BSE Small-cap, Mid-cap indices outshine Sensex

After a recent sharp setback in share prices, a broad-based rebound was witnessed on the domestic bourses today, 10 August 2011, as US Federal Reserve's decision on Tuesday, 9 August 2011, to keep US interest rates ultra-low for two more years raised expectations of increase in fund inflows into high-yielding emerging markets such as India. Incidentally, foreign institutional investors (FIIs) pressed heavy sales of Indian shares recently as a US credit rating downgrade caused global risk aversion. The barometer index BSE Sensex today, 10 August 2011, regained the psychological 17,000 mark. The Sensex jumped 272.60 points or 1.62%, off 125.95 points from day's high and up 108.26 points from day's low.



Heavy selling by FIIs and growing fears of another recession in the US, the world's biggest economy, had pushed Indian shares lower recently. The Sensex had tumbled 7.95% in six trading sessions to a 14-month closing low of 16,857.91 on Tuesday, 9 August 2011, from a recent high of 18,314.33 on 1 August 2011. The Sensex had tumbled 2,013.38 points or 10.66% in eleven trading sessions to 16,857.91 on Tuesday, 9 August 2011, from a high of 18,871.29 on 25 July 2011.

Today's rebound was quite broad-based as indicated by the strong market breadth. Eleven out of 13 sectoral indices on BSE were in green. Small-cap and mid-cap indices on BSE outperformed the Sensex. NSE's volatility index, India VIX, dropped to 28.95% from its close of 34.88% on Tuesday, 9 August 2011.

Auto stocks gained on optimism the recent fall in global commodity prices may boost profitability of auto firms. Software pivotals staged a comeback on bargain hunting after a recent steep slide triggered by fears that a recession in the US may lead to a slowdown in decision-making on technology spending by clients in the world's largest outsourcing market. Banking stocks were in demand on bargain hunting after a recent decline triggered by worries that higher lending rates will crimp loan growth. Fertiliser shares rose on renewed buying as the government moved a step closer to decontrolling urea prices and bringing it under the nutrient-based subsidy regime.

Infrastructure and construction stocks reversed recent steep losses on bargain hunting. Metal stocks rose in volatile trade on bargain hunting after recent steep slide triggered by worries the global economic slowdown may crimp demand. Tata Steel hit 52-week low today. Index heavyweight Reliance Industries (RIL) logged small gains in volatile trade. Oil exploration major Oil & Natural Gas Corporation (ONGC) lost over 2% on profit booking after gaining for prior three trading sessions.

The market opened on a firm note, with sentiment helped by a Wall Street rally on Tuesday, 9 August 2011, triggered by the US Federal Reserve's decision to keep US interest rates ultra-low for two more years. The market soon came off highs. The market regained strength in morning trade. The market once gain came off highs in mid-morning trade. A bout of volatility was witnessed in early afternoon trade as the market regained strength soon after hitting fresh intraday low. The Sensex moved in a range in afternoon trade. The market pared gains in mid-afternoon trade as European shares moved off initial highs. The market came off lows later.

The BSE Sensex jumped 272.60 points or 1.62% to settle at 17,130.51, its highest closing level since 5 August 2011. The Sensex surged 398.55 points at the day's high of 17,256.46 in early trade. The index rose 164.34 points at the day's low of 17,022.25 in mid-afternoon trade.

The S&P CNX Nifty was up 88.15 points or 1.74% to 5,161, its highest closing level since 5 August 2011. The Nifty hit a high of 5,197.95 in intraday trade.

The market breadth, indicating the overall health of the market, was quite strong. On BSE, 2,225 shares advanced while 727 shares declined. A total of 82 shares remained unchanged.

The BSE Mid-Cap index rose 2.31% and the BSE Small-Cap index gained 2.46%. Both these indices outperformed the Sensex

The total turnover on BSE amounted to Rs 2811 crore, lower than Rs 3398 crore on Tuesday.

Eleven out of 13 sectoral indices on BSE logged gains. The BSE Auto index (up 4.17%), the BSE Realty index (up 2.98%), and the BSE Consumer Durables (up 2.61%), outperformed the Sensex. The BSE FMCG index (down 0.47%), the BSE Oil & gas index (down 0.19%), and the BSE PSU index (up 0.95%), underperformed the Sensex.

Among the 30-share Sensex pack, 23 gained while the rest declined. Hindustan Unilever (down 1.31%), Sun Pharmaceuticals (down 1.32%), and ITC (down 1.4%), edged lower from the Sensex pack.

