Key benchmark indices dropped for fifth day in a row after the Reserve Bank of India (RBI) kept its key lending rate viz. the repo rate steady after a monetary policy review, as the central bank focused on managing the currency volatility rather than pushing for growth. The S&P BSE Sensex settled at its lowest level in nearly three weeks. The 50-unit CNX Nifty settled at five week low. The Sensex was down 244.94 points or 1.25%, off 324.38 points from the day's high and up 19.80 points from the day's low. The market breadth, indicating the overall health of the market, was weak.
Indian stocks fell for the fifth straight session today, 30 July 2013. The Sensex has fallen 953.79 points or 4.7% in five trading sessions from a recent high of 20,302.13 on 23 July 2013. The Sensex has fallen 47.47 points or 0.24% so far in July 2013 (till 30 July 2013). The Sensex has declined 78.37 points or 0.4% in calendar 2013 so far (till 30 July 2013). From a 52-week high of 20,443.62 on 20 May 2013, the Sensex has fallen 1,095.28 points or 5.36%. From a 52-week low of 16,760.72 on 27 July 2012, the Sensex has surged 2,587.62 points or 15.44%.
Reliance Infrastructure slumped after the company reported muted growth in net profit in Q1 June 2013. PSU OMCs tumbled as rupee once again fell below the psychological 60 mark against the dollar, raising concerns about increased costs of importing oil. Dr Reddy's Laboratories dropped in volatile trade after Q1 results. Metal and mining stocks declined. Sterlite Industries (India) extended recent losses triggered by the company reporting weak Q1 results. Hindalco Industries also extended recent steep losses. Tata Steel and Sail hit 52-week low. Sesa Goa declined on weak Q1 result. NTPC declined after the company reported a muted growth in bottomline in Q1 June 2013.
IT major Wipro extended Monday's rally triggered by the company issuing upbeat revenue guidance for Q2 September 2013 at the time of announcing Q1 June 2013 results on Friday, 26 July 2013. Shares of other IT firms gained also edged higher after Wipro's upbeat Q2 revenue guidance. Bank stocks declined in volatile trade. FMCG major Hindustan Unilever (HUL) extended losses for the third straight day after the company reported a muted growth in bottom line in Q1 June 2013. Sterlite Industries (India) extended recent losses triggered by the company reporting weak Q1 results. Hindalco Industries also extended recent steep losses. Tata Steel hit 52-week low. Shares of two wheeler makers skidded. Realty stocks also edged lower. Shares of realty major DLF hit 52-week low. Shares of state-run oil and gas stocks companies dropped. In pharma pack, Ranbaxy Laboratories and Wockhardt hit 52-week low.
A bout of initial volatility was witnessed as key benchmark indices pared gains after moving into the positive terrain after opening lower. Volatility continued as key benchmark indices recovered after hitting fresh intraday low in morning trade. The S&P BSE Sensex and the 50- unit CNX Nifty, both, hit their lowest level in nearly three weeks. High volatility was witnessed as key benchmark indices slipped into the red after surging to hit fresh intraday high in mid-morning trade soon after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged after a monetary policy review. The market extended losses to hit fresh intraday low in early afternoon trade. Key benchmark indices extended intraday losses in mid-afternoon trade. The Sensex extended losses to hit fresh intraday low in late trade.
The S&P BSE Sensex was down 244.94 points or 1.25% to 19,348.34, its lowest closing level since 10 July 2013. The index declined 264.74 points at the day's low of 19,328.54 in late trade, its lowest level since 10 July 2013. The index rose 79.44 points at the day's high of 19,672.72 in mid-morning trade.
The CNX Nifty was down 76.60 points or 1.31% to 5,755, its lowest closing level since 27 June 2013. The index hit a high of 5,861.30 in intraday trade. The index hit a low of 5,747.60 in intraday trade, its lowest level since 27 June 2013.
The BSE Mid-Cap index fell 1.96% and the BSE Small-Cap index fell 1.98%. Both these indices underperformed the Sensex.
