrading platinum's status to a recognised reserve asset and past studies on the issue it had taken did not support the notion.

Asian Stocks Slip Ahead of Chinese Trade Data

Shanghai stocks sank in opening exchanges Tuesday ahead of the release of Chinese trade data, with expectations of another weak reading that could fuel more market volatility.

The benchmark Shanghai Composite Index slid 0.84 per cent, or 25.98 points, to 3,054.44.

The Shenzhen Composite Index, which tracks stocks on China's second exchange, lost 0.88 per cent, or 14.76 points, to 1,662.57.

However, Hong Kong's benchmark Hang Seng Index rose 0.52 per cent, or 106.06 points, to 20,689.58.

Tokyo shares opened higher Tuesday after fresh Japanese data showed its economy did not shrink as much as initially believed in the April-June quarter.

However, the gains were short lived and the Nikkei-225 index at Tokyo Stock Exchange slipped 0.85 per cent, or 152 points, to 17,708.02.


Many investors were seen staying away from making major bets in early trade, as they cautiously monitored anything related to the Chinese economy.

"While there are opportunities out there, there's no rush to pick the bottom at this stage given prevailing uncertainties over the slowdown in the Chinese economy and the timing of the US interest-rate increase," Tim Schroeders, a portfolio manager who helps oversee about $1 billion in equities at Pengana Capital, told Bloomberg News.

"Investors probably want to sit tight and watch developments closely," he said.

Adding to concerns about China, Beijing on Monday lowered the country's GDP growth figure for last year by 10 basis points to 7.3 percent.

Further muddying the waters, the prospects for a US rate hike have remained largely uncertain, with some analysts saying the latest US jobs data released last week did not necessarily provide clues strong enough to change Fed policy.

Financial markets in New York were closed on Monday for the Labour Day holiday.

In Tokyo forex trade, the dollar stood at 119.40 yen, compared with 119.34 yen in Tokyo Monday afternoon.

The euro was $1.1160 and 133.26 yen, compared with $1.1136 and 132.90 yen in Tokyo.

China Stocks Slip in Volatile Trade Despite Fresh Steps to Calm Investors

Shanghai: China major stock indexes fell in volatile in early trading on Tuesday, after Beijing introduced fresh measures - including tax cuts and a proposed "circuit breaker" system - to discourage speculation and stem further slides in share prices.

The CSI300 index fell 0.7 per cent to 3,226.53 points at 1:59 GMT, while the Shanghai Composite Index lost 0.7 per cent to 3,060.16 points - both indexes were shunted in and out of the black in a reflection of the fragile sentiment.

Late on Monday, China said it would remove personal income tax on dividends for shareholders who hold stocks for more than a year, in a move aimed at encouraging longer-term investment in equities as opposed to short-term speculation.

The announcement came hours after regulators proposed introducing a "circuit breaker" on China's flagship CSI300 index to help stabilise the market.

The Shanghai Stock Exchange also restricted trading in stock options, which can be used by stock investors as a tool to place bearish bets on the market.

But some analysts said these measures would do little to reverse the downtrend of the market.

"The circuit breaker may help calm sentiment, but it doesn't change investors' attitude toward stocks," said Hou Yin, analyst at AJ Securities.

He added that the tax cuts offer little incentive to stock buyers because "investors prefer to stand on the sidelines due to huge uncertainty they face."

In addition, some analysts and traders say government restrictions on shorting activities could be counterproductive, as investors who aren't able to adequately hedge risks in futures or options market have no choice but to unwind their positions in the cash market to reduce risks.

China CSI300 stock index futures for September were flat at 3,120, 106.53 points below the current value of the underlying index.

The Hang Seng index in Hong Kong was up 0.4 per cent, to 20,661.26 points.

Timeline of China's Attempts to Prevent Stock Market Meltdown

Shanghai: The Chinese government has taken unprecedented steps to stave off a crash in its stock markets, which have plunged since mid-June on concerns over the slowing economy and an unexpected devaluation of the yuan in mid-August.

Following is the timeline of interventions, announcements and rumours: 

Sept 7: China removes personal income tax on dividends for shareholders who hold stocks for more than a year, halves tax on dividends for those holding shares between a month and a year.

