ECONOMIC INTELLIGENCE BULLETIN - DGSND · Economic Intelligence Bulletin includes abstracts of...

ECONOMIC INTELLIGENCE BULLETIN 1st October 2015- 15th October 2015

2015

GOVERNMENT OF INDIA DIRECTORATE GENERAL OF SUPPLIES &DISPOSALS

JEEVAN TARA BUILDING, 5 SANSAD MARG, NEW DELHI - 110001

SUMMARY OF ECONOMIC INTELLIGENCE BULLETIN

Economic Intelligence Bulletin includes abstracts of important economic/commercial/ technical development and reviews as reported in the issues of financial dailies. The Bulletin pertains to the fortnight ending 15th October, 2015.

1. PRICE TREND

1.72 DOMESTIC GAS PRODUCERS FACE 18% PRICE REDUCTION

The government on 30th September announced an 18 per cent reduction in the price of domestic natural gas to $3.82 per unit from $4.66 a unit, in line with the decline in the global gas prices. The new price, to be effective for six months beginning October 1, will dent the earnings of state-run explorers Oil and Natural Gas Corporation (ONGC) and the government’s earnings from royalty on production.

The new price will not impact Reliance Industries Ltd (RIL) as the price the company is allowed to charge from its gas reservoirs in the Eastern offshore KG-D6 block is capped at $4.2 an mBtu (Million British Thermal Unit), pending the resolution of an arbitration over cost recovery on account of a shortfall in production from the D1 and D3 discoveries. The difference between the two prices is currently credited to a gas pool account.

The new price will not be applicable to all coal-bed methane (CBM) blocks. The 2014 gas price notification had said the new pricing guidelines will not be applicable where prices have been fixed contractually for a certain period.

(BUSINESS STANDARD 1ST OCTOBER, 2015)\

1.73 OIL UP AS PRODUCTION IN US FALLS

Oil prices rose on 7th October after data showed the market was beginning to tighten, with falling supply, higher demand and lower inventories after two years of heavy surplus in the market. Global benchmark Brent crude oil has dropped to around $50 from a high above $115 a barrel in June 2014 and many oil companies are losing money with oil prices so low.

(FINANCIAL EXPRESS 15th October, 2015)

1.73 GOLD TOPS RS 27,000 ON GLOBAL CUES, SILVER ABOVE RS 37000

Gold prices again zoomed past Rs 27,000-level by surging Rs 385 to close at over two-week high of Rs 27,185 at the bullion market on 14th October, tracking a firm trend overseas and increased buying by jewellers, driven by ongoing festive and wedding season demand. Silver also recovered by Rs 500 to Rs 37,300 per kg on increased offtake by industrial units and coin makers.

Traders said pick up in buying activity on beginning of Navratras an auspicious period of making a fresh purchases in Hindu religion, also supported the upside in the prices.


2. FISCAL POLICY

2.138 FDI INFLOWS INTO INDIA STOOD AT $19.4 BN DURING JAN-JUNE

Foreign investment inflows during JanuaryJune 2015 stood at $19.4 billion, compared to $14.94 billion in the year ago period. This, however, is at variance with the foreign investment inflows of $31 billion as claimed in a report published in Financial Times.

According to the Department of Industrial Promotion & Policy (DIPP), during the sixmonth period, foreign investment inflows showed a fluctuating trend. The highest foreign direct investment (FDI) received in January was $4.48 billion, compared to $2.18 billion in the same month a year ago. FDI inflows also grew in February to $3.28 billion compared to $2.01 billion. However, the month of March saw a dip and reached $2.11 billion against $3.53 billion in the same month a year ago.

(BUSINESS STANDARD 1ST OCTOBER, 2015)

2.139 RBI ACTIONS TO BRING FPI FUNDS OF RS 48000CRORE/YEAR IN GOVERNMENT BONDS

Within the current financial coverage evaluate may entice a median annual movement of Rs 48,000 crore in authorities bonds from abroad traders for the following few years, says a report.

