Dollar Drops to 10 Month Low Versus Euro

Dollar Drops to 10 Month Low Versus Euro

The dollar dropped to fresh 10-month lows against the euro and four-month lows versus the Aussie dollar the ‘miss’ in the September NFPs. For many, this data is confirmation that the Fed’s unpopular – for capital markets like US equities – decision to Taper its stimulus program would be pushed all the way until March 2014. Yet, it is interesting to note that the dollar reaction was more restrained than the debt resolution and the S&P 500’s exuberance was significantly weaker than the average bullish performance last week. What are we to derive from this? One element of this restrained is the level of speculation surrounding the looser monetary policy conditions. Assets like US equities in particularly seem like they never doubted an ongoing support system. And, in the absence of a ‘relief’ rally on risk, tepid jobs and stimulus don’t exactly spell out the beginning of a long-term bull trend. A more prolific problem that may develop traction moving forward is outright doubt that stimulus will be maintained that long or even be effective in its moral hazard gearing. What happens if the S&P 500 drops even with QE3 at full tilt…

British Pound Looking to BoE Minutes as GBPUSD Faces 1.6250

Where the interest rate outlook for the US may be at the bearish extreme with markets expecting the accelerator depressed on stimulus through the next five months, the sterling is on the opposite end of the spectrum. Rates-sensitive markets have made it clear that the Bank of England’s (BoE) foreword guidance for benchmark rates to be held until 2016 are not believed. An expectation for the first hike to come in 2015 was further reinforced last week when the central bank’s chief economist voiced implicit support of the more hawkish time frame. We will see whether these expectations are indeed overblown or on track with the upcoming BoE minutes. Should the language soften on the adamant dove stance with the GBPUSD so close to 1.6250 – a multi-year resistance – a break may be in store. However, expectations are already stretched; and the group has not strayed from its original guidance. Furthermore, the argument of a hike two years out over three years out doesn’t present a particularly strong bullish line beyond short-term repricing. The greater risk is for a dovish hold and bearish response for the pound.

Australian Dollar Rally on 3Q CPI More Successful for AUDNZD

With rate making a consistent recovery from the discounts of persistent rate cuts just months ago, the Australian dollar has found recovery traction with a timid risk appetite supporting carry. Yet, the shift so far for the Aussie yield projection has only made the transition to rate cuts to a flat forecast. We have yet to see a material outlook for rate hikes take root. The slow build up was put into jeopardy early this morning when the third quarter consumer inflation (3Q CPI) figures crossed the wires. With the annual, headline reading expected to slow to 1.8 percent and thereby drop out of the RBA’s preferred range, fear of another near-term cut began to creep back in. The 2.2 percent reading mitigated those fears, but it didn’t move forward the time frame on the first hike. Without active carry appetite, this data my garner little strength.

