MCX Stock Exchange Limited

In this Issue.
2 Global Market Connect Exchange Statistics 3 Currency Movements
Number of Members 743

Global Indices

Turnover (` in crs) Average daily Total 19,443 408,313

First Quarter Review 2011-12

Volume (in lots) Average daily Total Market share (%) 4,208,972 88,388,424 38.43

Exchange Corner

Regulatory Updates

MCX-SX Circulars
Mail box Appreciate your feedback at mailto:yourviews@mcxsx.com?subject=Feedback for Market Update

Data Corner India 10 Economic Calendar

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Economic News

Global Market Connect

US Dollar Index fell by 0.81% from a closing value of 74.349 on July 01, 2011 to a closing value of 73.745 on July 29, 2011. .

CRB Index has risen by 1.59% from a closing value of 336 on July 01, 2011 to a closing value of 342 on July 29, 2011.

Dow Jones Index has fallen by 3.49% from a closing value of 12582.77 on July 01, 2011 to a closing value of 12143.24 on July 29, 2011.

Gold has risen by 9.54% from a closing value of $1484.50 on July 01, 2011 to a closing value of $1626.14 on July 29, 2011.

Crude Oil has risen by 0.80% from a closing value of 94.94 on July 01, 2011 to a closing value of 95.70 on July 29, 2011. .
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Currency Movements

EURO has depreciated by 0.87% against Dollar from a closing value of $1.4522 on July 01, 2011 to a closing value of $1.4395 on July 29, 2011.

The British pound has appreciated by 2.14% against the Dollar from a closing value of $1.6074 on July 01, 2011 to a closing value of $1.6418 on July 29, 2011.

The Japanese Yen has appreciated by 5.07% against the Dollar from a closing value of 80.83 Yen on July 01, 2011 to a closing value of 76.73 Yen on July 29, 2011.

US Dollar index has weakened during July 2011

Month- July 2011 July 01, Close
1.4522 80.83 1.6074 0.9585 6.2650 0.8476

Weightage to the Index

July 31, Close

1.4395 76.73 1.6418 0.9551 6.2656 0.7852

Percentage change

Dollar Strength/weak

Previous Month (June 2011) Dollar Strength /Weakness

Weak Weak Strength Weak Strength Weak

Euro Japanese Yen Pound Sterling Canadian Dollar Swedish Krona Swiss Franc

57.6% 13.6% 11.9% 9.1% 4.2% 3.6%

-0.87 -5.07 2.14 -0.35 0.01 -7.36

Strength Weak Weak Weak Strength Weak

The US Dollar weakened the most against Japanese Yen, depreciating about 5.07%. However the Dollar index strengthened the most against Euro, appreciating about 0.87%.
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Global Indices

NIKKEI has fallen by 0.36% from a closing value of 9868 on July 01, 2011 to a closing value of 9833 on July 29, 2011.

NASDAQ has risen by 0.06% from a closing value of 2361 on July 01, 2011 to a closing value of 2362 on July 29, 2011.

HANGSENG has fallen by 1.45% from a closing value of 22770 on July 04, 2011 to a closing value of 22440 on July 29, 2011.

SENSEX has fallen by 3.01% from a closing value of 18762 on July 01, 2011 to a closing value of 18197 on July 29, 2011.

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Market Update July 2011

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Macroeconomic & Monetary Developments: First Quarter Review 2011-12

