Profit Top 10: Rupee, markets tank as RBI measures disappoint

  • RBI announces measures to boost economy, rupee
  • Rupee limits gains as RBI steps disappoint
  • Sensex, Nifty end at day’s low
  • Moody’s maintains India’s rating at ‘stable’ despite slowing growth
  • IOC, HPCL, BPCL hold $5 billion in oil bonds: Sources
  • Goldman Sachs, UBS cut jobs amid slowdown
  • Some in US see shades of 2008 in ‘terrifying’ euro crisis
  • Why China could miss 2012 growth target
  • General Motors’ female manufacturing chief faces big truck test
  • Samsung expects to sell more than 21,000 phones per hour in Q2

1) RBI announces measures to boost economy, rupee

The Reserve Bank of India on Monday said it would allow companies to borrow more from overseas to pay back their high cost rupee loans. The central bank has also allowed new category of investors like sovereign wealth funds, pension funds, insurance funds and foreign central banks to buy Indian government bonds. (Read More)

While experts reacted positively, markets fell after the announcement. Here are some pointers that could help comprehend why markets reacted negatively to RBI measures.

2) Rupee limits gains as RBI measures disappoint

The Indian rupee gained partially against the dollar on Monday after RBI announced that it would hike investment limits in government bonds, disappointing investors who had expected bolder measures. The Rupee had opened much higher at 56.73 to the dollar and quickly rallied over 1 per cent on hopes of strong measures from RBI and government. However, disappointed with the measures, it ended at 57.01 to the dollar, just 0.19 per cent or 11 paise higher than Friday’s close of 57.12. (Read More)

3) Sensex, Nifty end at day’s low as RBI’s measures disappoint markets

The Street swung from gains to losses, disappointed by the Reserve Bank, which announced measures to check the slide of the rupee. Equities and currencies traded higher for most part of the day on hopes that the government will announce measures to boost the economy, but declined to end over 0.50 per cent lower from Friday’s close. (Read More)

Meanwhile, IT stocks underperformed the broader markets Monday amid rising fear that industry bellwether Infosys may not meet its modest dollar revenue guidance it had put out in April. (Read More)

4) Moody’s maintains India’s rating at ‘stable’ despite slowing growth

Moody’s Investors Service on Monday said it is maintaining a stable outlook on India’s sovereign credit rating. It said that credit challenges such as weak fiscal performance, inflationary trends and uncertain investment policy environment have been part of the Indian economy for decades and were therefore previously built into India’s current Baa3 rating. (Read More)

5) IOC, HPCL, BPCL hold $5 billion in oil bonds: Sources

India’s three big state-run oil retailers together hold oil bonds worth about $5 billion, which is likely to be the maximum amount of dollars these companies will be able to buy directly from the Reserve Bank of India (RBI). There have been talks that the RBI may sell dollars to oil companies directly against oil bonds to reduce demand from market and contain volatility in the rupee. (Read More)

6) Goldman Sachs, UBS cut jobs amid slowdown

Investment banks and brokerages across Asia have launched a sweeping round of job cuts as Europe’s debt crisis and China’s economic slowdown bite into the region’s financial activity. CLSA, Deutsche Bank, Goldman Sachs, and UBS were among the banks and brokerages that cut jobs, sources said. (Read More)

7) Some in US see shades of 2008 in ‘terrifying’ euro crisis

Grim. Serious. Terrifying. Nerve-rattling. These are the words some prominent American investors and strategists are using to describe the worsening debt crisis in the euro zone and its impact on the global economy. Some even suggest markets are taking on shades of the 2008 global crisis, with the potential for a collapse in investor confidence, bank runs in Europe and a seizure for the global financial system.

Meanwhile, world stocks fell on Monday as investors grew cautious ahead of a critical European Union summit later this week where Greek leaders will attempt to renegotiate some terms of the country’s international bailout. (Read More)

8) Why China could miss 2012 growth target

China’s annual growth target for 2012 looks increasingly in jeopardy as demand at home falters and Europe’s debt crisis worsens, complicating matters for Beijing as the country heads into a once-in-a-decade leadership transition. HSBC’s flash PMI showed China’s factory sector shrank for an eighth straight month in June as export order sentiment hit its weakest level since early 2009, indicating the economic trough may extend well into the third quarter. (Read More)

9) General Motors’ female manufacturing chief faces big truck test

General Motors Co sells its big, brawny trucks for their torque, testosterone and hefty profits, so when the U.S. automaker wanted to introduce the next models, they turned to one of the toughest executives in its ranks. Global manufacturing chief Diana who has made her mark in what were regarded as male domains, faces an even more critical task for the world’s largest automaker. (Read More)

10) Samsung expects to sell more than 21,000 phones per hour in Q2

Samsung Electronics Co expects sales of its new Galaxy S III, launched at the end of last month as a main rival to Apple’s iPhone, to top 10 million during July, making it the South Korean group’s fastest selling smartphone. Samsung sold 44.5 million smartphones in January-March – equal to nearly 21,000 every hour – giving it 30.6 per cent market share.

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