Rupee at four-week high; climbs 90 paise against dollar

MUMBAI: The rupee on Monday strengthened by 90 paise to trade at four-week high of 62.58 against the dollar at the Interbank Foreign Exchange market on increased capital inflows and dollar selling by exporters.

The rupee had settled at 63.48 against the dollar on Friday, up marginally by two paise over previous day's close.

Traders said apart from selling of the American currency by exporters and banks, a higher opening at the domestic equity market and dollar's weakness against other overseas currencies, after Larry Summers, the man tipped to be named Ben Bernanke's successor as Fed chairman, withdrew from the race, also supported the rupee. 
Meanwhile, the BSE benchmark sensex soared by 293.30 points, or 1.49%, to 20,026.06 in early trade today. 

Sensex climbs 293 points in early trade on Sebi steps

MUMBAI: The BSE benchmark sensex on Monday shot up by 293 points in opening trade, mainly on the back of a flurry of buying by funds and investors after market regulator Sebi allowed overseas entities to invest in government securities without any auction mechanism.

Amid a firming trend in the Asian region, the 30-share index gained 293.30 points, or 1.49%, to trade at 20,026.06, with banking, capital goods, PSUs and power sector stocks leading the rally. It had lost over 265 points in the previous two sessions.

The wide-based National Stock Exchange index Nifty rose by 81.95 points, or 1.40 per cent, to trade at 5,932.55. 

Brokers said sentiments turned buoyant after Securities and Exchange Board of India (Sebi) allowed FIIs to invest in government securities without any auction mechanism so as to boost foreign fund inflows into the capital markets.

They said rise in rupee also supported the upside in equities. The rupee gained 90 paise against dollar to 62.58 in early trade today.

In the Asian region, Hong Kong's Hang Seng index rose by 1.47% in the opening trade, while Japan's Nikkei would remain closed today.

The US Dow Jones Industrial Average ended 0.49% higher on Friday.

July industrial output surprises with 2.6 pct growth

India's industrial production jumped an unexpected 2.6 percent in July after contracting for two straight months, government data showed on Thursday, good news for Asia's third-largest economy as it tries to emerge from a deep slump.
Analysts polled by Reuters had expected output to shrink an annual 0.8 percent in July after a 2.2 percent contraction in June.
The manufacturing sector, which constitutes about 76 percent of industrial production, rose 3.0 percent from a year earlier, the statistics office said.
Capital goods production, a barometer for investments in the economy, rebounded by a robust 15.6 percent in July from a year earlier

World shares slide on growth, Fed concerns, dollar flat

Adrop in euro zone factory output after a run of weaker-than expected U.S. data stalled an eight-day rise in world shares on Thursday, jangling the nerves of investors positioning for a shift in Fed policy next week.
Moves towards a diplomatic solution on Syria gave some support to financial markets, but doubts over what exactly the Fed will announce on September 18 increase the potential for near-term volatility.
"The Fed is still likely to taper next week or in October but the trajectory of the tapering that we had assumed can no longer be taken for granted," said Ned Rumpeltin, head of G10 FX strategy at Standard Chartered Bank.
Euro/dollar and dollar/yen one-week implied volatilities - a gauge of how sharp price swings will be next week - have shot up as investors try to guess when and how fast the Fed will start to run down its monetary stimulus.
The one-week euro/dlr implied volatility traded at around 7.85 percent, much higher than the equivalent one-month rate which was around 7.2 percent.
The one-week dollar/yen implied volatility was also trading much higher than the one-month level.
Uncertainty has grown with weaker-than-expected U.S. data, including jobs growth in August and consumer spending, home building, new home sales, durable goods orders and industrial production in July.
A Reuters poll of economists on Monday this week found most now see the Fed trimming its $85 billion monthly spend on bonds by about $10 billion. This was down from $15 billion in a poll before the jobs report.
The shifting views have put pressure on the dollar, which hovered near two-week lows against a basket of major currencies .DXY on Thursday. U.S. Treasury yields have dipped to nearer 2.8 percent from over 3 percent last week.
But the euro slipped against the dollar on Thursday and European shares ended a run that had taken them near a five-year high when data showed a surprisingly large drop in industrial output across the currency bloc in July.
That bolsters the case for the European Central Bank to keep monetary policy loose in the face of changes at the Fed and adds weight to the argument that it should even consider another rate cut.
Europe's broad FTSE Eurofirst 300 index .FTEU3 was down 0.1 percent by mid-morning at 1,248.33 points, edging away from a 5-year high of 1,258.09 points reached in late May this year.
The MSCI world equity index .MIWD00000PUS was slightly lower, with U.S. stock index futures pointing to further weakness when trading gets underway on Wall St. .N
ASIAN RELIEF
Reduced expectations of the degree of Fed tapering eased pressure on emerging market currencies, which had been driven up as the cheap U.S. money was pumped into high-yielding stocks and bonds, and are now falling as these trades reverse.
Indonesia's central bank unveiled a surprise rate hike to help the rupiah recover from a 4-1/2 year low. Other Asian central banks were expected to wait for next week's Fed decision before taking any action.
MSCI's broadest index of Asia-Pacific shares outside Japan .MIAPJ0000PUS shed 0.2 percent while the stronger yen and downbeat economic data helped push Japan's Nikkei stock average .N225 down 0.3 percent.
In fixed income markets anticipation of the Fed trimming its stimulus combined with concerns abut domestic politics drove up Italy's borrowing costs at an auction of 7.5 billion euros ($10 billion) of new debt.
A cross-party Senate committee in Italy is due to resume a hearing later on whether to bar Silvio Berlusconi from political life, at the risk of prompting the former prime minister's allies to pull out the coalition government.
No decision by the Senate is expected until mid-October leaving investors in considerable uncertainty over whether the government has the strength to overhaul the economy and manage its budget deficit.
In commodities, copper slipped 0.9 percent to $7,101 a tonne. An improved outlook for China's economy and the reduced risk of a strike on Syria have helped bring copper prices off the three-year lows plumbed in late June.
Gold skidded 1.8 percent to $1,342.56 an ounce, its weakest since mid-August while Brent crude added about 0.8 percent to $112.40 as investors watched diplomatic efforts to place Syria's chemical weapons under international control stepped up.
U.S. Secretary of State John Kerry and Russian Foreign Minister Sergei Lavrov were meeting in Geneva on Thursday to try to agree on a strategy to eliminate the chemical arsenal.

