FMCG stocks edge higher on favourable outlook for winter crop

Key benchmark indices edged higher for the third straight trading session, with market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained buyers of Indian stocks on Monday, 1 October 2012. The stock market was closed on Tuesday, 2 October 2012, on account of Mahatma Gandhi Jayanti. Intraday recovery in European stocks also supported domestic bourses. The 50-unit S&P CNX Nifty reached its highest closing level in more than 17 months. The barometer index, BSE Sensex, attained its highest closing level in more than over 14 months. The Sensex advanced 45.78 points or 0.24%, off about 35 points from the day's high and up close to 55 points from the day's low. The market breadth was strong. From a recent low of 18,589.50 on 27 September 2012, the Sensex has jumped 280.09 points or 1.5% in three trading sessions. The Sensex has jumped 3,414.67 points or 22.09% in calendar 2012 so far (till 3 October 2012). The Sensex has gained 106.85 points or 0.56% so far in October month (till 3 October 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,733.73 points or 24.66%. Coming back to today's trade, index heavyweight Reliance Industries (RIL) edged higher. Index heavyweight and cigarette maker ITC edged lower. FMCG stocks moved higher on favourable outlook for Rabi or winter crop following wide-spread rains in August and September. Hindustan Unilever (HUL), Godrej Consumer Products and Bata India hit record highs. Shares of Tata Global Beverages rose for the third day in a row and hit record high after Tata Starbucks -- an equal joint venture between Tata Global Beverages and Starbucks Coffee Company -- after trading hours on 27 September 2012 confirmed that the first store in India will open in Mumbai by the end of October 2012. United Spirits hit record high. Most capital goods stocks edged higher on renewed buying. Shares of brokerage firms also edged higher. The market edged higher amid a bout of initial volatility. The market retained positive zone in morning trade. The market extended initial gains to hit fresh intraday high in mid-morning trade. The 50-unit S&P CNX Nifty hit its highest level in more than 17 months whereas the barometer index Sensex hit its high level more than 14 months. The Sensex trimmed gains in early afternoon trade. Key benchmark indices regained positive terrain after slipping into the red in afternoon trade. Key benchmark indices were a tad higher in mid-afternoon trade. The market retained positive zone in late trade. The market sentiment was boosted by data showing that foreign institutional investors (FIIs) remained buyers of Indian stocks on Monday, 1 October 2012. Foreign institutional investors (FIIs) bought shares worth a net Rs 243.30 crore from the secondary equity markets on Monday, 1 October 2012, as per data from Securities & Exchange Board of India (Sebi). The stock market was closed on Tuesday, 2 October 2012, on account of Mahatma Gandhi Jayanti. FIIs made substantial purchases of Indian stocks last month. They bought shares worth a net Rs 19035.10 crore from the secondary equity markets in September 2012. The BSE Sensex advanced 45.78 points or 0.24% to settle at 18,869.69, its highest closing level since 25 July 2011. The index jumped 81.71 points at the day's high of 18,905.62 in mid-morning trade. The index fell 7.34 points at the day's low of 18,816.57 in afternoon trade. The S&P CNX Nifty advanced 12.45 points or 0.22% to settle at 5,731.25, its highest closing level since 29 April 2011. The index hit a low of 5,715.80 and a high of 5,743.25 intraday trade. The BSE Mid-Cap index rose 0.58% and the BSE Small-Cap index gained 0.96%. Both these indices outperformed the Sensex. BSE clocked turnover of Rs 2581 crore, higher than Rs 2132 crore on Monday, 1 October 2012. The market breadth, indicating the overall health of the market, was strong. On BSE, 1,759 shares rose and 1,172 shares fell. A total of 136 shares were unchanged. From the 30-share Sensex pack, 20 stocks rose and rest of them fell. Index heavyweight Reliance Industries (RIL) rose 1.49% to Rs 847, off the day's high of Rs 852.55. RIL announced after market hours on Monday, 1 October 2012, that it had acquired Recron (Malaysia) Sdn Bhd way back in 2007 and has been operating the unit since then. BP Chemicals (Malaysia) Sdn Bhd (BPCM) has been the largest supplier of purified terephthalic acid (PTA) to this facility, RIL said. BP Chemicals (Malaysia) Sdn Bhd (BPCM) has announced that Reliance Global Holdings Pte. (an associate of Reliance Ports and Terminals) has acquired BPCM's 100 % equity in purified terephthalic acid (PTA) production. It is anticipated that the Kuantan PTA plant of BPCM will continue to supply PTA to Recron (Malaysia) Sdn Bhd after the acquisition, RIL said in a statement. Meanwhile, RIL has purchased 3.9 crore shares and spent Rs 2794.73 crore (excluding brokerage, service tax, Securities Transaction Tax, Stamp Duty, Exchange Transaction Charges and Sebi fees) till 18 September 2012 under the company's ongoing share buyback program. RIL has set maximum buyback price of Rs 870 per share. The company has set aside Rs 10440 crore for share buyback. The buyback program opened on 1 February 2012 and closes on 19 January 2013. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in June 2012 that the company's buyback program represents a highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future. FMCG stocks rose on favourable outlook for Rabi or winter crop following wide-spread rains in August and September. FMCG firms derive substantial revenue from rural India. Winter crops will gain from high soil moisture and brimming water reservoirs, which have filled up in the past four weeks after dipping to alarmingly low levels following a prolonged dry patch at the start of monsoon season. Hindustan Unilever (HUL) rose 2.49% to Rs 556.15. The stock hit a record high of Rs 557.60 in intraday trade today, 3 October 2012. Godrej Consumer Products jumped 4.21% to Rs 706. The stock hit a record high of Rs 717.70 in intraday trade today, 3 October 2012. Shares of Tata Global Beverages rose for the third day in a row after Tata Starbucks -- an equal joint venture between Tata Global Beverages and Starbucks Coffee Company -- after trading hours on 27 September 2012 confirmed that the first store in India will open in Mumbai by the end of October 2012. The stock jumped 7.19% to Rs 155.80. The stock hit record high of Rs 155.85 in intraday trade today, 3 October 2012. The store will also be the first Starbucks location to feature espresso sourced and roasted locally from India through the coffee sourcing and roasting agreement with Tata Coffee, Tata Global Beverages said on 27 September 2012. Tata Starbucks will own and operate Starbucks cafés in India. Shares of Tata Coffee lost 1.14% to Rs 1021.35. The stock reversed direction after hitting a 52-week high of Rs 1041.50 in intraday trade today, 3 October 2012. Tata Global Beverages holds 57.48% stake in Tata Coffee (as per the shareholding pattern as on 30 June 2012). Index heavyweight and cigarette maker ITC fell 0.9% to Rs 271, off from the day's low of Rs 267.70. The stock had hit record high of Rs 274.90 in intraday trade Monday, 1 October 2012. United Spirits rose 0.85% to Rs 1250.10. The stock hit a record high of Rs 1041.45 in intraday trade today, 3 October 2012. In a joint press release issued by United Spirits and Diageo plc on 25 September 2012, Diageo plc confirmed that it is in discussion with United Spirits and United Breweries (Holdings) in respect of possible transactions for Diageo plc to acquire an interest in United Spirits. However, there is no certainty that these discussions will lead to a transaction, the press release had stated. United Spirits early this week said that credit rating agency ICRA has revised the credit rating on the term loans, long term fund based limits, short term fund based limits and short term non-fund based limits of the company. The revision in the bank line ratings reflects delay in debt servicing by the company in March 2012. United Spirits added that these delays have since been corrected. Bata India rose 1.12% to Rs 981.50. The stock hit a record high of Rs 989 in intraday trade today, 3 October 2012. IT stocks fell on a firm rupee. The rupee hit over five-month high against the dollar on Wednesday. A firm rupee adversely affects operating profit margins of IT firms as the sector derives a lion's share of revenue from exports. India's second largest software services exporter by revenues Infosys fell 1.17%. India's third largest software services exporter by revenues Wipro declined 0.69%. India's largest software services exporter by revenues Tata Consultancy Services (TCS) gained 1.46%. The company last week announced the launch of Firebird Plus -- a new rapid implementation offering for Oracle Fusion Human Capital Management (HCM). A Diamond level partner in Oracle PartnerNetwork (OPN), TCS will leverage its Firebird/Firebird Plus solution along with its proven experience in Oracle Fusion HCM to deploy best-in-class human resource functionality within a fixed scope, TCS said in a statement. HCL Technologies rose 1.36% after the company said after market hours on Monday, 1 October 2012, that with an objective to rationalize the subsidiaries structure, a committee of the board of directors of the company has approved a scheme of arrangement between HCL Technologies and HCLSS (a subsidiary of HCL Technologies) under Section 391 to 394 of the Companies Act, 1956. As per the scheme, HCLSS would focus on the regulated business and the rest of the business of HCLSS would be merged with HCL Technologies. Cairn India fell 0.76% as US crude oil futures fell for the 2nd day in row after an industry report showed US crude stockpiles climbed a 4th week, signaling demand may be faltering in world's biggest crude consumer. US crude oil futures for November 2012 delivery were down 