Chinese exchanges say mulling "circuit breaker" to CSI300 index that would briefly suspend market trade if the index rises or falls 5 per cent, suspending trade for a day if it rises or falls 7 per cent.

Aug 28: The SSEC ends up 4.8 per cent after rising 5.3 per cent a day earlier amid signs of revived market-rescue measures, but the benchmark index is still down 7.9 per cent for the week as few investors are sure how long official support will last and where the market is heading.

Aug 27: A senior Chinese central bank official tells Reuters the global stock market rout of the past week was sparked by concerns over a possible U.S. interest rate rise and not by yuan devaluation. State media issues commentaries defending China's policy making, showing Beijing's sensitivity to suggestions it may have fumbled economic policy.

Aug 26: Regulators and police are cracking down on suspected violations of stock dealing rules and the fabrication of trading information, the latest in a slew of steps to clean up the market amid wild price gyrations.

Aug 24: Share indexes slump more than 8 per cent, giving up all their gains for the year as the "national team" stays on the bench.

The PBOC cuts interest rates and RRR for the second time in two months, ratcheting up support for the stumbling economy and the plunging stock market.

Aug 23: China allows pension funds managed by local governments to invest in the stock market for the first time.

Aug 18: Share indexes drop more than 6 per cent amid worries of further yuan depreciation and over the fate of the equity market after the "national team" withdraws.

Aug 14: The CSRC surprises the market by announcing that Beijing will allow market forces to play a bigger role in determining stock prices, the first official signal that Beijing is moderating its efforts to prop up stocks.

Aug 11: The central bank devalues the yuan by nearly 2 per cent, a move that was followed by further weakening of the currency in trading in following days. Policymakers describe the move as part of ongoing reforms but markets suspect political pressure is growing to weaken the yuan to boost ailing exports.

Aug 10: Reuters exclusively reports that the ruling Communist Party of China has begun looking for an eventual replacement for the top securities regulator, who faces internal criticism over his handling of this year's boom and bust in Chinese stock prices.

July 31: Regulators say they have restricted 24 stock trading accounts for suspected trading irregularities.

Reuters exclusively reports China has asked financial institutions in Singapore and Hong Kong for stock trading records, widening its pursuit of investors shorting Chinese stocks.

July 27: After a few weeks of relative stability, share indexes slump again, with SSEC plunging 8.5 per cent on the day, sparked by talk of a government withdrawal from market-rescue steps and worries over the health of the economy.

The CSRC says it is investigating share dumping incidents and vows further market support.

July 8: Chinese regulators come out with another series of support statements and measures, in particular raising margin requirements for short positions taken against the small-cap CSI500 Index, and making it easier for insurers to buy blue chips. The CSRC warns of "panic" and "irrational selling" in the market.

July 6: Main stock indexes open up more than 7 per cent on the rescue measures, but give back most gains during the day, with the SSEC closing up only 2.4 per cent.

July 5 (Sunday): China state-owned investment company Central Huijin Investment Ltd says it has recently purchased exchange-traded funds (ETFs) to support the market and will continue to do so.

The growing number of state agents and brokerages and other entities enlisted into the market rescue effort are soon dubbed "the national team".

The CSRC announces that PBOC will inject liquidity directly to the state-backed margin finance company to stabilise the tumbling stock market.

July 4 (Saturday): China's top 21 securities brokerages pledge to invest at least 120 billion yuan ($19 billion) collectively to help stabilise the market.

Twenty-eight Chinese companies planning to list on the country's stock exchanges say they would suspend their initial public offering plans.

July 3: China Financial Futures Exchange (CFFEX) suspends 19 accounts from short-selling for one month. SSEC loses 5.8 per cent despite the regulator's efforts to stop the slide.

July 2: The CSRC announces relaxation of rules on margin trading before market open, lowering threshold for individual investors to trade on margins and expanding brokerages' funding channels.

The CSRC announces setting up a team to look into illegal manipulation and investigate cases if needed.

July 1: Stocks tumble again, surrendering much of the previous day's sharp gains to end down around 5 per cent. After the market closes, the Shanghai and Shenzhen stock exchanges announce plans to lower securities transaction fees by 30 per cent from August.