Euro: Greece Readies Troika Demands, 

ECONOMIC DATA

GMT	Currency	Release	Survey	Previous	Comments
0:00	AUD	DEWR Skilled Vacancies (MoM) (SEP)		0.3%	Inflation looks to hit its lowest level since the June 2012 print. A continuation below 1.8% could strike concern among members of the RBA and may warrant comments at the next meeting.
0:30	AUD	Consumer Price Index (QoQ) (3Q)	0.8%	0.4%
0:30	AUD	Consumer Price Index (YoY) (3Q)	1.8%	2.4%
0:30	AUD	CPI RBA Trimmed Mean (QoQ) (3Q)	0.6%	0.5%
0:30	AUD	CPI RBA Trimmed Mean (YoY) (3Q)	2.1%	2.2%
0:30	AUD	CPI RBA Weighted Median (QoQ) (3Q)	0.6%	0.7%
0:30	AUD	CPI RBA Weighted Median (YoY) (3Q)	2.3%	2.6%
1:45	CNY	MNI Business Sentiment Indicator (OCT)
2:00	CNY	China Economic Survey - Bloomberg (OCT)
6:45	EUR	French Business Survey Overall Demand (OCT)		-14	August’s 98 print was the best business confidence index in manufacturing since the fall of 2011.
6:45	EUR	French Own-Company Production Outlook (OCT)		13
6:45	EUR	French Production Outlook Indicator (OCT)	-11	-10
6:45	EUR	French Business Confidence Indicator (OCT)	98	97
8:30	GBP	BBA Loans for House Purchase (SEP)	39500	38228	The print is approaching 2012 highs, but far below pre-crisis levels.
11:00	USD	MBA Mortgage Applications (OCT 18)		0.3%	Import price indexes for September were delayed due to the government shutdown.
12:30	USD	Import Price Index (MoM) (SEP)	0.2%	0.0%
12:30	USD	Import Price Index (YoY) (SEP)	-1.0%	-0.4%
13:00	USD	House Price Index (MoM) (AUG)	0.8%	1.0%
14:00	CAD	Bank of Canada Interest Rate Decision	1.0%	1.0%
14:00	EUR	Euro-Zone Consumer Confidence (OCT A)	-14.5	-14.9	If the print beats prior, it will be the best reading since the Euro-crisis began.
14:30	USD	DOE U.S. Crude Oil Inventories (OCT 18)	3000K		WTI Crude broke below $100 Tuesday for the first time since July.
14:30	USD	DOE U.S. Distillate Inventory (OCT 18)	-1800K
14:30	USD	DOE U.S. Gasoline Inventories (OCT 18)	-1000K
21:45	NZD	Trade Balance (New Zealand dollars) (SEP)	-680M	-1191M	Kiwi strength remains vulnerable after it spiked to 6 month highs post-NFP print.
21:45	NZD

ECONOMIC DATA

GMT	Currency	Release	Survey	Previous	Comments
0:00	AUD	DEWR Skilled Vacancies (MoM) (SEP)		0.3%	Inflation looks to hit its lowest level since the June 2012 print. A continuation below 1.8% could strike concern among members of the RBA and may warrant comments at the next meeting.
0:30	AUD	Consumer Price Index (QoQ) (3Q)	0.8%	0.4%
0:30	AUD	Consumer Price Index (YoY) (3Q)	1.8%	2.4%
0:30	AUD	CPI RBA Trimmed Mean (QoQ) (3Q)	0.6%	0.5%
0:30	AUD	CPI RBA Trimmed Mean (YoY) (3Q)	2.1%	2.2%
0:30	AUD	CPI RBA Weighted Median (QoQ) (3Q)	0.6%	0.7%
0:30	AUD	CPI RBA Weighted Median (YoY) (3Q)	2.3%	2.6%
1:45	CNY	MNI Business Sentiment Indicator (OCT)
2:00	CNY	China Economic Survey - Bloomberg (OCT)
6:45	EUR	French Business Survey Overall Demand (OCT)		-14	August’s 98 print was the best business confidence index in manufacturing since the fall of 2011.
6:45	EUR	French Own-Company Production Outlook (OCT)		13
6:45	EUR	French Production Outlook Indicator (OCT)	-11	-10
6:45	EUR	French Business Confidence Indicator (OCT)	98	97
8:30	GBP	BBA Loans for House Purchase (SEP)	39500	38228	The print is approaching 2012 highs, but far below pre-crisis levels.
11:00	USD	MBA Mortgage Applications (OCT 18)		0.3%	Import price indexes for September were delayed due to the government shutdown.
12:30	USD	Import Price Index (MoM) (SEP)	0.2%	0.0%
12:30	USD	Import Price Index (YoY) (SEP)	-1.0%	-0.4%
13:00	USD	House Price Index (MoM) (AUG)	0.8%	1.0%
14:00	CAD	Bank of Canada Interest Rate Decision	1.0%	1.0%
14:00	EUR	Euro-Zone Consumer Confidence (OCT A)	-14.5	-14.9	If the print beats prior, it will be the best reading since the Euro-crisis began.
14:30	USD	DOE U.S. Crude Oil Inventories (OCT 18)	3000K		WTI Crude broke below $100 Tuesday for the first time since July.
14:30	USD	DOE U.S. Distillate Inventory (OCT 18)	-1800K
14:30	USD	DOE U.S. Gasoline Inventories (OCT 18)	-1000K
21:45	NZD	Trade Balance (New Zealand dollars) (SEP)	-680M	-1191M	Kiwi strength remains vulnerable after it spiked to 6 month highs post-NFP print.
21:45	NZD