Index heavyweight Reliance Industries (RIL) rose 0.39% to Rs 768.35, off day's high of Rs 790. The stock rose on bargain hunting after the recent slide, which took the stock to a 52-week low of Rs 754.25 in intraday trade on Tuesday, 9 August 2011. RIL on Tuesday, 9 August 2011, said it has received the government's formal approval to sell a 30% stake in 21 oil and gas production sharing contracts to BP PLC. "Following the approval, Reliance and BP will work together to conclude the deal expeditiously," RIL said in a statement.

The initial proposal was for RIL to sell the stake in 23 blocks to BP for $7.2 billion plus another $1.8 billion linked to exploration success. However, the government cleared only 21 blocks and RIL had said it would continue to seek approval for the remaining two blocks.

The prized KG-D6 fields of RIL produced 31% less than previously projected natural gas output in the April-June 2011 quarter, the Oil Ministry said recently. The average gas production during April-June 2011 from KG-DWN-98/3 (KG-D6) block was 48.60 million metric standard cubic meters per day (mmscmd), less than the approved Field Development Plan (FDP) rate of 70.39 mmscmd, the ministry said.

India's largest oil exploration firm by market capitalisation Oil & Natural Gas Corporation (ONGC) lost 2.38% to Rs 279.40 and was the top loser from the Sensex pack. The stock declined on profit booking after gaining for prior three trading sessions.

Indian Oil Corporation slumped 3.02% after company reported a net loss of Rs 3718.70 crore for Q1 June 2011, higher than a net loss of Rs 3388.39 crore for Q1 June 2010. Indian Oil Corporation's (IOC) total income rose 38.7% to Rs 101688.73 crore in Q1 June 2011 over Q1 June 2010. The company said that the average gross refining margin in Q1 June 2011 was $4.71 per barrel compared with $3 per barrel in Q1 June 2010. The company announced the Q1 results during market hours today, 10 August 2011.

Auto stocks gained on optimism the recent fall in global commodity prices may boost profitability of auto firms. India's second largest bike maker by sales Bajaj Auto surged 4.03%.

India's largest small car maker by sales Maruti Suzuki India galloped 6.31% to Rs 1284 ahead of the launch of an upgraded model of the Swift hatchback this month. Maruti had said early this month that new Swift being manufactured at the company's Manesar plant will be launched nationally in mid-August 2011. It was the top gainer from the Sensex pack

India's largest truck maker by sales Tata Motors jumped 5.71% on bargain hunting after sliding 17.15% in the preceding six trading sessions. Its ADR increased 7.06% to $18.36 on Tuesday.

India's largest tractor and utility vehicles maker by sales Mahindra & Mahindra (M&M) surged 4.88%. The stock extended two-day rally. M&M during market hours on Monday, 8 August 2011, reported 7.6% rise in net profit to Rs 604.90 crore on 28.8% increase in gross revenue & other income to Rs 7294.30 crore in Q1 June 2011 over Q1 June 2010. M&M said profit before tax (PBT) rose 12.9% to Rs 814.30 crore. M&M said there was a sharp increase in non-cash charge arising from amortization of ESOPs granted in earlier years, at Rs 26.50 crore in Q1 June 2011 from Rs 0.90 crore in Q1 June 2010. Excluding this charge, PBT growth was 16.5% in Q1 June 2011, M&M said.

M&M said despite a relentless increase in material costs the profit grew in the first quarter due to tight control on expenses and good volumes in both auto and tractor segments. Since prospects for agricultural and services sectors growth remain reasonably robust, the outlook for the company for the remaining part of the year remains positive but watchful, M&M said.

India's local car sales fell 16% to 1.33 lakh units in July 2011 over in July 2010 as rising loan rates and higher fuel costs crimped demand for new vehicles. Industry body, the Society of Indian Automobile Manufacturers, expects car sales to rebound from August 2011 because of the introduction of new cars and resumption of full production at Maruti Suzuki, the country's largest car maker by sales.

India's largest bike maker by sales Hero MotoCorp rose 0.99%. The company aims to increase annual revenue to $10 billion and two-wheeler sales to 10 million units a year in the next five to six years, as it expands in overseas markets and hopefully benefits from strong local demand. The company expects exports to contribute a tenth of its vehicle sales and revenue over the same period.

Hero MotoCorp's chief executive Pawan Munjal on Tuesday, 9 August 2011, said the company has identified 30 new markets in Africa, Southeast Asia and Latin America where it plans to sell one million two-wheelers in the next five to six years. Munjal said the company will start exporting two-wheelers to some countries in Africa in the October-December quarter. Hero MotoCorp will retain a link to Japan's Honda Motor, paying royalties to the latter for use of technology until end-2014.

Munjal said Hero MotoCorp is enhancing its research and development set-up and exploring opportunities for collaboration with international design houses and technology suppliers. The company on Tuesday, 9 August 2011, unveiled a new 110-cubic-centimeter scooter model, Maestro, and a 150cc motorcycle, Impulse.

