ITC slides as Govt notifies new pictorial health warnings

Key benchmark edged lower in choppy trade on weak global equities. The barometer index, BSE Sensex, lost 83.42 points or 0.44%, off close to 105 points from the day's high and up about 20 points from the day's low. The market breadth was negative. Index heavyweight and cigarette maker ITC extended Monday's losses triggered by an announcement from the Ministry of Health and Family Welfare that it has notified new pictorial health warnings to be depicted on tobacco product packs which will come into effect from 1 April 2013. Another index heavyweight Reliance Industries (RIL) also edged lower. Yes Bank surged after strong Q2 results. The Sensex has fallen 52.72 points or 0.28% in October 2012 so far (till 23 October 2012). The Sensex has surged 3,255.10 points or 21.06% in calendar 2012 so far (till 23 October 2012). From a 52-week high of 19,137.29 on 5 October 2012, the Sensex has declined 427.27 points or 2.23%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,574.16 points or 23.61%. Coming back to today's trade, Lupin reversed intraday gains after Q2 results. Wockhardt hit record high. Castrol India edged lower after weak Q3 results. Idea Cellular rose after good Q2 results. Cairn India gained after robust Q2 results. IT stocks fell across the board. FMCG major Marico hit record high. Rain Commodities declined for the second day in a row after the company on Sunday, 21 October 2012, announced large overseas acquisition. A bout of initial volatility was witnessed as key benchmark indices regained positive terrain after slipping into the red after opening higher. The Sensex scaled 1-1/2-week high in early trade. Key benchmark indices alternately moved between positive and negative zone near the flat line in morning trade. Volatility was witnessed once again in mid-morning trade as key trimmed losses soon after hitting fresh intraday low. Volatility continued as key benchmark indices pared losses after hitting fresh intraday low in early afternoon trade. Key benchmark indices hit fresh intraday low in afternoon trade as European market opened lower. Key benchmark indices hovered in negative zone in mid-afternoon trade. Key benchmark indices trimmed losses after hitting fresh intraday low in late trade. World stocks fell on Tuesday, 23 October 2012, after Moody's Investors Service on Monday, 22 October 2012, lowered credit ratings on five Spanish regions and as investors parsed the final presidential debate between US President Barack Obama and presidential challenger Mitt Romney before the presidential election in the US on 6 November 2012 which took place late in the US on Monday, 22 October 2012. The market may remain volatile on Thursday, 25 October 2012, as traders roll over positions in the futures & options (F&O) segment from the near month October 2012 series to November 2012 series. The near-month October 2012 derivatives expire on Thursday, 25 October 2012. The stock market remains closed tomorrow, 24 October 2012, on account of Dussera. The BSE Sensex lost 83.42 points or 0.44% to settle at 18,710.02, its lowest closing level since 19 October 2012. The index declined 104.06 points at the day's low of 18,689.38 in mid-afternoon trade. The index rose 19.49 points at the day's high of 18,812.93 in early trade, its highest level since 12 October 2012. The S&P CNX Nifty lost 25.75 points or 0.45% to 5,691.40, its lowest closing level since 19 October 2012. The index hit a high of 5,720.80 and a low of 5,681.45 in intraday trade. The BSE Mid-Cap index fell 0.23% and the BSE Small-Cap index declined 0.25%. Both these indices outperformed the Sensex. The total turnover on BSE amounted to Rs 2100 crore, higher than Rs 1804 crore on Monday, 22 October 2012. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,490 shares fell and 1,308 shares rose. A total of 146 shares were unchanged. From the 30-share Sensex pack, 23 stocks fell while the rest of them rose. Index heavyweight Reliance Industries (RIL) fell 0.58% to Rs 809.95. RIL's net profit declined 5.7% to Rs 5376 crore on 15.4% growth in turnover to Rs 93265 crore in Q2 September 2012 over Q2 September 2011. RIL's gross refining margin (GRM) which is the differential between the cost of a barrel of crude oil and realization from sale of refined products produced from it declined to $9.5 a barrel in Q2 September 2012 from $10.1 a barrel in Q2 September 2011. RIL's net profit jumped 20.2% to Rs 5376 crore on 1.7% decline in turnover to Rs 93265 crore in Q2 September 2012 over Q1 June 2012. The GRM surged to $9.5 a barrel in Q2 September 2012 from $7.6 a barrel in Q1 June 2012. RIL announced the second quarter results last week. Index heavyweight and cigarette maker ITC declined 1.29% to Rs 290, with the stock extending Monday's losses triggered by an announcement from the Ministry of Health and Family Welfare that it has notified new pictorial health warnings to be depicted on tobacco product packs which will come into effect from 1 April 2013. Three sets of warnings each have been notified for smoking as well as smokeless forms of tobacco product packages. The Ministry of Health and Family Welfare said in a statement on Monday, 22 October 2012, that well-designed health warnings and messages are part of a range of measures to communicate health risks due to tobacco use. Pictorial health warnings communicate health risks in a visible way, provoke a greater emotional response and increase the motivation of tobacco users to quit and to decrease their tobacco consumption, the ministry's statement said. Graphic warning labels have a greater impact than text-only labels and can be recognized by low-literacy audiences and children, the statement added. Shares of ITC had hit record high on Friday, 19 October 2012, after the company announced strong Q2 results during trading hours on that day. The stock had hit record high of Rs 299.20 in intraday trade on Friday, 19 October 2012. ITC's net profit after net profit jumped 21.27% to Rs 1836.42 crore on 18.65% growth in income from operations to Rs 7226.58 crore in Q2 September 2012 over Q2 September 2011. FMCG major Marico rose 1.89% to Rs 210.05. The stock hit record high of Rs 211 in intraday today, 23 October 2012. Cairn India gained 0.06% on robust Q2 results. The company said after trading hours on Monday, 22 October 2012, its consolidated profit after tax (PAT) jumped 204.4% to Rs 2322.20 crore on 67.5% growth in revenue to Rs 4443.10 crore in Q2 September 2012 over Q2 September 2011. PAT excluding foreign exchange transactions jumped 1239.65% to Rs 3108 crore in Q2 September 2012 over Q2 September 2011. Earnings before interest, taxation, deprecation and amortization (EBITDA) jumped 65.9% to Rs 3425.30 crore