Mumbai, June 18
The rupee fell 1.5 percent to a record closing low on Tuesday as traders worried that the country's current account deficit made the currency especially vulnerable to any scaling back of the US Federal Reserve's monetary stimulus.

The rupee is expected to remain hostage to global currency movements ahead of the outcome of the Fed's monetary policy meeting on Wednesday. Any signal that the US central bank will start to scale back efforts to keep interest rates low would likely result in a shift of funds out of India, dealers said.

Dealers also cited heavy dollar demand from local market participants, which traders attributed to demand related to the government's defence needs and oil refiners.

Other Asian currencies also fell, reflecting the high stakes for regional policymakers should the Fed end a period of easy money that had boosted markets from Jakarta to Mumbai.

The weakening currencies come at a tricky time for Asian economies, as countries face an uncertain growth outlook for China, the region's biggest economy, with problems in India and Indonesia compounded by inflationary pressures each faces.

The funding of India's current account deficit remains a big concern for foreign investors. These concerns were reinforced after data on Monday showed trade deficit widened to a seven-month high in May.

The rupee is also being pressured as foreign investors have net sold rupee debt of $4.7 billion over 18 sessions, while outflows from the equity market are also picking up pace.

The Reserve Bank of India was not spotted intervening even as the rupee approached an all-time low of 58.98 hit on June 11, the last time the central bank was seen selling dollars.

"The rupee will depreciate and will surpass its record low, with RBI interventions only delaying the fall. Over time, I see it moving towards 60 to a dollar," said Param Sarma, CEO at NSP Forex. "The trade deficit remains high and capital inflows are not coming through."

The partially convertible rupee closed at 58.77/78 per dollar, surpassing its previous lowest close of 58.39 seen last week. It had closed at 57.87/88 on Monday. The rupee's fall in the late session was also tailing the euro, which moved off four-month highs against the dollar after release of German ZEW data.

Despite concerns about the current account deficit, analysts say recent measures to curb gold demand could help dent imports of the yellow metal, though any such improvements would need time to filter through.

Some countries are already moving to shore up their currencies beyond interventions, but so far to no avail. Foreign funds have been net sellers of more than $4.5 billion in Indian government bonds in the last 17 trading sessions in what traders call an unprecedented selling streak. — Reuters

New Delhi, June 18
The drug pricing regulator said Wednesday it will fix the ceiling prices of over 300 medicines by the end of this month, a move that will come as a major relief to patients.

"We will fix the ceiling prices of over 300 formulations based on bulk drugs by the end of this month. This would include around 237 formulations the ceiling prices of which we have already fixed," National Pharmaceutical Pricing Authority (NPPA) chairman C.P. Singh told PTI.

According to industry experts, the implementation of the new drug policy could lead to slashing of prices of many anti-cancer and anti-infective drugs by 50-80%.

The initiative by NPPA follows the government notification of the Drug Prices Control Order (DPCO), 2013, with effect from May 15, replacing the earlier 1995 order.

The new order is set to regulate the prices of 348 essential drugs listed in the National List of Essential Medicines (NLEM). Earlier, Drug Prices Control Order 1995 regulated prices of only 74 bulk drugs.

According to the new drugs policy, all strengths and dosages specified in the 2011 National List of Essential Medicines will be under price control.

According to the approved policy, prices of medicines will now be capped by taking simple average of all brands which have more than one per cent market share instead of input costs.

"What has been seen is that in the process so far there has been around 15 to 20% reduction in the prices of most medicines across the board," Singh said.

According to the Drug Prices Control Order, 2013, issued under the Essential Commodities Act, 1955, NPPA is the implementation authority for the new policy. — PTI

New Delhi, June 18
Outsourcing firm iGate has been slapped with class action lawsuit in the US for alleged violations of federal securities laws in view of its sacked CEO Phaneesh Murthy's "improper relationship" with a subordinate employee.

The suit has been filed on behalf of persons or entities which purchased or acquired securities of iGate between March 14, 2012, and May 21, 2013.

The New York-Based law firm, Pomerantz Grossman Hufford Dahlstrom & Gross LLP, filed the class action lawsuit against US-based iGate Corporation and some of its officers in the US District Court of Northern District of California on June 14.

The complaint alleged that throughout the class period, defendants (iGate) had made materially false and misleading statements regarding its business, operational and compliance policies.

"Specifically, defendants made false and/or misleading statements and/or failed to disclose that (i) the company's chief executive officer and president 'Murthy' was involved in an improper relationship with a subordinate employee in violation of iGATE's explicit policies to the contrary. (ii) Murthy's improper conduct created a risk that he would be terminated from the company, jeopardising the company's future success."

iGate sacked Murthy on May 20 for allegedly failing to report a relationship with a subordinate employee. The suit has been filed to recover damages against the firm and some of its officers and directors on account of alleged violations of the federal securities laws pursuant to Sections 10(b) and 20(a) of the Securities Exchange Act of 1934 and Rule 10b-5 promulgated thereunder. — PTI

Mumbai, June 18
In a significant move, Vodafone India said on Tuesday it has reduced data charges by up to 80 per cent in three cellular circles and the new cheaper data rates will be rolled out nationally in a phased manner.

