Market slides for the second day in a row

Key benchmark indices edged lower as world stocks fell on concerns about the US "fiscal cliff" and the euro-zone economy. The barometer index, BSE Sensex, was down 162.58 points or 0.86%, off 210.74 points from the day's high and up 27.27 points from the day's low. The market breadth was weak. Index heavyweight Reliance Industries (RIL) extended fall in late trade. Index heavyweight and cigarette major ITC edged higher in choppy trade. United Spirits (USL) inched up ahead of the announcement of the deal with Diageo plc whereby Diageo will initially acquire 27.4% in USL and it will eventually acquire a majority stake in the Indian spirits maker. Indian stocks dropped for the second day in a row today, 9 November 2012. The Sensex has declined 218.73 points or 1.15% in the past two trading sessions. The Sensex has surged 3,228.76 points or 20.89% in calendar 2012 so far (till 9 November 2012). The Sensex has gained 178.30 points or 0.96% in this month so far. From a 52-week high of 19,137.29 on 5 October 2012, the Sensex has declined 453.61 points or 2.37%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,547.82 points or 23.43%. Tata Steel dropped as the company swung to net loss in Q2 September 2012. ONGC also declined after weak Q2 results. State Bank of India (SBI) fell as the bank's bad loans rose in Q2 September 2012. Power Finance Corporation dropped after Q2 result. Jindal Steel & Power slipped after Q2 result. BPCL rose on reporting turnaround earnings in Q2 September 2012 over Q2 September 2011. Indian Oil Corporation declined after Q2 results. IT pivotals fell on concerns about upcoming fiscal challenges for the United States, the biggest outsourcing market for Indian IT firms. Tata Power Company dropped after acquisition of 26% stake in PT Baramulti Suksessarana Tbk (BSSR), Indonesia. Sun Pharmaceutical Industries dropped after announcing a US acquisition. Telecom stocks were in green. Bank stocks slipped on profit booking. Telecom stocks reversed intraday gains. Key benchmark indices reversed direction after a lower opening triggered by negative Asian stocks. Key benchmark indices pared gains after striking intraday high in morning trade. A bout of volatility was witnessed in mid-morning trade as key benchmark indices alternately swung between gains and losses. Key benchmark indices dropped to fresh intraday low in early afternoon trade. Key benchmark indices weakened to hit fresh intraday low in afternoon trade. The market extended intraday losses in mid-afternoon trade. Weakness persisted on the bourses in late trade. The BSE Sensex lost 162.58 points or 0.86% to settle at 18,683.68, its lowest level since 1 November 2012. The index lost 189.85 points at the day's low of 18,656.41 in mid-afternoon trade. The index rose 48.16 points at the day's high of 18,894.42 in morning trade, its highest level since 7 November 2012. The S&P CNX Nifty lost 52.50 points or 0.91% to settle at 5,686.35, its lowest level since 1 November 2012. The index hit a low of 5,677.75 in intraday trade. The index hit a high of 5,751.70 in intraday trade, its highest level since 7 November 2012. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,760 shares declined and 1,156 shares advanced. A total of 126 shares were unchanged. The BSE Mid-Cap index fell 0.99%, underperforming the Sensex. The BSE Small-Cap index fell 0.69%, outperforming the Sensex. The total turnover on BSE amounted to Rs 2456 crore, lower than Rs 2607 crore on Thursday, 8 November 2012. From the 30-share Sensex pack, 27 stocks fell while only three of them rose. Tata Steel fell 3.88% after the company reported a net loss of Rs 363.93 crore in Q2 September 2012, compared with a net profit of Rs 212.43 crore in Q2 September 2011. Net sales rose 4.18% to Rs 33867.32 crore in Q2 September 2012 over Q2 September 2011. The result was announced during trading hours today, 9 November 2012. United Spirits rose 0.65% to Rs 1352, after hitting a 52-week high of Rs 1,425. Diageo plc, United Breweries (Holdings) (UBHL) and United Spirits (USL) have today, 9 November 2012, announced agreements under which Diageo will acquire a majority stake in United Spirits (USL), the leading spirits company in India. The announcement was made after market hours today, 9 November 2012. The agreements are in two parts. Diageo will acquire a 19.3% interest in the current share capital of USL at a price of Rs 1440 per share from the UBHL group, the USL Benefit Trust, Palmer Investment Group and UB Sports Management (two subsidiaries of USL) and SWEW Benefit Company (a company established for the benefit of certain USL employees). Following this disposal, the UBHL group would continue to have a shareholding in USL amounting to 14.9% of current share capital. Diageo will also seek approval for preferential allotment at Rs. 1,440 