Among the sectoral indices on BSE, the S&P BSE IT (up 0.91%), the S&P BSE Teck (down 0.11%), the S&P BSE Capital Goods (down 0.82%), the S&P BSE Consumer Durables (down 1%) and S&P BSE Healthcare (down 1.11%) outperformed the Sensex.
The S&P BSE Bankex (down 1.28%), the S&P BSE Metal (down 1.91%), the S&P BSE FMCG (down 1.92%), the S&P BSE Auto (down 2.06%), the S&P BSE PSU (down 3.11%), the S&P BSE Power (down 3.35%), the S&P BSE Realty (down 3.6%) and the S&P BSE Oil & Gas (down 3.89%) underperformed the Sensex.
The total turnover on BSE amounted to Rs 1747 crore, lower than Rs 1758.93 crore on Monday, 29 July 2013.
The market breadth, indicating the overall health of the market, was weak. On BSE, 1,542 shares fell and 724 shares rose. A total of 144 shares were unchanged.
Among the 30-share Sensex pack, 22 stocks fell and rest of them rose.
Index heavyweight and cigarette major ITC fell 1.96%.
FMCG major Hindustan Unilever (HUL) fell 2.22%, with the stock extending losses for the third straight day after the company reported a muted growth in bottom line in Q1 June 2013. The company's net profit declined 23.43% to Rs 1019.25 crore on 5.88% increase in total income to Rs 6985.79 crore in Q1 June 2013 over Q1 June 2012. The result was announced on 26 July 2013.
The company said that the year on year fall in net profit was due to significant exceptional income generated in Q1 June 2012 from the sale of properties. Profit after tax but before exceptional items rose 4% to Rs 885 crore in Q1 June 2013 over Q1 June 2012. HUL stated that while commodity costs were relatively benign, PFAD prices started to move up and the rupee sharply depreciated towards the end of the quarter. Competitive intensity remained at high levels and the company continued to invest in its brands. Advertisement and promotion (A&P) cost increased by Rs 70 crore on year on year basis in Q1 June 2013.
Akzo Nobel India lost 9.32% as the stock turned ex-dividend today, 30 July 2013, for total dividend of Rs 80 per share for the year ended 31 March 2013. Akzo Nobel India's board of directors at its meeting held on 20 May 2013 had recommended a dividend of Rs 20 per share plus a special dividend of Rs 60 per share for the year ended 31 March 2013.
Shares of oil exploration major ONGC were off 5.76%. RIL was off 2.41%. RIL and ONGC on 27 July 2013 announced signing a memorandum of understanding (MoU) to explore the possibility of sharing RIL's infrastructure facility in the East Coast. The MoU aims at working out the modalities for sharing of infrastructure, identifying additional requirements as well as firming up the commercial terms. The companies intend to enter into a definitive agreement after concluding a joint study which will be spread over the next nine months, RIL said in a statement on 27 July 2013.
GAIL (India) lost 2.98% to Rs 307.70 after a foreign brokerage downgraded the stock to underweight from overweight after cutting its EPS forecast for fiscal years 2014 to 2016. According to the brokerage report, the domestic gas output has fallen faster than expected due to a drop in output from the KG-D6 block. The brokerage expects a recovery in gas output to be 12-18 months away. The fall in output from KG-D6 will also raise gas costs for GAIL (India).
PSU OMCs tumbled as rupee once again fell below the psychological 60 mark against the dollar today, 30 July 2013, raising concerns about increased costs of importing oil. HPCL (down 11.16%), BPCL (down 8.95%) and Indian Oil Corporation (down 8.96%) slumped. The partially convertible rupee was trading at 60.28 against the dollar, sharply lower than Monday's close of 59.415/425. PSU OMCs import about 70-75% of their crude oil needs and rely heavily on foreign currency borrowings, which largely remain unhedged.
State-run lignite-based power producer Neyveli Lignite Corporation surged 6.33% to Rs 57.10. The company unveils Q1 results on 2 August 2013.