In a shock transfer, RBI final week lowered repo price by 50 foundation factors to 6.75 per cent from 7.25 per cent. In response to home score company India Rankings, RBI’s entrance loaded financial motion and accompanying coverage adjustments have a big positives for mounted earnings and the rupee.


2.140 SEBI WANTS MFS TO LOWER COSTS, BE VIGILANT OF RISKY ASSETS

To safeguard investor’s interest and help them maximise returns, markets regulator SEBI is set to tighten norms for mutual funds by asking them to lower the cost of investments and be more vigilant about risky assets. The watchdog also wants fund houses to improve their disclosure regime and make it simpler for investors by doing away with the current practice of having too many schemes.


2.141 TAX COLLECTIONS TO FALL 5-7% SHORT OF TARGET

The finance ministry on 5th October said it expected the overall tax collections this financial year to fall five-seven per cent short of the Budget estimate, largely due to less-than-projected direct tax collections.

Senior ministry officials were confident that the Centre's fiscal deficit would be restricted to 3.9 per cent of gross domestic product (GDP) without expenditure cuts, a departure from the past few years. (TAX SHORTFALL)

The ministry said it remained confident of GDP growth of more than 7.5 per cent in FY16, though it would be less than the earlier projection of 8.1-8.5 per cent.

Indirect tax collections have been robust, increasing 36.5 per cent between April and August. This could be attributed to measures such as a rise in excise duty on petroleum products in October last year, an increase in service tax from 12.36 per cent to 14 per cent in June this year and doing away with excise duty concessions to the auto and capital goods sectors in January 2015.

(BUSINESS STANDARD 6TH OCTOBER, 2015)

2.142 CCEA TO DECIDE ON TWO FDI PROPOSALS WORTH RS 13,200 CRORE

Cabinet will take a final call on Rs13,200-crore foreign direct investment (FDI) proposals of Sistema Shyam TeleServices and IIFL Holdings, which have been referred to it for consideration by Foreign Investment Promotion Board (FIPB).

Meanwhile, the Government has cleared 11 FDI proposals worth Rs1,568 crore, including that of Eros International Media, Amar Ujala Publications, O-zone Networks Pvt and BTI Payments. “Based on the recommendations of FIPB in its meeting held on 11 September 2015, Government has approved ll proposals of Foreign Direct Investment (FDI) amounting to Rs1,567.91 crore,” the finance ministry said on 7th October.

(THE ECONOMIC TIMES 8th October, 2015)

2.143 CROSS-CURRENCY IMPACT TO PULL DOWN REVENUE GROWTH

Revenue growth would remain tepid in y-o-y (year on year) terms (our focus), showing further deceleration but q-o-q (quarter on quarter) growth (street’s focus) would be healthy due to seasonality. Cross- currency impact would pull down revenue growth and partially offset margin gains from INR depreciation. Revenue growth convergence between TCS and Infosys would also be apparent, with the two also leading on q-o-q growth. We expect quarter results to determine stock leadership for the next quarter.

While sequential USD revenue growth is likely to remain healthy in the seasonally strong quarter, on y-o-y terms growth is likely to remain lacklustre and fail to indicate a pick-up in overall demand. The growth convergence between TCS and Infosys would be apparent, with the two companies also leading on sequential growth. Currency would again play spoilsport, with the movement in certain currencies like AUD (Australian Dollar) and LATAM (Latin America) currencies partially offsetting

some gains due to the depreciation of the INR. Cross-currency was a small positive in the previous quarter. Pressure on margins due to pricing and competitive intensity would again be evident, with the companies failing to pass on the full impact of INR depreciation in the P&L.


2.144 CENTRE, STATES WANT EASY GST SCHEME FOR SMALL TRADERS

Traders and businesses above a specified annual turnover will have to get a unique identification number for collecting goods and services tax (GST) from consumers, while those with lesser annual sales can get a GST registration voluntarily if they want to seek credit for the taxes previously paid, according to a report on GST business process released by the government for public comments.