41 cents at $91.48 a barrel in electronic trading today, 3 October 2012. The contract had lost 59 cents or 0.63% to settle at $91.89 a barrel on the New York Mercantile Exchange on Tuesday, 2 October 2012, its lowest closing level since 27 September 2012 and the first decline in four days. Prices are down 7.3% this year. Lower crude oil prices will result in lower realization from crude sales for oil exploration firms such as Cairn India. The American Petroleum Institute (API) said the US crude inventories rose 462,000 barrels last week in the longest run of gains since May 2012. Commercial vehicles maker Ashok Leyland rose 2.08% to Rs 24.50 as the company's total vehicles sales rose 21% to 10,623 units in September 2012 over September 2011. Its commercial vehicle sales excluding small commercial vehicle Dost fell by 12% at 7,596 units. Sales of its small commercial vehicle Dost surged 3,027 units in September 2012 compared with 196 units in September 2011. Maruti Suzuki India rose 0.54%. The company's chief operating officer for marketing and sales Mayank Pareek today, 3 October 2012, said the company has increased the prices of its vehicles by Rs 2,400 to Rs 5,250, mainly because of a rise in raw-material costs. The new prices are effective from Wednesday, 3 October 2012. The company on 1 October 2012, said its domestic sales rose 12.7% to 88,801 units in September 2012 over September 2011. Exports declined 23.1% to 5,187 units in September 2012 over September 2011. The company's total sales rose 9.8% to 93,988 units in September 2012 over September 2011. Utility vehicles and tractors major Mahindra & Mahindra (M&M) rose 0.74% to Rs 869.85. The stock hit a record high of Rs 875.90 in intraday trade today. The company early this week announced record monthly automobile in September 2012. The company's automobile sales jumped 10% to 48,342 units in September 2012 over September 2011. The company said the record monthly sales in September 2012 were despite high base effect as the festive season had started early in 2011. M&M's passenger vehicles sales jumped 22% at 23,808 units in September 2012 over September 2011. The company's total domestic sales rose 10% to 45,263 units in September 2012 over September 2011. The 4 wheeler commercial segment which includes the passenger and load categories has registered a growth of 7%, M&M said. Mahindra & Mahindra's farm equipment sector (FES) maintained its leadership position in the tractor industry in September 2012. M&M's total domestic tractor sales declined 19.56% to 18,908 units in September 2012 over September 2011. The company said September 2012 and September 2011 are not comparable as the festive season had started early in 2011. The company's total tractor sales declined 18.59% to 20,085 units in September 2012 over September 2011. Exports rose 1.03% to 1,177 units in September 2012 over September 2011. However, India's largest commercial vehicle maker by sales Tata Motors fell 0.47%. Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles fell 4% to 75,773 vehicles in September 2012 over September 2011. The company's domestic sales of Tata commercial and passenger vehicles declined 3% to 70,332 units in September 2012 over September 2011. Tata Motors' total sales rose 3% to 4.09 lakh units during the six month period April-September 2012 over six month period April-September 2011. The country's largest two-wheeler maker by sales Hero MotoCorp declined 1.66% as the company's total sales declined 26.35% to 4.04 lakh units in September 2012 over September 2011. Commenting on its numbers, Hero MotoCorp Senior Vice President (Marketing and Sales) Anil Dua said, "The sales number of September reflects the prevailing market sentiment in the automobile industry. The upcoming festive season is expected to improve the overall disposition of the market and we expect the industry to get back on the growth path with the festive season demand coming in". The company has a comprehensive marketing and customer engagement plan lined up for the festive season in October and November and has ensured sufficient stocks across dealerships to meet the expected market demand, he added. Bajaj Auto fell 1.52% after company on Tuesday, 1 October 2012, said its total sales declined 14% to 3.6 lakh units in September 2012 over September 2011. The company attributed the decline in sales to sluggish market conditions. The company's motorcycle sales declined 15% to 3.15 lakh units in September 2012 over September 2011. The company attributed the fall in motorcycle sales to high base effect as the festive season viz. Diwali had started early in 2011 whereas this year Diwali falls around mid-November. The company said its bigger and sportier Pulsar and Discover brands contributed 64% of motorcycles sales in September 2012. The new Pulsar 200 NS and Discover 125 ST had sales of about 9,000 and 35,000 units respectively in September 2012. Bajaj Auto said its Discover brand of sports bikes has become the world's