ECONOMIC DATA

GMT	Currency	Release	Survey	Previous	Comments
0:00	AUD	DEWR Skilled Vacancies (MoM) (SEP)		0.3%	Inflation looks to hit its lowest level since the June 2012 print. A continuation below 1.8% could strike concern among members of the RBA and may warrant comments at the next meeting.
0:30	AUD	Consumer Price Index (QoQ) (3Q)	0.8%	0.4%
0:30	AUD	Consumer Price Index (YoY) (3Q)	1.8%	2.4%
0:30	AUD	CPI RBA Trimmed Mean (QoQ) (3Q)	0.6%	0.5%
0:30	AUD	CPI RBA Trimmed Mean (YoY) (3Q)	2.1%	2.2%
0:30	AUD	CPI RBA Weighted Median (QoQ) (3Q)	0.6%	0.7%
0:30	AUD	CPI RBA Weighted Median (YoY) (3Q)	2.3%	2.6%
1:45	CNY	MNI Business Sentiment Indicator (OCT)
2:00	CNY	China Economic Survey - Bloomberg (OCT)
6:45	EUR	French Business Survey Overall Demand (OCT)		-14	August’s 98 print was the best business confidence index in manufacturing since the fall of 2011.
6:45	EUR	French Own-Company Production Outlook (OCT)		13
6:45	EUR	French Production Outlook Indicator (OCT)	-11	-10
6:45	EUR	French Business Confidence Indicator (OCT)	98	97
8:30	GBP	BBA Loans for House Purchase (SEP)	39500	38228	The print is approaching 2012 highs, but far below pre-crisis levels.
11:00	USD	MBA Mortgage Applications (OCT 18)		0.3%	Import price indexes for September were delayed due to the government shutdown.
12:30	USD	Import Price Index (MoM) (SEP)	0.2%	0.0%
12:30	USD	Import Price Index (YoY) (SEP)	-1.0%	-0.4%
13:00	USD	House Price Index (MoM) (AUG)	0.8%	1.0%
14:00	CAD	Bank of Canada Interest Rate Decision	1.0%	1.0%
14:00	EUR	Euro-Zone Consumer Confidence (OCT A)	-14.5	-14.9	If the print beats prior, it will be the best reading since the Euro-crisis began.
14:30	USD	DOE U.S. Crude Oil Inventories (OCT 18)	3000K		WTI Crude broke below $100 Tuesday for the first time since July.
14:30	USD	DOE U.S. Distillate Inventory (OCT 18)	-1800K
14:30	USD	DOE U.S. Gasoline Inventories (OCT 18)	-1000K
21:45	NZD	Trade Balance (New Zealand dollars) (SEP)	-680M	-1191M	Kiwi strength remains vulnerable after it spiked to 6 month highs post-NFP print.
21:45	NZD

India to build $300 billion forex chest to counter a slimmer QE figure

NEW DELHI: India hopes to have a $300-billion war chest ready by the end of the year as a frontline defence against tapering by theUS Federal Reserve, which is now expected to begin sometime early next year.

The finance ministry expects $30 billion to be added to its foreign exchange reserves, currently estimated at $251 billion, by the end of November.

"The effort is to build the forex kitty," said a senior finance ministry official. The government doesn't see any major upheaval from tapering, he said.

Fed Chairman Ben Bernanke's suggestion in May that the US could start pulling back its bond-purchase programme triggered a panic exodus from emerging markets, with India among the worst hit. There's been a recovery since then as overseas investors have returned and Fed has put off a decision on when tapering will start. Meanwhile, the government and RBI have taken a series of steps aimed at strengthening India's defences ahead of the inevitable withdrawal of the stimulus programme.

RBI is expected to respond more quickly than it did last time to check rupee volatility as tapering approaches.

Independent experts also see strong dollar reserves as the best defence against any capital outflow and resultant pressure on the rupee. Total reserves, including gold and balances with IMF, are currently at $281 billion, up from $275 billion at the end of August.