in Q2 September 2012 over Q2 September 2011. Gross cash available to the company as on 30 September 2012 was Rs 13067.70 crore. The net cash available as on 30 September 2012 was Rs 12442.70 crore. The non-convertible debentures (NCD) outstanding as on 30 September 2012 were Rs 625 crore. The outstanding NCD were redeemed in October 2012. CIL said that the search for appointing new CEO is ongoing and progressing well. In the meantime, the board of directors of the company has appointed Mr. P. Elango, Director - Strategy and Business Services and a member of Cairn India's Executive Committee, as the Interim CEO. Further, Mr. Sudhir Mathur has joined the company as the Chief Financial Officer and member of the Cairn India Executive Committee. Commenting on the company's Q2 results, Elango P, Interim Chief Executive Officer, Cairn India (CIL) said: "The quarter saw consistent production from our flagship Rajasthan asset. The block continues to produce about 175,000 bopd, which is more than 20% of India's domestic oil production. Work to enhance production from the block continues to remain our focus. Production from all assets resulted in reducing India's import bill by about $1.8 billion and contributing about $0.8 billion to the national exchequer during the quarter. Following support from the Government of India (GoI), we have received all approvals for our corporate re-organisation. Implementation of this will help simplify and consolidate the multi-layered structure of CIL, comprising foreign subsidiaries. We have made good progress with GoI in respect of further exploration in the Barmer Basin. With our internal preparation to implement exploration programmes at an advanced stage, I am confident that the Joint Venture can move quickly to harness the Block's full potential post approvals. Our farm-in agreement in the Orange Basin, South Africa and partnership with PetroSA is a step in the right direction towards our strategic goal of growing our resource base by building a balanced portfolio with a long term vision." Idea Cellular rose 0.31% on strong Q2 results. The company after trading hours on Monday, 22 October 2012, said its consolidated profit after tax (PAT) rose 2.52% to Rs 240 crore on 3.44% fall in total revenue to Rs 5314 crore in Q2 September 2012 over Q1 June 2012. Earnings before interest, taxation, depreciation and amortization (EBITDA) declined 0.9% to Rs 1422.50 crore in Q2 September 2012 over Q1 June 2012. With the increasing proportion of rural subscribers, the seasonal slowdown in second quarter became more pronounced, resulting in a sharp contraction in the voice minutes of use by 4% to 125.60 billion minutes in Q2 September 2012 over Q1 June 2012, Idea Cellular said in a statement. The overall wireless telecom business outlook for the quarter remains muted due to headwinds emerging from uncertain regulatory interventions, weak seasonal demand and continued grim battle for market supremacy, Idea Cellular said. The company was quick to spot the external challenges and in-spite of fall in demand, is happy to report an improvement in EBITDA margin by 0.3%, to 23.6% on standalone basis, primarily through optimization of 'Subscriber Acquisition & Servicing' and 'Advertisement & Business Promotion' expenditure, Idea said. Idea's EBITDA margin, based on consolidated results, edged up to 26.8% in Q2 September 2012 from 26.1% in Q1 June 2012. The company said the share of non-voice revenue rose to 15.6% in Q2 September 2012 from 14.5% in Q1 June 2012. Idea said its 3G investment plans are on track and high speed broadband services are now available in 3,500 towns in 20 service areas (including roaming arrangements). The company on its own way is assisting development of 3G ecosystem, with the launch of 4th Idea branded 3G handset AURUS, Idea said a statement. Over 18.9 million of Idea's strong 115 million subscriber base use mobile data services, contributing 5.4% of total service revenue, the company said. The company said that the management is confident of the company overcoming the current uncertain regulatory phase and emerge stronger as the overcapacity comes to an inevitable decline, consolidate its position in the telecom voice market and aggressively expand in the ever evolving wireless broadband business. Among other telecom shares, MTNL, Tata Teleservices (Maharashtra), Reliance Communications, and Bharti Airtel were down 0.24% to 1%. The Telecom Regulatory Authority of India (TRAI) on Monday, 22 October 2012, said it has allowed cellular services provider to offer Combo Vouchers to customers. Combo vouchers would provide more flexibility to the service providers to offer innovative bundling of the products based on market segmentation, the statement added. Further, the use of Combo Vouchers afford the subscriber convenience of purchasing additional monetary value as well as well as getting benefit of special tariffs through a single transaction, according to the statement. TRAI has decided, through the Fourth Amendment to the TCPR, to permit the Combo Vouchers as a fourth category of vouchers with certain safeguards to ensure that Top Up Vouchers are clearly distinguishable to subscribers, the Ministry of Communications & Information Technology said. Top-Up Vouchers will be exclusively available in denomination of Rs10 and multiples thereof. The Combo Vouchers will be available only in denomination other than Rs10 and multiples thereof. The Combo Vouchers will also clearly mention the terms and conditions of offer so that consumers can make an informed choice. In addition, service providers will also mention the availability of standalone top up vouchers whenever combo vouchers are publicised. Lupin reversed intraday after reporting Q2 results. The stock shed 1.6% to Rs 560.70, off the day's high of Rs 579.50. Lupin's consolidated net profit rose 8.83% to Rs 290.46 crore on 29.93% growth in total income to Rs 2305 crore in Q2 September 2012 over Q2 September 2011. The company announced the results during trading hours today, 23 October 2012. Lupin said that the company's normalized earnings before interest, taxation, depreciation and amortization (EBITDA) after adjusting for Medicis IP income of Rs 88.10 crore in Q2 September 2011 jumped 63.8% to Rs 520.30 crore in Q2 September 2012 over Q2 September 2011. The company said normalized profit before tax jumped 70.5% to Rs 441.20 crore in Q2 September 2012 over Q2 September 2011 and normalized profit after tax jumped 40.1% to Rs 290.50 crore in Q2 September 2012 over Q2 September 2011. Lupin entered into a licensing agreement with Medicis Pharmaceutical Corporation in Q2 September 2011 to apply proprietary Lupin formulation technologies to multiple therapeutic compounds. Commenting on the