Dr Reddy's Laboratories fell 2.1% to Rs 2171.10 after Q1 result. The stock was volatile. The stock hit high of Rs 2261.70 and low of Rs 2151. The company's adjusted consolidated net profit rose 12% to Rs 320 crore on 12% rise in revenue to Rs 2840 crore in Q1 June 2013 over Q1 June 2012. The adjustments pertain to taxation. The tax rates for both the period i.e. for Q1 June 2013 and for Q1 June 2012 have been normalized to the annual effective tax rate for the concerned full year. The company announced Q1 result during market hours today, 30 July 2013.
Earnings before interest, taxes, depreciation and amortization (EBITDA) rose 13% to Rs 568.90 crore in Q1 June 2013 over Q1 June 2012.
Research and development (R&D) expense rose 55% to Rs 243 crore in Q1 June 2013 over Q1 June 2012. The company said that the jump in R&D expense is in line with the increased focus on complex formulations, differentiated portfolios and biosimilars.
The company's selling, general & admistrative (SG&A) expenses rose by 6% to Rs 879.40 crore in Q1 June 2013 over Q1 June 2012.
The company launched 18 new products, filed 12 new product registrations and filed 5 Drug Master Files (DMFs) globally in Q1 June 2013.
Ranbaxy Laboratories fell 6.22% to Rs 279.75 after hitting a 52-week low of Rs 276.80 in intraday trade today, 30 July 2013. The company announces Q2 results on 7 August 2013.
Wockhardt was locked at 5% lower circuit at Rs 491.25 at 12:11 IST on BSE, also its 52-week low, with the stock extending its recent steep slide.
Reliance Infrastructure slumped 7.13% after the company reported muted growth in net profit in Q1 result. The company's consolidated net profit rose 0.78% to Rs 415.20 crore on 1.28% rise in total operating income to Rs 5452.45 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours today, 30 July 2013.
Shares of two wheeler makers skidded. Bajaj Auto (down 3.3%) and Hero MotoCorp (down 0.34%), edged lower.
Tata Motors declined 4.19%. The stock turned ex-dividend today, 30 July 2013, for dividend of Rs 2 per share for the year ended 31 March 2013 (FY 2013).
Capital goods pivotals saw mixed trend. Shares of power equipment major Bharat Heavy Electricals (Bhel) fell 2.84% to Rs 152.50. The stock had hit 52-week low of Rs 152.20 in intraday trade today, 30 July 2013.
Engineering and construction giant L&T gained 0.9% to Rs 848. The stock had hit 52-week low of Rs 836 in intraday trade on Monday, 29 July 2013. The company on Monday, 29 July 2013, said that its construction division secured an order worth $ 1403 million (Rs 8250 crore) from the ArRiyadh Development Authority, kingdom of Saudi Arabia for the design, construction and comissioning of metro project in Riyadh, Saudi Arabia. L&T has secured the order as a JV partner of ArRiyadh New Mobility consortium. The total value of the order is $5.94 billion. The project is to be completed during a period of four years, which will be preceded by eight months to prepare the detailed designs and to carry out the enabling works, the coordination for utilities diversion and the site preparation works, and followed by four months of system demonstration, trial run and project handing over.
Easun Reyrolle gained 4.45% after the company acquired 82% stake in Australia-based Electrical Distribution Solutions. Easun Reyrolle, through its subsidiary ERL International, has acquired 82% equity and ownership control in an Australian company, Electrical Distribution Solutions Pty (EDS). This synergic and strategic acquistion would help Easun Reyrolle establish and hold presence in Australian power transmission and distribution market, the company said. It may be noted, recently Easun Reyrolle obtained order from EDS to supply Medium Voltage Switchgear products to Australian Utility, Energex in the State of Queensland. The total supply value of this order $84 million to be supplied over the next seven years. Energex manages energy distribution networks of the State of Queensland for more than 100 years.
Havells India tumbled 13.44%. The company's net profit rose 18.2% to Rs 94.66 crore on 1.82% growth in total income to Rs 1054.50 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced during trading hours today, 30 July 2013. Havells India has invested Rs 19.70 crore in its wholly owned subsidiary Havells Holdings in Q1 June 2013.
Jaypee Infratech dropped 5.35% after net profit slumped 61.4% to Rs 81.01 crore on 13.4% increase in net sales to Rs 769.20 crore in Q1 June 2013 over Q1 June 2012. The company announced the result after market hours on Monday, 29 July 2013.