per share of new shares amounting to 10 per cent of the post-issue enlarged share capital of United Spirits. These agreements will trigger an obligation on Diageo to launch a mandatory tender offer to the public shareholders of USL. Diageo will launch a tender offer to acquire, at a price of Rs 1440 per share, a maximum of 3.77 crore shares, which equates to 26% of the enlarged share capital of USL. On completion of the share purchases as described above and in the event that the tender offer were fully subscribed, Diageo will hold 53.4% of the enlarged USL share capital at an aggregate cost of Rs 11,166.50 crore. This represents a 20x multiple of USL's EBITDA for the year ended 31 March 2012. Following completion of these agreements, Dr Vijay Mallya will continue in his current role as Chairman of USL, and UBHL and Dr Mallya will work with Diageo to build the USL business as the current consumer trends for premiumisation accelerate in India. Dr Vijay Mallya, Chairman of the UB Group, said, "I am very proud of USL and what has been created over the last 30 years to bring this company to its pre-eminent position in India. I have had a long association with Diageo and therefore I am confident that this winning partnership with Diageo provides USL with the best possible platform for future growth. I am delighted to remain part of that journey as Chairman of USL as we work together to build continued value for the shareholders of USL and UBHL." Meanwhile, United Spirits announced its result during trading hours today, 9 November 2012. Its net profit fell 73.46% to Rs 39.27 crore on 15.06% increase in total income to Rs 2215.88 crore in Q2 September 2012 over Q2 September 2011. Operational Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) rose 1% to Rs 269.21 crore in Q2 September 2012 over Q2 September 2011. Liquor volumes declined by 1% to 28.40 million cases in Q2 September 2012 over Q2 September 2011. Index heavyweight Reliance Industries (RIL) shed 1.22% to Rs 786.90. The stock hit a high of Rs 803.55 and low of Rs 786. Reliance Industries (RIL) has selected Foster Wheeler as an engineering and procurement services contractor for its Paraxylene project. This is part of the expansion project being executed at RIL's world-scale Jamnagar refining and petrochemical complex in Gujarat, on the West Coast of India. RIL made the announcement was made after market hours on Thursday, 8 November 2012. ONGC lost 3.07%. ONGC's net profit fell 31.77% to Rs 5896.57 crore on 9.44% decline in total income to Rs 21786.22 crore in Q2 September 2012 over Q2 September 2011. The result was announced after market hours on Thursday, 8 November 2012. A sharp surge in subsidy sharing burden adversely impacted ONGC's profitability. ONGC said its profit after tax was adversely hit to the extent of Rs 7103 crore in Q2 September 2012 due to under recovery discount which was much higher than an adverse impact of Rs 3322 crore in Q2 September 2011. ONGC's gross realization in the quarter under review stood at $109.85 a barrel but it had to give a discount of $63 per barrel, leading to a net realization of only $46.8 per barrel. Last year same quarter, it had realised $82.6 a barrel after a discount of $33. The company's crude output dipped 8.2% to 5.103 million tonnes while gas output rose 1.2% to 5898 million standard cubic metres. ONGC notified 14 new oil and gas discoveries in the first half of the year. BPCL rose 0.29% after the company reported a net profit of Rs 5034.79 crore in Q2 September 2012 compared with a net loss of Rs 3229.27 crore in Q2 September 2011 Total income rose 34.15% to Rs 57344.65 crore in Q2 September 2012 over Q2 September 2011. The result was announced during trading hours today, 9 November 2012. Indian Oil Corporation slipped 1.21%. The company reported a net profit of Rs 9611.35 crore in Q2 September 2012 as against net loss of Rs 7485.55 crore in Q2 September 2011. Total income rose 30.31% to Rs 106848.25 crore in Q2 September 2012 over Q2 September 2011. The result was announced during trading hours today, 9 November 2012. Coal India slipped 0.33%. After market hours today, 9 November 2012, the company reported 18.7% growth in consolidated net profit to Rs 3078.08 crore on 10.83% rise in net sales/income from operations to Rs 14572.54 crore in Q2 September 2012 over Q2 September 2011. Index heavyweight and cigarette maker ITC rose 0.21% to Rs 289.35. The stock hit a high of Rs 290.35 and a low of Rs 286.90. The Ministry of Health and Family Welfare last month notified new pictorial health warnings to be depicted on tobacco product packs which will come into effect from 1 April 2013. The Ministry of Health and Family Welfare said in a statement on 22 October 2012 that three sets of warnings each have been notified for smoking as well as smokeless forms of tobacco product packages. The 