“If our debt gets included in one of the global indices, there would be an additional flow of $20 billion just on this count,” said Abheek Barua, chief economist, HDFC Bank, referring to ongoing efforts aimed at getting included in such benchmarks for emerging market debt. “We expect forex reserves to be a little less than $300 billion with an upside,” he said.

Fed deferred the scaling down of its $85-billion-a-month bond buying programme on September 18 until there was stronger evidence of recovery in the world’s largest economy. Most analysts now expect the rollback of bond purchases to begin by early next year after employment numbers last month showed the US economy was gathering pace. The rupee depreciated more than 20% in less than five months toward the end of August, hitting an all-time low of 68.85 to the dollar as foreign investors pulled out funds.

It has since rebounded to around 61 to the dollar because of measures by both the government and RBI and a substantial improvement seen in the current account deficit (CAD). Economists agree the preparation will mean that India will be able to handle the actual winding down of Fed’s unprecedented monetary stimulus better than it did when there was a mere mention of its possibility. “We will be able to manage and there would not be much volatility... India's fundamentals have improved,” said DK Pant, director and head, public finances, India Ratings, the local arm of Fitch Ratings.

Tanay Tapas

PGDM 1st

Banking licence: RBI seeks more info

MUMBAI: The Reserve Bank of India (RBI) has called for additional information from companies that have applied for a banking licence and sought replies by the week-end. The central bank has also written to regulators, including the Securities and Exchange Board of India, Insurance Regulatory and Development Authority and Pension Funds Regulatory Authority, asking whether the banking licence aspirants meet the "fit and proper" criteria and if there are any regulatory concerns.

RBI is understood to have written to the finance ministry seeking clarification on proposals by public sector entities to set up banks. Of the 26 applicants, four-Department of Posts, IFCI, LIC Housing Finance and Tourism finance Corporation-are public sector undertakings. IDFC, another aspirant, was set up following an announcement in the Union Budget in '96. Since the grant of licences is dependent on the funding support from the promoter, the RBI has sought government's stand on the matter.

The information sought from the applicants include their income-tax filings and info on other companies within the group. According to sources, the applications are being screened by three teams under RBI executive director B Mahapatra. The teams are looking at separate issues such as group holding structure, business plan, compliance and financial inclusion. According to sources, the RBI may not consider firms that do not have resources to make an upfront investment of Rs 500 crore.

md.aquil alam
pgdm 1st sem

SAT upholds Sebi order against Angel Broking:

 

 The Securities Appellate Tribunal (SAT) on Tuesday upheld Sebi's order against Angel Broking in a case related to fraudulent trade practices in Sun Infoway shares.

    
Earlier this year, the Securities and Exchange Board of India (Sebi) had barred Angel Broking from taking up any new assignments for a period of two weeks after finding that the broker had executed trades on behalf its client in shares of Sun Infoway which were synchronised circular trades.
   
Consequently, Angel Broking had approached the tribunal challenging Sebi's order.
    
In its order today, SAT said it found "no merit in the appeal" an

d accordingly "dismissed" it.

    

Angel's argument that there existed nothing more than broker-client relationship and that there is no material on record to show that it was connected with the group is "without any merit", it observed.

    

Besides, SAT did not accept the broker's argument that turnover in Sun Infoways shares was minuscule compared to its large turnover and hence penalty should not have been imposed.

    

"One who has violated provisions of Sebi Act and regulations made thereunder must suffer even if turnover in the scrip in which violations are found is minuscule compared to the total turnover of that person," SAT said.

    

However, SAT noted that trades executed by Angel Broking on behalf of his client were in 2001 and Sebi had passed the order only in January 2013.

    

"This inordinate delay could have been avoided," it said adding, however, that the broker cannot escape penalty merely because Sebi had passed that order belatedly.

    

Meanwhile, SAT has imposed a "stay operation" on its order against Angel Broking for 4 weeks.

    

The case relates to Sebi probe into dealings in the Sun Infoway scrip during February 5, 2001 to May 2, 2001 wherein a consistent fall in price of the firm's scrip was noted.