Bank stocks fell in volatile trade after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged after first quarter review of the Monetary Policy 2013-14 announced today, 30 July 2013. Among private sector banks, ICICI Bank (down 0.44%), HDFC Bank (down 1.3%), Axis Bank (down 0.32%), Yes Bank (down 4.14%) and Kotak Mahindra Bank (down 1.81%) declined.
Among PSU bank stocks, State Bank of India (down 1.15%), Canara Bank (down 3.79%), Union Bank of India (down 4.9%), Bank of India (down 3.63%), Bank of Baroda (down 2.43%) and Punjab National Bank (down 3.54%) declined.
City Union Bank rose 1.93% on good Q1 result. The bank's net profit rose 22.19% to Rs 90.28 crore on 24.85% growth in total income to Rs 707.82 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Monday, 29 July 2013. City Union Bank's ratio of net non-performing assets (NPA) to net advances stood at 0.63% as on 30 June 2013, compared with 0.63% as on 31 March 2013 and 0.50% as on 30 June 2012.
The ratio of gross NPA to gross advances increased to 1.25% as on 30 June 2013, from 1.13% as on 31 March 2013 and 1.07% as on 30 June 2012.
The bank's provisions and contingencies rose 15.59% to Rs 20.53 crore in Q1 June 2013 over Q1 June 2012. The provision coverage ratio as at 30 June 2013 stood at 71%.
City Union Bank's capital adequacy ratio (CAR) as per Basel II norms stood at 13.21% as on 30 June 2013, as against 13.98% as on 31 March 2013 and 12.01% as on 30 June 2012.
Total deposits of the bank increased by 20% to Rs 20516 crore as on 30 June 2013 from Rs 17062 crore as on 30 June 2012. Gross advances went up by 20% to Rs 15388 crore as on 30 June 2013 from Rs 12773 crore as on 30 June 2012.
The savings bank deposits recorded growth of 15% and growth in current and savings account (CASA) was 11% as on 30 June 2013. The bank's balance sheet size increased by 22% to Rs 23477 crore as on 30 June 2013 from Rs 19286 crore as on 30 June 2012.
NTPC declined after the company reported a muted growth in bottomline in Q1 June 2013. The stock was down 3.28%. The company's net profit rose 1.13% to Rs 2527.02 crore on 2.9% fall in total income to Rs 16358.78 crore in Q1 June 2013 over Q1 June 2012. The company announced Q1 result during market hours today, 30 July 2013.
Reliance Power declined 3.47%. The company's consolidated net profit rose 0.23% to Rs 240.06 crore on 3.63% fall in total income to Rs 120626 crore in Q1 June 2013 over Q1 June 2012. The result was announced during market hours today, 30 July 2013.
JP Chalasani, chief executive of Reliance Power, said, The 1,200 megawatt Rosa Power project in Uttar Pradesh continued with its strong operating and financial performance. The regulatory approval for selling power on the cost-plus basis from the 600 megawatts (MW) Butibori power project would page the way for substantially mitigating the sectoral challenges such as fuel and commercial risk for the plant and I am confident of improved performance once the off-take commences.
IT major Wipro was up 2.33%, with the stock extending Monday's rally triggered by the company issuing upbeat revenue guidance for Q2 September 2013 at the time of announcing Q1 June 2013 results on Friday, 26 July 2013. The stock had surged 6.71% on Monday, 29 July 2013. Wipro expects 1.99% to 3.88% growth in revenue from IT services business at between $1.62 billion to $1.65 billion in Q2 September 2013 over Q1 June 2013.
The company's consolidated net profit rose 3% to Rs 1623.30 crore on 1% growth in revenue to Rs 9734.60 crore in Q1 June 2013 over Q4 March 2013. The results are as per International Financial Reporting Standards. The results are after adjusting for the spinoff of its non-technology businesses, completed in April.
Shares of other IT firms gained for the second straight day after Wipro's upbeat Q2 revenue guidance. Infosys gained 1.38%. HCL Technologies rose 1.23%.