latest financial performance, Dr. Kamal K. Sharma, Managing Director, Lupin, said: "We have had a record first half, driven by strong operating performance and sustained growth across all our business segments. Our growth momentum continues." Lupin's revenue expenditure on R&D for Q2 September 2012 amounted to Rs 93.50 crore or 4.2% of net sales, which was lower than Rs 138 crore or 7.9% of net sales in Q2 September 2011. This is on account of lower expenditure towards legal and professional charges incurred during the quarter. The company's operating working capital increased to Rs 2132.20 crore as on 30 September 2012 from Rs 1925.60 crore as on 30 June 2012. The working capital number of days stood at 87 days as on 30 September 2012, as against 78 days on 30 June 2012. The company's debt equity ratio stood unchanged from 30 June 2012, at 0.26. Dr Reddy's Laboratories (DRL) rose 0.1%, with the stock gaining for the second straight day. DRL said before trading hours Monday, 22 October 2012, that the company along with its subsidiaries announces the intended public offer to acquire the issued and outstanding shares of OctoPlus N.V., a service based specialty pharmaceutical company, for an offer price of euro 27.39 million in cash, representing 100% of issued and outstanding ordinary shares. The offer price represents a premium of 30% over the closing price of OctoPlus on 19 October 2012, DRL said. DRL currently holds and irrevocable commitment from shareholders representing over 50% of OctoPlus's issued and outstanding shares. Further, the Executive Board and the Supervisory Board of OctoPlus have unanimously recommended DRL's offer to the remaining shareholders of OctoPlus, DRL said. DRL said the acquisition of OctoPlus will expand DRL's expertise and scientific capabilities. Assuming that the requisite number of shares are tendered by the balance shareholders, the transaction is expected to be concluded by the end of the current fiscal year, DRL said in a statement. Wockhardt jumped 3.23% to Rs 1550.80. The stock hit record high of Rs 1,569 in intraday trade today, 23 October 2012. Castrol India declined 1.07% as net profit declined 9.88% to Rs 85.70 crore on 7% growth in total income from operations (net) to Rs 721.30 crore in Q3 September 2012 over Q3 September 2011. The company announced the results during trading hours today, 23 October 2012. IT stocks fell across the board. India's second largest software services exporter by revenues Infosys declined 1.52%. The company announced after market hours Monday, 22 October 2012, it has completed the acquisition of Lodestone Holding AG, a leading management consultancy based in Switzerland. The acquisition is in accordance with the terms set out in the agreement announced on September 10, 2012. The deal strengthens the management consulting capabilities of Infosys around the world, adding more than 750 experienced consultants and 200 clients in wide-ranging areas such as manufacturing and the automotive and life sciences industries, Infosys said in a statement. Commenting on the conclusion of the acquisition, Infosys CEO & Managing Director, Mr. S.D. Shibulal said: "Our clients are looking for help driving the transformations that will allow them to be successful in a challenging and dynamic market. Combining our global scale with Lodestone's consulting heritage creates a world-class team that can bring clients a broad spectrum of capabilities across consulting, systems integration, and outsourcing." Infosys has cut both revenue and earnings guidance in rupee terms for FY 2013 following appreciation of the rupee against the dollar. Infosys has now forecast 17.3% growth in revenue to at least Rs 39582 crore for FY 2013, which is lower than its July guidance of 19.7% growth to at least Rs 40364 crore. The company has now forecast 10.3% growth in earnings per share (EPS) to at least Rs 160.61 for FY 2013, which is lower than its July guidance of 14.4% growth in EPS to at least Rs 166.46. Infosys announced Q2 results on 12 October 2012. Infosys has retained its revenue growth guidance for the year ending 31 March 2013 (FY 2013) in dollar terms while lowering the guidance on earnings per American depository receipt (EPADS) to give effect to prevailing exchange rates. Infosys has retained its forecast of 5% growth in revenue to at least $7.343 billion for FY 2013. The company has reduced the guidance on FY 2013 EPADS to $2.97 from the guidance of $3.03 which the company had given on 12 July 2012 at the time of announcement of Q1 June 2012 results. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 3.49% to Rs 2369 crore on 2.51% growth in revenue to Rs 9859 crore in Q2 September 2012 over Q1 June 2012. IT major TCS declined 0.54%. TCS after trading hours on Friday, 19 October 2012, said its consolidated net profit rose 3.5% to Rs 3434 crore on 5.1% growth in revenue to Rs 15621 crore in Q2 September 2012 over Q1 June 2012. The core operating profit margin (OPM) declined to 28.4% in Q2 September 2012 from 29.1% in Q1 June 2012. TCS' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 7.1% to Rs 3512 crore on 5.1% growth in revenue to Rs 15621 crore in Q2 September 2012 over Q1 June 2012. Operating income rose 2.2% to Rs 4179 crore in Q2 September 2012 over Q1 June 2012. In dollar terms, consolidated net profit as per International Financial Reporting Standards (IFRS) rose 6.4% to $643 million on 4.6% growth in revenue to $2.85 billion in Q2 September 2012 over Q1 June 2012. Operating income rose 1.7% to $763 million in Q2 September 2012 over Q1 June 2012. TCS said growth in Q2 September 2012 was quite broad-based and seen across all industry segments led by Manufacturing, Retail, Telecom and BFSI. There was balanced growth across all service lines with new services like infrastructure growing in double digits, TCS said. Geography wise, all markets grew with major markets led by UK and Europe, TCS said. Growth markets like India, APAC, Latin America and Middle East performed well, TCS said. The company added 41 new clients in Q2 September 2012. TCS also announced that Rajesh Gopinathan, vice president, business finance will take over as the next Chief Financial Officer of the company when S Mahalingam retires on 9 February 2013. TCS has appointed Mr. Gopinathan as Deputy CFO with effect from 19 October 2012. TCS said Mr. Gopinathan has been with the company since 2001 when he joined from the Tata Strategic Management Group (TSMG). He currently heads the Business Finance function responsible for financial management of the company's operating units. He has held several positions in finance, strategy and sales during his career with the company and worked in multiple geographies. He is an MBA from IIM, Ahmedabad and an engineer