Market may open lower on weak Asian stocks; HDFC Q4 result eyed

The market may open lower as Beijing's monetary-policy tightening over the weekend and a sell-off on Wall Street Friday, 30 April 2010, pulled Asian stocks lower. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicate that the Nifty could fall 27.50 points at the opening bell. Auto shares may edge higher on strong sales in the month just gone by. HDFC will announce its Q4 result today, 3 May 2010. The company's board will also consider stock-split proposal.

The results announced so far have been fairly encouraging. The combined net profit of a total of 789 companies rose 27.6% to Rs 34723 crore on 31.9% rise in sales to Rs 317052 crore in the quarter ended March 2010 over the quarter ended March 2009.

Tata Motors' total sales including exports of commercial and passenger vehicles jumped 52% to 57,202 vehicles in April 2010 over April 2009. Domestic sales rose 49% to 54,065 units. Exports rose 148.8% to 3,137. Commercial vehicle sales in the domestic market rose 36% to 30,963 units. Passenger vehicle sales jumped 70% to 24,902 units. Passenger vehicle sales include distribution of Fiat cars by Tata Motors. Sales of the ultra-cheap car Tata Nano totaled 3,525 units in April 2010.

Maruti Suzuki India's total sales rose almost 30% to 93,058 units in April 2010 over April 2009. Domestic sales rose 23.4% to 80,34 units.

Asian stocks declined on Monday after China on Sunday, 2 May 2010, raised the proportion of deposits that lenders must keep in reserve at the central bank. The key benchmark indices in Hong Kong, South Korea, Singapore and Taiwan fell by between 0.37% to 1.18%. But, Indonesia's Jakarta Composite rose 0.18%. The stock markets in China and Japan were closed for holidays

The People's Bank of China said it was lifting lenders' reserve requirement ratio by 50 basis points, effective 10 May 2010, its third increase of that magnitude this year.

US stocks tumbled on Friday, 30 April 2010 as news of a criminal probe into US investment bank Goldman Sachs unnerved investors already worried about the prospects for heavy banking regulation. The Dow Jones Industrial Average fell 158.71 points or 1.42% to 11,008.61. The Standard & Poor's 500 Index lost 20.09 points, or 1.66% to 1,186.69. The Nasdaq Composite Index dropped 50.73 points, or 2.02% to 2,461.19.

The US economy expanded at a 3.2% annual rate in the first quarter slowing down from the fourth-quarter's rapid 5.6% pace

Meanwhile, Euro-region ministers agreed to a 110 billion-euro ($146 billion) rescue package for Greece to prevent a default and stop the worst crisis in the currency's 11-year history from spreading through the rest of the bloc.

Back home on the macro front, the latest data showed infrastructure sector output jumped 7.2% in March 2010 from a year earlier, higher than an upwardly revised rise of 4.7% in February 2010.

The Indian Meteorological department (IMD) expects normal rainfall in the June-September monsoon season this year. Rainfall is likely to be 98% of the long-term average, the IMD said on 23 April 2010. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation. The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season holds key.

The Reserve Bank of India expects India's economy to expand 8% in the year ending March 2011 (FY 2011) with an upward bias, assuming a normal monsoon this year and sustenance of good performance of the industrial and services sectors on the back of rising domestic and external demand.

The RBI at its annual policy review, on 20 April 2010, said it will continue to monitor macroeconomic conditions, particularly the price situation closely and take further action as warranted. A 25 basis points hike in the cash reserve ratio (CRR) with effective from 24 April 2010 will suck out excess liquidity of Rs 12500 crore from the banking system.

In its half-yearly World Economic Outlook, the International Monetary Fund (IMF) has pegged India's GDP growth at 8.75% in calendar 2010 and 8.5% in calendar 2011. According to the IMF, domestic demand in India will strengthen as the labour market improves, and investment is expected to be boosted by strong corporate profitability, rising business confidence and favourable financing conditions.

Profit booking in late trade capped gains on the domestic bourses on Friday, 30 April 2010 as European stocks fell in volatile trade on unease over euro zone sovereign debt levels. The BSE 30-share Sensex was up 55.24 points or 0.32% to 17,558.71 on Friday.

As per provisional figures on NSE, foreign funds bought shares worth Rs 355.55 crore and domestic funds bought shares of Rs 217.61 crore on Friday.