TCS rose 0.52%. TCS on Monday, 29 July 2013, said it has won a three-year contract from the Zambia Revenue Authority (ZRA) for the modernisation of its domestic tax system.
Geometric was locked at 20% lower circuit at Rs 79 after the company experienced unexpected softness in the industrial vertical in Q1 June 2013 and expects this weakness to continue till the end of this calendar year. On a consolidated basis, Geometric's net profit 38.8% to Rs 15.41 crore on 5.3% increase in revenues to Rs 260.27 crore in Q1 June 2013 over Q4 March 2013. The operating profit rose 55.7% to Rs 37.28 crore in Q1 June 2013 over Q4 March 2013. The result was announced after market hours on Monday, 29 July 2013.
Mr. Manu Parpia, Managing Director & CEO, Geometric said, Our new organization structure consisting of six verticals, each with P&L responsibility, came into effect this quarter. I believe this will have a strong positive impact on the performance of our organization as we go forward. While most of our verticals performed in line with our outlook, the industrial vertical which comprises of businesses like mining, agricultural, and construction equipment experienced unexpected softness. We anticipate this weakness to continue to the end of this calendar year.
In anticipation of this slowdown, the company deferred the salary increments of employees by a quarter, and therefore the impact of salary increases will be seen in Q2 September 2013, the company said in a statement.
The company said that attrition rate reduced to 11% in Q1 June 2013 due to strong employee engagement focus.
Metal and mining stocks declined. Tata Steel dropped 2.76% to Rs 209.75. The stock hit 52-week low of Rs 207.95 in intraday trade today, 30 July 2013.
Sail shed 3.69% to Rs 41.75. The stock hit 52-week low of Rs 41.25 in intraday trade today, 30 July 2013.
Among other stocks, JSW Steel (down 3.84%), Hindustan Zinc (down 2.16%) and NMDC (down 4.02%), declined.
But, Jindal Steel & Power rose 2.08% ahead of its Q1 result today, 30 July 2013.
Sterlite Industries (India) fell 0.88%, with the stock extending recent losses triggered by the company reporting weak Q1 results. Sterlite Industries' consolidated net profit fell 22% to Rs 934 crore on 23% fall net sales/income from operations to Rs 8190 crore in Q1 June 2013 over Q1 June 2012. The Q1 result was announced on 25 July 2013.
Hindalco Industries dropped 4.3%, with the stock extending recent steep losses.
Sesa Goa declined 1.24% on weak Q1 result. The company after market hours on Monday, 29 July 2013, reported 57.05% fall in net profit to Rs 414 crore on 78.18% fall in net sales/income from operations to Rs 378 crore in Q1 June 2013 over Q1 June 2012. The results are on consolidated basis. The sharp decline in net profit was due to suspension of iron ore operations at the company's mines in Goa and Karnataka. The company said its Karnataka mine has received clearance from the Supreme Court, and the company is now awaiting final statutory clearances in order to restart mining at the unit. The company expects to resume mining at Karnataka in Q2 September 2013, it said.
Regarding the suspension of mining in Goa, the date for hearing is yet to be fixed by the Supreme Court. Earlier, the Goa state government and major miners, including Sesa Goa, had filed their responses to the report submitted by the Central Empowered Committee. Separately, Sesa has filed an application to the Supreme Court for a modification or vacation of the court's existing order on the suspension of mining and restrictions on ore transportation.
The company said that exploration activities are progressing well at its Liberia iron ore project, with 91,500 meters of drilling completed till 30 June 2013 across the three deposits viz. Bomi, Bea and Mano River. The company said that the first phase of 2 million tonnes per annum is likely to be completed by December 2014, and that the company remains on track to deliver the first shipment by March 2014.
The company said proposed merger of Sterlite Industries (India) and Sesa Goa and Vedanta Group consolidation has received the approval of the High Court of Madras on 25 July 2013 and the approval of the High Court of Bombay at Goa on 3 April 2013. One of the shareholders of Sesa Goa has filed an appeal against the order passed by the High Court of Bombay at Goa before the Division Bench of the same court. The hearings before the Division Bench have been completed and the order is awaited.