from REC (Trichy). TCS said the employee utilization rate (excluding trainees) was at 81.6% and including trainees was at 72.8%. The attrition rate (LTM) fell further to 11.4% overall including IT and BPO. The company said the attrition rate was the lowest in the last 10 quarters. TCS Executive vice president and Global Head, Human Resources Ajoy Mukherjee said “We are delighted to have increased our retention rate further to 88.6%. We have also been able to increase our utlisation rate including trainees despite adding over 10,000 fresh graduates during the quarter.” HCL Technologies fell 0.11% to Rs 610.40 on profit taking. The stock had hit a 52-week high of Rs 613.85 in intraday trade Monday, 22 October 2012. HCL Technologies on 17 October 2012 said its consolidated net profit as per US accounting standards rose 3.9% to $161.8 million on 3.2% growth in revenue to $1.113 billion in Q1 September 2012 over Q4 June 2012. The company said its earnings before interest, taxation, depreciation and amortization (EBITDA) rose 4.1% to $247 million Q1 September 2012 over Q4 June 2012. EBITDA margin edged up to 22.2% in Q1 September 2012 from 22% in Q4 June 2012. India's third largest software services exporter by revenues Wipro dropped 0.25%. Metal shares fell as LMEX, a gauge of six metals traded on the London Metal Exchange, dropped 1.12% on Monday, 22 October 2012. Hindustan Zinc, Bhushan Steel, Sail. Jindal Steel & Power, Tata Steel, JSW Steel and Hindalco Industries shed by between 0.12% to 2.48%. Sterlite Industries declined 0.76%. The company's consolidated net profit jumped 75% to Rs 1743 crore on 9% growth in net sales to Rs 11029 crore in Q2 September 2012 over Q2 September 2011. The company announced results after market hours today, 23 October 2012. Sterlite said strong production and sales volumes of silver and lead at Zinc India, commercial power sales at Sterlite Energy (SEL) and refined copper sales at Copper India aided revenue growth in the second quarter. Sterlite said its Q2 EBITDA was in line with the corresponding prior quarter at Rs 2538 crore. Interest cost declined 25% to Rs 178 crore, primarily due to rupee appreciation in the quarter which resulted into lower foreign exchange loss being transferred to interest cost. The company recorded a foreign exchange gain of Rs 219 crore in Q2 September 2012 due to appreciation of rupee against the dollar. The company said depreciation charges rose due to capitalization of new plants at Zinc India and SEL. Sterilte said that the company continued to maintain a strong balance sheet with cash and liquid investment of Rs 23334 crore as on 30 September 2012. The company said it continues to follow a conservative investment policy and invests in high quality debt instruments in the form of mutual funds, bonds and fixed deposits with banks. Shares of private sector bank Yes Bank advanced 3.18% to Rs 399.35. The bank today, 23 October 2012, said its net profit jumped 30.2% to Rs 306.10 crore on 33.6% growth in total net income to Rs 800.90 crore in Q2 September 2012 over Q2 September 2011. Operating profit jumped 25.6% to Rs 484.70 crore in Q2 September 2012 over Q2 September 2011. Commenting on the results and financial performance, Dr. Rana Kapoor, Managing Director & CEO, Yes Bank said, "This quarter has once again demonstrated a stable financial performance through a meaningful contribution from all revenue streams, strong asset quality and sustained growth momentum. The bank has achieved steady growth in profits on the back of impressive growth in net interest income (NII) of 35.9% with sustained growth in Customer Assets of 32.5% and sequentially improving margins to 2.9%. The bank continues its momentum of accelerating traction in savings accounts with y-o-y growth of 351.3%, resulting in CASA ratio improving to 17.3%. With the branch network crossing 400 and the launch of new products, the bank expects to continue this momentum to achieve further granularity in liabilities and assets. We are also confident that our foray in the securities broking business will further our commitment towards a 'One-bank approach' to our customers. Given the recent reforms announced by the government, there are initial signs of improvement in the macro-economic environment. The bank is agile enough to capitalize on the growth opportunities and is well capitalized to capture the same." Yes Bank's specific provisioning cover was at 80.4% as at September 30, 2012. Total restructured advances (excluding NPAs) were at Rs 192.20 crore as at September 30, 2012. This represents 0.46% of the gross advances. There was no new restructuring in Q2 September 2012, Yes Bank said. ICICI Bank rose 0.53%. ICICI Bank has cut its floating rate on new home loans by up to 100 basis points until December end, the country's second-largest lender said on 11 October 2012. For loans up to Rs 30 lakh, the bank will charge 10.25% interest, ICICI Bank said. It earlier used to charge 10.5% for loans up to Rs 30 lakh. The interest rate for loans between Rs 30 lakh and Rs 3 crore will be 10.5%, down from 11.5%, the bank said, adding the new rates are applicable only for the festive period that starts in October and ends in December. ICICI Bank on 16 October 2012 denied media reports that it is in acquisition talks with Karnataka Bank. ICICI Bank said it is currently not considering merger or acquisition of any bank. India's largest bank by branch network State Bank of India (SBI) was down 0.3% Axis Bank was down 0.04% on profit booking after recent gains triggered by strong Q2 results. Axis Bank announced on 15 October 2012 that its net profit rose 22.1% to Rs 1123.54 crore on 27.2% growth in total income to Rs 8280.29 crore in Q2 September 2012 over Q2 September 2011. Axis Bank's fee income jumped 20% to Rs 1343 crore in Q2 September 2012 over Q2 September 2011. The main business segments driving fee growth during the quarter were retail banking, which grew 43% year-on-year (YoY) and large and mid-corporate banking which grew 15% YoY, Axis Bank said. SME and agricultural banking fees grew 17% YoY in the quarter, the bank said. Trading profits of the bank were Rs 207 crore in Q2 September 2012. Axis Bank's provisions and contingencies jumped 26% to Rs 509.42 crore in Q2 September 2012 over Q2 September 2011. The bank's Capital Adequacy Ratio (CAR) stood at 12.99% as on 30 September 2012, lower than 13.03% as on 30 June 2012 but higher than 11.35% as on 30 September 2011. Axis Bank's management at a conference call held on 16 October 12 after the second quarter results said that the bank proposes to continue focus on low cost deposits and plans to improve the share of retail term deposits in total deposits base and reduce share of wholesale deposits. The