Market may open lower; Bharti Airtel, DLF Q2 results eyed

The key benchmark indices may open lower if trading of S&P CNX Nifty futures on the Singapore stock exchange is of any indication. It indicate that the Nifty could fall 39 points at the opening bell. Asian stocks were mostly higher.

Bharti Airtel and DLF will announce their Q2 result today.



Net profit of Hindalco Industries rose 26.09% to Rs 433.81 crore on 18.66% rise in net sales to Rs 5802.76 crore in the quarter ended September 2010 over the quarter ended September 2009.

Net profit of Tata Motors declined 40.66% to Rs 432.70 crore on 44.51% rise in net sales to Rs 11449.61 crore in the quarter ended September 2010 over the quarter ended September 2009. The company had a net extraordinary income of Rs 3.78 crore in the quarter ended September 2010 and Rs 354.64 crore during the previous quarter ended September 2009.

Asian stock markets were mostly higher on Wednesday, despite a decline overnight in New York as U.S. investors shifted to commodities. The key benchmark indices in Indonesia, Japan, South Korea and Taiwan rose by between 0.2% to 1.17%. But, the key benchmark indices in Singapore, China and Hong Kong fell by between 0.69% to 0.95%.

The Dow Jones industrial average fell 0.5% to 11,346.75, while the broader Standard & Poor's 500 index slipped 0.8% to 1,213.40. The technology-heavy Nasdaq composite index was down 0.7% at 2,562.98. There are fears in the U.S. that the Federal Reserve's plan to buy bonds could drive up inflation, and hard commodities are seen by some as a safe haven.

Another concern was continuing debt problems in Europe, where there are fears that Ireland's government will have to seek financial aid from the eurozone and the International Monetary Fund, as Greece did earlier in the year.

Back home, the $ 1.7 billion follow-on public offer of state-run Power Grid Corporation opened for bidding on Monday, 9 November 2010. The issue was fully subscribed on the first day of the issue, data on NSE showed. The issue closes on Thursday 11 November 2010 for the qualified institutional bidders and on Friday 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 2146 firms surged 35.4% to Rs 85570 crore on 18.2% growth in sales to Rs 641796 crore in Q2 September 2010 over Q2 September 2009.

In macro news, 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.

So far in 2010, foreign funds have pumped more than $28 billion into Indian primary and secondary equities