ACC fell 1.58% as the stock turned ex-dividend today, 30 July 2013, for interim dividend of Rs 11 per share for the year ending 31 December 2013.
Ambuja Cements shed 1.43% as the stock turned ex-dividend today, 30 July 2013, for interim dividend of Rs 1.40 per share for the year ending 31 December 2013.
Swiss cement major Holcim had on 24 July 2013 announced a major restructuring of its India operations -- currently, Holcim owns a little over 50% stake in its two cement subsidiaries in India viz. ACC and Ambuja Cements. The board of directors of Ambuja Cements on 24 July 2013 approved a proposal, wherein Ambuja will first acquire from Holderind Investments, Mauritius (Holcim), a 24% stake in Holcim India for a cash consideration of Rs 3500 crore, followed by a merger of Holcim India into Ambuja. The intra-group transaction will result in Ambuja holding 50.01% stake in ACC. The merger swap ratio proposed by two independent accounting firms and approved by Ambuja's board, is one Ambuja share for 7.4 Holcim India shares, translating into an implied swap ratio of 6.6 Ambuja shares for every ACC share, Ambuja said in a statement. Based on the approved merger ratio, Ambuja will issue 58.4 crore new equity shares of the company to Holcim, as consideration for the merger. Post the merger, the expanded capital base of Ambuja (post cancellation of the shares held by Holcim India in Ambuja and the issuance of new shares as aforesaid) will increase by 28%. Holcim will then own 61.39% of Ambuja and Ambuja in turn own 50.01% of ACC.
In addition, Ambuja's board also provided its approval for Ambuja to make commercially reasonable efforts to invest up to Rs 3000 crore to acquire an economic ownership in ACC of up to 10% without triggering a mandatory open offer.
Ambuja said that this restructuring exercise is expected to be EPS accretive from year one post completion of the transaction. There is synergy potential of about Rs 900 crore through supply chain and fixed cost optimization expected to be realised in a phased manner over two years post completion of the transaction.
Jet Airways reversed intraday gain in volatile trade after the Foreign Investment Promotion Board on Monday, 29 July 2013, approved a proposal by Jet Airways (India) to sell a 24% stake to Abu Dhabi-based Etihad Airways, with some conditions. The stock lost 8.53% to Rs 377.05 after gaining as much as 7.96% at the day's high of Rs 445. Last month, FIPB had deferred a decision on Jet-Etihad deal, asking for more details on effective control and ownership of the Indian carrier post the stake sale.
The Jet Airways stock had spurted recently on speculation that the FIPB will clear the Jet-Etihad deal as its meeting on Monday, 29 July 2013.
Realty stocks edged lower after the Reserve bank of India (RBI) held its key policy rates viz. the repo rate and cash reserve ratio unchanged after first quarter review of the Monetary Policy 2013-14 announced today, 30 July 2013. Purchases of both residential and commercial property are largely driven by finance. HDIL (down 4.36%), Unitech (down 3.5%) and Godrej Properties (down 1.94%), edged lower.
DLF dropped 6.04% to Rs 158.80 after hitting a 52-week low of Rs 156.20 in intraday trade today, 30 July 2013. The stock turned ex-dividend today, 30 July 2013, for dividend of Rs 2 per share for the year ended 31 March 2013 (FY 2013).
Prestige Estates Projects fell 2%, reversing intraday gain. The company's net profit jumped 75.85% to Rs 86.66 crore on 114.85% growth in total income to Rs 529.31 crore in Q1 June 2013 over Q1 June 2012. The result was announced after market hours on Monday, 29 July 2013.
Telecom stocks edged lower. MTNL (down 2.09%), Reliance Communications (down 3.49%), Idea Cellular (down 1.79%), Bharti Airtel (down 3.29%) declined. Tata Teleservices (Maharashtra) rose 1.9%.
After First Quarter Review of Monetary Policy 2013-14, the RBI today, 30 July 2013, kept the repo rate unchanged at 7.25%. The central bank also kept the cash reserve ratio (CRR) unchanged at 4%. RBI said that the macroeconomic outlook for 2013-14 is subject to a number of risks and it scaled down the GDP growth forecast for 2013-14 to 5.5%, from its earlier projection of 5.7% growth. The RBI said that it will endeavour to condition the evolution of inflation to a level of 5% by March 2014, using all instruments at its command.