On the global front, the sovereign debt problems that have beset the euro area over the past year now threaten larger economies in the region. There is heightened anxiety about whether the euro area will be able to agree on an economically viable, fiscally sustainable and politically feasible solution to the vexing sovereign debt problem. In this regard, the agreement reached by the euro zone leaders in their meeting on July 21, 2011 is a positive development. In the US, concerns over a sovereign default loom over financial markets, with potentially disruptive consequences for global capital flows. Despite sluggish economic activity, inflationary pressures also emerged in advanced economies under the impact of high commodity prices. In striking contrast to advanced economies, emerging market economies (EMEs) are generally dealing with rising inflation, caused by a combination of elevated commodity prices and robust domestic demand. From the perspective of India's macroeconomic policy imperatives, a critical consideration is the effect that global conditions will have on commodity prices. After the May 3 Policy Statement, the prices of many commodities, including that of crude oil, showed signs of softening, reflecting weakening demand in advanced economies. However, one quarter later, the downtrend has not yet proved to be very strong. Prices are generally still high compared with last year. Turning to the domestic economy, output expanded by 8.5% during 2010-11. The index of industrial production (IIP) suggested that earlier signals of a growth deceleration in the second half of last year were exaggerated. In fact, the growth momentum remained strong throughout last year. Inflation continues to be the dominant macroeconomic concern. The headline WPI inflation rate for the first quarter of this fiscal year remained stubbornly close to double digits and inflationary pressures continued to be broad-based. Non-food manufactured product inflation ruled above 7% in the first quarter suggesting that producers, operating at high levels of capacity utilisation, are able to pass on rising commodity input prices and wage costs to consumers. As stated in the First Quarter Review of Monetary Policy 2011-12 released on July 26, 2011, the baseline projection for WPI inflation for March 2012, as indicated in the May 3 policy statement, was 6.0% with an upward bias. However keeping in view the domestic demand-supply balance, global trends in commodity prices and the likely demand scenario, we have revised the baseline projection for WPI inflation for March 2012 upward to 7%. Risks to the indicative projections of growth and inflation for 2011-12 are: Uncertainty about the future path of global commodity prices, especially oil Uncertainty about capital flows from the perspective of financing the current account deficit Risks to food inflation stemming from the monsoon performance, higher minimum support prices and inadequate supply response pertaining to protein-rich items Significant upside risks to the projected fiscal deficit for 2011-12 as fiscal deficit has been a key source of demand pressures. Based on an assessment of the current macroeconomic situation, following has been affected: Increase the policy repo rate under the liquidity adjustment facility (LAF) by 50 basis points. The repo rate will move up from 7.5% to 8.0%. Consequently, the reverse repo rate under the LAF, determined with a spread of 100 basis point below the repo rate, automatically adjusts to 7%. Similarly, the Marginal Standing Facility (MSF) rate, determined with a spread of 100 bps above the repo rate, stands recalibrated at 9.0%. Top ^

Market Update July 2011

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Exchange Corner
The Rupee appreciated against the Dollar, with the close price of USDINR for July 2011 moving from `44.7700 to `44.4325 during the period, experiencing an high of `44.8250 and a low of `44.1900. The Rupee depreciated against the GBP, with the close price of GBPINR for July 2011 moving from `71.7050 to `72.3400 during the period, experiencing an high of `72.5575 and a low of `70.9475.

The Rupee appreciated against the EURO, with the close price of EURINR for July 2011 moving from `64.7925 to `63.3200 during the period, experiencing an high of `64.7925 and a low of `62.4125.

The Rupee depreciated against the JPY, with the close price of JPYINR for July 2011 moving from `55.4250 to `57.1975 during the period, experiencing an high of `57.1975 and a low of `54.6550.

During July 2011, the market share of the Exchange stood at 38.43% in the Currency Futures market. The average traded daily turnover in MCX-SX was `19443.52 crores with average daily contracts of 4,208,972. Top ^

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Exchange Corner

Market share across all Currency Futures

Daily Contract-wise distribution of Turnover

In USDINR, the trading depth is seen across contracts other than 1 st month with the percentage turnover ranging between 2.59% to 20.48%. In the other currency pairs i.e EURINR, GBPINR and JPYINR, it is observed that trading is seen beyond 1st month expiry period.
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Regulatory Updates

