Market may continue to march forward; SBI Q2 result eyed

The key benchmark indices may continue to march forward if trading of S&P CNX Nifty futures on the Singapore stock exchange is of any indication. It indicate that the Nifty could gain 31.50 points at the opening bell.

India's largest commercial lender by branch network State Bank of India will declare June-September 2010 quarter results today, 8 November 2010.



Asian shares were mixed Monday, with buying in some markets supported by better-than-expected U.S. jobs data Friday. The key benchmark indices in China, Hong Kong, South Korea and Taiwan fell by between 0.13% to 0.38%. But, the key benchmark indices in Indonesia and Japan rose 0.23% and 1% respectively.

U.S. October nonfarm payroll data reported Friday was better than expected as the economy added 151,000 jobs, compared with an expected rise of 70,000 jobs, while the unemployment rate was unchanged at 9.6% as expected.

Back home, the Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 1943 firms surged 38.8% to Rs 81032 crore on 18.4% growth in sales to Rs 589193 crore in Q2 September 2010 over Q2 September 2009.

The food inflation eased for a third week in late October 2010, the latest government data showed. The food price index in the year to 23 October rose 12.85% compared with 13.75% rise in the previous week, as the prices of vegetables and pulses fell. Fuel inflation for the same period was at 10.67%, slowing from 11.25% the prior week. The primary articles price index was up 15.43%, compared with an annual rise of 16.62% a week earlier. Food makes up a little over 14% of the wholesale price index (WPI) while fuel contributes about 15%.

India's services sector expanded last month at a faster rate than in September 2010, bringing an end to a 3-month decline in the key business activity index, a survey showed on Wednesday, 3 November 2010. The manufacturing sector expanded in October 2010 at a much faster pace than in September 2010, supported by strong output and a sharp rise in new business, a purchasing managers' index (PMI) showed on Monday, 1 November 2010.

The Reserve Bank of India (RBI) at its second quarterly monetary policy review on Tuesday, 2 November 2010, hiked its lending and borrowing rates by a quarter point each, as expected, to tackle inflationary pressures. The central bank signaled a pause in its policy tightening drive that began in October 2009. Based purely on current growth and inflation trends, the Reserve Bank of India (RBI) believes that the likelihood of further rate actions in the immediate future is relatively low, RBI governor D Subbarao said in a monetary policy statement. "However, in an uncertain world, we need to be prepared to respond appropriately to shocks that may emanate from either the global or domestic environment," he added.

The RBI said it will continue to closely monitor both global and domestic macroeconomic conditions. "We will take action as warranted with a view to mitigating any potentially disruptive effects of lumpy and volatile capital flows and sharp movements in domestic liquidity conditions, consistent with the broad objectives of price and output stability", the policy statement said.

Foreign funds have made heavy purchases of Indian stocks this year. Net equity inflows in 2010 now stands at a record $26.75 billion, above last year's $17.45 billion.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. State-run Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the companies that are planning large share sales in coming months.

The follow-on public offer of state-run Power Grid Corporation opens for bidding on Tuesday, 9 November 2010. The issue closes on Thursday 11 November 2010 for the qualified institutional bidders and on Friday 12 November 2010 for all other bidders.

It was a Diwali bonanza for stock market investors as the key benchmark indices scaled record closing highs during the special 45-minute Muhurat trading session held Friday, 5 November 2010, to mark the begging of the Samvat Year 2067. The BSE 30-share Sensex jumped 111.39 points or 0.53% to 21,004.96, a record closing high. The S&P CNX Nifty was up 30.65 points or 0.49% to 6,312.45, a record closing high.