Although the report does not specify the turnover threshold for registration, officials have tentatively kept it at Rs10 lakh. Those in the Rs10-50 lakh turnover range will be eligible for the lower-than-the-standard GST rate under the compounding scheme, under the consensus among Union and state government officials.


2.145 INBOUND M&A DEALS ON I-T DEPARTMENT'S RADAR

The tax department has fixed its eagle eye on yet another target — this time it's inbound mergers and acquisitions (M&As). Forty companies are said to have received notices and the total tax demand could exceed Rs 4,000 crore, according to estimates.

Income tax isn't levied on inbound foreign direct investment ( FDI) to encourage the inflow of overseas money. But the revenue department has cited Section 68 of the Income Tax Act, which deals with "unexplained cash credits," to impose a hefty 34 per cent levy on part of the transactions. While ETcould not confirm the total demand under this provision, it adds up to more than Rs 500 crore in two cases.

The 40 Indian companies that got the tax demand include Credit Suisse, Godrej Properties, Kohinoor Infrastructure and Carat Media, according to the documents that ET has seen. They are among at least eight that have filed writ petitions in the Bombay High Court.


2.146 DEBT MAY BE AWASH WITH $2.5 B

Foreign institutional investors (FIIs) are primed to pump as much as Rs 16,500 crore ($2.55 billion) into the Indian debt market on 12th October with higher limits set by Reserve Bank kicking in on government securities.

Also, while yields are set to decline, these will still be higher than most other emerging markets, bankers added. In its monetary policy review on September 29, the Reserve Bank of India (RBI) said it will fix the FII limit in government bonds in rupee terms and also allow overseas investors to hold up to 5% of outstanding stock in phases unti March 2018. That starts on 12th October with Rs 13,000 crore ($2 billion) of government securities and RS 3,500 crore ($540 million) of state government bonds on offer.


2.147 INVESTMENT VIA P-NOTES FALLS TO RS 2.53 LAKH CRORE IN AUGUST

Investment through Participatory Notes (P-Notes) into India's capital market dropped to Rs 2.53 lakh crore ($39 billion) at the end of August.

The investment via this route has been declining in the three months (June-August) after touching a seven-year high of Rs 2.85 lakh crore in May. This was the highest investment since February 2008, when the cumulative value stood at Rs 3.23 lakh crore.

According to Sebi data, total value of P-Notes investment in Indian markets (equity, debt and derivatives) declined to Rs 2.53 lakh crore at August-end, from Rs 2.72 lakh crore in the previous month.


2.148 FIIS NOT BANKING ON LENDERS ANY LONGER

Slowdown in the credit growth of banks and concerns over stressed assets have prompted foreign institutional investors (FIIs) to trim their ownership in the Indian banking universe to multi-year lows.

According to the shareholding data for the September quarter compiled by Capitaline data, FII ownership in 14 out of 21 banks is at the lowest point in more than three years without any key difference between public and private sector banks. These lenders include HDFC Bank, Bank of Baroda, Canara Bank, Punjab National Bank, Indian Overseas Bank, and Bank of India.

Ownership of FIIs in HDFC Bank stood at 32.4% as on quarter ended September – the lowest since September 2012, while the same in ICICI Bank was at 38.21% – the lowest in the last eight quarters. FII holding in Axis Bank was at 42.13%, the lowest in the previous ten quarters.


2.149 CENTRE’S CAPITAL EXPENDITURE SEEN SLOWING

The Plan capital spending was just Rs 981 crore in August this year compared with Rs 20,580 crore in July and Rs 10,066 crore in August last year, according to Controller General of Accounts (CGA) data. Yet, in the April-August period, such expenditure was Rs 52,612 crore, an impressive 38% higher than the year-ago period (the budgeted growth rate was a tad higher at 41%).