bank also expects the cost of funds to come down with easing deposit rates. The management expects the bank's gross NPA to remain in the range of 1% to 1.2% and sees net NPA to be capped at 0.5%. Axis Bank's ratio of gross non-performing assets (NPA) to gross advances stood at 1.1% as on 30 September 2012, higher than 1.06% as on 30 June 2012 and 1.08% as on 30 September 2011. The ratio of net NPA to net advances stood at 0.33% as on 30 September 2012, higher than 0.31% as on 30 June 2012 but lower than 0.34% as on 30 September 2011. Axis Bank restructured Rs 323 crore of assets in Q2 September 2012, taking the outstanding restructured book higher to Rs 4068 crore and accounting for 2.36% of advances book at end September 2012. The increase in outstanding restructured book was driven by surge in large and mid-corporate restructured book by Rs 247 crore to Rs 3309 crore. However, the size of agri (including micro-finance) restructured book declined to Rs 250 crore at end September 2012 from Rs 268 crore at end June 2012. The management expects retail business to support the bank's credit growth. The share of retail loan book in total loan book of the bank has continued to increase and touched 25.7% at end September 2012. The bank proposes to further increase the retail loan book size to 28-29% in next two years by focusing on agri and SME lending. Axis Bank's CASA ratio improved slightly to 40.5% at end September 2012, snapping continuous moderation for previous four sequential quarters. India's second largest private sector bank by net profit HDFC Bank fell 0.91% to Rs 633.30. The stock reversed direction after hitting record high of Rs 640 in intraday trade today, 23 October 2012. The bank's net profit jumped 30.06% to Rs 1559.98 crore on 24.47% growth in total income to Rs 9869.8 crore in Q2 September 2012 over Q2 September 2011. HDFC Bank announced the second quarter results during trading hours on 12 October 2012. Auto stocks declined across the board. Mahindra & Mahindra (M&M) declined 0.79% ahead of its Q2 results on Thursday, 25 October 2012. The company last week announced the launch of high-end sports utility vehicle SsangYong Rexton. Designed and developed by SsangYong in Korea, this is the third generation Rexton, most suitable for the discerning Indian customer, M&M said in a statement on 17 October 2012. SsangYong Rexton is priced at Rs 17.67 lakh ex-showroom Mumbai for the RX5 version with manual transmission and Rs 19.67 lakh ex-showroom Mumbai for the RX7 version with automatic transmission. The SsangYong Rexton is manufactured and assembled at M&M's Chakan plant near Pune by sourcing components from SsangYong Korea and from India. India's largest car maker by sales Maruti Suzuki India fell 0.11%. The car major last week launched an upgraded model of its popular Alto car. Maruti Suzuki on 16 October 2012 said the new Alto 800 is over 15% more fuel efficient than the current Alto model. Maruti Suzuki along with its vendors have invested over Rs 470 crore towards developing the Alto 800, the company said. Alto 800 will be manufactured at Maruti's state-of-the-art Gurgaon facility and will be available in 3 petrol variants and 3 factory fitted CNG variants. Additionally, driver airbag will be available as an optional feature. The introductory price for Alto 800 ranges between Rs 2.44 lakh and Rs 2.99 lakh ex-showroom Delhi for 3 variants in petrol segment. The introductory price for 3 variants in CNG segment ranges between Rs 3.19 lakh and Rs 3.56 lakh ex-showroom Delhi, Maruti said. India's largest commercial vehicle maker by sales Tata Motors dropped 0.75%. The company's global sales declined 4% to 1.03 lakh units in September 2012 over September 2011. Global wholesales of all passenger vehicles declined 11% to 48,895 units in September 2012 over September 2011. Global wholesales of Tata passenger vehicles declined 17% to 22,434 units in September 2012 over September 2011. Global wholesales of Jaguar Land Rover in September 2012 were at 26,461 vehicles, lower by 4% over September 2011, which includes model year change over timings, Tata Motors said last week. Global wholesales of all commercial vehicles -- Tata, Tata Daewoo and the Tata Hispano Carrocera range -- were 54,761 units in September 2012, higher by 3%, over September 2011, Tata Motors said. Motorcycle major Bajaj Auto fell 0.65%. The company on Saturday, 20 October 2012, said its profit after tax rose 2% to Rs 741 crore on 4% decline in turnover to Rs 5139 crore in Q2 September 2012 over Q2 September 2011. Operating EBITDA declined 6% to Rs 992 crore in Q2 September 2012 over Q2 September 2011. Operating EBITDA margin declined to 19.7% in Q2 September 2012 from 20.1% in Q2 September 2011. The operating EBITDA margin improved to 19.7% in Q2 September 2012 from 19.4% in Q1 June 2012. Bajaj Auto had cash and cash equivalents of Rs 4521 crore as on 30 September 2012, lower than Rs 5682 crore as on 30 June 2012. The reduction in cash was mainly due to payment of annual dividend to shareholders in July 2012. Bajaj Auto said Q2 September 2012 was a challenging quarter for the industry at large. The motorcycle industry which witnessed a CAGR growth of 15% over last 4 years, witnessed a decline of about 9% in Q2 September 2012. Added to this was the overall inflationary pressures, rise in input cost and depreciating rupee forcing the government to increase fuel prices. In this environment, the company's performance has been more than satisfying, Baja Auto said in a statement. Bajaj Auto said that the company's strategy to focus on the high end motorcycle segment of the market together with its variable cost structure ensured that in a subdued market there was no negative impact on operating leverage. Bajaj Auto launched Pulsar 200 NS and Discover ST motorcycles pan-India in Q2 September 2012. Both the products have received an over-whelming response, Bajaj Auto said. In September 2012, Discover became the largest selling motorcycle brand in the country, having dislodged Splendor from the coveted spot. With the success of new launches, Bajaj Auto increased its share in domestic motorcycle market to 27% in September 2012 from 23% in April 2012. With regard to motorcycle exports, Bajaj Auto said that the African region continues to do well. In other markets, in-line with overall global slowdown, demand remained subdued. In Sri Lanka, as against an average sale of 12,000 motorcycles per month, the company's current sales are at about 6,500 units per month. The company's overall market share in motorcycles across the world stood at about 33% in Q2 September 2012. With regard to three-wheeler sales in the domestic market, Bajaj Auto said that the company has performed better than the industry on the back of