GOLD RECORDS SINGLE BIGGEST EVER RISE

Gold prices zoomed to a record high of Rs 34,500 per ten gram with a biggest ever single day surge of Rs 2,500 in opening trade in bullion market today amid the rupee hitting historic low of 68.75 a dollar. The current upsurge surpassed its record price of Rs 32,975 per ten gram, set on November 27 last year, with its biggest ever single day surge as panic-striken investors rushed to purchase gold as a safe haven during current financial crisis when forex and equity melting fast. The rupee has been witnessing an unprecedented plunge in its value as it dropped to an all-time intra-day low of 68.75 per dollar today, while the BSE benchmark Sensex also declined sharply. "The bullion demand has got a boost as the rupee hit fresh record low and equities tumbled, leaving no place for investors but to park their funds in gold as a safe-haven," Surender Jain, Vice President, All India Sarafa Bazar told PTI. He said the yellow metal climbed to over three-month high in global markets as speculation that the US could lead military action against Syria within days spurred investors' demand for a haven.
A Delhi-based bullion merchant Rakesh Anand said the outlook for gold is bullish as dollar-priced metal moving hand-in-hand with forex market and shifting of investors funds from melting equities. "Gold will have more upward strength in coming days keeping in view the approaching festival and marriage season," Anand said. The gold in Singapore, which normally set price trend on the domestic front here, dropped by 0.3 per cent to 1,419.55 dollar an ounce.
Traders said a steep rise in gold prices on the Multi Commodity Exchange in early trade today further supported the uptrend, indicating more demand for the precious metals in coming sessions.

SENSEX REBOUNDS AFTER CRASH

 The benchmark S&P BSE Sensex ended 28 points higher today, staging a dramatic recovery after plunging more than 500 points in intra-day trade, as the rupee rebounded from a new low against the dollar. The gains were led by IT, metal and teck sector stocks, while public-sector and consumer durable shares fell. Initially, market sentiment was weighed down after US stocks closed lower yesterday and key Asian indices fell amid indications of military action against Syria for its alleged use of chemical weapons against civilians. Investors were also concerned about the Food Security Bill's subsidy burden and capital outflows with the likely tapering of bond buying by the US Federal Reserve next month. The rupee recovered some ground after falling to a new lifetime low of 68.75 against the dollar as oil prices rose on concern about the possible military action against Syria. Higher oil prices increase India's import bill and put pressure on the current account deficit. The 30-share Sensex opened at 17,851.44, lower than yesterday's close of 17,968.08, and plunged almost 520 points to the day's low of 17,448.71. As the rupee rebounded, value-buying set in to help the index erase the day's losses and climb to 18,101.84 before ending at 17,996.15, a gain of 28.07 points, or 0.16 per cent. Life Insurance Corporation (LIC), the country's biggest institutional investor, was said to have bought shares. Stocks also recovered as investors covered their pending long positions created in the recent bear run ahead of the monthly derivatives contract expiry on Thursday, brokers said. The broader Nifty index on the National Stock Exchange also recovered from its initial sharp fall, although it closed down by 2.45 points at a 13-month low of 5,285. 

RUPEE HITS RECORD LOW OF 66.30

Worries about the food subsidy bill dragged the rupee to a fresh lifetime low of 66.30 to the dollar today before closing at 66.24 as the market ignored government assurances on keeping the fiscal deficit in check. The rupee fell amid weak local equities, dollar demand from importers and banks, outflows and rising oil prices. At the interbank foreign exchange market, the rupee resumed lower at 65 a dollar from the previous close of 64.30 and remained in negative terrain through the day. It dropped to a record intra-day low of 66.30 before settling a tad better at 66.24, a fall of 194 paise or 3.02 per cent. The rupee had plunged 148 paise on August 19. The previous lifetime low was 65.56 on August 22.
The rupee slipped below the 103- level to touch a new bottom of Rs 103.29 against the British pound today amid sharp plunge in equities and fresh investor concerns over foreign capital outflows.It finally ended the day at Rs 102.8 against the UK currency, a fall of Rs 2.68 from yesterday's close of Rs 100.12 per pound. 

The rupee had first breached the 100 level against pound on August 20 and continued to trade below this level for three consecutive days before regaining some lost ground in the past two sessions (August 23 and August 26). The rupee has depreciated by about 25 per cent in past three months, from close to 83 in mid-May. It was even higher at about 80 against the Pound in March.