June 29: The state-backed provider of margin financing, China Securities Finance Corp, publicly says that the risk of margin trading is controllable and margin calls are relatively small.

Main indexes shrug off the monetary easing to end down over 3 per cent after a day of see-saw trade, leading domestic media to call it "Black Monday". The benchmark Shanghai Composite Index closes down 3.3 per cent.

June 27 (Saturday): The People's Bank of China (PBOC), the central bank, cuts interest rates and trims banks' reserve requirement ratios (RRR) in a move widely interpreted as mainly a step to support the slumping stock market

Weak Economic Outlook, Oversupply Weigh on Oil Markets

Singapore: Oil prices remained weak on Tuesday as the global economic outlook darkened further and cooperation between oil producing countries to curb oversupply looked unlikely.

Japan's economy shrank an annualised 1.2 per cent in April-June, revised GDP data showed on Tuesday, despite ongoing government and central bank measures to support growth.

"Oil prices are now expected to stay around current levels until the end of 2015, before rising to the mid to high 50s by the end of 2016," National Australia Bank said in its September commodities note to clients.

U.S. crude benchmarks were at $44.60 per barrel at 0152 GMT, down $1.45 since Friday's close, weighed down by the closure of the largest crude distillation unit at Exxon Mobil Corp's 502,500 barrel-per-day (bpd) Baton Rouge, Louisiana, refinery.

U.S. markets were closed on Monday for a holiday.

Not impacted by the refinery outage, Brent futures firmed 32 cents in early trading to $47.95 barrel, although the global benchmark was still down $1.32 from its opening value on Monday.

Oil prices have fallen almost 60 percent since June 2014 on a global supply glut, with prices seesawing in recent weeks as concerns about a slowing Chinese economy caused turmoil in global stock markets.

Asian stocks edged higher on Tuesday after a six-day losing streak and the dollar firmed against the safe-haven Japanese yen, but gains were muted ahead of Chinese data which could offer more clues on the health of its economy.

On the supply side for oil, recent speculation that Russia might be willing to cooperate with the Organization of the Petroleum Exporting Countries (OPEC) to curb output in support of prices was given a blow on Monday after the chief executive of Russian oil major Rosneft ruled out a Russian cut.

Igor Sechin said that unlike the Middle East, where most oil companies are government owned and controlled, Russia could not easily cut its output as its oil firms had strong foreign shareholders and the corporations were responsible to shareholders rather than the government.

OPEC is producing close to record volumes to squeeze out competition, especially from U.S. shale producers, which have so far weathered the price plunges to keep pumping oil

BSE Sensex Likely to Open Higher: 10 Developments

BSE Sensex and Nifty are likely to open higher on Tuesday. SGX CNX NIFTY was trading 0.60 per cent higher at 7,605, indicating a strong start for Indian markets. But analysts remain skeptical whether Indian markets can hold on to the gains amid mostly lower Asian markets.

Here are top 10 developments:

1) Asian markets were mostly lower today with Japan's Nikkei down nearly 0.75 per cent. China stocks were volatile, trading with a negative bias.  The Wall Street was closed for a holiday yesterday.

2) Prime Minister Narendra Modi will meet industry leaders today to deliberate on the recent developments in the global economic scenario and opportunities it presents for India. PM Modi's second meeting with representatives of industry associations or chambers in two months, is being held amid global market turbulence caused by a slowing Chinese economy.

3) Domestic stock markets, roiled by developments in China and the US, had slumped 1.2 per cent on Monday, with the BSE Sensex closing below the psychological 25,000 mark for the first time since June 4, 2014.

4) Continued uncertainty about whether the Federal Reserve will hold off from hiking interest rates this month has been weighing on foreign flows. The Fed has not raised rates in nearly a decade, leading to fund flows in emerging countries like India.

5) Analysts say that Indian markets are likely to remain volatile till the crucial US Fed meet, which is scheduled for September 16-17. An interest rate hike in the US could accelerate the selling from foreign investors who would like to park their money in US bonds.

6) Indian markets are also witnessing an exodus from foreign investors who sold a record Rs 16,877 crore worth of domestic stocks in August. On top of that, they sold Indian stocks worth nearly Rs 4,800 crore in the past five sessions.

