Indian rupee nears 13-mth lows, trade gap in focus

The partially convertible Indian rupee fell towards 13-month lows on Wednesday as record oil prices raised worries of a deteriorating trade deficit against a backdrop of slowing capital inflows.

At 9:38 a.m. (0408 GMT), the rupee was at 42.75/76 per dollar, 0.3 percent weaker than Tuesday’s close of 42.635/640. It hit 42.92 last Friday, its weakest since mid-April 2007.

"Dollar/rupee opened up today because of oil, but there seems to be some good selling at higher levels. Exporters may come in later," said Indrajit Sengupta, a currency dealer at state-run Canara Bank.

"It seems to be an interbank play for now. The rupee should be in a 42.60-42.80 band for the day, and if it breaks above 42.80, then the rupee may easily fall to 43 per dollar."

Oil CLc1, India’s biggest import, has surged to record highs over $129 a barrel, raising the risk of a widening trade deficit which could put downward pressure on the rupee.

India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars. The country’s oil import bill shot up by more than a third in 2007/08 because of soaring oil prices, and the trade deficit widened by a similar percentage.

Added to that, capital inflows into stocks have slowed down significantly, with foreigners being net sellers of $2.7 billion of shares so far in 2008, after buying a record $17.4 billion in 2007.

28 mn US citizens need food aid to eat

Nearly 28 million US citizens depend on Coupons to eat, a situation constantly increasing because of unemployment and the high price of food, said Virginia, US newspaper- USA Today.

USA Today said difficulties to subsist are so many, that even people with a high cultural level cannot escape from then. "It is inconceivable to see myself in such a condition, especially when you have a pride," said Ohio resident Philomena Gist, a woman with a Master Degree in Psychology.

The newspaper said no one of the millions of people needing help to eat, should be placed in such a category, and the number of needed people goes over the record established in 1994.

While these US citizens are fighting for taking their homes something to eat, politicians are discussing other topics and economists debate if they are on a recession or not, said the US influential newspaper.

The costs of food and fuel are increasing since 2006, and now these phenomena are combined with loss of jobs, and the standstill of salaries, which rocketed the number of US citizens urged on a support.

US citizens depending on coupons to eat, represent nearly 10 percent of the US total population

UTI plans to relaunch $500 mn IPO

UTI Asset Management, India’s second-largest mutual fund firm, plans to revive a roughly $500 million IPO that had been delayed from earlier this year, with management scheduled to meet investors next week to gauge market interest, according to people familiar with the deal.

UTI executives will meet investors on Monday in Mumbai and on Tuesday in Singapore, followed tentatively by presentations in Hong Kong, London and New York.

UTI had hoped to complete its domestic listing in April but delayed the deal as India’s stock market went into freefall, with the benchmark Sensex plunging 23 percent in the first three months of the year. Since the start of April, however, the index has risen 10 percent.

IPO volumes from India have nearly doubled so far this year from the same period last year, according to Thomson Financial data, although Reliance Power’s nearly $3 billion January listing accounts for most of the $3.8 billion raised from 18 offerings.

Citigroup, Enam Securities and JM Financial are sponsoring the deal. No terms or deal schedule were immediately available.

UTI managed 8.34 million accounts worth 568.54 billion rupees ($13.3 billion) as of the end of December.

RBI approves HDFC Bank's Centurion buy

India’s HDFC Bank said the central bank has approved its acquisition of Centurion Bank of Punjab, with effect from May 23.

The combined entity would have a nationwide network of 1,167 branches and a net advances of 890 billion rupees ($21 billion) and deposit base of 1.22 trillion rupees, it said in a statement issued late on Tuesday.

HDFC Bank agreed to buy smaller rival Centurion in February in all-share deal worth $2.4 billion at that time.

Indian shares open 0.96 pct lower

Indian shares opened 0.96 percent lower on Wednesday and quickly extended losses past 1 percent, with the fall led by Reliance Industries Ltd.

The markets have opened on a weak note following weak cues across the globe due to shot up in crude price and inflation worries in US. Profit booking has seen in banking, capital goods and technology. Midcap and small cap stocks are under selling pressure. Market breadth is weak.

Losers were HDFC, BHEL, Unitech, HDFC Bank, Maruti, ACC, Infosys, ABB, Wipro, Satyam, TCS, BPCL, Tata Comm, PNB and Zee Ent while Cairn India continued its uptrend (Nymex crude was trading above USD 129 per barrel).

At 9:56 am, the Sensex was down 163 points at 17,067 and the Nifty down 38 points at 5066. The CNX Midcap slipped 58 points at 6845. Market breadth is weak; about 1400 shares have advanced, 1521 shares declined, and 179 shares are unchanged.

Asian markets were trading sharply lower. Shanghai Composite was down 1.87% or 64.33 points at 3,378.83. Hang Seng fell 158.77 points or 0.63% at 25,010.69.

Nikkei 225 Average was down 259.25 points or 1.83% at 13,900.84. Jakarta Composite fell 27.46 points or 1.09% at 2,483.50. Straits Times fell 0.8% or 25.69 points at 3,174.19. Seoul Composite slipped 18.12 points or 0.97% at 1,855.03. Taiwan Weighted lost 15.65 points or 0.17% at 9,053.24.

US markets slid after oil prices jumped above $ 129 a barrel and a key inflation gauge rose more than expected. The Dow tumbled 199.48 points, or 1.53%, to 12,828.68. The Standard & Poor’s 500 index declined 13.23 points, or 0.93%, to 1,413.40, and the Nasdaq composite index fell 23.83 points, or 0.95%, to 2,492.26.

OPEC's Badri says worried by oil price speculation

OPEC Secretary General Abdullah al-Badri said on Tuesday he was "worried" because supply and demand factors were not behind high oil prices.

In an interview with Reuters during a visit to Venezuela, Badri said oil prices could keep rising if non-market factors such as the weakening dollar continue to put pressure on prices but that OPEC would only act when market fundamentals showed a need to do so.

Rupee drops towards 13-month lows, oil hurts

The Indian rupee headed towards 13-month lows on Wednesday as record oil prices raise concerns of a widening trade deficit, and losses in Asian stock markets raise concerns about foreign demand for local stocks.

* At 9:04 a.m. the partially convertible rupee was at 42.77/78 per dollar, weaker than Tuesday’s close of 42.635/640. It hit a low of 42.92 last Friday, its weakest since mid-April 2007.

* Asian stocks fell for a second consecutive day on Wednesday, feeding a rally in government bonds, as fears about consumer demand in the face of high oil prices rattled investors.

* Oil, India’s biggest import, has surged to record highs over $129 a barrel, raising the risk of a widening trade deficit. India imports more than two-thirds of its oil needs, and crude refiners are the biggest buyers of dollars.