The Centre’s total expenditure in the first five months of this fiscal grew 8.8% to Rs 7.32 lakh crore. The spending in August was about Rs 1.31 lakh crore compared to Rs 1.7 lakh crore in the previous month. The Reserve Bank’s all-time high surplus profit transfer (of Rs 65,896 crore) to the exchequer combined with the moderation in

spending helped the Centre to report a small fiscal surplus of Rs 15,808 crore in August. That was, of course, a blip.


2.150 START-UP INVESTMENTS IN INDIA TO SEE THREE-FOLD RISE TO $6.5 BN IN 2015: NASSCOM

India will witness about $6.5-billion (Rs 42,300 crore) funding in start-ups this year, as global investors look at investing in firms that build products and solutions for the local market, while using them for emerging markets in Asia, Africa and Latin America. India is the world’s third largest start-up hub.

Global private equity (PE) and venture capital (VC) firms spent $2.2 billion (Rs 14,300 crore) in 179 Indian start-ups in 2014. Till October, these firms doubled their investments to $4.9 billion (Rs 31,900 crore) and expect to increase them to $6.5 billion by the end of the year, according to industry body National Association of Software and Services Companies (Nasscom). Indian start-ups that received funding doubled to 400 in 2015, said a Nasscom report, released during the product conclave that began 13th October. The report added investors had reaped returns in 2015, with exits touching $700 million.


3. IMPORT AND EXPORT POLICY

3.55 GOVT EXEMPTS CUSTOMS AND EXCISE DUTY ON USE OF BUNKER FUELS

In order to promote movement of cargo through coastal waters, the government on 7th October said it has exempted customs and excise duty on the use of

bunker fuels by Indian ships. One of the issues hindering the growth of coastal shipping has been the levy of customs and central excise duty on bunker fuels which raises cost of transportation, said an official statement.

The exemption has further been extended by department of revenue in a notification on September 17 to Indian flagships carrying a mix of EXIM, empty and domestic containers, the shipping ministry said.

(FINANCIAL EXPRESS 8TH OCTOBER, 2015)

3.56 COSTLY LNG IMPORTS, ASSET UNDERUTILISATION HIT GAIL PROFITS

0.43 % is grappling with pricey imports of liquefied natural gas (LNG) and underutilisation of the company's assets, the two biggest challenges which are squeezing its profits and the inclination to invest, chairman and managing director BC Tripathi said.

The state-run company, which runs India's largest natural gas pipeline, has seen erosion of about 30% in its value this year while the broader market barely changed. A sharp decline in global oil and gas prices that began last year has messed up the maths at GAIL, which draws most of its revenue by selling and transporting gas across India.

"The challenge will be to service debt," he said. The company is saddled with a debt of Rs 10,000 crore. More debt will be added when GAIL goes to the market to raise about Rs 1,000-1,500 crore in 2016-17, mainly to fund the construction of the just-launched Jagdishpur-Haldia pipeline, the first leg of which is expected to cost about Rs 4,000 crore.

(THE ECONOMIC TIMES, 12TH OCTOBER, 2015)

3.57 IRON ORE IMPORT MIGHT FALL TO 5 MT

With surplus availability of iron ore in the domestic market, imports are likely to shrink to five million tonnes (mt) in the current financial year, compared with 15 mt in 2014-15.

Iron ore output in the country is estimated to be 153 mt by the end of FY16, up from 123 mt in the last financial year. Analysts say subdued demand in steel and the falling rupee will also play a role in pulling down imports.

After the enactment of the amended Mines and Minerals (Development & Regulation) Act, Odisha issued orders to extend the validity of 50-odd mine leases. Of this, 27 iron ore mines have re-commenced production, raising the hope of robust output. Odisha's iron ore production is pegged at 65 mt in the current financial year, up from 47 mt a year ago. Odisha, the biggest ore producer, is tipped to contribute 42.5 per cent of the country's overall iron ore output in FY16.

