Market may extend last week's sharp losses tracking weak Asi

The key benchmark indices may extend last week's sharp losses tracking weak Asia. The investors will keenly watch the quarter ended June 2009 results of India Inc for further cues. Axis Bank, Motilal Oswal, Gammon Infra, Indowind Energy, ETC Networks, TVS Electronics, Era Infra Engineering will announce their quarter ended March 2009 result today.

The India's earning season was kickstarted on Friday, 10 July 2009 after India's second largest IT exporter by sales Infosys announced its Q1 June 2009 result. The company raised the lower end of its annual forecast in dollar terms at the time of announcing Q1 June 2009 results on Friday, 10 July 2009. The management comments that global information technology spending may recover in 2010 on a possible revival of the global economy, also boosted the counter.

Infosys said consolidated revenues in dollar terms are expected to fall 3.1% to 4.6% at $4.45 billion to $4.52 billion in the year ending March 2010 (FY 2010). In April 2009 at the time of announcing Q1 June 2009 results, Infosys has forecast a revenue of between $4.35 to $4.52 billion.

Asian stocks fell today, extending two weeks of declines, on caution ahead of upcoming corporate earnings releases. The key benchmark indices in China, Hong Kong, Japan, South Korea, Singapore and Taiwan fell by between 0.19% to 3.22%.

The US markets closed flat on Friday, 10 July 2009. The Dow Jones and S&P 500 ended the session with modest losses. However, the Nasdaq finished with a slight gain. The Dow Jones was down 36.65 points or 0.45% at 8146.52 and S&P down 3.55 points or 0.4% at 879.13. However, the Nasdaq closed up 3.48 points or 0.2% at 1756.03. It was fourth straight week of losses on Wall Street. For the week, the Dow Jones lost 1.6%, while the S&P skidded 1.9% and the Nasdaq dropped 2.3%.

Chevron Corp warned about second-quarter earnings, raising the specter of a weaker-than-expected second-half economic recovery and anemic corporate profits. After the market hours on Thursday 9 July 2009, Chevron Corp said second-quarter earnings would be hit by a sharp decline in U.S. refining margins and that any benefits from higher oil prices would be largely offset by a weaker dollar.

Back home, the finance minister Pranab Mukherjee said on Saturday, 11 July 2009 that the government may take more steps to make cheaper and adequate funds available to the private sector, while ensuring the government's record-high borrowing plan proceeds smoothly. Pranab Mukherjee said the country aims to return to the higher growth of past years, for which the government has outlined a spending plan of Rs 10,000,00 crore ($205 billion) for the year to March 2010, largely funded through debt.

Markets were spooked on the budget day, 6 July 2009 after the government announced a Rs, 4,51,000 crore borrowing plan for 2009/10. High government borrowing plan may affect already ballooning fiscal deficit. The government plans reforms affecting subsidies, taxes and stake sales to cut its fiscal deficit in coming years.

Key benchmarks corrected sharply the week ended Friday, 10 July 2008 on concerns of a ballooning fiscal deficit. Investors were also disappointed as the Finance Minister did not announce major liberalization measures in his new budget. A cautionary statement on India's sovereign rating by Standard & Poor's (S&P), the credit rating agency, further weighed on the bourses. The 30-share BSE Sensex tanked 1,408.83 points or 9.45% to 13,504.22 in the week ended Friday, 10 July 2009.

As per the provisional figures on NSE, the foreign funds sold shares worth Rs 903.32 crore and the domestic funds bought shares worth Rs 886.13 crore on Friday, 10 July 2009.

Meanwhile, the progress of India's annual monsoon still remains a cause of worry. The delayed southwest monsoon however appears to have picked up momentum in several parts of the country with as many as 21 sub-divisions receiving normal to excess rains except the northwestern region. The country as a whole has received near normal rainfall last week and 21 out of the 36 meteorological sub-divisions received normal to excess rains, the weather office said. In the rest 15 sub-divisions, rainfall was either deficient or scanty, it said. Central and northeast India also received near normal rainfall. However, rainfall was deficient by 59% over northwestern parts of the country.