<?xml version="1.0" encoding="UTF-8"?><root available-locales="en_US," default-locale="en_US"><static-content language-id="en_US"><![CDATA[<p>With investors pressing the panic button in the last hour of trade on rupee plunging to record lows, the Sensex lost initial momentum closing the day with a meagre 31 points gain.<br><br>The Indian rupee finished the day lower by 61 paise at its life-span low of 55.03 against the greenback before recording its historic intra-trade low of 55.05 at the fag end on sustained dollar demand from importers, mainly oil refniers, and some corporates.<br><br>The Indian benchmark sensex, which was up by over 145 points, ended up by over 30 points or 0.19 per cent.<br><br><br>Before the gains were wiped out, the sentiment had improved following State Bank of India reporting better-than-expected earnings. SBI on Friday posted net profit of Rs 4,050.27 crore in the fourth quarter ended March 2012 against Rs 20.88 crore recorded in Q4 of the previous fiscal.<br>Earlier in the day, the BSE benchmark went up by 145.64 points to the day's high of 16,298.39. It finally closed at 16,183.26, a gain of 30.51 points.<br><br>"A sudden bout of selling in last hour of trading session led markets to surrender almost all gains... the decline in rupee made the sentiments jittery. Markets managed to close in a positive territory, albeit with slight gains," said Shanu Goel, Senior Research Analyst, Bonanza Portfolio.<br><br><br>Dollar also recovered its initial losses and and was up by over 0.1 per cent against a basket of currencies amid fresh capital outflows and some hesistancy in local stocks also put pressure on the rupee, a forex dealer said.<br><br><br>The euro steadied versus the dollar in currency dealings today, but strategists warned that more pressure may be in store due to continued uncertainty over Greece?s fate within the euro zone and jitters over the region?s banking systems, which would help the dollar.<br><br><br>At the Interbank Foreign Exchange (Forex) market, the domestic unit opened slightly lower at 54.45 a dollar from last weekend's close of 54.42 and immediately touched a high of 54.44.<br><br><br>Later, it continued its downslide till fag end to close at 55.03, showing a fall of 1.12 per cent.<br><br><br><br>Pramit Brahmbhatt, CEO, Alpari Financial Services (India) said,"A rising dollar index and lack luster Indian equity markets weighed on INR which witnessed the INR moving for fresh historical lows. The INR which has been a laggard in Asian currencies has witnessed frequent RBI intervention but is still trading at its lowest levels." <br><br><br>"With INR breaching its previous low, the 55.30 - 55.50 levels becomes the near term targets. There has been a shift in the overall range of INR. The Euro gave up its most of its gains on risk aversion and continued negativity in global markets. The rising debt costs and downgrades of banks have been weighing on the single currency," he added.The rupee was threatening to breach 55-level as stocks markets were wrapping up the day's trade. After stock market hours, the rupee breached the psychological 55 level. <br><br><br>As BW wrote in its May 28 issue, there's a single message for those looking at the rupee's value: maybe further intervention by the Reserve Bank of India (RBI) is a bad idea. First off, we do not have the kind of reserves needed to protect the rupee's value. On a fundamental and structural basis, the rupee's value is quite representative of its current value against the dollar. (<strong>Read <a href="http://www.businessworld.in/businessworld/businessworld/content/Free-Fall-Fiscal-Fix.html">Free Fall, Fiscal Fix</a>).<br></strong><br>The volatility in the rupee reflects the growing worries about India's economic outlook. <br><br><br><strong>Growth Forecast Cut</strong><br>Morgan Stanley cut its India's 2012 economic growth forecast to 6.3 per cent from its prior 6.9 per cent forecast, saying the country's "bad" growth mix -- a combination of high national deficit and a policy of supporting consumption while private investment slows -- has reached its limits. <br><br>Market concerns have risen as Greece's political uncertainty casts a deep shadow over the euro zone, helping spark steep falls in the rupee, which on Monday hit its fourth consecutively daily all-time low against the dollar. The rupee has declined 12.2 per cent since its yearly peak to the dollar on February 2012, while the BSE Sensex has fallen 8.8 percent in the same period. Both markets are known to track each other's directions.<br>"Rupee is the lead indicator for the market as well as the economy at this point, if rupee weakens more it can unnerve some more positions in the market," said Paras Adenwala, chief investment officer of Capital Portfolio Advisors.<br><br><br>"Indian rupee continued the downtrend and made yet another all time intra-day low of 55.05 levels. Morgan Stanley cuts India's 2012 economic growth forecast to 6.3 percent from prior 6.9 percent; 2013 forecast to 6.8 percent from 7.5 percent, making the investors cautious. Even after the continuous fall of rupee against US dollar, there are no signs of the RBI, intervening in the currency markets. RBI is currently in a state where it can neither support the rupee nor can allow the rupee to depreciate further," Mr. Abhishek Goenka, CEO, India Forex Advisors said.<br><br><br>"In the past few weeks, RBI took some important steps to control the falling rupee, by increasing the rates of interest on FCNR deposits and by asking the exporters to convert 50% of the balance in EEFC accounts into rupees. But it seems that none of these norms have been able to calm down the overheated Indian currency. RBI had also conducted Open market operations twice in the previous weeks, to offset the sliding rupee, but that did not prove to be effective enough," he commented.<br><br><br>Despite a weak rupee, which boosts exporters' margins, IT stocks in Sensex like Wipro and Infosys were the worst-hit with losses of nearly 2 per cent each. TCS also closed 0.2 per cent down.<br><br><br>Amongst sectoral indices, BSE-IT was the worst performer with a loss of 1.19 per cent. It was followed by BSE-FMCG (1.17 per cent) and BSE-TECk (1 per cent).<br><br><br>On the other hand, BSE-Capital Goods (1.96 per cent), BSE-Realty (1.90 per cent) and BSE-Power (1.27 per cent) lent support to the stock market today. The NSE 50-share Nifty also moved up by 14.60 points of 0.30 per cent to 4,906.05. <br><br><br>According to Jagannadham Thunuguntla, Head of Research, SMC Global, starting 1st January 2011 till date, about 46 IPOs were called off. The total amount they were expected to raise was about Rs 38,326 crore. All these 46 companies had valid Sebi approval in hand for their IPOs. Even then, they couldn't open their IPOs within the validity period of one year from the date of Sebi approval.<br><br><br>Besides this, starting 1st January 2011 till date, about 4 IPOs were withdrawn due to poor response. This list includes Samvardhana Motherson, Goodwill Hospitals, Plastene, Galaxy Surfacants. The total amount they were expected to raise was about Rs 2,000 crore.<br><br><br>All in all, 50 IPOs didn't materialized during the period between January 1, 2011 till date. The aggregate that these IPOs expected to raise was about Rs 40,326 crore.</p>