largest selling motorcycle brand, overtaking Hero MotoCorp's Splendor in the month of September 2012. Discover sold a record 1,22,968 units in September 2012 to become the world leader, the company said. The company said that the recently launched Discover 125 ST has generated an overwhelming response from the market. Bajaj Auto's commercial vehicle sales declined 4% to 44,838 units in September 2012 over September 2011. The company's total exports declined 6% to 1.33 lakh units in September 2012 over September 2011 India's largest bank by branch network State Bank of India (SBI) rose 1.15%. The bank cut its benchmark prime lending rate by 25 basis points to 14.5% per annum with effect from 27 September 2012. Earlier, the bank had cut its base rate by 25 basis points to 9.75% with effect from 20 September 2012. State Bank of Mysore rose 0.02%. The bank has reduced base rate by 25 basis points to 10.25% with effect from 3 October 2012. State Bank of Mysore is a subsidiary of State Bank of India (SBI). India's second largest private sector bank by net profit HDFC Bank fell 0.63% to Rs 619.30. The stock had hit a record high of Rs 639.25 in intraday trade on 26 September 2012. Yes Bank rose 1.65% to Rs 400.40. The stock hit a record high of Rs 402 in intraday trade today. Metal stocks rose on hopes China will introduce additional stimulus measures to help reverse a slowdown in the world's second-biggest economy. China is the world's largest consumer of copper and aluminum. JSW Steel, Tata Steel, Hindustan Zinc, Hindalco Industries, Sterlite Industries and Sail rose by between 0.27% to 1.64%. Many cement shares extended their recent rally triggered by the hopes construction activity will pick up as the southwest monsoon has already started withdrawing from the country. Mangalam Cement, J K Cement, Madras Cement, Birla Corporation, Kakatiya Cement, and Heidelberg Cement rose by between 0.94% to 7.64%. ACC rose 0.46% after company after trading hours on Monday, 1 October 2012, said its cement dispatches rose 4.04% to 1.8 million tones in September 2012 over September 2011. Cement production rose 8.98% to 1.82 million tones in September 2012 over September 2011. Ambuja Cements gained 2.41% after the company announced today that its cement dispatches rose 4.92% to 1.554 million tones in September 2012 over September 2011. Cement production rose 6.63% to 1.558 million tones in September 2012 over September 2011. UltraTech Cement fell 0.43% to Rs 2011. The stock reversed direction after hitting a record high of Rs 2,025 in intraday trade today, 3 October 2012. Capital goods stocks edged higher on renewed buying. L&T rose 0.33% to Rs 1610.05. The stock had hit a 52-week high of Rs 1619 in intraday trade on 28 September 2012. The company early this week said its construction division secured new orders valued at Rs 1439 crore in September 2012 from leading developers for the design and construction of major residential projects in the National Capital Region, Delhi. The company last week said its construction division secured new orders valued at Rs 3874 crore across various business segments in September 2012. Among other capital goods stocks, BEML, Siemens, Punj Lloyd and Thermax rose by between 0.21% to 5.6%. India's largest power equipment maker by sales Bhel fell 0.54%. Shares of brokerage firms edged higher. Aditya Birla Money, India Infoline, Emkay Global Financial Services, Motilal Oswal Financial Services, Edelweiss Financial Services, Geojit BNP Paribas Financial Services, JRG Securities and Religare Enterprises rose 0.5% to 20%. The Q2 September 2012 earnings season will begin around mid-October 2012. Investors and analysts will closely watch the management commentary that would accompany the results which could cause revision in their future earnings forecast of the company for the current year or the next year. Software major Infosys and private sector bank HDFC Bank unveil Q2 September 2012 results on 12 October 2012. Axis Bank announces Q2 results on 15 October 2012. Bajaj Auto unveils Q2 results on 20 October 2012. HDFC announces Q2 results on 22 October 2012. Mahindra & Mahindra unveils Q2 results on 25 October 2012. Ranbaxy Laboratories unveils Q3 September 2012 results on 8 November 2012. BPCL announces Q2 results on 9 November 2012. The government will set final rules on tax avoidance within 20 days after considering recommendations made by a government panel, Finance Minister P. Chidambaram said on 1 October 2012. The panel was set up by Prime Minister Dr. Manmohan Singh to examine controversial laws known as general anti-avoidance rules (GAAR), first proposed in the budget in March, that target firms and investors routing money through tax havens. In a previous draft report, the panel had recommended that the GAAR rules be deferred for three years. The committee in an earlier report submitted to the government last month had suggested deferring the implementation of GAAR by three years. The committee had also