Huge tobacco use in India seen killing 1.5 million a year

 

Tobacco inflicts huge damage on the health of India's people and could be clocking up a death toll of 1.5 million a year by 2020 if more users are not persuaded to kick the habit, an international report said on Thursday.
Despite having signed up to a global treaty on tobacco control and having numerous anti-tobacco and smoke-free laws, India is failing to implement them effectively, leaving its people vulnerable to addiction and ill health, according to the report by the International Tobacco Control Project (ITCP).
"Compared with many countries around the world, India has been proactive in introducing tobacco control legislation since 2003," said Geoffrey Fong, a professor of psychology at Canada's University of Waterloo and a co-author of the report.
"However ... the legislation currently in place is not delivering the desired results - in terms of dissuading tobacco use and encouraging quitting."
As a result, India, with a population of 1.2 billion, currently has around 275 million tobacco users, the report said.
Harm from tobacco accounts for nearly half of all cancers among males and a quarter of all cancers among females there, as well as being a major cause of heart and lung diseases.
"The tobacco epidemic in India requires urgent attention," the report said, adding that by 2020, tobacco consumption will account for more than 1.5 million Indian deaths a year.
Worldwide, the number of deaths caused by tobacco is expected to rise from around 6 million a year now to more than 8 million by 2030, according to the World Health Organisation.
The ITCP India Survey conducted face to face interviews with 8,000 tobacco users and 2,400 non-users across four Indian states - Bihar, Madhya Pradesh, Maharashtra and West Bengal.
So-called smokeless tobacco - including chewing products such as gutkha, zarda, paan masal and khaini - is the most common form of tobacco use in India, with many poorer people and women preferring these over smoking cigarettes or bindis - small, cheap, locally-made cigarettes.
According to the Global Adult Tobacco Survey, 26 percent of adults in India consume smokeless tobacco - 33 percent of men and 18.4 percent of women. Smokeless tobacco can cause oral and other cancers, as well as other mouth diseases and heart disease.
Among several striking findings in the ITCP report was that, while many smokers and tobacco users said they knew of the health risks, only a small proportion said they would like to quit.
Up to 94 percent of smokers and up to the same proportion of smokeless users in the survey said they had no plans to give up.
Set against this, the report also found that up to 81 percent of smokers and up to 87 percent of smokeless tobacco users expressed regret for taking up the habit, and more than 90 percent of tobacco users and non-users in all four states had negative views on smoking and tobacco.
The report said that, while India has been a regional leader in enacting tobacco control legislation over the past 10 years, the laws are poorly enforced, regulations covering smoke-free zones are patchy, and tobacco remains relatively cheap.
Fong said the low percentage of people wanting to quit meant deaths from tobacco use were destined to stay high.
"If there is any single indicator of the urgent need for continued and strengthened efforts for strong, evidence-based tobacco control in India - this is it."