Market may gain on firm Asian stocks;Q4 GDP data in focus

The market may edge higher tracking firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 16 points at the opening bell. Foreign institutional investors (FIIs) bought shares worth Rs 253.48 crore and domestic funds sold shares worth Rs 50.39 crore on Monday, 30 May 2011, as per provisional figures released by the stock exchanges.

The government unveils Q4 March 2011 GDP data today, 31 May 2011. The data could provide cues on the likely monetary policy stance of the central bank at the mid-June 2011 review. The recent data showing gain in food prices in mid-May 2011 will increase pressure on the Reserve Bank of India (RBI) to raise policy rates when it undertakes mid-quarter monetary policy review on 16 June 2011.



Public sector aluminum producer National Aluminum Company announced after market hours on Monday that net profit declined 18.18% to Rs 305.26 crore on 12.26% rise in total income to Rs 1922.67 crore in Q4 March 2011 over Q4 March 2010.

Reliance Communications announced after market hours on Monday that consolidated net profit plunged 71.09% to Rs 1345.65 crore on 4.4% rise in total income to Rs 23107.63 crore in the year ended March 2011 over the year ended March 2010.

ONGC announced after market hours on Monday that net profit fell 26.09% to Rs 2790.86 crore on 1.34% rise in total income to Rs 16693.48 crore in Q4 March 2011 over Q4 March 2010.

Meanwhile, the annual monsoon rains have reportedly hit Kerala two days earlier than expected, boosting prospects for a harvest that could spur Asia's third-largest economy. The India Meteorological Department (IMD) has predicted the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. IMD has indicated that there is very low probability for the season rainfall to be deficient (below 90% of LPA) or excess (above 110% of LPA).

Good rains would help ease food inflation and boost rural income. Rainfall that comes within 96% to 104% of the long-term average is considered a normal monsoon season, but this alone doesn't guarantee a good crop. The timing and spread of the rains are equally important. The quantity and geographical spread of rainfall during the monsoon season is crucial for India's agriculture sector, which lacks irrigation facilities on more than half its farm land. Monsoon rains usually enter India's mainland through the southern state of Kerala in the first week of June, gradually progressing to cover most of central and northern India by July, before retreating in September.

Asian stocks rose on Tuesday amid speculation European officials will sanction more assistance for Greece. The key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan rose by between 0.03% to 1.5%.

Moody's Investors Service has today placed the Government of Japan's Aa2 local and foreign currency bond ratings on review for possible downgrade. Japan's unemployment rate rose to 4.7% in April from 4.6% the statistics bureau said in a report in Tokyo today.

US markets were closed on Monday, 30 May 2011, for Memorial Day.