the success of the recently launched diesel variants. Bajaj Auto said it continues to dominate the gasoline and alternate fuel passenger segment. With the opening of new permits, the outlook for three-wheeler sales in coming quarters in the domestic market is encouraging, Bajaj Auto said. As regards three-wheeler exports, with price rationalization in Sri Lanka, average sales have recovered to about 7,500 units per month. The loss on sales in Sri Lanka is being partially off-set with gains in Egypt, Bajaj Auto said. The country's largest two-wheeler maker by sales, Hero MotoCorp, fell 1.9%. Hero MotoCorp's net profit declined 27.01% to Rs 440.58 crore on 10.94% fall in net sales to Rs 5151.18 crore in Q2 September 2012 over Q1 September 2011. The result hit the market after trading hours today, 23 October 2012. Comments on the results, Mr. Pawan Munjal Managing Director & Chief Executive Officer, Hero MotoCorp said: "The two-wheeler market in the country has been adversely impacted due to the overall market slowdown and prevailing sentiments since the beginning of this quarter. Sensing the slowdown in the market, we led the way in adjusting our production plans in August and September, and this has been reflected in our quarterly sales figures. The onset of the festive season has been encouraging, with the retail sales of over two lakhs in the Navratras. We, at Hero MotoCorp will continue to bring new launches even as we expand our distribution reach to over 5,400 outlets during this fiscal. Our global business plan will also take shape this fiscal, with the launch of Hero products in new international markets such as Nigeria, Kenya and Guatemala, having already been launched in existing markets such as Sri Lanka and Nepal in September". Hero MotoCorp (HMCL) said the overwhelming customer response in the form of over 2 lakh units in retail sales during the Navratras has come about thanks to a combination of strategic initiatives -- the new exciting range of products, new advertising campaigns comprising premium segment offerings and ground-level activation. Hero MotoCorp (HMCL) completed the process of brand migration of its models from the erstwhile joint brand to the new Hero brand during the quarter. HMCL has recently started dispatching its new 110cc motorcycle Passion X Pro, further broadening its range of products to offer more exciting options for the customers in the forthcoming festive season, HMCL said in a statement. Tyre stocks gained as lower rubber prices will boost profitability of tyre makers. Apollo Tyres, JK Tyre & Industries, MRF and CEAT rose by between 0.52% to 4.8%. Rubber futures dropped to the lowest level in more than three weeks in Tokyo on Monday, 22 October 2012, on concern that demand will fall as Japan's exports declined at the fastest pace since last year's post-earthquake slump. Rubber is a key raw material in manufacture of tyres. PSU OMCs rose as crude oil future fell. US crude oil futures for November delivery fell 1.5% to settle at $88.73 a barrel on Monday, 22 October 2012, the lowest close since 3 October 2012. BPCL, Indian Oil Corporation (IOCL) and HPCL gained by between 0.33% to 1.62%. Lower crude oil prices could reduce under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol. Kingfisher Airlines was locked at 5% lower circuit at Rs 10.40 on BSE, with the stock extending Monday's 5% slide triggered by the aviation regulator suspending the Scheduled Operator's Permit of the airline with effect from 20 October 2012. The Director General Civil Aviation (DGCA) suspended the Scheduled Operator's Permit of Kingfisher Airlines with effect from 20 October 2012 and till such time Kingfisher Airlines submits a concrete and reliable revival plan ensuring safe, reliable, efficient and sustainable Scheduled Air Transport Services to the satisfaction of DGCA, the Ministry of Civil Aviation said in a statement on Saturday, 20 October 2012. The DGCA decided to suspend the airline's permit after examining the airline's reply received on 19 October 2012 to the show cause notice served by DGCA dated 5 October 2012 which was not found satisfactory, it said. DGCA has observed that Kingfisher Airlines has not addressed any of the issues raised by the DGCA during a meeting held with the airline on 2 October 2012 and the points raised in the show cause notice. DGCA had asked Kingfisher Airlines to submit operational preparedness plan for resumption of its flight operations. Instead, Kingfisher Airlines has sought more time to file a reply to the show cause notice and it has also not indicated any time frame for submitting the detailed response, the Ministry of Civil Aviation said. Reacting to the suspension of the license, Kingfisher Airlines said in a statement on 20 October 2012, "While this order of DGCA is being examined, we would like to bring to your notice that the actual position has not changed because of this order. We have in any case always maintained that once the issues with the employees are resolved, we will first present our resumption plan to DGCA for review, before resuming operations. Notwithstanding the order of the DGCA, we had in any case suspended operations and closed forward bookings till 6 November 2012. The management has already earlier communicated to all stakeholders this very position. We are now immediately suspending all forward bookings till such time we resume operations. It is our endeavour to re-start operations at the earliest and we assure you we are working towards achieving this". Rain Commodities slumped 4.42%, with the stock reversing initial gains. Rain Commodities on Sunday, 21 October 2012, announced that Rain CII Carbon LLC, a wholly owned step-down subsidiary of the company, has agreed to acquire Rutgers N.V., a Belgium headquartered coal tar pitch (CPT) manufacturer, from funds advised by Triton. Rain CII has executed share purchase agreement with Triton to acquire 100% of stake in Rutgers for gross enterprise value of 702 million euro. The transaction is expected to close in the first quarter of 2013, subject to necessary approvals and customary closing conditions, Rain Commodities said. The acquisition of Rutgers is complimentary to the company's core business of calcined petroleum coke (CPC), Rain Commodities said in a statement on Sunday, 21 October 2012. Expanding into tar distillation business constitutes both product and geographical diversification to Rain Group and provides vertical depth within its core business, it said. Rain CII is planning to fund the transaction through a combination of internal cash accruals and issue proceeds of euro 533 million of long term bonds. L&T rose 1.91%, with the stock extending Monday's 2.17% gains triggered by the company's good Q2 results. The stock