WHAT AN IDEA ANAND...

An out-of-the-box idea to help contain the widening current account deficit (CAD) is monetising 500 tonnes of gold at the current value, Commerce and Industry Minister Anand Sharma said today. "It is for the banking secretary, bankers and the RBI to see how you can monetise gold, (from) the country with over 31,000 tonnes of declared gold. That is the declared part. So, even if 500 tonnes is monetised, then in today's value, I think it takes care of CAD," he said at a meeting of the Board of Trade. He, however, added that this "decision (of monetising gold) is beyond me... but I am just pointing in that direction. Can we do something there? I think we can, because you have to think out of the box." At current market rates, 500 tonnes of gold is valued at about USD 25 billion. Globally, demand for gold in April-June was 856 tonnes, down 12 per cent from a year earlier, the World Gold Council said in a statement on August 15. The government has targeted a CAD of 3.7 per cent of GDP, or USD 70 billion, in the current financial year. India's CAD, which indicates the excess of imports of goods, services and transfers over exports, touched a record 4.8 per cent of GDP, or USD 88.2 billion, in 2012-13. The CAD has widened due to increasing imports, especially of commodities such as oil and gold. Gold imports in April-July rose 87 per cent to 383 tonnes. After a dip in June, gold imports again surged in July with 47 tonnes of inward shipments compared with 31 tonnes in the previous month. The government and the RBI have taken steps to curb demand for the yellow metal. The government recently raised customs duty on gold to 10 per cent. 

HOUSING PRICES DOWN IN MAJOR CITIES

Housing prices in 22 major cities, including Delhi and Mumbai, are witnessing downward trend in April-June period compared to the previous quarter due to slowdown in demand, National Housing Bank said today. Property prices in majority of the cities, 22 out of 26 are witnessing marginal downward trend, quarterly update of NHB Residex said. The movement in prices of residential properties for the quarter has shown declining trend in majority of the cities, ranging from -0.45 per cent in Mumbai to -5.99 per cent in Ludhiana, it said. On the contrary, there was a price rise in four cities, 0.55 per cent in Dehradun and 3.07 per cent in Nagpur during the quarter April-June, 2013. In term of price decline, property prices in Indore declined by (-5.64 per cent), Vijaywada (-5.43 per cent), Hyderabad (-4.55 per cent), Kolkata (-4.06 per cent) and Guwahati (-3.92 per cent). Among others, residential property in Kochi declined by (-3.37 per cent), Patna (-3.29 per cent), Coimbatore (-3.26 per cent), Ahmedabad (-3.13 per cent), Faridabad (-2.42 per cent), Chennai (-2.26 per cent), Jaipur (-1.79 per cent), Delhi (-1.49 per cent), Bhopal (-1.30 per cent). NHB RESIDEX tracks the movement in prices of residential properties on a quarterly basis since 2007. The index for Delhi includes property transactions in Gurgaon, Noida, Greater Noida and Ghaziabad. NHB RESIDEX has been expanded to include six new cities namely Chandigarh, Coimbatore, Dehradun, Meerut, Nagpur and Raipur from this quarter, it said.

BIG FALL

The benchmark S&P BSE Sensex today plunged 590 points to end below the 18,000 mark as the rupee fell past the 66-mark to a lifetime low and concerns were raised about the subsidy burden after passage of the Food Security Bill.

Chaos returned to the stock markets after three sessions of gains as foreign funds sold heavily. Investor sentiment was unchanged after Finance Minister P Chidambaram said the fiscal deficit would be contained at 4.8 per cent of GDP even after doling out subsidies to implement the Food Security Bill. The 30-share Sensex remained in negative terrain since the opening and touched a low of 17,921.82 before ending at 17,968.08, a fall of 590.05 points or 3.18 per cent. In the previous three sessions, the index added 652.22 points. The broader Nifty on the National Stock Exchange slumped 189.05 points or 3.45 per cent to 5,287.45. The SX40 on the MCX-SX closed down 391.41 points at 10,629.77. "The Food Security Bill was passed yesterday, which is expected to add to the fiscal burden. We believe crude oil has emerged as a key risk in the near term, which is not a good sign for the rupee. Thus, on an overall basis, the macroeconomic outlook has weakened and risks have clearly strengthened."  " said Sanjeev Zarbade, VP at Kotak Securities. 