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 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 19 October 2012. ITC's 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. State Bank of India (SBI) declined 4.04% after the bank's ratio of net non-performing assets to net advances stood at 2.44% as on 30 September 2012, higher than 2.22% as on 30 June 2012 and 2.04% as on 30 September 2011. SBI's net profit rose 30.16% to Rs 3658.14 crore on 12.21% increase in total income to Rs 32983.47 crore in Q2 September 2012 over Q2 September 2011. During the quarter ended 30 September 2012, the bank made additional provisions of Rs 115 crore (net) against an account pending restructuring and against certain non performing domestic advances. The bank's provision coverage ratio as on 30 September 2012 works out to 62.78%. The bank's ratio of gross non-performing assets (NPA) to gross advances stood at 5.15% as on 30 September 2012, higher than 4.99% as on 30 June 2012 and 4.19% as on 30 September 2011. The bank's Capital Adequacy Ratio (CAR) as per Basel II norms stood at 12.63% as on 30 September 2012, lower than 13.14% as on 30 June 2012 and 11.40% as on 30 September 2011. Private sector banking giant ICICI Bank fell 1.47%. ICICI Bank's net profit jumped 30% to Rs 1956 crore in Q2 September 2012 over Q2 September 2011. Net interest income jumped 35% to Rs 3371 crore and non-interest income jumped 17% to Rs 2043 crore in Q2 September 2012 over Q2 September 2011. Net interest margin improved to 3% in Q2 September 2012 from 2.61% in Q2 September 2011. Cost-to-income ratio reduced to 40.9% in Q2 September 2012 from 44.4% in Q2 September 2011. The result was announced on 26 October 2012. India's second largest private sector bank by net profit HDFC Bank shed 0.11% to Rs 638. The stock had hit a record high of Rs 645.05 in intraday trade on 7 November 2012. HDFC 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 on 12 October 2012. The Reserve Bank of India said on 30 October 2012 that it has decided to increase the provision for restructured standard accounts of banks from to 2.75% from current 2% with immediate effect. As indicated in the Monetary Policy Statement of April 2012, a Working Group (Chairman: Shri B. Mahapatra) reviewed the existing prudential guidelines on restructuring of advances by banks/financial institutions. The report of the Working Group was submitted in July and was placed on the website of the Reserve Bank inviting comments from the stakeholders. The recommendations of the Working Group as also the comments/suggestions received in this regard are under examination and draft guidelines will be issued by end-January 2013, RBI said. Power Finance Corporation lost 2.13%. The company's net profit jumped 147.17% to Rs 1036.49 crore on 33.26% growth in total income to Rs 4191.16 crore in Q2 September 2012 over Q2 September 2011. Power Finance Corporation announced the results during trading hours today, 9 November 2012. Power Finance Corporation (PFC) said that as on 30 September 2012, Rs 749.26 crore has been carried forward in the Foreign Currency Monetary Item Translation Difference Account. Jindal Steel & Power fell 0.42%. The company's consolidated net profit rose 2.5% to Rs 897.28 crore on 6.41% rise in total income to Rs 4733.81 crore in Q2 September 2012 over Q2 September 2011. The company announced results during market hours today, 9 November 2012. Tata Power Company slipped 0.25%. Tata Power Company on Thursday, 8 November 2012, announced that it has acquired 26% stake in PT Baramulti Suksessarana Tbk (BSSR), Indonesia through its 100% subsidiary Khopoli Investments (Khopoli), and is now a 26% shareholder in BSSR. PT Antang Gunung Meratus (AGM), a 100% subsidiary of the BSSR, and BSSR together own approximately 1 billion tonne of coal resources in South and East Kalimantan in Indonesia. Tata Power made the announcement after market hours on Thursday, 8 November 2012. Speaking on the development, Mr. Anil Sardana, Managing Director, Tata Power said" "We recognize fuel security is key to support Tata Power's growth agenda. Thus, besides entering into coal off-take agreement, we have acquired 26% stake in this coal mine too as its reserves and outlook is very promising. This acquisition would aim to support our power generation projects in select geographies, to be developed over next few years." Earlier Tata Power had signed a long term coal supply agreement with PT Antang Gunung Meratus (AGM), a 100% subsidiary of the Indonesian company PT Baramulti Sukses Sarana (BSSR). NTPC fell 1.44%. During market hours on Thursday, 8 November 2012, the company said its board of directors at a meeting held on Wednesday, 7 November 2012 has accorded the investment approval for the Lara Super Thermal Power Project, Stage-I (2 X 800 megawatt) to be implemented in the state of Chhattisgarh