STOCK MARKET ON RECOVERY PATH

Ignoring the rupee's further descent to a fresh record low, the benchmark S&P BSE Sensex today gained for the first time in five days surging 407 points on the back of metal shares, which got a boost from encouraging data from China. The 30-share Sensex opened at 17,896.84, lower than the previous close of 17,905.91, and dropped to a low of 17,759.59. Value buying saw the index recover and touch the day's high of 18,349.82 before it closed at 18,312.94, a gain of 407.03 points, or 2.27 per cent. The biggest gain for the index in almost two months helped investors become richer by Rs 1.17 lakh crore. The index had gained 519.86 points on June 28. Brokers said the rally was backed by metal stocks after a manufacturing index in China, the biggest consumer of metals, increased in August from an 11-month low. They said higher openings in the European stock markets as manufacturing in Germany expanded at a faster-than-expected pace also influenced the Indian market sentiment. "Global cues provided needed respite to our domestic bourses amid further weakness in rupee," said Jayant Manglik, president retail distribution at Religare Securities Ltd. "With better-than-expected manufacturing numbers from China, metal stocks outshone other pivots by strong margins." The Nifty index on the National Stock Exchange surged by 105.90 points, or 2 per cent, to 5,408.45. The SX40 index on the MCX-SX added 199.44 points to 10,817.88.  

RUPEE HITS RECORD LOW

The rupee remained in the doldrums for the sixth session in a row today as it breached the 65 mark to an all-time intra-day low of 65.56 before recovering to settle at 64.55 against the dollar, still down 44 paise. Even as local stocks recovered, the rupee's declined on dollar sales by exporters and capital outflows. Steps taken by the Reserve Bank and the government to curb volatility in the exchange rate appeared to have had little effect. The dollar strengthened overseas after minutes showed the U.S. central bank remains on course to start trimming its stimulus before the year end. The dollar index, consisting of six major global currencies, was up 0.32 per cent. At the interbank foreign exchange market, the rupee resumed weaker at 64.85 a dollar from the previous close of 64.11 and crossed the 65 mark to a historic low of 65.56. It recovered some ground and ended at 64.55, still a fall of 44 paise or 0.69 per cent. In six straight sessions, the rupee has tanked by 336 paise or 5.49 per cent.  

SECOND PART OF THE ARTICLE ON RUPEE FALL

NANO BE POSITIONED AS SMART CITY CAR

Faced with steep fall in sales of Nano, Tata Motors is mulling to position BUDGET CAR NANO as SMART CITY CAR...in future.with added features such as power steering, apart from introducing a CNG version. Tata Group Chairman Cyrus P Mistry informed this to the shareholders at the 68th annual general meeting. 
"We are now focusing on increasing the features and the perceived value of the Nano with every subsequent model launch, We are now focusing on making it a smart city car and targeting the young customers," he added.
Despite discounts and other freebies, Tata Motors has not been able to draw in customers to Nano showrooms and its dedicated Nano plant at Sanand in Gujarat is running much below even half its capacity. "We are coming out with power steering options (on Nano), improved interiors and exteriors and better fuel efficiency," Mistry said.
Mistry also said the company will launch the much-delayed CNG variant of the Nano this year. 

MARUTI LAUNCHES STINGRAY

Looking to beat the slowdown blues, country's largest carmaker Maruti Suzuki India (MSI) today launched a compact car Stingray, priced between Rs 4.1 lakh and Rs 4.67 lakh (ex-showroom Delhi). With the Stingray, which will be more expensive than the existing WagonR by about Rs 20,000, MSI is hoping to attract young customers and make the most out of the upcoming festive season. With this, the company will have nine models in its compact car portfolio and the WagonR would continue to be in the market. Stingray, which is powered by a 998 cc petrol engine, is available in three variants and the company will also roll out a CNG model soon. The launch comes when the auto industry is gearing up to boost sales in the upcoming festive season.

"We are hoping sales will pick up in the festive season but we are not expecting very strong sales during the period considering the current macro-economic conditions. It won't be as euphoric as last year," MSI Chief Operating Officer (Marketing & Sales) Mayank Pareek said. Asked about the sales target for Stingray, he said the company hasn't set any numbers.
Pareek said with the difference between petrol and diesel fuels getting narrower, demand for petrol vehicles has been coming back in recent months. "The industry average is about 54:46 between diesel and petrol now. In two or three quarters we can expect it to be 50:50," he said, adding this trend held out hope for the petrol-driven small car segment, which was earlier battered. Pareek also said the rupee depreciation has put pressure on margins but ruled out passing the burden to customers, saying the market conditions did not warrant it.

UNLISTED COMPANIES OVERSEAS IPO'S UNDER CONSIDERATION

Faced with the sliding rupee, the government is considering allowing unlisted companies to launch public offers in overseas markets and raise funds in foreign currency. "The proposal to allow unlisted companies to list on overseas stock exchanges through Initial Public Offering (IPO) is being considered," a senior finance ministry official said.
Under the current norms, only those companies that are listed on the domestic stock exchanges are permitted to list on bourses overseas. The move is expected to help the companies meet their foreign exchange requirements and at the same time ease pressure on the domestic currency, which has been touching new lows over the past couple of months.
"It would also help in reducing pressure on the CAD as such companies will either bring in the foreign exchange or utilise the proceeds to meet their own requirements," the official added.
The proposal will also help companies gain access to other markets at a time when the domestic stock market is witnessing massive sell-offs. The BSE 30-stock index, Sensex, has lost around 1,500 points in the last four trading sessions amid the weakening of the domestic currency.
The rupee, which has been on a declining trend since June, touched all-time low of 64.49 against the US dollar in the intra-day trade today. A weak rupee, which can mainly be attributed to widening of the Current Account Deficit (CAD), raises import cost and fuels inflation in addition to putting pressure on other macro economic parameters. The CAD, which is the difference between the inflow and outflow of foreign exchange, touched a record high of USD 88.2 billion or 4.8 per cent of GDP in 2012-13.