hit a 52-week high of Rs 1697.85 in intraday trade today, 23 October 2012. L&T's recurring profit after tax (PAT) rose 15% to Rs 915 crore on 17% growth in gross revenue to Rs 13328 crore in Q2 September 2012 over Q2 September 2011. After considering certain exceptional and extra-ordinary items of income, the overall PAT jumped 42% to Rs 1137 crore in Q2 September 2012 over Q2 September 2011. L&T announced the second quarter results during trading hours Monday, 22 October 2012. L&T said order inflow at Rs 20967 crore in Q2 September 2012 recorded an impressive year-on-year growth 30%, thus sustaining the momentum seen during Q1 June 2012. The major orders came from buildings & factories, infrastructure and hydrocarbon sectors, L&T said. L&T's order book stood healthy at Rs 158528 crore as on 30 September 2012. International orders constituted 12% of the total order book. L&T said that uncertainty prevailing around the revival of growth in the global economies and the slow pace of reforms in India, have led to deceleration in growth across the sectors. Inflation continues to remain elevated exerting pressure on operating margins, L&T said. The rebounding of industrial production and improved credit demand was seen in many sectors towards the end of Q2 September 2012. A few steps takes by the Indian government recently underscore its commitment for accelerating the pace of economic development which provides positive signals for the prospects of the company, L&T said in a statement. L&T said that the company has been sustaining its growth momentum on the back of its strong and diversified business portfolio and increasing international presence. With its execution efficiencies and robust order book, the company is placed well to realize its near term targets and medium term plans, L&T said. The focus of the stock market is currently on the second quarter earnings. 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. Mahindra & Mahindra, Kotak Mahindra Bank and Asian Paints unveil Q2 results on Thursday, 25 October 2012. Hindustan Unilever, ICICI Bank, NTPC, Sesa Goa, GAIL (India), Punjab National Bank and IDFC unveil Q2 September 2012 results on Friday, 26 October 2012. Bharat Heavy Electricals (Bhel) announces Q2 results on 29 October 2012. Maruti Suzuki India, Grasim Industries and Dr. Reddy's Laboratories unveil their Q2 results on 30 October 2012. Power Grid Corporation of India announces Q2 September 2012 results on 31 October 2012. Wipro announces Q2 results on 2 November 2012. Tata Power and Hindalco Industries unveil Q2 results on 6 November 2012. Bharti Airtel announces Q2 results on 7 November 2012. Sun Pharmaceuticals Industries announces Q2 September 2012 results on 8 November 2012. Ranbaxy Laboratories unveils Q3 September 2012 results on the same day. BPCL and ONGC announce Q2 results on 9 November 2012. India's bourses are working with the country's stock-market regulator to prevent a recurrence of the "flash crash" this month, National Stock Exchange (NSE) Chief Executive Ravi Narain said in an interview to international daily newspaper on 14 October 2012. Erroneous orders placed by a single brokerage firm on 5 October 2012 sent the NSE's main index, the 50-unit S&P CNX Nifty, falling a massive 899.40 points or 15.5% in just a few seconds. Although most of the stocks recovered soon after a 15-minute trading halt, the incident created panic among traders, highlighting concerns that high-speed traders have brought instability to the markets. On the macro front, data released last week showed that inflation based on the wholesale price index (WPI) rose to the highest level in 10 months in September 2012, limiting the central bank's ability to cut rates to help support the slowing economy. WPI inflation edged up to 7.81% in September 2012 from 7.55% in August 2012 due to a steep hike in diesel price in mid-September 2012. The core inflation, which is manufactured products inflation excluding food products, remained steady at 5.57% in September 2012. The Reserve Bank of India (RBI) announces Second Quarter Review of Monetary Policy - 2012-13 on 30 October 2012. The RBI left interest rates unchanged at its last policy meeting on 17 September 2012 citing sticky inflation. RBI Deputy Governor Subir Gokarn said on 3 October 2012 that the central bank will factor in the impact of the government's economic reforms on growth and inflation while formulating its monetary policy. Consumer price inflation in India also remains high. Inflation based on the consumer price index stood at 9.73 % in September 2012, compared with 10.03% in August 2012. Economic Affairs Secretary Arvind Mayaram on 14 October 2012 said that he hoped the RBI would match the government's efforts with a rate cut on 30 October 2012. The outlook for Rabi or winter crops has improved following wide-spread rains in August and September. 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. Winter crops will gain from high soil moisture and brimming water reservoirs. 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. India's merchandise exports fell 10.78% to $23.69 billion in September 2012, data released by the Ministry of Commerce & Industry on 11 October 2012 showed. Imports rose 5.09% to $41.77 billion. Oil imports jumped 30.74% to $14.09 billion whereas non-oil imports declined 4.46% to $27.68 billion. The trade deficit surged sharply to $18.08 billion in September 2012 from $13.19 in September 2011. Trade deficit declined to $89.25 billion during the six month period April-September 2012 from $89.39 billion during the six month period April-September 2011. On the political front, Bahujan Samaj Party's (BSP) chief Mayawati on 10 October 2012 said she has not taken a decision yet on whether or not to continue support to the UPA. Mayawati said that her party has left the final decision on her and she will soon take a decision. The BSP chief said the BSP is ready for early Lok Sabha elections. Attacking the UPA over corruption, Mayawati said that the government has not taken any strong steps to control corruption. BSP provides outside support to the Congress led UPA government at the Centre which has been reduced to a minority government after Trinamool Congress (TMC) withdrew support to UPA last month. The TMC withdrew support from the UPA last month to register its protest against the reformist decisions viz. 