Ore output in Chhattisgarh would move up marginally from 31 mt to 33 mt this year. For Karnataka and Jharkhand, too, the growth is projected to be modest. Karnataka’s ore output is projected at 24 mt (from 21 mt in FY15), while Jharkhand is expected to improve its tally from 17 mt to 19 mt. Goa, which produces low-grade ore, would add five mt from zero level.


4. MISCELLANEOUS

4.189 GROWTH OF EIGHT CORE SECTORS SLOWS DOWN TO 2.6 PCT IN AUGUST

The growth of eight core sectors slowed down to 2.6 per cent in August mainly due to contraction in steel output. The expansion in eight infrastructure sectors, which contribute about 38 per cent to the overall industrial production, was 5.9 per cent in the same month last year. The August output, however, was higher than the previous month when the core sectors had expanded by just 1.1 per cent.

According to the data released by the Commerce and Industry Ministry 30th September, the steel output in the month under review declined to 5.9 per cent as against a positive growth of 9.4 per cent in August 2014.

Coal, cement and electricity output slowed down to 0.4 per cent, 5.4 per cent and 5.6 per cent respectively during the last month as compared to 13.2 per cent, 10 per cent and 12.9 per cent. However crude oil, natural gas, refinery products and fertilisers recorded healthy growth.


4.190 FISCAL DEFICIT LAST MONTH 66.5% OF FY16 TARGET

India's fiscal deficit for April-August was Rs 3.69 lakh crore, or 66.5 per cent of the full-year target of Rs 5.56 lakh crore. The fiscal deficit was Rs 3.98 lakh crore in the same period a year ago, about 75 per cent of the FY15 target.

The net tax revenue for the first five months of 2015-16 was Rs 2.1 lakh crore, or 23 per cent of the full-year budgeted estimates, compared to 19 per cent in the comparable period of 2014-15.

The non-tax revenue for the period under review was Rs 1.26 lakh crore, or 61.2 per cent of the budgeted estimates, compared with 40 per cent in the same period a year ago. Non-debt capital receipts reached a staggering 21.6 per cent of full-year estimates, compared with only six per cent in April-August in the past year.


4.191 INDIA ON TRACK TO MEET DEFICIT TARGET, GDP TO EXCEED 7.5%

India is well on track to meet its fiscal deficit target of 3% of GDP by FY18, said the finance ministry's top bureaucrats, who are confident growth will exceed 7.5% in the current fiscal. They said growth projections will be reviewed after second-quarter numbers are announced. Revenue will only fall short by about Rs 50,000 crore in the current year, the finance ministry's secretaries said in an hour-long briefing. The government has prepared a disinvestment plan to try and raise the maximum possible amount, said the officials, who were joined by chief economic advisor Arvind Subramanian.

The government will push ahead with its reform agenda to realise a potential growth rate of 8% and above over time, the ministry said in a release. An early start has been made on budget preparation as part of this exercise. "Our macro-fundamentals remain strong," finance secretary Ratan Watal said. "We are now better placed to handle unforeseen external shocks and to put India firmly on the path of economic recovery and inclusive prosperity."


4.192 INDIA’S FISCAL SITUATION EXPECTED TO IMPROVE IN 5 YEARS: IMF

The International Monetary Fund (IMF) has said that it expects India's fiscal situation to improve steadily over the next five years, media reported. As per reports, India's total fiscal deficit slid down to 6.1 per cent of GDP from expected 7.2 per cent of GDP in the current financial year.

“According to IMF estimates, India's fiscal deficit would be highest among its BRICS peers and well above the average of 2.7 per cent of GDP for the entire emerging market,” he added. The World Economic Outlook has forecasted that India will grow 7.3 per cent in the current fiscal, same as last year, and slightly below the 7.5 per cent forecast by the IMF earlier.