The telecom operator has reduced the price from 10 paise per 10 kilobytes (kB) to 2 paise per 10 kilobytes for Karnataka, Uttar Pradesh West and Madhya Pradesh and Chhattisgarh circles.

"The rate cut from 10 paise per 10 kilobytes to 2 paise per 10 kilobytes will make Internet access affordable for customers who use mobile Internet in a limited way," Vodafone said in a statement issued on Tuesday.

The company said this rate would be applicable for all prepaid and postpaid customers using 2G network on a 'Pay as you Go' basis in these circles.

"These rates are currently applicable in Karnataka, Uttar Pradesh West and Madhya Pradesh and Chhattisgarh cellular circles and will be rolled out nationally in a phased manner," Vodafone said.

As part of its strategy to "democratize" data, Vodafone is educating current and potential users about how Internet can add significant value to them.

The company, which is the Indian arm of UK-based telecom giant Vodafone plc, is also building content partnerships, simplifying pricing, educating retailers and offering choice to customer basis their interests and consumption patterns.

"We, at Vodafone, want to accelerate mobile Internet adoption ...this 80 per cent reduction in data charges for customers using 2G (second generation) cellular network is an important step in this direction," Vodafone India chief commercial officer Vivek Mathur said. — PTI

Bangalore/Mumbai, June 18
Battered Indian stocks will bounce back in the second half of 2013, according to a Reuters poll of leading equity strategists who cited hopes of economic recovery and further fiscal reforms.

Despite share prices taking a beating in recent weeks, the median of 22 strategists polled from June 11-17 predicted the benchmark BSE Sensex would gain almost 9% from Monday's close of 19,325.87 points, reaching 21,000 by the end of the year.

It is then expected to gain a further 5% to a new high of 22,000 by next June, beating a previous record of 21,206.77 reached in January 2008.

In a March poll, strategists had expected the Sensex to end this month at 20,500, a level almost reached when the index hit a 2-1/2-year peak of 20,443.62 on May 20.

Although the Reserve Bank of India left its policy rates unchanged on Monday, it has helped improve economic confidence after cutting interest rates by 75 basis points (bps) this year and a total of 125 bps since April 2012.

"We believe India's macro fundamentals are well poised to improve on the back of the rate easing cycle and policy reforms," said Deven Choksey, MD of K.R. Choksey.

Analysts remain optimistic, even after the rupee has slumped to record lows this month on concerns that foreign investors would sell Indian investments should the US Federal Reserve roll back its stimulus measures.

Since U.S. Federal Reserve chairman Ben Bernanke hinted last month at trimming a massive bond-buying programme, the index has fallen almost 4%. Still, none of the 19 strategists surveyed expect any impact to foreign institutional investor (FII) inflows.

"I don't know why there is uncertainty about it because the Fed cannot monetize things for the next hundred years," said Phani Sekhar, fund manager at Angel Broking.

FIIs have pumped almost $14 billion into India so far this year and $22.2 billion last year, according to regulatory data, making them vital to stock markets, and the poll shows confidence that foreign flows will continue to support markets.

Finance Minister P. Chidambaram this month promised more fiscal and economic reforms. Those measures could prop up the rupee and help narrow a current account deficit that hit a record high of 6.7% of gross domestic product in the October-December quarter.

A slew of reforms since September 2012 led Fitch Ratings to raise the country's sovereign outlook back to "stable" from "negative" last week.

However, some analysts worry the government will struggle to pass fiscal and economic reforms in light of a gridlocked parliament, although 14 of 19 strategists do not expect India's minority coalition to call for early elections. — Reuters

New Delhi, June 18
The government has approved 16 projects envisaging foreign investment worth Rs 1,647 crore, while deferring Punj Lloyd's proposals for lack of security clearance.

"Based on the recommendations of the Foreign Investment Promotion Board at its meeting on May 10, 2013, the government has approved 16 foreign direct investment proposals amounting to Rs 1,646.875 crore," an official statement said. The board also cleared the Rs 962 crore proposal of Vijay Television for acquisition by foreign promoters.

It also approved Korea Western Power Co's proposal to invest in an Indian company to the tune of Rs 270 crore.

Besides the proposals of Darjeeling Organic Tea Estates' to increase foreign equity participation worth Rs 105 crore and Bangalore-based BTI Payments Pvt Ltd's to set up White Label ATM with FDI worth Rs 108.50 crore was also cleared.

The board kept the proposal of Punj Lloyd in abeyance on the grounds of security clearance. The meeting also deferred 8 proposals, while not taking a view on two proposals — US-based Jawahar Palaniappan and Kolkata-based Akzo Nobel — saying they are not within the FIPB purview. The proposals which were deferred include those of Sterlite Networks Ltd to reduce quantum of FDI, IL&FS Securities Services for merger of an Indian company with another company.

The other proposals cleared include that of ABG Container handling, Belgium-based Celio International and pharma firms Mylan Laboratories and Terumo Mauritius Holding Ltd. — PTI