Third quarter results, key economic data to dictate trend

The market may see stock-specific action next week as third quarter result season kicks off. Besides corporate results, market participants will be keenly watching India's industrial production data and monthly inflation data

Government data on industrial performance for November 2009, as measured by the index of industrial production (IIP), will be unveiled on 12 January 2010. Inflation data for December 2009 is due on 14 January 2010.

Major companies announcing Q3 results include, Infosys Technologies (on 12 January), Bajaj Auto (12 January), TCS (15 January), HDFC Bank (15 January), and Axis Bank (15 January).

Other companies announcing result are, Dhampur Sugar Mills, Exide Industries, Geojit BNP Paribas Financial, Maharashtra Scooters, Jaiprakash Hydro-Power, Bajaj Finserv, Mastek, Nectar Lifesciences, Piramal Life Sciences, Indowind Energy, TCI Finance, TTK Prestige, Rural Electrification Corporation, Bajaj Holdings, Texmaco, Infomedia 18, Sintex Industries, Tata Metaliks, Jindal Saw, Rallis India, CMC, Finolex Industries, Usha Martin, Orient Paper, South Indian Bank, GRUH Finance, IDBI Bank, Shree Renuka Sugars, Indusind Bank, Development Credit Bank, State Bank of Travancore, State Bank of Bikaner and Jaipur, NIIT Technologies, UCO Bank, Escorts, Camlin, Finolex Cables, and ETC Networks.

The Reserve Bank of India (RBI) will hold the third quarter review of the monetary policy on 29 January 2010, when it is widely expected to hike the cash reserve ratio or the percentage of amount banks park with the RBI to absorb excess money from the system.

RBI Deputy Governor Subir Gokarn will hold a pre-credit policy meet with bankers. Gokarn's team is scheduled to meet bank chiefs on 14 January 2010. A meeting with primary bond market dealers is scheduled on 11 January 2010.

Chairman of Prime Minister's Economic Advisory Council C Rangarajan had recently said that raising CRR might be one of the tools to be used by the Reserve Bank of India to suck out excess liquidity in the banking system.

India's food price inflation eased slightly in late December, but experts believe a rise in fuel prices may elevate headline inflation, maintaining pressure on the central bank to tighten monetary policy.

The food price index rose 18.22% in the 12 months to 26 December 2009, lower than an annual rise of 19.83% in the previous week. Food prices are rising on supply constraints after the driest spell in nearly four decades, followed by floods in some regions that hit crops. Higher government prices paid to farmers are another factor.

The fuel index rose an annual 4.85% in late December. The index has risen about 8% since the end of March 2009, following an upswing in world crude prices amid signs of a global recovery.