4.193 COAL INDIA LTD FINDS FEW TAKERS FOR COAL IN SPECIAL E-AUCTION

The coal ministry’s special e-auction scheme for 2015 had few bidders as companies found that the floor price fixed was too high, much above the current global prices. While there were eight companies participating in the bid, the auction nearly failed to get any premium above the floor price.

The ministry, under a special e-auction scheme for power producers, offered 5 million tonne for sales. But MSTC could auction less than half the quantity that CIL offered, an MSTC official said.

For power plants having long-term and medium-term power purchase agreements (PPAs) the reserve price was set at 20% (of the CIL notified price) plusthe CIL notified price for the power sector. For power plants having short-term PPAs or no PPAs at all, the price was set at 40% plus the CIL notified price.


4.194 STRESSED ALUMINIUM INDUSTRY SEEKS GOVT COVER

Facing the twin onslaught of galloping imports and meltdown in global prices, the domestic aluminium industry on 7th October made a strong pitch for a safeguard duty breather in its meeting with revenue secretary even as its demand for doubling import duty to 10% remains unanswered.

The prices of the metal have also crashed. Since April 2011, aluminium prices at London Metal Exchange (LME) have dropped by 42% from $2,623/tonne to $1,540/tonne in August this year, but the production cost remains the same. The domestic industry is hardly making any money, but reeling under a mammoth debt burden of Rs70,000 crore. Government needs to step in to save the industry from bleeding,” said an industry source.


4.195 SMES MOP UP RS 134 CRORE THROUGH IPOS IN APR-AUG

As many as 17 small and medium enterprises (SMEs) got listed on capital markets with public issues worth Rs 134 crore in the first five months of the ongoing fiscal. In comparison, nine SMEs had launched their initial public offerings (IPO) and raised a total of Rs 90 crore during the April-August period of the previous fiscal. According to the data available with Sebi, three SMEs came out with public issues in August, raising a total of Rs 21 crore, while five companies hit the capital markets in July to mop-up Rs 69 crore.

Further, eight SME had hit the markets with an IPO worth Rs 39 crore in June, one firm launch its public issue in May, while no issue was launched in April. These companies are from sectors like trading, steel, manufacturing, textile and finance and are spread across the country, according to a report by Knowledge and News Network, a media platform that focuses on micro and SMEs.


4.196 PHARMA STOCKS SET TO PIP NIFTY FOR FIFTH YEAR ON DRUG APPROVALS

Shares of pharmaceutical companies are poised to outperform benchmark indices for the fifth consecutive calendar year, driven by a pick-up in USFDA approvals and a weak rupee, providing a double-boost to profitability and stock performance of these companies.

According to Bloomberg data, the CNX Pharma index has yielded 20.67% return so far in 2015 while the benchmark Nifty has lost 1.85% of its value from last year.

Barring Sun Pharmaceuticals, all major pharmaceutical companies have yielded 25-40% returns in CY15. Lupin is the top performer with a 43.39% gain, while Aurobindo Pharma has gained 38.4%. Glenmark and Dr Reddy’s Laboratories gave nearly 30% return in CY15.


4.197 NATURAL RUBBER OUTPUT FALLS 15%, CONSUMPTION SLIPS 2%

The downslide in natural rubber (NR) output continues unabated, as the low price-realisation has been holding back farmers from investing manpower in tapping, monsoon-care and replanting activities in their rubber plantations.

According to the latest statistics from Rubber Board of India, NR production has fallen by 15% in September 2015, compared to last year .

“Production of NR for September 2015 decreased 15% to 51,000 tonnes compared with 60,000 tonnes in September 2014,” Rubber Board said in a statement. The good news, however, is that there is no surge in the NR consumption in the same period. NR consumption fell from 86,280 tonnes to 84,500 tonnes, year-on-year, in September, says the release.


