Weakening Rupee headache for Jewellery traders

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Jewellery traders in the Tex city are facing a serious slump in their gold business owing to the rising price of the yellow metal on one side and the fall in rupee value on the other side. Worried over the declining sale, traders have demanded that excise duty on the precious metal be reduced, so as to ease imports from other countries, which might help stabilize the rates.

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President of the Coimbatore Jewelers Association K Krishnamoorthy said the two major reasons for rise in gold price are the value falling of rupee against the US dollar and the lack of gold metal in the market. “The import of gold was not stopped officially. The excise duty on it was hiked four times in a year. The excise duty in 2012-13 was 4 per cent. It is 10 per cent now. This has let to an increase of 16 per cent in gold price,” said Krishnamoorthy.

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“The Central government should reduce the excise duty on gold to the earlier levels of 4 per cent. Only then will the jewellery trade revive,”  he added.

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“The season from mid-August to Deepavali is the peak period for gold trade. But, the rupee crisis and hike in excise duty has hit the industry at a wrong time,” he complained.

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Cement Stocks Continue to Break Down

Shares of India’s top cement majors are effort in today’s trade even as the benchmark

indices are showing flag of hurdle back.

 

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Ambuja Cements, part of Swiss major Hoclim, slipped below Rs 160 on the BSE and is currently trading at Rs 159.15 at 10:35 am. Its sister-concern ACC too, continues to trade weak as the counter continues to remain weak below Rs 1,100 mark. The company’s stock is trading at Rs 1,068.05 currently.

 

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India,japan seek early agreement on civil nuclear pact

TOKYO – Japanese Prime Minister Shinzo Abe and his Indian counterpart Manmohan Singh agreed on Wednesday to speed up talks on a deal to allow Japan to export nuclear plants and to strengthen security cooperation as both sides keep a wary eye on China’s military clout.

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“In the political and security area, maritime security cooperation will further be strengthened … On civil nuclear cooperation, negotiation will be accelerated toward the early conclusion of the agreement,” Abe told a ceremony alongside Manmohan Singh.

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Unable to rely on a coal sector crippled by supply shortages and mired in scandals, India is pushing ahead with constructing nuclear reactors despite global jitters over safety. Hundreds of millions of Indians still live without power and factories suffer frequent blackouts.

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A civil nuclear energy pact with India would give Japanese nuclear technology firms such as Toshiba Corp and Hitachi Ltd access to India’s fast-growing market when they search for opportunities overseas to offset an anti-nuclear backlash at home in response to the Fukushima radiation crisis.

Sequester dents US earnings, but full impact still unclear

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The US federal government began implementing across-the-board spending cuts last month, known formally as sequestration.The US federal government began implementing across-the-board spending cuts last month, known formally as sequestration.A range of US companies are warning investors that sequestration is starting to bite, but executives are still unclear how deep the wound will be.

The US federal government began implementing across-the-board spending cuts last month, known formally as sequestration but more commonly called “the sequester.”

It has meant everything from furloughs for air traffic controllers to fewer planes for the US Navy to smaller subsidies for farmers. So far this earnings period, executives from Lockheed Martin to IBM and Delta Airlines are flagging how those US budget cuts cost them some sales in the first quarter. But the bigger concern is how much they might lose in the months to come as the budget cuts begin to really take hold – and getting a detailed forecast has proven hard to come by.

 “Sequestration is a reality, but it’s unfolding slowly at this time,” United Technologies Chief Executive Louis Chenevert said in an interview Tuesday. “We will understand more what sequestration does as we get to the end of the year.” Market strategists said the fears about sequestration feed into a broader decline in confidence, underlined by a recent rise in unemployment claims and decline in factory activity in parts of the country.

“These CEOs saying it’s all three to four months out, it kind of plays into that,” said JJ Kinahan, chief derivatives strategist at TD Ameritrade. “The sequester is one more data point for people to worry about.” Yet investors are not spooked. Since March 1, when the sequester kicked in, the S&P is up 4 per cent, continuing a sharp run that started last November.

Rangarajan presents FY13 report card, sees FY14 GDP at 6.4%

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The Prime Minister’s Economic Advisory Council (PMEAC) projected the economy to grow at 6.4 percent in the new financial year that began on April 1. The panel said the economy probably grew 5 percent in the fiscal year 2013, its slowest pace in a decade, but an upward revision was likely.

Presenting the economic review for fiscal year 2013, C Rangarajan, chairman, PMEAC lauded the reform measures taken by the government and claimed it had started yielding desired results. The PMEAC chairman said manufacturing sector is all set to improve its performance over FY13 and may even report numbers higher than what the Central Statistical Office (CSO) had estimated.

The improvement in the growth rate in the current fiscal, he said, would mainly be on account of better performance of agriculture, industry and services sectors.

He also said FY14 current account deficit (CAD) is expected to narrow down to 4.7 percent (from 5.1 percent in FY13) when the pace of exports pick up. He clarified that exports will remain modest in first quarter but will see gradual momentum from second and third quarters. CAD, which is the difference between inflow and outflow of foreign exchange, rose to phenomenal 6.7 per cent for the quarter ended December 2012.

Saying that there are tell-tale signs of WPI inflation coming down, specifically non-food inflation, Rangarajan pegged it at 6 percent for fiscal year 2014. “Non—food manufacturing inflation remains around the comfort zone. As inflation comes down, it will create more space for monetary policy to support growth,” the economist said hoping that lower inflation will contain demand for gold imports thereby reducing pressure on CAD.

Below are the sector-wise performance prediction for FY14:

    Industry Growth seen at 4.9 percent

    Services growth seen at 7.7 percent

    Normal monsoon can lead to 3.5 percent agriculture growth

    Manufacturing growth seen at 4 percent

RBI may cut benchmark lending rate by 0.25% in May

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RBI Governor D Subbarao will announce the Monetary Policy Statement for FY14 on May 3, 2013

The Reserve Bank may cut the benchmark short-term lending rate by about 0.25% in its annual monetary policy next month in the backdrop of declining inflation and the urgency to promote growth, say economists. 

“Right now conditions should enable the RBI to cut repo rate. We expect a cut of 25 basis points (or 0.25%) in its policy in May and may be by another 25 bps in the next review,” HDFC Bank Chief Economist Abheek Barua said. 

RBI Governor D Subbarao will announce the Monetary Policy Statement 2013-14 on May 3, 2013. 

YES Bank Chief Economist Shubhada Rao said RBI may cut the repo rate or the short-term lending rate by about 0.25% in May as inflation has come down and there is a need to fuel economic growth. 

“Taking cue from inflation, we believe that RBI could take this time…To cut rate, particularly, the way we have seen inflation in the past coming down. Given the strong deceleration in growth, we think RBI may cut repo rate by 0.25% in May as well as may provide some liquidity easing,” Rao said. 

Wholesale prices (WPI), a measure of inflation, softened to 5.96% in March after an annual rise of 6.84% in February, the lowest rate since November 2011. 

“If you look at the incremental data WPI, IIP in the last two months, that data is in favour of the 25 basis points rate cut. We are expecting a cut in repo rate in May,” Anubhuti Sahay, Economist, Standard Chartered Bank said. 

Industry has been batting for a rate cut to tide over the problems concerning poor demand, low industrial output and subdued economic growth.

 The Index of Industrial Production (IIP), the key gauge to measure industrial activity, slumped to 0.6% in February from 4.3% a year ago because of poor performance in manufacturing coupled with contraction in power generation and mining output. India’s economic growth rate is estimated to slip to a decade’s low of 5% in 2012-13, pulled down by poor performance of manufacturing, agriculture and services sectors.