CORPORATES ON JOB CUTTING SPREE

Faced with a tough economic scenario, corporates are cutting jobs and rationalising manpower to save on costs and the situation is likely to get worse in coming days, according to an Assocham study. "Alongwith the increasing number of corporates rushing to banks for debt restructuring, scores of them are also being forced to go in for manpower rationalising, reducing the headcount to save costs which they are unable to bear in the face of a difficult economic environment," according to the Assocham report on on Impact of Slowdown on Employment. The sad part is the situation is likely to become worse, rather than improve, in the weeks to come and the pain would only increase, it said. The companies resorting to rationalisation of manpower belong to sectors like infrastructure, gems and jewellery, educational solutions, realty, non-banking finance companies, especially in the gold-loan segment, media and public relations.
"More and more companies are approaching the consulting firms seeking solutions to cut costs so that they can weather the difficult economic environment vitiated by adverse global situation, pressure on currency, sinking stock market, high interest rates, inflation and limited elbow available with the government to bail out the troubled industry," it said.
The report further pointed out that if the situation does not improve in the near future, the negative fallout would be felt on those sectors as well which are driven by job markets like consumer goods, white goods, electronic gadgets and passenger cars. Moreover, eroding consumer confidence would also affect tourism and its constituents like hotels, restaurants and tour operating. The aviation sector would also face tougher times, the report suggests. However, the sectors which are still doing well include agri-related companies in implements, tractors, fertiliser, seeds, extension services and the rural product focussed FMCG.

SENSEX TUMBLES BELOW 18000 MARK...NIFTY NEAR PSYCHOLOGICAL BARRIER

After an initial rally, the benchmark S&P BSE Sensex crashed another 340 points today to the lowest closing level in more than 11 months as the rupee continued its free fall to an all-time low. The rupee continued its downslide for the fifth trading day in a row , dropping to 64.52 against the dollar in afternoon deals, amid fresh measures announced by the Reserve Bank of India (RBI) yesterday to increase the availability of cash in the banking system. The 30-share Sensex opened at 18,545.44 and rallied more than 300 points from yesterday's close to a high of 18,567.70 before declining to a low of 17,807.19. It closed at 17,905.91, a loss of 340.13 points, or 1.86 per cent, the lowest level since Sept. 11, 2012. In four days, the Sensex has plunged by 1,461.68 points or 7.55 per cent. The Nifty index on the National Stock Exchange dropped 98.90 points, or 1.83 per cent, to 5,302.55. 

The SX40 index on the MCX-SX closed at 10,618.44, down 1.95 per cent. Brokers said market sentiment was hurt by sustained weakness in the rupee and expectations the US Federal Reserve would start withdrawing its bond-buying programme next month. "The fall was led by selling in index heavyweights. This coincided with further weakness in the rupee," said Sanjeev Zarbade, Vice President, Private Client Group Research at Kotak Securities. "The market is now awaiting the Fed meeting notes to be released today for fresh clues on when the central bank plans to taper its monthly bond purchases." Bharti Airtel, Sun Pharma, Sterlite Industries, ITC and Reliance Industries led the losers on the Sensex, while BHEL, HDFC and HDFC Bank gained. ITC and Reliance Industries together contributed 176 points to the index decline. Metals, oil and gas, realty and FMCG were among the sectoral indices that fell. The bank and consumer durables sectors were the only two that gained. Bank stocks rallied after the RBI relaxed some rules to will help them deal with the notional or mark-to-market (MTM) loss in their government bond portfolios due to the recent sharp fall in bond prices.

VERY FINE ANALISYS ON RUPEE FALL

RUPEE HITS NEW LOW AGAINST POUND

As markets remain focused on rupee's fall against the US dollar, Indian currency today slipped below 100-level against the British pound for the first time ever to touch a new bottom of 100.52. After a modest recovery, the rupee finally ended the day at 99.04 against the UK currency with a fall of 25 paise from its yesterday's close of 98.79 for one pound.

The 100 level against the pound was breached early in the morning, alongside rupee's fall below 64 level against the US dollar, as weak economic issues including ballooning current account deficit weighed down on the Indian currency.
The rupee has depreciated by about 25 per cent in past three months, from close to 83 in mid-May, while it was even higher at about 80 against the British Pound in March.
At close to 100 level, the British pound is the most expensive against the Indian rupee among major foreign currencies across the world, followed by euro (Rs 84.66), Swiss franc (Rs 69.07), US dollar (Rs 63.25), Canadian dollar (Rs 61.24), Australian dollar (Rs 57.34), New Zealand dollar (Rs 50.46) and Singapore dollar (Rs 49.66). Against US dollar too, rupee today hit a fresh low below 64-level and slipped to as low as 64.13 before closing at 63.25 in the Interbank Foreign Exchange (Forex) market. Forex dealers said that strong demand for foreign currency from importers and banks and continuing plunge in equity markets, in view of sustained foreign funds outflows added pressure to the rupee.
However, some recovery was seen later in the day amid sale of dollar and other foreign currencies in the market by state-owned banks presumably on the instruction of RBI, dealers said.