Indian rupee gains against dollar as Syrian tensions ease

The rupee today extended gains for the fifth session in a row by appreciating 16 paise to 63.68 against the dollar in early trade at the Interbank Foreign Exchange market amid weakening US currency overseas.
The rupee had settled at 63.84 against the dollar yesterday and was up 140 paise over the previous day's close as fears of US military strike on Syria eased, leading to lower global oil prices.
Traders said besides decline in India's trade deficit, dollar selling by exporters and its weakening against other currencies overseas helped the rupee to maintain its rising streak.
Related: Rupee's ranking slips 5 ranks to 20th in foreign exchange market turnover
India's exports rose to a two-year high of 13 per cent in August on account of improved global situation, enabling trade deficit to fall to a four-month low of USD 11 billion, aided by subdued gold imports.
Meanwhile, the BSE benchmark index Sensex fell by 156.98 points, or 0.79 per cent, to 19,840.11 in early trade.

Sensex hits 20K, rupee below 64: Five reasons for the euphoria

NEW DELHI: The S&P BSE Sensex rallied over 700 points in trade on Tuesday to touch its key psychological level of 20,000. Tracking the momentum, the 50-share Nifty, which rallied for the fourth consecutive day in a row, surged over 200 points to hit its key psychological level of 5,900 in trade today.

The rupee was at a two-week high following weakness in the dollar index. The partially convertible rupee was at 63.90 in late trade.

The 30-share index ended at 19,997.10, up 727.04 points or 3.77 per cent. It touched a high of 20,012.69 and a low of 19,444.66 in trade today.

The Nifty closed at 5,896.75, up 216.35 points or 3.81 per cent. It touched a high of 5,904.85 and a low of 5,738.20 in trade today.

Tracking the momentum, as much as 50 stocks hit their fresh 52-week highs in rallying markets today on the BSE. Stocks which rallied to their 52-week high include names like Tata MotorsBSE 10.12 % which rallied over 10 per cent; and pharma major Cipla.
As much as ten stocks hit their 52-week highs on the NSE as Nifty rallied towards its key psychological level of 5,900 for the first time since July 26. Stocks which rose to their 52-week highs on the NSE include CiplaBSE 0.34 %, HCL TechnologiesBSE 4.27 %, Four Soft BSE -1.72 %, Tata Motors, Alembic, etc.

We have collated five reasons which may have led 700-point rally in the market:

Upbeat Trade-Data: India's trade deficit for the month of August narrowed to $10.9 billion, versus $12.26 billion in July. The deficit narrowed on the back of improving exports and declining imports, and was down 11% month-on-month.

In the recent past, analysts have started emphasising more on trade data because it constitutes gold and oil import data which are top two constituents used in calculating the current account deficit (CAD).

Gold imports for FY14 till August were reported at $197.8 billion, a rise of 1.7% year-on-year. Gold imports declined significantly to $0.65 billion versus $2.2 billion month-on-month.

Given nearly 15 per cent drop in rupee so far in the year 2013, there are a few data points which can conclude that the macroeconomic slowdown and other headwinds are behind us.

"The one single data point that one should watch out for over the next 2-3 months is trade deficit. It would be interesting to see the trade deficit stay at current levels," said Manishi Raychaudhuri, MD & HoR, BNP Paribas BSE -3.96 % Securities in an interview with ET Now.

"Even if it moves up slightly to $13.5-14 billion per month, it would be satisfactory. This is because the low trade deficit numbers in June-July were supported by relative lack of economic activity and the non-wedding season," he added.

Rupee at two-week high: The rupee rallied to its two-week high as expectations for a narrower trade deficit and receding concerns about Syria helped the currency continue its recent recovery from record lows hit last month.

The rupee rose as much as 1.7 percent on the day, and looked set for a fourth consecutive session of gains after Raghuram Rajan announced key measures to stem rupee fall. However, the currency is still down nearly 15 per cent so far in the year 2013.

According to analysts, hopes of further measures from Raghuram Rajan will keep the momentum intact in the rupee.

"The currency appreciation that we have seen since last week, is essentially due to certain announcements after the new RBI governor took charge. However, the fundamental factors behind rupee fall continue to signal a weakening trend," said Dhananjay Sinha, Co- Head, Institutional Research- Economist & Strategist at Emkay Global Financial Services Ltd BSE 4.99 %.