7) Market experts attributed the huge outflows to sustained global risk-off trend along with some domestic concerns like monsoon deficit, slow pace of reforms and economic slowdown. Concerns about a rate hike in the US as early as next week, have led to selling by foreign investors.

8) Domestic institutional investors have been buyers of stocks despite the selloff from foreign investors, helping to provide some support to Indian markets. On Monday, they bought shares worth Rs 504 crore.

9) Despite Sensex and Nifty losing over 6 per cent in August, investments into Indian mutual funds surged in August from July, signalling the continued retail support for equities despite a deteriorating outlook. Investments into equity mutual funds rose 63 per cent to Rs 9,625 crore last month from July, marking a 16th consecutive month of inflows.

10) Traders are also watching the value of the rupee which affects the dollar returns of foreign investors. The rupee fell to a two-year low of 66.82/dollar on Monday, against Friday's close of 66.46.        

Indian crude basket at $48.16/bbl on September 4

The price of Indian Basket decreased to Rs. 3,197.82 per bbl on Friday as compared to Rs. 3,225.40 per bbl on Thursday.

The international crude oil price of Indian Basket as computed by Petroleum Planning and Analysis Cell (PPAC) under the Ministry of Petroleum and Natural Gas was US$ 48.16 per barrel (bbl) on Friday. This was lower than the price of US$ 48.70 per bbl on previous publishing day of Thursday.

In rupee terms, the price of Indian Basket decreased to Rs. 3,197.82 per bbl on Friday as compared to Rs. 3,225.40 per bbl on Thursday. Rupee closed weaker at Rs. 66.40 per US$ on Friday as against Rs. 66.23 per US$ on Thursday.

Doha Bank partners with Anil Ambani led Reliance Group

The scope of the partnership will strengthen Doha Bank’s presence in India and the bank’s strategic role in trade finance, banking and financial services across the region and in creating business opportunities between GCC and India.

Doha Bank and Reliance ADA Group have entered into an alliance to create new opportunities for cooperation and innovation in terms of business development across the GCC and India. The MOU is envisaged to provide tangible business opportunities and further prospects for expansion for Doha Bank and Mr. Anil Ambani led Reliance Group. It will also provide synergy in product development and congruence in mutual infrastructure support.

Doha Bank which enjoys brand excellence, a vast network of branches and representative offices across the world and multi-pronged initiatives; offers a wide range of banking services related to Retail, Corporate, Treasury and Investments. Doha Bank’s large growing customer base and its business integration model  sets the grounds for a perfectly fitted partnership with one of India’s most diversified business houses, having a robust presence in Financial Services, Telecom, Infrastructure, Entertainment, Power, Health Care, and Defense industries.

The relationship-based model has been designed with a revolutionary approach between Doha Bank and Reliance Group which has been engaged in pivotal roles in the ongoing economic transformation of India. This agreement will open new horizons for business reciprocity in Financial Services.

The agreement which has been formalized at the Sheraton Doha Hotel was signed by Anil D. Ambani, Chairman, Reliance Group and Doha Bank Group CEO Dr. R. Seetharaman in the gracious presence of Mr. Sanjiv Arora, Ambassador of India to Qatar. The exclusive assembly has been attended by the most renowned and influential business leaders and investors in Qatar at which the Qatar Airways Group CEO Akbar Al Baker was the guest of honour. Also the event was attended by a delegation of eminent businessmen from India.

Anil D. Ambani the Chairman of Reliance Group said, “We are glad to enter into this partnership which will further reinforce the economic interaction between GCC and India. Reliance  Capital will look forward to offering customized solutions and investment products to Doha Bank customers.”

Doha Bank Group CEO Dr. R. Seetharaman has accentuated in a press conference the scope of the collaboration and said: “The arrangement will include financial services initiatives with Reliance Capital in the areas such as asset management, life and general insurance and distribution of financial services.”

The scope of the partnership will strengthen Doha Bank’s presence in India and the bank’s strategic role in trade finance, banking and financial services across the region and in creating business opportunities between GCC and India. It is worthwhile mentioning that all the activities under the partnership will be strictly compliant with the laws and regulations in India and the GCC. Reliance Group and Doha Bank partnership further proves that there is so much to look forward to between India and GCC.