Allocation of Government debt long term limits to FIIs Ref No: CIR/IMD/FIIC/11/2011 dated July 29, 2011 at www.sebi.gov.in First Quarter Review of Monetary Policy 2011-12: Press Statement by Dr. D. Subbarao, Governor. Press Release: 2011-2012/133 dated July 26, 2011 Macroeconomic and Monetary Developments: First Quarter Review 2011-12 Press Release: 2011-2012/129 dated July 25, 2011 at www.rbi.org.in Establishment of Connectivity with both depositories NSDL and CDSL Companies eligible for shifting from Trade for Trade Settlement (TFTS) to normal Rolling Settlement Ref No: CIR/MRD/DP/ 10 /2011 dated July 18, 2011 at www.sebi.gov.in Regularisation of Liaison Offices / Branch Offices of foreign entities established in India during the pre-FEMA regime Press Release: 2011-2012/86 dated July 15, 2011 at www.rbi.org.in Clarification regarding admission of Limited Liability Partnerships as members of Stock Exchanges. Ref No: CIR/MIRSD/12/2011 dated July 11, 2011 at www.sebi.gov.in RBI Releases Draft Guidelines on Equity Investments by scheduled commercial banks in subsidiaries and other companies Press Release: 2011-2012/32 dated July 6, 2011 at www.rbi.org.in

Modification of Client Codes of Non-institutional Trades Executed on Stock Exchanges (All Segments) Ref No: CIR/DNPD/6/2011 dated July 05, 2011 at www.sebi.gov.in . It has been decided that the Stock Exchanges may allow modifications of client codes of non-institutional trades only to rectify a genuine error in entry of client code at the time of placing / modifying the related order.

Facilitating Rupee Trade Hedging Facilities for Non-resident Entities Press Release: 2011-2012/115 dated July 21, 2011 at www.rbi.org.in

Issued guidelines allowing non-resident importers and exporters to hedge their currency risk in respect of exports from and imports to India, invoiced in Indian Rupees, with AD Category I banks in India. The guidelines have been finalised in consultation with the Foreign Exchange Dealers Association of India (FEDAI) and market participants.

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MCX-SX Circulars
Regular Updates
Settlement Schedule for August 2011
Ref No: MCX-SX/C&S/601/2011dated July 12, 2011

List of Government of India Securities, Treasury Bills, Equity Shares and Exchange Traded Funds accepted as Collaterals.
Ref No: MCX-SX/C&S/595/2011 dated July 01, 2011

Market Regulation

Modification of Client Codes of Non-Institutional Trades

Ref No: MCX-SX/ID/613/2011 dated July 29, 2011

Change of Expiry Timing

Ref No: MCX-SX/TRD/610/2011 dated July 22, 2011

Revision in maximum compensation limit to single investor from Investor Protection Fund
Ref No: MCX-SX/LEGAL/607/2011 dated July 20, 2011

FATF public statement dated June 24, 2011 against FATF identified jurisdictions that have strategic AML/CFT deficiencies.
Ref No: MCX-SX/ID/603/2011 dated July 15, 2011

Self Clearing Member in Currency Derivatives Segment

Ref No: MCX-SX/C&S/602/2011 dated July 14, 2011

Technology

Smart Order Routing (SOR) List of System Auditors

Ref No: MCX-SX/CTCL/612/2011 dated July 29, 2011

Review of Internet Based Trading (IBT) and Securities Trading using Wireless Technology
Ref No: MCX-SX/CTCL/596/2011 dated July 05, 2011

RSA Hardware Tokens for Internet Trading

Ref No: MCX-SX/IT/594/2011 dated July 01, 2011

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Data Corner - India Economic Data

Date Exports June 2011 May 2011 Imports June 2011 May 2011 International reserves as on July 22, 2011 Policy Rates Bank Rate Repo Rate Reverse Repo Rate Lending/Deposit Rates US $36.87bn US $40.90bn US$ 316.80bn 6.00% 8.00% 7.00% 9.25% - 10.25% 4.00% 8.25% - 9.10% -9.85% US $29.21bn US $25.94bn 12.61% Event Percentage Change