The RBI said that keeping in view global and domestic macroeconomic conditions, outlook and risks, the policy stance in this review is guided by the need for continuous vigil and preparedness to pro-actively respond to risks to the economy from external developments, especially those stemming from global financial markets, while managing the trade-off posed by increased downside risks to growth and continuing risks to inflation and inflation expectations.
The RBI also noted that though inflation had eased to a level that it considered reasonable, some risks had emerged that could keep it from staying low. The RBI said that risks to inflation include high international oil prices, and the rupee's depreciation, which makes imports more expensive.
The current situation -- moderating wholesale price inflation, prospects of softening of food inflation consequent on a robust monsoon and decelerating growth -- would have provided a reasonable case for continuing on the easing stance, RBI said. "However, India is currently caught in a classic impossible trinity trilemma whereby we are having to forfeit some monetary policy discretion to address external sector concerns", the RBI said.
The central bank said that its recent liquidity tightening measures aimed at checking undue volatility in the foreign exchange market will be rolled back in a calibrated manner as stability is restored to the foreign exchange market, enabling monetary policy to revert to supporting growth with continuing vigil on inflation. It should be emphasised that the time available now should be used with alacrity to institute structural measures to bring the current account deficit (CAD) down to sustainable levels, the RBI said. The RBI said it stands ready to use all available instruments and measures at its command to respond proactively and swiftly to any adverse development.
European stock markets edged higher on Tuesday, 30 July 2013, boosted by upbeat German consumer-confidence data. Key benchmark indices in Germany and France were up 0.2% to 0.36%. UK's FTSE 100 shed 0.04%.
Economic confidence in the euro area improved for a third month in July, reaching the highest in 15 months and adding to indications the 17-nation currency bloc is emerging from a record-long recession. An index of executive and consumer sentiment rose to 92.5 from 91.3 in June, the European Commission in Brussels said today.
GfK's forward-looking German consumer-sentiment indicator rose for the seventh straight month, to 7 points in August from 6.8 points in July, hitting its highest level since September 2007.
The European Central Bank (ECB) and the Bank of England (BoE) will announce their policy decisions on Thursday, 1 August 2013.
Asian stocks rose on Tuesday, 30 July 2013, after China's central bank injected funds into money markets easing cash crunch worries. Key benchmark indices in China, Hong Kong, Japan, Singapore, South Korea, Indonesia and Taiwan rose by 0.26% to 1.53%.
China's central bank injected funds into money markets via open market operations on Tuesday for the first time since February, easing fears of another cash crunch ahead of the month end after a severe cash squeeze in June caused market panic.
Meanwhile, the results of two separate surveys on Chinese manufacturing activity in July are due on Thursday, 1 August 2013.
In Japan, data released on Tuesday, 30 July 2013, showed that Japan's industrial production unexpectedly fell a seasonally adjusted 3.3% in June from the level in May. Japanese household spending also declined, though the monthly unemployment rate eased to 3.9% from 4.1%.
Trading in US index futures indicated that the Dow could gain 16 points at the opening bell on Tuesday, 30 July 2013. US stocks edged lower on Monday, 29 July 2013, slipping after a decline in June home sales as investors look ahead to key data later in the week and the Federal Reserve's upcoming policy meeting. The National Association of Realtors said pending home sales fell 0.4% in June, with rising rates blamed for undercutting sales momentum.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting today (30 July 2013) and tomorrow (31 July 2013), with expectations that it will offer further clues on how long it will maintain its bond purchases. In his two-day testimony to Congress, which concluded on 18 July 2013, Federal Reserve Chairman Ben Bernanke said plans to taper asset purchases were not on a preset path and stressed intentions to be very responsive to data. Additionally, Bernanke said recent data have been "mixed" and it was "way too early" to make a judgment on when the central bank will slow down the pace of its asset purchases. The Fed currently buys $85 billion a month in government and mortgage bonds in an effort to keep interest rates low and stimulate economic growth.
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