Market may extend losses; Industrial output data eyed

The key benchmark indices may extend losses for the third straight day tracking weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicate that the Nifty could fall 30 points at the opening bell.

Tata Power Company and Tata Steel will announce their Q2 results today, 12 November 2010.



Net profit of Cipla declined 4.62% to Rs 263.01 crore on 15.22% rise in net sales to Rs 1579.88 crore in the quarter ended September 2010 over the quarter ended September 2009. The company announced its result after market hours on Thursday.

On the macro front, the government will announce the industrial output data for September 2010 today, 12 November 2010. Industrial production rose at a much slower-than-expected 5.6% in August 2010.

India's economy is expected to grow 8.5% in the current year and 9% in 2010/11, Prime Minister Manmohan Singh said on Friday. However, high unemployment in industrialised countries threatens a revival of protectionist sentiment, especially since the use of conventional monetary and fiscal tools to revive the economy has been exhausted, he said in a speech at the plenary session of the G20 summit in Seoul.

Asian stock markets were mostly lower on Friday, with banking stocks hurting the Tokyo and Sydney bourses. Sentiment was hurt by Wall Street's drop Thursday, dragged by a plunge in Cisco System's shares and concerns over European sovereign debt. The key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore and Taiwan fell by between 0.14% to 0.84%. But, South Korea's Seoul Composite rose 0.27%.

Greece's jobless rate rose to a record 12.2% in August, while the nation's progress in reducing its deficit appeared to slow, government data showed Thursday.

Meanwhile, the G20 will reportedly agree to setting vague "indicative guidelines" for measuring global imbalances and hammer out the details next year, effectively calling a timeout to let tempers cool after heated debate over currencies. Negotiators laboured until the wee hours of the morning to try to thrash out an agreement that their leaders can all endorse, despite deep divisions that were on public display in the run-up to the Group of 20 summit concluding on Friday.

Back home, food price index rose 12.30%, while the fuel price index climbed 10.67% in the year to 30 October 2010, government data on Thursday showed. In the prior week, annual food and fuel inflation stood at 12.85% and 10.67%, respectively. The primary articles price index was up 14.87% in the latest week compared with an annual rise of 15.43% a week earlier.

The wholesale price index for the month of October will be announced on Monday, 15 November 2010.

The $ 1.7 billion follow-on public offer of state-run Power Grid Corporation was subscribed 9.72 times on the third day of bidding on Thursday data on NSE showed. The issue closes today, 12 November 2010 for all other bidders. Follow-on offer price band is fixed between Rs 85 to Rs 90 per Share, and 5% discount will be available to Retail investors and eligible employees at the issue price on allotment.

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. After Power Grid Corp, Steel Authority of India and Indian Oil Corp are some of the other companies that are planning large share sales in coming months.

Meanwhile, share sales by the Indian government in state run firms Manganese Ore India (MOIL) and Shipping Corporation of India are likely to hit the market by end-November, while an offer by Hindustan Copper is likely in December, Disinvestment Secretary Sumit Bose said

On the corporate front, the Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 2487 firms surged 36% to Rs 92359 crore on 19.7% growth in sales to Rs 743075 crore in Q2 September 2010 over Q2 September 2009.

Back home, 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, theReserve 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.