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 Union Cabinet on 4 October 2012 approved a long-pending proposal to raise the foreign investment limit in insurance companies to 49% from 26%. It also approved a plan to open up the pension sector to overseas investors, allowing them to own stakes of up to 49% in local companies. Both the proposals viz. the increase in foreign investment ceiling in insurance sector and opening of pension sector to overseas investors will require Parliament's approval. The Finance Ministry early this month said that the government has decided not to proceed for the time being with the initial public offer for divestment 10% equity in Rashtriya Ispat Nigam (RINL). The government remains committed to the disinvestment programme and it will evaluate the decision in due course keeping in view all relevant factors, the statement from the Finance Ministry added. A high-level expert panel set up by the government said on 9 October 2012 that retrospective amendments in tax laws targeting overseas mergers and acquisitions of companies with assets in India should occur in exceptional or rarest of rare cases, and with particular objectives: first, to correct apparent mistakes/anomalies in the statute; second, to apply to matters that are genuinely clarificatory in nature, i.e. to remove technical defects, particularly in procedure, which have vitiated the substantive law; or, third, to "protect" the tax base from highly abusive tax planning schemes that have the main purpose of avoiding tax, without economic substance, but not to "expand" the tax base. Moreover, retrospective application of a tax law should occur only after exhaustive and transparent consultations with stakeholders who would be affected, the panel has headed by tax expert Parthasarathi Shome has said. The panel has also recommended exempting from tax foreigners investing in India's capital markets through institutions. The Finance Ministry has sought public comments on the Shome panel report on retrospective amendments to tax laws. "The views expressed in Report of the Committee are that of an independent Committee and it should not be construed in any manner whatsoever as the views of the Government", the Finance Ministry said in a statement. The views of the Government on the recommendations of the Shome panel on retrospective amendments to tax laws will be formed after receipt of their final report, the Finance Ministry said. 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 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 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. The Election Commission of India on 3 October 2012 announced the schedule of assembly elections in Gujarat and Himachal Pradesh. Assembly polls in Gujarat will take place in two phases on 13 and 17 December 2012. Assembly polls in Himachal Pradesh will take place on 4 November 2012. Counting of votes of assembly elections in Gujarat and Himachal Pradesh will take place on the same day on 20 December 2012. European shares edged lower on Tuesday, 23 October 2012, after Moody's Investors Service on Monday, 22 October 2012, lowered credit ratings on five Spanish regions. Key benchmark indices in UK, France and Germany were down by 1.05% to 1.28%. A week after deciding against cutting Spain's credit-rating to below investment grade, Moody's Investors Service on Monday, 22 October 2012, cut its rating on Catalonia and four other Spanish regions. Catalonia, which will hold an early election on Nov. 25 focused on whether to seek independence for the region that accounts for a fifth of Spain's economy, was reduced two steps to Ba3 from Ba1, the ratings firm said in a statement. Extremadura was lowered to Ba1 from Baa3, Andalucia was slashed to Ba2 from Baa3, and Castilla-La Mancha was cut to Ba3 from Ba2 and Murcia dropped to Ba3 from Ba1. Moody's decision to cut the regions was "driven by the deterioration in their liquidity positions, as evidenced by their very limited cash reserves as of September 2012 and their significant reliance on short-term credit lines to fund operating needs," the ratings firm said. A week ago, Moody's kept Spain's sovereign rating at Baa3, the lowest level of investment grade, citing a reduction in the risk of losing market access because of the European Central Bank's willingness to buy the nation's debt. S&P downgraded Spain on Oct. 10, saying it doubted the loans will be mutualized among euro-region nations. The Spanish economy contracted for a fifth quarter in the three months through September, adding pressure on Premier Mariano Rajoy to seek more European aid. Gross domestic product shrank 0.4% from the previous three months, matching the contraction of the second quarter, the Bank of Spain said in an estimate in its monthly bulletin released in Madrid today, 23 October 2012. Spain sold 3.53 billion euros ($4.6 billion) of bills today, 23 October 2012, exceeding its maximum goal. Asian indices dropped on Tuesday, 23 October 2012. Key benchmark indices in China, Indonesia, South Korea and Taiwan shed by between 0.26% to 0.86%. Key benchmark indices in Japan and Singapore rose by between 0.04% to 0.17%. Stock markets in Hong Kong were closed for a holiday. A final debate between US President Barack Obama and presidential challenger Mitt Romney before the presidential election in the US on 6 November 2012 which took place during Asian morning trade on Tuesday, 23 October 2012, saw both the contenders comment on China, with Obama saying he will insist that China plays by the same rules as everyone else. Romney echoed those comments and reiterated his pledge to label China a currency manipulator immediately should he be elected. China is aiming to increase direct financing to 30%-40% of total social financing by 2015, the head of country's securities regulator wrote in an article published on Monday by the state-owned Administration Reform magazine. China has been striving for significant growth in direct financing--fundraising via debt and equity issuance--in a bid to reduce its heavy reliance on indirect financing, such as borrowings from banks, that may put the country's banking system at greater risk. US stock futures were in red after the end of the final debate between Obama and Romney late in the US on Monday, 22 October 2012. Trading in US index futures indicated that the Dow could fall 110 points at the opening bell on Tuesday, 23 October 2012. US stocks recouped early losses on Monday, 22 October 2012, to end the session higher, with earnings reports helping drive the day's action. Following the close of trade, Internet concern Yahoo Inc. posted a jump in quarterly profit. The Federal Open Market Committee will release its statement tomorrow, 24 October 2012, following a two-day policy meeting on interest rates in the United States. 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 2011 when it agreed to a deficit deal as a way out of a deadlock over raising the US debt ceiling. Markit releases its October preliminary purchasing-managers' index results for the United States, euro zone, China, Germany and France tomorrow, 24 October 2012.