at an appraised current estimated cost of Rs 11846 crore subject to environmental clearance of Ministry of Environment and Forests (MOEF). During market hours on Thursday, 8 November 2012, the company also said that the Unit-III of 500 megawatts (MW) of Indira Gandhi Super Thermal Power Project at Jhajjar of Aravali Power Company (APCPL), a joint venture of NTPC, Haryana Power Generation Corporation and Indraprastha Power Generation Co., was commissioned on Wednesday, 7 November 2012. With this, the total capacity of NTPC group has become 39,674 MW. With the commissioning of Unit-III, the total installed capacity of Indira Gandhi Super Thermal Power Project has become 1,500 MW Ashok Leyland jumped 6.43%. The company's net profit fell 7.45% to Rs 142.60 crore on 4.94% rise in net sales to Rs 3222.44 crore in Q2 September 2012 over Q2 September 2011. The result was announced after trading hours on Thursday, 8 November 2012. Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) rose 4% to Rs 358 crore in Q2 September 2012 over Q2 September 2011. Interest costs jumped 57.4% to Rs 104 crore due to higher working capital needs. Depreciation rose 14.5% to Rs 98.41 crore in Q2 September 2012 over Q2 September 2011. "To have gained market share in a falling market is indeed reflective of a good sales performance," said Mr. Vinod K. Dasari, Managing Director, Ashok Leyland. "This can be attributed to enhanced performance from our products, resulting in better profitability for our customers, robust network expansion program, and aggressive brand building efforts. Exports struggled with drop in our primary markets of SAARC but made up to a large extent with entry into many new markets across the world. Our LCV product 'Dost' continued its strong run, becoming the number 1 brand in all the markets where it was launched. Engines and Spare Parts business enhanced its performance substantially," he added. Speaking about the quarter ahead, he said, "The market has been extremely volatile but we are hopeful that there would be new initiatives in the areas of infrastructure development, mining and construction that would improve the macro-economic outlook and buoy up sentiments. For Ashok Leyland, in particular, the coming few months are very critical as we have a slew of new product launches on the anvil, and need to continue the pace of brand and network building across the country, as well as push into new markets across the world." IT pivotals fell on concerns about upcoming fiscal challenges for the United States, the biggest outsourcing market for Indian IT firms. IT major Wipro shed 0.83%. On a consolidated basis under International Financial Reporting Standards (IFRS), Wipro's net profit rose 24% to Rs 1611 on 17% increase in total revenue to Rs 10657 crore in Q2 September 2012 over Q2 September 2011. The company announced the result on 2 November 2012. Wipro expects 1.23% to 3.17% growth revenues from IT services business at $1.56 billion to $1.59 billion in Q3 December 2012 over Q2 September 2012. Wipro's board of directors on 1 November 2012 approved demerger of the Wipro Consumer Care & Lighting (including Furniture business), Wipro Infrastructure Engineering (Hydraulics & Water businesses), and Medical Diagnostic Product & Services business (through its strategic joint venture), into a separate company to be named Wipro Enterprises. Wipro will remain a publicly listed company that will focus exclusively on information technology. Wipro Enterprises will be an unlisted company. Infosys lost 1.04%. Infosys on Thursday, 8 November 2012, announced that it has signed an agreement with the Ministry of Corporate Affairs (MCA), Government of India, to implement MCA21 v2, a multi-year business transformation project. Infosys said this latest agreement, which underscores growing traction for Infosys in its India operations, will deliver enhanced services to all of the ministry's stakeholders: businesses, citizens, and government employees. Infosys made the announcement after market hours on Thursday, 8 November 2012. Infosys will revamp the existing application, after the transition from the incumbent vendor and manage the overall transformation to MCA21 v2. The company will provide services, application support, and infrastructure operations for at least five years in a contract valued at approximately $50 million. The revamped application will cater to the rapidly changing needs of the industry in the new digital era. The MCA21 v2 project is the latest in a string of significant successes for the India Business Unit of Infosys. The company recently won a similar transformation project for India Post. India's largest software services exporter by revenues TCS declined 0.04%. TCS' board of directors has appointed Mr. Cyrus Mistry as the Deputy Chairman of the company with immediate effect and Chairman Designate