Market participant see the rupee rising to 63 against the US dollar this week and is likely to trade in the range of 63-65.50, said a PTI report

Dam waters in rift mode

Hyderabad: State law minister Erasu Pratap Reddy has sent a special note on the request of defence minister A.K. Antony on the controversial issue surrounding the Srisailam Dam and sharing of waters among Telangana and Seemandhra.
After Hyderabad's status as a capital city, the Srisailam Dam on the Krishna River has become controversial in the backdrop of the state's bifurcation.
State law minister Erasu Pratap Reddy has sent a special note on the request of defence minister A.K. Antony on the controversial issue surrounding the Srisailam Dam and sharing of waters among Telangana and Seemandhra.
In the note, Reddy has stated that the division of AP into smaller states will give rise to a number of complications regarding sharing of waters as well as operation of the projects. The head works of the projects on Krishna River are located in such a way that one side of the river is in Telangana while the other is in Rayalaseema and Coastal Andhra.
“There are a number of such projects which gives rise to conflicts, starting from the Rajolibanda Diversion Scheme, Pothireddypadu Head Regulator, Srisailam and Nagarjunsagar. Conflicting interests with regard to quantum and time of water release for generation of hydro power, and for other purposes including flood evacuation etc. will arise,“ stated Pratap Reddy .
He also said that since a majority of the projects were in Telangana on the Krishna, it would get assured waters under tribunal awards, while Rayalaseema based projects like Telugu Ganga, Galeru-Nagari and Handri-Neva would be affected due to the allocation of “surplus“ waters.
Given the fact that Srisailam Dam, the capacity of which has already come down from 308 tmc ft to 215 tmc ft due to heavy siltation, is losing 3 tmc ft capacity each year, once the state is divided, more complications will arise in the operations of the lift irrigation schemes as both Telangana and Seemandhra regions will start lifting water without considering the demands of the lower areas.
Srisailam Dam was originally built for the purpose of generating hydro-electricity and it has not yet been officially converted into a multipurpose project so that drinking water and irrigation water got first and second priority. This is a matter of grave concern, said the note.
Telangana, which suffers from acute power shortage, will have to depend more on hydel generation. However, if the state is divided, Telangana will not be able to operate the generating stations as the state on the other bank will run the generation stations on its side.
Furthermore, drought-prone areas will not get any help during emergencies.

Fines blamed for onion price

Hyderabad: Heavy fines and restrictions imposed by the traffic police in the city has led to scarcity of onions, fuelling a price rise, say onion traders.
According to traders, Hyderabad requires 50 truckloads of onions but the city markets are receiving not even half that amount due to restrictions imposed by the traffic police on the movement of trucks on account of the Metro Rail works besides the Rs 1,000 fine for violations.
They say the trucks carrying onions coming from Karnataka, Kurnool, Mahbubnagar and  Maharashtra are being diverted to Sholapur to avoid the tough traffic rules imposed in the city, leading to shortage.
“Onion transporters are avoiding Mahbub Mansion market on account of these fresh restrictions, leading to shortage in city markets and rythu bazaars. If the onion market is shifted to Lakdaram village market near Patancheru, this problem can be overcome.
From here, onions can be supplied to city   without any traffic problems,” said Ananth Reddy, president of the Hyderabad Onion Import Merchants’ Association. The association representatives also met minister for marketing Mukesh Goud and urged him to take the initiative for shifting the market. The minister assured them that he would take up the issue with the CM.

Malakpet Andhra Bank branch gutted

 
Hyderabad: The Andhra Bank branch at Malakpet was completely gutted as a result of a short-circuit on Friday morning. Passers-by noticed smoke coming out of the premises at 7.45 am and alerted the fire control room.
A fire engine from the Malakpet fire station was rushed to the spot. Computers, air-conditioners and false ceiling inside the bank premises were badly damaged. The bank is situated on the ground floor of the three-storey building, with the first and the second floors housing a lodge.
However, the two top floors were not majorly affected.
Additional district fire officer, M. Bhagwan Reddy said the bank has not estimated the property loss yet. “The origin of fire is definitely electrical and since it was locked completely it took some time for people to notice it,” he said.