Base Rate Savings Bank Rate Deposit Rate

Economic Calendar August 2011

Monday 1
Foreign merchandise trade Exports/Imports 8 OECD composite leading indicator for India 15 9 10 11

Tuesday 2

Wednesday 3

Thursday 4

Friday 5
FX reserve

12 FX reserve IIP 19 FX reserve CPI Agricultural/Rural Labourers 26 FX reserve

16 WPI Inflation

17

18

22

23

24 Output of Crude oil/ Refinery/ Natural gas IIP Core 31

25

29

30 GDP CPI-Industrial Workers

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Economic Calendar August - 2011

Monday 1 EMU: PMI Mfg Index EMU: Unemployment Rate US: ISM Mfg Index EMU:ECB Announcement 11 US: Trade Balance CA: Ivey Purchasing Managers' Index 12 EMU: Industrial Prodn US: Retail Sales 19 CA: CPI Tuesday 2 EMU: PPI Wednesday 3 EMU: Retail Sales US: ISM Non-Mfg Index Thursday 4 JP: BoJ Announcement GB: BOE Announcement Friday 5 GB: Producer Price Index US: Employment Situation

9 GB: Industrial Production

10 US: FOMC Meeting JP: Tertiary Index

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16 EMU: GDP CA: Mfg Sales US: Housing Starts US: Import and Export Prices US: Industrial Prodn 23 CA: Retail Sales

17 EMU:HICP US: Producer Price Index

18 US: Consumer Price Index

22

24 US: Durable Goods Orders 31 US: FOMC Minutes JP: Industrial Prodn

25

26 JP: CPI US: GDP

29

30 JP: Unemployment Rate CA:IPPI

EMU: Unemployment Rate CA: Monthly GDP

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Economic Calendar September - 2011

Monday Tuesday Wednesday Thursday 1 EMU:PMI Mfg Index US:ISM Mfg Index 8 US: Beige Book GB: BOE Announcement EMU: ECB Announcement CA: Merchandise Trade 15 EMU:HICP CA: Mfg Sales US: Consumer Price Index US: Industrial Prodn 22 CA: Retail Sales 29 CA: IPPI US: GDP Friday 2 EMU:PPI US: Employment Situatn 5 EMU: Retail Sales 6 JP: BoJ Announcement EMU: GDP US: ISM Non-Mfg Index 7 CA: BoC Announcement 9 UK: Trade Balance

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13 US: Import and Export Prices

14 EMU: Industrial Prodn US: Producer Price Index US: Retail Sales

16 US: Industrial Production

19

26

20 US: Housing Starts 27

21 US: FOMC Meeting CA: CPI 28 US: Durable Goods

23

30 JP: Unemployment Rate JP: CPI JP: Industrial Production EMU: Unemployment Rate CA: Monthly GDP

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Economic News July 2011

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Economic News July 2011

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Offices
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Sources

www.rbi.org.in; www.sebi.gov.in; www.commerce.nic.in; www.mospi.gov.in; www.tickerplantindia.com; www.finmin.nic.in; www.bls.gov; www.reuters.com; www.cmegroup.com; www.worldbank.org.in;

Disclaimer: This is a newsletter for academic information. It is not intended to be used as trading advice by anybody and should not in any way be treated as a recommendation to trade. This information contained in this newsletter does not constitute or form part of and should not be construed as, any offer for purchase or sale of any foreign currency or their derivatives. While the information in the newsletter has been compiled from sources believed to be reliable and in good faith, readers may note that the contents thereof including text, graphics, links or other items are provided without warranties of any kind. MCX Stock Exchange Ltd (MCX-SX) expressly disclaims any warranty as to the accuracy, correctness, reliability, timeliness, merchantability or fitness for any particular purpose, of this newsletter. MCX-SX shall also not be liable for any damage or loss of any kind, howsoever caused as a result (direct or indirect) of the use of the information or data in this newsletter. Any alteration, transmission, photocopied distribution in part or in whole or reproduction of any form of this newsletter or any part thereof without prior consent of MCX-SX is prohibited.

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