Market set for uncertain start after a long weekend

The market is likely to see an uncertain start after a long weekend reacting to global cues. Global markets had declined on Monday when the local markets were closed on account of Gurunanak Jayanti festival. The S&P CNX Nifty futures were trading 31 points lower in Singapore. Auto and cement companies will be in action following release of the monthly sales figures for October 2009 during the weekend.

Automobile sales rose 29.89% to 154,476 units in October 2009 over October 2008 as softened lending rates and attractive benefits offered by companies pushed the aggregate sales of the industry. Domestic sales of Maruti Suzuki grew 21% to 71,551 units in October 2009, compared with 59,127 units posted in the same month a year ago. Utility vehicle maker Mahindra & Mahindra saw its overall sales climbing 32% in October this year to 18,410 units against 13,935 units in the same month last year. Tata Motors' sales grew 18% to 20,011 units last month against 17,014 units in the same period last year.

Cement major ACC reported fall in cement despatches to 1.69 million tonnes in October 2009 from 1.70 million tonnes in October 2008. However Ambuja Cement's despatches rose 14.64 lakh tonnes from 14.21 lakh tonnes.

The following results were unveiled after market hours on Friday, 30 October 2009. State Bank of India (SBI)'s consolidated net profit rose 28.29% to Rs 3,133.16 crore on 22% rise in consolidated income to Rs 33,101.65 crore in Q2 September 2009 over Q2 September 2008.

Reliance Communications reported 51.66% decline in its consolidated profit at Rs 740 crore in Q2 September 2009 over Q2 September 2008. Consolidated revenue increased to Rs 5,703 crore in the quarter under review from Rs 5,645 crore in the year-ago period.

Reliance Infrastructure on Saturday reported 6.2% rise in net profit to Rs 306.90 crore in Q2 September 2009 over Q2 September 2008. Total income rose to Rs 2,812.82 crore from Rs 2,674.86 crore in the same period last year.

Hindalco Industries on Saturday reported a 52% drop in its standalone net profit to Rs 344 crore on 13.4% fall in net sales to Rs 4,917 crore in Q2 September 2009 over Q2 September 2008.

Hindustan Unilever net profit fell 22% to Rs 429 crore on 5% rise in net sales to Rs 4,228 crore in the quarter ended September 2009 over the quarter ended September 2008.

Most Asian markets were trading lower today, 3 November 2009 as concern over the withdrawal of stimulus measures overshadowed Ford Motor Company.'s unexpected profit and a rally in gold prices. Key benchmark indices in Hong Kong, Japan, Singapore, South Korea and Taiwan were down by between 0.06% and 2.31%. However China's Shanghai Composite was up 1.10%.

Asian markets had dropped on Monday, 2 November 2009 following a sharp sell-off in US markets on Friday, 30 October 2009.

Wall Street edged higher on Monday as manufacturing expanded more than expected last month.

The Dow Jones industrial average gained 76.71 points, or 0.8%, to 9,789.44. The S&P 500 index added 6.69 points, or 0.7%, to 1,042.88, and the Nasdaq Composite index rose 4.09 points, or 0.2%, to 2,049.20.

Among the economic data, the ISM reported its gauge of manufacturing activity at 55.7 in October 2009, the third straight month of growth and the highest reading since April 2006. Also pending-home sales rose to their highest level in nearly three years in September, boosted by the first-time homebuyer's tax credit. Also construction spending rose 0.8% in the month of September.

Back home, as per provisional data, foreign funds dumped stocks worth a net Rs 576.05 crore on 30 October 2009 whereas domestic funds bought equities worth a net Rs 592.93 crore.

The Reserve Bank of India at its monetary policy review early this week left its key rates unchanged, but raised the wholesale price-based inflation projection for end-March 2010 sharply to 6.5% with an upward bias, from 5 % earlier.

The IMF said on 29 October 2009 the economies of India, China and Australia were recovering especially rapidly, suggesting it notices growing pressures for authorities there to tighten monetary policy ahead of others in the region. It called the three economies special cases, while adding a tightening of monetary policy seemed unnecessary elsewhere in the region in the near future.

It also advised Asian central banks not to raise interest rates only to calm asset price growth, saying lifting rates ahead of advanced economies could attract "carry trade-type" capital inflows and aggravate asset price pressures.

The supply of paper by Indian firms appear limitless, raising concerns that additional share sales will suck liquidity from the secondary equity market. As per reports, Indian firms have garnered about $9 billion (Rs 32,400 crore at the current exchange rates) through sale of shares and convertible bonds to institutional buyers since April 2009. Indian companies are taking advantage of a surge in liquidity to recapitalize and fund capital expenditure after being starved of cash last year.

Unlisted Reliance Infratel announced on 22 September 2009 its intention to raise Rs 5,000 crore from the primary market. Divestment of state-run firms by the government may also increase the supply of paper in the market.

The government recently approved stake sales in state-run power producer NTPC and another unlisted power firm Satluj Jal Vidyut Nigam which reflects the country's resolve to speed up reforms and raise more resources for social schemes.

The government has approved a follow-on public offering of 20% of state run Steel Authority of India, the steel minister said on 21 October 2009. The Government of India owns nearly 86% of Sail. Also the government gave its approval for 15% follow on public offer for Rural Electrification Corporation on 29 October 2009.