Reports said Brent crude was close to a 5-month high amid tension after a suspected chemical weapons attack in Syria. Investors lost Rs 1.7 lakh crore in wealth as 1,538 stocks closed lower and 719 advanced. The rupee fell to a lifetime low of 66.07 against the dollar on month-end demand from importers, capital outflows and food bill subsidy concerns. Twelve of the 13 sectoral indices closed lower, led by banking, capital goods and power shares. HDFC Bank, HDFC and ICICI Bank together contributed 251.54 points to the Sensex's decline. The biggest losers on the index were Bharat Heavy Electricals, HDFC Bank and HDFC. Among the gainers, Infosys added Rs 27.55, or 0.91 per cent, to Rs 3,058.10. Foreign institutional investors sold a net Rs 607.43 crore of shares yesterday, as per provisional exchange data. Chidambaram attributed the present economic woes to the stimulus provided to the industry to tide over the global financial meltdown of 2008, which cost the government in terms of fiscal deficit and current account deficit. Referring to the Cabinet Committee on Investment approving 27 projects envisaging an investment of Rs 1.83 lakh crore, the minister said once the investment cycle and manufacturing pick up, there will be positive impact on the economy and in particular, the current account deficit.

ASIAN STOCKS PLUNGE

Asian stock markets ended lower after US Secretary of State John Kerry said Syria's government will be held accountable for using chemical weapons against civilians. Key indices in Singapore, Taiwan, Hong Kong, South Korea and Japan fell, while China's Shanghai Composite inched up. In Europe, indices in France, Germany and UK declined in early trade. In the domestic market, 27 shares on the Sensex ended lower, led by BHEL (9.49 pc), HDFC Bank (8.04 pc), HDFC (7.7 pc), NTPC (5.86 pc), Jindal Steel (5.68 pc), Larsen (5.3 pc), Hindalco (4.98 pc), Bharti Airtel (4.15 pc), Tata Power (4.12 pc) and Coal India (4.09 pc). Among the sectoral indices, S&P BSE-Bankex dropped 5.34 pc, followed by S&P BSE-Capital Goods 4.71 pc, S&P BSE-Power 4.51 pc, S&P BSE-Realty 3.95 pc, S&P BSE-PSU 3.8 pc and S&P BSE-Metal 3.52 pc.
The Mid-Cap and Small-Cap indices fell 2.09 per cent and 1.7 per cent, respectively. The market breadth turned negative as 1,538 stocks ended with losses while 719 finished higher and 138 were unchanged. Total turnover rose to Rs 2,064.78 crore from Rs 1,847.82 crore yesterday. 

177 STOCKS HIT 52 WEEK LOW

As many as 177 stocks hit their fresh one-year low on the BSE today, amid mayhem in the stock market where the benchmark Sensex plunged almost 600 points.Following the weak sentiment across the stock market, blue-chips, including HDFC Bank, HDFC, Ultratech Cement, NTPC and ACC touched their respective 52-week low. Shares of HDFC Bank tanked 8.04 per cent to close at Rs 560.9, while mortgage lender HDFC plunged 7.70 per cent to Rs 686.85 and NTPC lost 5.86 per cent to close at Rs 124.50. In contrast, 47 scrips scaled their 52-week high at the BSE.

Among the 30-Sensex constituents, 27 stocks ended the day with losses in the range of 0.09-9.49 per cent, with BHEL emerging as the worst performer. From the BSE 13 sectoral indices, barring IT space, 12 ended the day in the red with banking sector taking the biggest hit.
Investors lost Rs 1.7 lakh crore in notional wealth in stocks. 