to take over as Chairman from Mr. Ratan N. Tata on his retirement in December 2012. TCS made after market hours on Thursday, 8 November 2012. Sun Pharmaceutical Industries fell 0.7%. Sun Pharmaceutical Industries and DUSA Pharmaceuticals, Inc. on Thursday, 8 November 2012, announced that they have entered into a definitive agreement under which Sun Pharma will acquire DUSA, a dermatology company focused on developing and marketing its Levulan (aminolevulinic acid HCl) photodynamic therapy platform. DUSA's Levulan combination therapy is approved by FDA for treatment of non-hyperkeratotic actinic keratoses or AKs of the face or scalp. Additionally, DUSA's BLU-U treatment has been approved by FDA for the treatment of moderate inflammatory acne vulgaris and general dermatological conditions. Sun Pharmaceutical Industries made the announcement of the acquisition after market hours on Thursday, 8 November 2012. Under the terms of the agreement, a 100% subsidiary of Sun Pharmaceutical Industries will commence a tender offer for all of the outstanding common stock of DUSA at a price of $8.00 per share in cash, a 38% premium to the closing price of DUSA's common stock on November 7, 2012. The transaction has a total cash value of approximately $230 million. The transaction has been unanimously approved by the boards of directors of both companies and DUSA's board has recommended that the company's shareholders tender their shares pursuant to the tender offer. Dilip Shanghvi, Managing Director, Sun Pharma said: "DUSA has proven technical capabilities in photodynamic skin treatments, with USFDA approved manufacturing. DUSA's business brings us an entry into dermatological treatment devices, where we see good growth opportunities. Robert Doman, President and CEO of DUSA Pharmaceuticals, Inc. said: "We believe this transaction brings significant value to DUSA shareholders and are pleased that Sun Pharma recognized the value that has been created. The entire team at DUSA has built an excellent franchise around Levulan PDT and continues to grow its presence in the dermatology space. We are confident that Sun Pharma will build upon the solid foundation our organization has established in the United States dermatology market to further expand access to Levulan for patients with actinic kerotoses." The closing of the tender offer will be subject to certain conditions, including the tender of a number of DUSA shares that represent at least a majority of the total number of DUSA's outstanding shares (assuming the exercise of all options and warrants and vesting of restricted shares), the expiration of the waiting period under the Hart-Scott-Rodino Antitrust Improvements Act and other customary conditions. Upon the completion of the tender offer, Sun Pharma will acquire all remaining shares at the same price of $8 per share through a second-step merger, subject to approvals as may be necessary. Aditya Birla Nuvo advanced 2.74% after consolidated net profit jumped 42% to Rs 304 crore on 12% growth in revenue to Rs 5992 crore in Q2 September 2012 over Q2 September 2011. The result was announced after market hours on Thursday, 8 November 2012. Telecom stocks reversed intraday gains. Bharti Airtel (down 0.42%), MTNL (down 2.73%), Tata Teleservices (Maharashtra) (down 1.32%) declined. Idea Cellular gained 3.09%. The government today, 9 November 2012, said it has decided to relax the policy on external commercial borrowing (ECB) for the telecom sector in view the large outlay of funds required to be paid by telecom firms directly to the government within a limited period of time for the upcoming 2G spectrum auction. The successful bidders in the 2G auction would be eligible to refinance their rupee loans availed of from the domestic lenders for making the upfront payment with a long-term ECB, under the 'automatic route' subject to certain conditions. Successful bidders can also avail of short term foreign currency loan in the nature of bridge finance under the 'automatic route' for the purpose of making upfront payment towards 2G spectrum allocation and replace the same with a long term ECB under the 'automatic route' subject to certain terms and conditions. Successful bidders will also be allowed to avail of ECB from their ultimate parent company without any maximum ECB liability-equity ratio under the 'automatic route' subject to certain conditions. Reliance Communications fell 2.13%. Reliance Communications' consolidated net profit fell 59.5% to Rs 102 crore on 1.2% decline in net sales to Rs 4634 crore in Q2 September 2012 over Q2 September 2011. The result was announced after market hours on Thursday, 8 November 2012. On a consolidated basis, Reliance Communications (RCom)'s net profit fell 37.04% to Rs 102 crore on 5% decline in net sales to Rs 4634 crore in Q2 September 2012 over Q1 June 2012. Earnings Before