recommended that the government should abolish the tax on gains arising from transfer of listed securities, whether in the nature of capital gains or business income, to both residents as well as non-residents. The committee had had said that the government might consider increasing the rate of Securities Transaction Tax (STT) appropriately to make the proposal tax neutral. At present, short-term capital gains on equities are taxable at the rate of 15%. Holding period of less than one year is considered as short term. There is no long term capital gains tax on sale of shares. Business income is taxed at 30%. Distinguishing capital gains and business income depends on several factors, and disagreements have resulted in numerous litigation cases between the Revenue Department and taxpayers, the committee had said last month. Reserve Bank of India (RBI) Deputy Governor Subir Gokarn today, 3 October 2012, said that the central bank will factor in the impact of the government's economic reforms on growth and inflation while formulating its monetary policy. Eventually, the judgment will have to be how these actions influence the growth-inflation trajectory, Gokarn said. The RBI left interest rates unchanged at its last policy meeting on 17 September 2012 citing sticky inflation. The RBI is scheduled to undertake Second Quarter Review of Monetary Policy - 2012-13 on 30 October 2012. The central bank considers 6% as the threshold for inflation, above which expectations of higher prices increase among consumers and companies, making it difficult to control inflation, Mr. Gokarn said. Inflation based on wholesale price index (WPI) accelerated to 7.55% from a year earlier in August, compared with 6.87% in July, according to government data released last month. Data on WPI for September is due Oct. 15. Mr. Gokarn said India's current-account deficit also remained outside the RBI's comfort zone. Central bank data last week showed India's current-account deficit narrowed to 3.9% of gross domestic product in the April-June period from a record 4.5% in the previous quarter. According to the RBI, India needs to limit the gap to 2.5%-3.0% of GDP to avoid any stress on its external debt. Markit Economics will release HSBC India Services PMI and HSBC India Composite PMI for September 2012 tomorrow, 4 October 2012. The HSBC India Services PMI had risen to a six-month high of 55 in August 2012 from 54.2 in July 2012. Services, including government services like railway transport, make up nearly 60% of India's economic output. In a move to cut down wastage, duplication and leakages and enhance efficiency, Prime Minister Dr. Manmohan Singh has given a major push to transfer individual benefits from the government directly into the bank accounts of beneficiaries. This is to be done in a fast-track, accelerated mode to be achieved in a time bound manner. The idea is to move to a completely electronic Cash Transfer System for the entire population, the Prime Minister's Office (PMO) said in a statement on 28 September 2012. In order to accelerate the process, which currently is being tried in pilots on a small scale and whose results are very encouraging, the Prime Minister has set up the architecture for moving to electronic Cash Transfers leveraging Aadhaar, the PMO said. With the rapid rollout of Aadhaar, now covering 20 crore people and rapidly growing to 60 crore, and with the National Population Register covering the other half, it is possible to move to a system of transferring cash benefits directly to the poor, the PMO said. A Cash Transfer System can be used for transferring cash benefits such as NREGA Wages, Scholarships, Pensions, Income support of other types and Health Benefits. Electronic Transfer of Benefits (ETB) is a simple change as the transfers are already taking place and the only modification that would be involved is a movement from a paper based, cash driven system to an electronic direct transfer system, the PMO said. Cash Transfer System would improve targeting, reduce corruption, eliminate waste, control expenditure and facilitate reforms, the PMO said. The Kelkar Committee (KC) set up by the government to outline a roadmap for fiscal consolidation has submitted its report to the government 3 September 2012, the Finance Ministry said on 28 September 2012. The Kelkar committee has come up with many innovative proposals which include speeding up disinvestment, revamping tax laws and tax administration, monetising vast reserves of land owned by the government and public sector agencies, curbing subsidies and moving to a system of cash transfers instead. The main conclusion of the Kelkar committee report is that "We cannot over-emphasize the need and the urgency of fiscal consolidation", the Finance Ministry said in a statement issued on 28 September 2012. The Finance Ministry said that the report is under consideration of the Government and the Government has not yet taken a view on the report or on any of the recommendations. The