4.198 SEPTEMBER RETAIL INFLATION RISES TO 4.41%

India's retail inflation based on the consumer price index (CPI) for September increased to 4.41 percent, from 3.74 percent recorded for the previous month, on the back of higher food prices, official data showed on 12th October. The CPI for September last year was at 5.63 percent.

Rural inflation in the month in question was higher at 5.05 percent, over the urban CPI at 3.61 percent, according to data released by the ministry of statistics. Overall food inflation was higher in September, at 3.88 percent compared to 2.20 percent in August.

September's rural food inflation rate was 4.05 percent as compared to 3.45 percent for urban.


4.199 INDIA’ FY16 GDP LIKELY AT 7.6%: NOMURA

India is in a goldilocks period of low inflation coupled with gradual recovery and the country is expected clock a GDP growth rate of 7.6 per cent this fiscal year, says a report.

According to Japanese financial services major Nomura, despite slowing external demand, the domestic growth cycle is improving.

As per official figures, Indias industrial output rose to nearly three-year high of 6.4 per cent in August on improvement in manufacturing and capital goods while retail inflation rose to 4.41 per cent in September.


4.200 AGRICULTURE GDP GROWTH RATE LIKELY TO ACCELERATE TO 2.5% THIS FISCAL ’

Despite a 14% rainfall deficit during the just-concluded monsoon season, the agriculture GDP growth rate is likely to accelerate to 2.5% in the current fiscal year from a meagre 0.2% in the previous fiscal year, mainly because of a likely higher output in the winter crop and livestock, NITI Aayog member Ramesh Chand said on 13th October. The farm sector grew by 1.9% in Q1FY16. The Reserve Bank of India (RBI) in its monetary policy review on September 29 said the farm sector is likely to grow 1.5% in FY16.

According to the first advance estimate on kharif crop production released last month by the agriculture ministry, the country’s summer foodgrain production is projected to drop by less than 2% to 124.05 million tonne (MT) in the 2015-16 crop season compared to previous year.


4.201 INDIA’S STEEL DEMAND MAY GROW 7.3% THIS YEAR

Steel demand growth in India is seen to be the highest at 7.3% in the current year, while there will be slackening of demand in all other major steel-producing nations such as China, the US, Japan, Korea and Russia. The world demand for the alloy would decelerate 1.7% compared to 2014, according to World Steel Association (WSA).

India’s steel demand grew by 3.1% in 2014 to 75.9 MT. In the current year, the demand is expected to grow to 81.5 MT. The demand is likely to accelerate further next year with 7.6% growth, the premier industry organisation said in its short-range outlook for the sector.


4.202 INDIA'S RUPEE FALLS MOST IN SEVEN WEEKS AS IMPORTERS BUY DOLLARS

India’s rupee fell the most in seven weeks on speculation importers are taking advantage of the currency’s recent strength to buy dollars.

The rupee rallied 1.4 percent in September, the best performance among 24 emerging-market exchange rates tracked by Bloomberg. It has advanced 0.6 percent this month as India remained insulated from China’s economic woes and amid optimism capital inflows will rise after the nation relaxed curbs on foreign ownership of its debt.

The rupee weakened 0.7 percent to 65.1850 a dollar in Mumbai, the most since Aug. 24, prices from local banks compiled by Bloomberg show. Regional currencies halted a seven-day run of gains 13th October as a sharper-than-predicted drop in Chinese imports added to signs the world’s second-largest economy is slowing.


4.203 WHOLESALE PRICE INFLATION (-) 4.54% IN SEPTEMBER; FOOD INFLATION INCHES UP

Wholesale Price Inflation continued to remain in the negative territory for the eleventh straight month, at -4.54% in September, but slightly higher than the -4.95% in August. The WPI data released on 14th October indicates that the impact of a broad-based decline in global commodity prices still persists, while domestic producers’ are unable to increase prices.

In September, fuel and power inflation dropped even further to -17.71% in September, compared with -16.50% in August, reflecting the fall in global crude oil prices, official data showed.


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