Interest Taxes Depreciation and Amortization (EBITDA) was reported at Rs 1638 crore in Q2 September 2012, up 2.1% from Rs 1605 crore in Q2 September 2011. EBITDA margin was reported at 31.5%, amongst the highest in the industry, with strong contribution from both Wireless and GEBU businesses. RCom's wireless revenue rose 3.9% and wireless EBITDA rose 16.4% in Q2 September 2012 over Q2 September 2011. Revenue per minute (RPM) stood at healthy 43.2 paisa in Q2 September 2012. The company said it has successfully achieved RPM stability for the last 10 consecutive quarters amidst increasing competition and over supply of minutes in market place. Global Enterprise (GEBU) revenues rose 4.2% to Rs 2433 crore, while EBIDTA fell 1.1% to Rs 563 crore in Q2 September 2012 over Q2 September 2011. GEBU's EBITDA margin stood at 23.2% in Q2 September 2012. RCom said it continues to be free cash flow positive. The company generated operational cash flow (EBITDA) of Rs 1638 crore in Q2 September 2012. This is the second full year of positive free cash flow (FCF) for the company. During the quarter, RCom raised pre-paid tariffs by 25% across GSM and CDMA platforms. This decision was in line with its aim of maintaining a healthy RPM and improving average margin per user. It expects the full revenue impact of the tariff hike to reflect by next financial year. The second quarter September 2012 earnings season is drawing towards a close. DLF and Jaiprakash Associates unveil Q2 results on Monday, 12 November 2012. Siemens will announce its results for the year ended 30 September 2012 (FY 2012) on 23 November 2012. The Cabinet Committee on Economic Affairs on Thursday, 8 November 2012, approved divestment of 10% government stake in Hindustan Aeronautics (HAL) out of its holding of 100% through an Initial Public Offer (IPO) in the domestic market as per the Securities and Exchange Board of India (SEBI) Rules and Regulations. Five percent discount on the issue price will be allowed for retail investors as well as to eligible employees of HAL applying under the employees reservation portion. After the divestment of 10 percent, Government of India's shareholding in the company would come down to 90 percent. After Second Quarter Review of Monetary Policy 2012-13 late last month, the Reserve Bank of India kept its key policy rate viz. the repo rate unchanged at 8% citing high inflation. The central bank cut the cash reserve ratio (CRR) requirement of scheduled banks by 25 basis points to 4.25%. The reduction in the CRR is intended to pre-empt a prospective tightening of liquidity conditions, thereby keeping liquidity comfortable to support growth, RBI said on 30 October 2012. It anticipates the projected inflation trajectory which indicates a rise in inflation before easing in Q4 March 2013, RBI said. While risks to this trajectory remain, the baseline scenario suggests a reasonable likelihood of further policy easing in Q4 March 2013, RBI said. RBI said its latest policy guidance will, however, be conditioned by the evolving growth-inflation dynamic, RBI said. Although inflation has remained persistently high over the past two years, it is important to note that during the 2000s, it averaged around 5.5%, both in terms of WPI and CPI, down from its earlier trend rate of about 7.5%, RBI said. Given this record, the conduct of monetary policy will continue to condition and contain perception of inflation in the range of 4% to 4.5%, RBI said. This is in line with the medium-term objective of 3% inflation consistent with India's broader integration into the global economy, RBI said. Finance Minister P. Chidambaram said last week that the best efforts would be made to contain fiscal deficit at 5.3% during the current financial year. Addressing the 4th meeting of the Consultative Committee attached to his Ministry on the issue of "The Economic Impact of Internal and External Debt", Chidambaram said the strategy to achieve the 5.3% fiscal deficit target would be to maximize revenue collections and control expenditure. Chidambaram further said that serious efforts would also be made to bridge the gap in the Current Account Deficit (CAD) which presently stood at $70.3 billion. The Finance Minister has laid out a roadmap to put the government's fiscal house in order, stressing the need to control expenses and generate more revenue as it targets fiscal deficit of 5.3% of gross domestic product this fiscal year and 4.8% next year. The fiscal deficit stood at 5.8% in the year ended 31 March 2012. Chidambaram's plan envisages bringing down the fiscal deficit to 4.2% of GDP in the fiscal year ending March 31, 2015; 3.6% in fiscal 2016 and 3% in fiscal 2017. The fiscal consolidation plan comes at a time when there are concerns that the government may increase its expenditure on social-sector programs in its budget for the next fiscal year