Secretary, Department of Economic Affairs, Mr. Arvind Mayaram said that some recommendations appear contrary to the declared objective of the Government of 'sustained and inclusive growth'. He said that the Government is of the view that in a developing country where a significant proportion of the population is poor, a certain level of subsidies is necessary and unavoidable, and measures must be taken to protect the poor and vulnerable sections of the society. It is in this view that the Government has reiterated its intention to implement the promise of food security for all, he added. Mr. Mayaram further said while taking a final view on the various recommendations of the report, the Government will bear in mind that the goal is to achieve high growth, inclusive development, and economic and social justice for all. Mr. Arvind Mayaram said that the Government welcomes an informed debate on the report submitted by the Kelkar Committee. The government has invited public comments on the report. Finance Minister P. Chidambaram last week said the recent pro-business measures that the government took to rein in its gaping fiscal deficit and attract investments were necessary and unavoidable. While speaking to reporters after a meeting the UPA co-ordination committee, Mr. Chidambaram said the government is considering more economic steps. The need to do more reforms was discussed at the meeting, he said. The specific measures will come before the cabinet (for approval), he said. The prime minister has underlined the need for a number of measures that will ensure that there is no volatility in the rupee, and that investment will continue to flow into India as well as stimulate domestic investors so that they will also invest in the economy, Mr. Chidambaram said. On the political front, with Trinamool Congress' (TMC) 19 MPs withdrawing support to UPA last month, the UPA has been reduced to a minority in the Lok Sabha. The TMC withdrew support from the UPA to register its protest against the reformist decisions like allowing 51% FDI in multi-brand retail, increasing the diesel price by Rs 5 per litre, and imposing a cap on the number of subsidized LPG cylinders per family at six. Prime Minister Dr. Manmohan Singh on 21 September 2012 said that the time has come for hard decisions. Explaining the rationale for the hike in diesel price, capping of subsidised LPG cylinders per household per year and allowing foreign direct investment in multi-brand retail trade, Dr. Singh said that rapid growth in the economy is necessary to raise the government's revenue for financing its programmes in education, health care, housing and rural employment. Dr. Singh said that India must avoid high fiscal deficit which could cause a loss of confidence in the economy. The government last month braved intense political opposition to notify the rules for allowing 51% foreign direct investment (FDI) in multi-brand retail. The government also notified the relaxed conditions for single brand retail as well as the norms for allowing 49% investment by foreign airlines in Indian carries and permitted greater foreign investment in some sections of the broadcasting sector. The Cabinet Committee on Political Affairs (CCPA) raised price of heavily subsidised diesel by Rs 5 per liter on 13 September 2012 to balance government's fiscal deficit situation. The CCPA also restricted the supply of subsidized LPG cylinders to each consumer to six cylinders (of 14.2 kg) per annum. The finance ministry last month announced reduction in the tax rate on the interest paid to overseas lenders by local companies to 5% from 20%. The rate is applicable from July 2012 until June 2015. The tax reduction will encourage corporates to borrow more for funding expansion projects. Over the past few weeks, the Reserve Bank of India has eased curbs on overseas borrowing for companies in the manufacturing and infrastructure sectors to boost growth. The outlook for Rabi or winter crops has improved due to the annual monsoon rains' delayed withdrawal, which has provided crops with badly needed moisture after months of insufficient rainfall. The monsoon rains usually leave India by 1 September, but this year rainfall began to pick up in late August, after insufficient rain in preceding months forced four major agricultural states to declare a drought. The four-month southwest monsoon season that starts from June accounts for almost 70% of total annual moisture that Indian soil receives in a year. The Centre has advised state government to go for early sowing of Rabi crops, especially in rainfed areas to make use of the moisture available in the soil due to wide-spread rains in August and September. The government has set food grain target for 2012-13 at 249.52 million tonnes. The Ministry of Agriculture on 24 September 2012 said as per the first advance estimates of production of Kharif crops, 117.18 million tonnes (MT) foodgrains is likely to be produced in the current Kharif season. European