Commodity & Stock Market Updates

The Indian rupee commenced lower on Thursday, November 01, 2012 tracking a sharp overnight fall in the European unit versus the US dollar. Rupee snapped two successive months of gains to fall in October. Domestic equities were also sulky, mostly in the red, unsupportive of the local unit. The domestic currency opened lower by 8 paise at Rs 53.88 to a dollar and dipped to a low of 53.90 so far during the day. However, a somewhat steadier euro after the steep fall overnight helped slightly push the local unit to a high of 53.70, until now. In the spot currency market the Indian unit was last seen trading at 53.75, higher by around 6 paise or 0.11% as compared to previous close at 53.81.

Domestic benchmark indices edged lower in early trade as most Asian stocks were in red. Asian shares also fell on Thursday as China's official manufacturing PMI, while confirming a trend toward recovering growth, lacked the punch to convince investors that the slowdown was bottoming out. Foreign institutional investors (FIIs) bought Indian shares worth a net Rs 248.48 crore on Wednesday, 31 October 2012, as per provisional data from the stock exchanges. At the time of writing, the BSE Sensex was down 41.92 points or 0.23% to 18,463.46 while the S&P CNX Nifty was down 13.10 points or 0.23% to 5608.60.

Meanwhile, the euro bought $1.2964, little changed from its New York close. It remained well within a $1.2800-1.3200 range seen since early September. Ongoing uncertainty about if and when Spain will seek a bailout and trigger the European Central Bank's bond-buying programme and whether Greece will secure more emergency loans continued to plague the single currency.

In the domestic currency futures market on the NSE, the forward month November contract, opened at 54.07 on Thursday, November 01, 2012, higher than the spot market rupee. The contract hit an intraday high at 54.15 and registered a low at around 53.90 so far during the day. At the time of writing, the NSE November 2012 USD/INR was trading at around 53.98, down almost 10 paise or 0.19% as compared to previous close at 54.08.

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Economic contraction in Spain continues for a fifth straight quarter while austerity measures kept Inflation at a 17-month high. Economy, Inflation, Unemployment & Austerity Measures are all moving sharply in Spain, albeit in the undesired direction. Recession in Spain extends deeper into the third quarter as Inflation continues to stay high in October. Value-added tax rose in September as part of the government’s 100 billion-Euro austerity program, pushing up prices. Austerity program to cut the public deficit is also pushing up living costs as prices rose sharply in October, piling pressure on the government to revive a paralyzed economy as it stalls over requesting aid. Prime Minister Mariano Rajoy has already introduced austerity measures worth over 60 billion euros ($77.6 billion) to the end of 2014 to try to deflate the deficit to below 3% of GDP from 9% last year. But rising social security costs, unemployment benefits and interest payments on public debt are undermining his cost-saving measures. Spain, Eurozone’s fourth largest economy has again moved to the forefront of the bloc’s fiscal crisis on concern that mounting debts owed by its regional administrations could make public finances unsustainable. The weakening Euro in the meanwhile also slipped further on doubts over whether Greece, the country that triggered Europe’s debt crisis, can agree to a deal on new austerity measures and its international lenders can figure out how to make its huge debts sustainable.

NCDEX UPDATES OF THE WEEK

Pepper futures drooping for second day on short selling at higher levels triggered by weak exports demand for Indian pepper. Tight availability against the strong domestic demand limited the weakness. The NCDEX Pepper for the most active November contract ended the day at Rs 43590, down Rs 160 or 0.37% from the last close.

Pepper arrivals decreased to 180 quintals from 520 quintals and slipped to 200 quintals from 550 quintals over previous close. Black Pepper for ready delivery in Kochi, closed Friday's trading session on secure note with MG-1 at Rs 42,100 and Un-Garbled pepper at Rs 40,600 per 100 kg.

Indian pepper prices were not supporting at higher levels due to the weak export demand for Indian parity due to its higher prices in the international markets. India's total manufacture of pepper during the year 2012 was estimated at 43,000 tonnes against 48,000 tonnes in 2011. India's crop dipped due to old vines, static acreage, low replanting and high labor cost. Besides, unfavorable weather conditions in 2011-12 affected the production. There are news the next year crop will be slightly better around 50,000 tonnes as crop condition in Idukki in Kerala and Karnataka are likely to be better. Indonesia has harvested with yields higher than estimated. Vietnam has exported nearly 93,000 tonnes of pepper valued 636 million USD during the first nine months of 2012. bazaar source said, all eyes are looking at Indonesia and Brazil.

The Pepper futures unsuccessful to hold above Rs 44000 per quintal recently and slip to the low Rs 43300 level on Friday. The answer gain almost Rs 160 or 0.37% to close at Rs 43590 per quintal. The open interest added 2.32% to 4,440 tonnes, representing short selling.Pepper