Market may open flat to slightly higher; ONGC in focus on Q4 results

The market may open flat to slightly higher after previous two days gains. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 3 points at the opening bell. Foreign institutional investors (FIIs) bought shares worth Rs 222.03 crore and domestic funds bought shares worth Rs 388.25 crore on Friday, 27 May 2011, as per provisional figures released by the stock exchanges.

ONGC, M&M, Reliance Communications, Indian Oil Corporation, BPCL and National Aluminum Company are set to unveil Q4 results today, 30 May 2011.



Reliance Infrastructure announced after market hours on Friday that consolidated net profit rose 2.12% to Rs 1551.61 crore on 1.75% rise in total income to Rs 15964.77 crore in the year ended March 2011 over the year ended March 2010.

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. The government unveils Q4 March 2011 GDP data on Tuesday, 31 May 2011. The data could provide cues on the likely monetary policy stance of the central bank at the mid-June 2011 review.

Investors will closely monitor the progress of the monsoon rains. Meanwhile, 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 swung between gains and losses on Monday after reports showed consumer spending in the U.S. increased less than estimates and sales of previously owned homes fell. The key benchmark indices in China, Indonesia, Japan and South Korea fell by between 0.04% to 0.23% The key benchmark indices in Singapore, Taiwan and Hong Kong rose by between 0.16% to 0.6%.

US stocks closed out their fourth week of losses with a small gain on Friday, but only with the help of a weaker dollar boosting metals prices and basic materials stocks.