stocks were mostly higher in volatile trade on Wednesday, 3 October 2012. Key benchmark indices in UK and Germany were up 0.01% to 0.05%. France's CAC 40 fell 0.29%. Spanish Prime Minister Mariano Rajoy reportedly said on Tuesday, 2 October 2012, that he has no plans to ask for a bailout for the country this week. Reports in recent days had signaled that an official request for aid from Spain could come as soon as this weekend. The final euro-zone composite purchasing managers' index for September fell to a four-month low, pointing to an "inevitable" return to recession in the third quarter, the survey compiler Markit said on Wednesday, 3 October 2012. The European Central Bank holds its monthly policy meeting tomorrow, 4 October 2012, on euro area interest rates. Asian stocks declined on Wednesday, 3 October 2012, as China's services industry weakened. Concerns about the ongoing territorial dispute between China and Japan also weighed on sentiment in Asian markets. Key benchmark indices in Singapore, Taiwan, Indonesia and Japan fell by between 0.06% to 0.45%. Hong Kong's Hang Seng rose 0.23%. Seoul stock markets were closed Wednesday for a holiday. The mainland Chinese markets are shut the whole of this week for the Golden Holiday week running from September 30 to October 7. China's non-manufacturing industries expanded at the weakest pace since at least March 2011 as officials struggle to reverse a slowdown in the world's second- biggest economy. The purchasing managers' index fell to 53.7 in September 2012 from 56.3 in August 2012, the National Bureau of Statistics and China Federation of Logistics and Purchasing said in Beijing today. Readings above 50 indicate expansion. China's ruling Communist Party is trying to retain public support by sustaining growth while avoiding a resurgence in home prices as it prepares for a once-a-decade handover of power that begins at a congress in Beijing starting November 8. Chinese consumer sentiment weakened in September for the third straight month, falling to its lowest level since December, according to a survey released by Deutsche Boerse's MNI on Wednesday. The sentiment index printed at 89.3, compared to 90.4 in August. A sub-component of the index measuring future expectations improved slightly, rising to 88.2 for the month compared to 87.9 in August. The report said sentiment among consumers towards the housing market slipped back after improvement in August, while views towards the stock market picked up slightly, but remained at depressed levels. The Asian Development Bank cut most of its 2012 and 2013 growth estimates for developing Asia on Wednesday as a slump in global demand weighs on the region's powerhouses China and India and on its export-dependent economies. The Manila-based bank said the region should diversify its growth drivers and capitalise on its booming service industries, as seen in India and the Philippines, to sustain domestic growth amid prolonged weakness in external demand. The euro zone's unresolved sovereign debt crisis and the United States' looming fiscal cliff were the biggest risks to the growth outlook, with Asia's most open economies particularly vulnerable to spillover effects, the ADB warned in an update of its regional outlook. The risk of rapid reversals in capital flows to developing Asia also remained a concern, although the region's capital markets have not shown excessive volatility, it added. Still, most countries in the region have enough room to use monetary and fiscal policy tools if necessary to protect domestic growth, with inflation expected to be slower than earlier anticipated this year and the next, the ADB said. The region must brace itself for a prolonged period of moderate expansion after years of rapid growth, the bank said. Developing Asia - comprised of 45 countries in Central, East, South, and Southeast Asia and the Pacific - is now forecast to grow 6.1% this year and 6.7% in 2013. Australia's central bank surprised the markets by announcing a reduction in its key policy rate on Tuesday, 2 October 2012 Trading in US index futures indicated a flat opening of US stocks on Wednesday, 3 October 2012. US shares ended on a mixed note on Tuesday, 2 October 2012, amid uncertainty about whether Spain will request European Union aid. Key US data due this week is non-farm payrolls for September 2012 on Friday, 5 October 2012. Election for a new president in the United States, the world's biggest economy, is scheduled on 6 November 2012. Investors are worried about US fiscal cliff. The "cliff" refers to the year-end deadline for the expiration of hundreds of billions of dollars worth of tax cuts and the triggering of $109 billion in across-the-board spending cuts. The non-partisan Congressional Budget Office has said the scenario could throw the country into recession. Congress created the hazardous deadline of 31 December 2012 in August 2O11 when it agreed to a deficit deal as a way out of a deadlock over raising the US debt ceiling.