    

Price of Sun Infoway shares had fallen from Rs. 342 as on February 5, 2001 to a low of Rs. 60.75 as on April 30, 2001 before finally closing at Rs. 73.75 on May 2, 2001. 

anand maurya

pgdm-1 sem

Wipro plunges over 8% as Q2 results fail to impress Dalal Street

NEW DELHI: Wipro LtdBSE -4.16 % slipped as much as 8.4 per cent in morning trade on Wednesday, after the IT major reported its results for the quarter ended September 30 which clearly lagged performance compared to the top tier players.
WiproBSE -4.16 % grew at its fastest pace in two years in the September quarter by posting 2.7 per cent sequential growth in dollar terms. However, even though growth in the second quarter was high by Wipro's standards, analysts believe momentum has been slow in returning.

The Bangalore company forecasts that revenue would grow between 1.8% and 3.7% in the three months to December, a seasonally slow quarter for India's $76 billion ( 4.7 lakh crore) technology services export sector, ET reported.

At 09:40 a.m.; Wipro recouped some of the morning losses and was trading 4.5 per cent lower at Rs 492.45. It hit a low of Rs 471.55 and a high of Rs 514.50 in trade today.

The pickup in growth has been aided to a large extent by the revival in demand for technology services in the United States. The company added 45 new clients during the quarter but the active clients decreased to 942 from 946 in1QFY2014.

At the consolidated level, Wipro's revenue came in at Rs 10,992 cr, up 13 per cent QoQ. During 2QFY2014, Wipro's IT services EBIT margin grew considerably by 250 bps QoQ to 22.5 per cent, as currency benefits and the improved execution offseted the wage hike impact.

On the consolidated level, EBIT margin grew by 220 bps QoQ to 20.4 per cent, while net profit (PAT) stood tall at Rs 1,942 up 19 per cent QoQ.

"Some improvement in growth is definitely there but it continues to lag peers 2.7 per cent QoQ $-growth in Sep-13 came in-line with expectations albeit once again at bottom end of peer comparables," CLSA said in a note.

The global brokerage firm maintains 'underperform' rating on the IT major, but has raised its 12-month target price to Rs 515 from its previous target price of Rs 480.

Considering the fact that Wipro has been trading closer to 52-week levels of Rs 519.50. The company will required to deliver a consistent growth in line with peers if not better to retain its valuation on bourses.

Dolat Capital continues to maintain their sector underperformer call on Wipro owing to its sustained underperformance in H1FY14 and discouraging outlook for FY14 as evident from its Q3 guidance, weak employee growth and miss from its long held aspiration of growing inline with peers which still seems tough target to achieve.

"We believe that the growth rate would converge in FY15 for Tier I vendors but Wipro would still remain an underperformer given few drivers of growth in its portfolio," added the note.

The brokerage firm recommends 'Reduce' rating on the stock with a target price of Rs 500 valued at 14x FY15E earnings which is 15 per cent discount to InfosysBSE -0.83 %. 

                    By 
Shah Mohammad Abdul Qadir
       PGDM-1st Sem

Elections 2014: 10,000 NRIs to be on Modi duty; expats to cheer for BJP’s PM candidate

By Ravi Teja Sharma, ET Bureau | 18 Oct, 2013, 08.13AM IST

Close to 10,000 NRIs living in the US, UK, Europe and SE Asian countries will postpone their holidays and fly down to cheer for BJP's PM candidate.

ET SPECIAL:

Save precious time tracking your investments

NEW DELHI: Holidaying NRIs are a wintertime fixture in India. This winter will be somewhat different. A large number of visiting NRIs will be on what they consider serious business - volunteering for Narendra Modi's election campaign.

ET has learnt, from talking to NRI organisations, that close to 10,000 Indians living in the US, UK, Europe and Southeast Asian countries will be on Modi duty. They are postponing their annual Diwali or winter holidays.

Some of them will campaign for the BJP's PM candidate in their native towns and villages while some will work with Modi's team.

Smita Barooah, an addictions counsellor working in Singapore, is a typical example. She's planning a three-month sabbatical starting January to work for the BJP campaign in India.