RUPEE @ 64.10-FELL BY 110 PAISE

The rupee today tumbled 110 paise to once again close below the 64 mark against the dollar, giving up a major part of Friday's gains amid heavy month-end dollar demand from importers and capital outflows. A strengthening dollar overseas and late weakness in local stocks also put pressure on the rupee, a forex dealer said. Global ratings agency Fitch today said India's fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet the fiscal deficit target. At the interbank foreign exchange market, the rupee opened lower at 63.65 a dollar from the previous close of 63.20 and dipped further to the day's low of 64.75. The local currency recovered some ground after the Reserve Bank of India (RBI) was said to have stepped in through state-run banks, helping the rupee to end at 64.30, a fall of 110 paise or 1.74 per cent. "The RBI, which was there in the market on Friday, was not seen today, at least till 4.30 pm today. After that, there was some hint of intervention by the RBI. Month-end dollar demand from oil importers kept rupee under pressure," said Navin Raghuvanshi, VP for treasury at Development Credit Bank. 

STOCK MARKET UNDER PRESSURE
 The benchmark S&P BSE Sensex today rose 39 points, settling in positive terrain for the third straight session, after erasing most of its early gains as the rupee once again weakened past the 64-mark against the dollar. Brokers said trading sentiment was initially firm after the Finance Ministry indicated that steps to attract capital flows to fund the current account deficit can be expected within a week. The announcement followed Finance Minister P Chidambaram's meetings with overseas investors and top bankers in Mumbai on Saturday.
The 30-share barometer opened higher and climbed to 18,728.19, a rise or 208.75 points. Later, selling in banking, refinery and PSU stocks pulled it down to settle at 18,558.13, a gain of 38.69 points or 0.21 per cent. The closing level was the highest since August 16, when it was at 18,598.18. The wider CNX Nifty on the National Stock Exchange edged up 4.75 points, or 0.09 per cent, to 5,476.50. The SX40 index on the MCX-SX closed 60.45 points up at 11,021.18. The fall of the rupee below the 64-mark to near 64.50 per dollar also weighed on sentiment in the stock market. "Some short covering along with cautious buying at lower levels aided market recovery," said Nidhi Saraswat, senior research analyst at Bonanza Portfolio Ltd. "However, market remains wary about the present situation of Indian rupee as well as economic condition of the country." Power, capital goods, IT and pharma shares attracted buying interest. Heavy electrical equipment major BHEL was the top gainer in the Sensex pack for the second straight day and closed up 6.63 per cent, adding to Friday's 8.1 per cent gain.

DOWNGRADING INDIA RATING ON CARDS?

Stating that the space to contain expenditure is very limited in the second half of the fiscal, global ratings agency Fitch today said the fiscal numbers "look weak" and warned of a downgrade if the country is unable to meet fiscal deficit target. "India's fiscal numbers look weak...fiscal slippage could trigger negative rating action," Fitch Ratings' head of Asia-Pacific Sovereigns Andrew Colquhoun said on a conference call today. The agency's lead analyst Art Woo added that fiscal management is a challenging task. "The fiscal side is proving more challenging...a slowdown in fiscal expenditure in the second half of the year remains quite challenging," Woo said. It can be noted that last fiscal, due to a pressure from international rating agencies threatening to cut the country's sovereign rating to junk status if the fiscal deficit worsens, the government had massively cut its expenditure to meet its fiscal deficit target. The P Chidambaram-led Finance Ministry had in fact, bettered the targeted number by limiting the deficit to 4.89 per cent for the fiscal, as against a stated target of 5.2 per cent. For the ongoing FY'14, the government is targeting to get the fiscal deficit number to 4.8 per cent. In the wake of a huge depreciation in the rupee and doubts over the revenue increase targets, the government has repeatedly asserted that it will be able to meet the fiscal deficit target of 4.8 per cent. The current account deficit, which is being blamed as one of the primary reasons for the ongoing rupee depreciation, will come in at USD 75 billion in FY14 as against the USD 87.8 billion in the previous fiscal, Colquhoun said today. "We expect the GDP ratio for India's current account deficit to be lower than for either of the last two years," he said. However, it said that the ongoing battle to hold on rupee level may dent the country's foreign exchange reserves and added that the total reserves could fall to USD 230 billion from the present level of around USD 278 billion. Meanwhile, on the rupee depreciation, Colquhoun clarified that Fitch does not wish to say anywhere that the ongoing troubles do not have a bearing from the credit rating perspective. The rupee touched an all-time low of 65.56 against the US currency last week. Reports last week had attributed Fitch as saying that the rupee fall does not warrant an immediate action on the country's rating. "These pressures have exceeded those of other emerging Asian economies, but Fitch Ratings does not view these developments as a trigger for rating action at this point," Fitch had said in a note.