through March 2014 as it prepares for next general elections, due before May 2014. The Ministry of Agriculture early this month said that as per reports received from different states, sowing of Rabi or winter crops has begun in some parts of the country. Preliminary data shows that pulses have been grown in 18.79 lakh hectares (LHa) so far. This acreage is more than double the average area under pulses at this time of the year (9.08 LHa) but is lower than the acreage of this time last year (27.23 LHa), a statement from the ministry said. On the occasion of taking additional charge as Minister of Parliamentary Affairs, Union Urban Development Minister Mr. Kamal Nath said on 29 October 2012 said that he will attempt to bring consensus among all political parties on national policies that are formed in the national interest that is dear to all parties. Answering queries from the media persons how he intends to face the challenge of running a smooth winter session of parliament starting next month, the minister highlighted the prominence of the parliament in the democratic system of the country and expressed desire that all political parties will discuss and debate the issues of national interest without resorting to politics of disruption rising above narrow political interests. 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 the UPA in September 2012. The TMC withdrew support from the UPA 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 braved intense political opposition and initiated economic reform measures in September 2012, by 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. Assembly polls will be held in Gujarat in two phases on 13 and 17 December 2012. Counting of votes of assembly elections in Gujarat and Himachal Pradesh (HP) Pradesh will take place on the same day on 20 December 2012. Assembly polls were held in HP on 4 November 2012. European stock markets were mostly lower on Friday, on concerns about the US "fiscal cliff" and the euro-zone economy. The key benchmark indices in UK, Germany and France fell by 0.17% and 0.98%. The European Central Bank (ECB) on Thursday held its main rate at 0.75%, deferring any cut in borrowing costs while it waits for a cue to use its new bond-purchase programme. The euro zone economy shows little sign of recovering before the year-end despite an easing of financial market conditions, ECB's Mario Draghi said on Thursday after interest rates were left at a record low. Asian stocks were mostly lower on Friday, hit by another day of post-US-election fallout and Europe worries triggered by speculation that Greece's next aid payment will be delayed. Key benchmark indices in Hong Kong, Singapore, South Korea, China and Japan were down by 0.08% to 0.90%. Key benchmark indices in Indonesia and Taiwan rose 0.13% and 0.70%. China's industrial output rose 9.6% in October 2012, marking an improvement from September's 9.2% gain. Retail sales were up 14.5% for the month from a year earlier, higher than September's 14.2% increase. Fixed-asset investment -- a measure of spending on construction, plant equipment and other projects -- grew 20.7% year on year in the first 10 months of the year. China's consumer-price inflation showed surprise easing in October, while wholesale prices deflated further, according to data released Friday. The consumer price index rose 1.7% from a year earlier. The producer price index fell 2.8% from the year-earlier period. Chinese consumer price data suggests more room for the People's Bank of China to ease policy further. The economic news came as China's ruling party is currently in the midst of a week-long conference to facilitate once-a-decade leadership changes. Trading in US index futures indicated that the Dow could slide 45 points at the opening bell on Friday, 9 November 2012. US stocks fell heavily for the second straight day on Thursday, as sentiment took another hit from the prospect of the "fiscal cliff". The Dow Jones Industrial Average lost 121.41 points, or 0.94%, to 12,811.32. The Standard & Poor's 500 index fell 17.02 points, or 1.22%, to 1,377.51. The Nasdaq Composite index dropped 41.70 points, or 1.42%, to 2,895.58. Meanwhile, President Barack Obama is scheduled to make a statement on Friday afternoon on efforts to strengthen the economy and avoid the fiscal cliff, the White House announced Thursday. The fiscal 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 US 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 Barack Obama was re-elected as US president on Wednesday, 7 November 2012, defeating Republican opponent Mitt Romney. Obama captured a second term after winning a number of electoral-vote rich states and several key battlegrounds. Obama overcame a long-running economic downturn to defeat Romney, while the House remained in Republican hands and Democrats maintained control of the Senate.