Indian American businessman Chandrakant Patel, who heads Overseas Friends of BJP in the US, will be in Chhattisgarh, Madhya Pradesh and Delhi during the state elections next month. He says nearly 5,000 Indian Americans will fly down to India before next year's elections. "Our young team here is also sensitising lakhs of Indians in America to register themselves as voters just in case they happen to be present in India during the elections and can vote," he says.

Around 3,500 NRIs in the UK are planning to come to India closer to the 2014 general elections. "Many of us are postponing our annual December visits to be available to campaign for Mr Modi," says Amit Tiwari, general secretary of the Overseas Friends of BJP for the UK and Europe. A banker, Tiwari is connecting NRIs wanting to do campaign work during coming state elections with local and regional-level BJP workers.

What explains this unusual degree of direct participation by NRIs in the Modi campaign? "This is the Chetan Bhagat generation, which is seeking change. In Modi, NRIs see an opportunity to drive this change," says Meghnad Desai, a prominent NRI and commentator.

Sociologist Dipankar Gupta says, "BJP's ardent supporters overseas are sensing victory so they want to participate." "The fact that Modi is perceived to be corporate-friendly - and most migrant Indians have benefitted from their association with Corporate America - makes him more appealing," he adds.

Entrepreneur Kalpesh Chavda (34), who is based in Singapore, has been in touch with Arvind Gupta, head of BJP's IT cell. Chavda says he plans to come down to India for at least five weeks before the elections.

"The mindset of the Indian diaspora is different this time. Earlier they would send emails or SMSes to people back home. Now they want to be part of direct action," says Tiwari.

Some NRIs say they plan to use their familiarity with social media and Internet campaigns in the West to launch similar campaigns in India. The math is simple, they argue.

Around 120 million Indians will be eligible to vote for the first time in the 2014 elections. And many more are in the 18-25 category. Smartphone usage is rising rapidly in India, and the young are the biggest smartphone users. The share of young voters in total voting population is around 20%, most estimates suggest.

vijay kr yadav

pgdm sem 1

sou- times of india

Sensex rallies over 200 points; rupee below 61/$

The Nifty was at 6,116.85, up 71 points or 1.17 per cent. The index touched intraday high of 6,120.65 and a low of 6,070.90.

"Nifty after taking support at a rising window pattern is likely to observe a gap up opening; the index is likely to breach the immediate resistance of 6,140 levels and the rally would extend towards the 6,250 in the near future," said Nirmal Bang report.

"The Bank Nifty faces strong resistance around the 10,400 &10,450 levels on the upside where selling pressure is expected and only on close above one can expect rise to 10,650 & 10,700 levels. There is an Immediate Support at 10,250 levels on the downside," the report added.

The S&P BSE Midcap Index was up 0.90 per cent and the S&P BSE Smallcap Index gained 0.60 per cent.

Among the sectoral indices, the S&P BSE Bankex was up 2.07 per cent, the S&P BSE Oil & Gas Index gained 1.23 per cent, the S&P BSE Metal Index moved up 1.18 per cent and the S&P BSE Realty Index was 1.14 per cent higher.

The S&P BSE Capital Goods Index was down 0.18 per cent.

ICICI BankBSE 2.87 % (2.95 per cent), HDFC (1.85 per cent), SBI (1.81 per cent), Dr Reddy's Laboratories (1.78 per cent) and Sesa Sterlite (1.63 per cent) were among the major Sensex gainers.

Bajaj AutoBSE -0.46 % (0.44 per cent) and TCS (0.32 per cent) were the only index losers.

The market breadth was positive on the BSE with 972 gainers against 283 losers.

The foreign institutional investors bought shares worth Rs 1,109.93 crore while domestic institutional investors were net sellers worth Rs 1,149.22 crore on Friday as per the provisional data from the National Stock Exchange.

The Asian markets were witnessing some buying action on reports that China's economy grew at 7.8 per cent.

The Hang Seng was 0.64 per cent higher, the Shanghai Composite moved up 0.43 per cent and the Taiwan Weighted advanced 0.53 per cent. The Nikkei 225 was down 0.30 per cent.




Tanay Tapas
PGDM 1st