NEW TYPHOID VACCINE FROM BHARAT BIOTECH

Bharat Biotech, a city-based vaccine manufacturer, today announced the launch of Typbar-TCV, the world's first clinically proven typhoid conjugate vaccine for six months old infants and adults. Bharat Biotech CMD Krishna M Ella said the new vaccine brings hope to millions by protecting them against typhoid caused by salmonella typhi, a highly virulent and invasive enteric bacterium. Ella said that this is a fourth generation vaccine against typhoid disease which has been proven to provide long term protection to adults and infants. Typhoid vaccines fall short in two major counts, namely long-term protection and protection of children below two years of age. "We hope this vaccine will reach millions of people and help reduce the burden of this devastating disease in infants and children," Ella told reporters at a press conference here, adding that his company had commenced commercial production of Typbar-TCV in pre-filled syringes at its vaccine production facility in Genome Valley. "The pricing of the vaccine has not yet been decided. There will be two price structures. One for public institutions and the other one will be for private organisations. Pricing will be fixed by next week," he said. The plant has the capacity to produce 10 million doses each year, which is expandable to 50 million doses per year in future. Bharat Biotech is the largest producer and supplier of typhoid vaccine in the world, having distributed over 50 million doses globally, he claimed. Quoting World Health Organisation reports, Director-General of the International Vaccine Institute (IVI) Christian Loucq said that typhoid fever kills between 250,000 to 600,000, besides causing 20 million illnesses per year, affecting mostly school children. "The World Health Organisation reports that 90 per cent of typhoid deaths occur in Asia and persists mainly in children under five years of age. In India, typhoid fever is observed throughout the year and a greater number of cases coincide with the rainy season," Loucq said. While typhoid fever can be cured by antibiotics, resistance to anti-microbials is widespread along with poor diagnostics, he said, adding that hence prevention of typhoid fever is better than curing it.

ONE TIME HIKE IN DIESEL PRICE NEEDED

With 12 per cent drop in rupee value against the US dollar making imports costlier, state- owned oil firms have demanded a one-time steep increase in diesel rates to make for the widening losses. Losses on sale of diesel at government controlled rates, had dropped to under Rs 3 per litre in May following monthly increases of up to 50 paise a litre. But with the rupee depreciating against the US dollar, the losses have widened to Rs 10.22 per litre. "We had requested the government for an increase in prices on ad-hoc basis. The decision on the increase rests with the government. The government of India has to take a decision on it. I have no comments on it," IOC Director (Finance) P K Goyal said.
Losses on diesel sales have widened to Rs 10.22 from Rs 9.29 a litre in the bigging of the month. Besides diesel, the oil companies are losing Rs 33.54 per litre on kerosene and Rs 412 per 14.2-kg cooking gas (LPG) cylinder. Speaking to reporters after flagging off a biking expedition to Ladakh, Goyal said the total revenue loss or under- recoveries on diesel and cooking fuel was estimated at Rs 80,000 crore at the beginning of the fiscal, which have now widened to Rs 140,000 crore. "Rupee has depreciated 12 per cent since April. It was 59.39 to a dollar and today it is 64.10. Rupee depreciating by one against the US dollar adds Rs 8,000 crore to our under- recoveries (revenue loss)," he said. The government had in January allowed oil companies to raise diesel rates by up to 50 paisa per month till such time that the losses on the most consumed fuel in the country are wiped out. With prices being raised regularly, the losses on diesel had come down to below Rs 3 per litre in May but rupee falling by 12 per cent since April has resulted in the difference climbing to Rs 10.22 per litre.
Oil companies feel 50 paisa increase is insufficient and there should a one-time steep increase to cover for fall in rupee. Oil Minister M Veerappa Moily had on August 14 stated that oil company suggestion of one-time hike was under consideration but no decision has been taken yet. "That's under consideration, but we have not yet decided," he said. Moily, however, said there is no proposal to raise LPG or kerosene rates. Diesel price was last hiked on August 1 when prices in Delhi went up by 56 paisa (after including local taxes) to Rs 51.40 per litre. IOC, Bharat Petroleum and Hindustan Petroleum had lost Rs 25,579 crore in revenue in the first quarter ended June 30, of which the government made good Rs 8,000 crore by way of cash subsidy.