Software pivotals rose on bargain hunting after a recent steep slide triggered by fears that a recession in the US may lead to a slowdown in decision-making on technology spending by clients in the world's largest outsourcing market. US is the biggest market for Indian IT firms.

India's largest software services exporter TCS rose 1.92%. TCS and Singapore Management University (SMU) on Monday, 8 August 2011, announced establishment of TCS-SMU iCity Lab to be located at SMU. TCS made the announcement after trading hours on Monday.

India's third largest software services exporter Wipro rose 2.52% and India's second largest software services exporter Infosys was up 3.32%

Mahindra Satyam jumped 9.99% after announcing turnaround Q1 June 2011 results. The company reported consolidated net profit of Rs 225.18 crore for Q1 June 2011 compared with a net loss of Rs 327 crore for Q4 March 2011. Earnings before interest, taxation, depreciation and amortisation (EBITDA) rose 17.8% to Rs 210 crore on 4.3% rise in total revenue to Rs 1434 crore in Q1 June 2011 over Q4 March 2011. During the quarter, the company added 2,172 people (net), taking total headcount to 31,438 as of 30 June 2011.

Mahindra Satyam will delist its American Depository Shares (ADS) from the US stock exchanges because of the company's inability to comply with the requirements of the US regulator due to the alleged accounting fraud perpetrated by its former promoter and founder Ramalinga Raju.

Mahindra Satyam Chairman Vineet Nayyar said, "Our results, this quarter, demonstrate our progression to the growth phase of our three-year transformation journey. Our relentless focus on market growth and margin expansion has yielded satisfactory results for yet another quarter". Nayyar added "We are reasonably confident that we would capitalise on this momentum. However, turbulent macro-economic conditions can pose challenges to the business environment for the outsourcing industry."

Banking stocks were in demand on bargain hunting after a recent decline triggered by worries that higher lending rates will crimp loan growth. A number of commercial banks have raised lending rates recently after the central bank raised its key lending rate by a steeper-than-expected 50 basis points at a policy review on 26 July 2011.

India's largest commercial bank by branch network State Bank of India vaulted 2.08%. The bank reportedly expects to raise Rs 23000 crore through a rights issue to fund loan growth. India's largest private sector bank by net profit HDFC Bank rose 2.73% after its ADR jumped 10.4% on Tuesday. India's largest private sector bank by net profit ICICI Bank gained 2.09% after its ADR advanced 8.87% on Tuesday.

Rural Electrification Corporation rose 1.7%. During market hours today, 10 August 2011, the company reported 12.7% rise in net profit to Rs 661.96 crore on 22.89% rise in total income from operations to Rs 2334.59 crore in Q1 June 2011 over Q1 June 2010.

Metal stocks rose in volatile trade on bargain hunting after recent steep slide triggered by worries the global economic slowdown may crimp demand. Steel Authority of India (up 4.23%), and National Aluminium Company (up 3.53%) surged.

India's largest private sector aluminium maker by sales Hindalco Industries jumped 5.01%. The stock had dropped to a 52-week low of Rs 143.65 in intraday trade on Tuesday, 9 August 2011.

India's largest private sector steel maker by sales Tata Steel fell 0.52% to Rs 483.50, off day's high of Rs 503.70. The stock hit a 52-week low of Rs 481 in intraday trade today, 10 August 2011. The company, last week, said it will invest 7 million pounds ($11.4 million) in its European unit to enhance welding and material handling capabilities of its mill in Hartlepool in the UK. "This investment will help us retain our position as a world-leading supplier of pipes and tubes," said Ramsay Ross, a director of Tata Steel's tubes business, said in a statement.

India's largest non-ferrous metal firm by capacity Sterlite Industries (India) gained 1.56%. The stock had touched a 52-week low of Rs 130 in intraday trade on Tuesday, 9 August 2011.

India's largest sponge iron steel maker by sales Jindal Steel & Power rose 1.03%.

JSW Steel advanced 0.30%. During market hours on Tuesday, 9 August 2011, the company said its crude steel production rose 15% to 5.99 lakh tonne in July 2011 over July 2010. The company, last week, denied the conclusions drawn in a report by the Lokayukta, Karnataka's anti-graft watchdog, against the company on procurement and transportation of iron ore in the state.

Sesa Goa rose 2.36%. On Saturday, 6 August 2011, the company said it has agreed to acquire 51% stake in Western Cluster, Liberia for a cash consideration of $90 million. With this acquisition, Sesa Goa will become a significant player in the upcoming West African Iron Ore hub, the company said.

Infrastructure and construction stocks reversed recent steep losses on bargain hunting. India's largest power equipment maker by sales Bharat Heavy Electricals (Bhel) gained 2.8%. The stock turned ex-dividend today, 10 August 2011, for dividend of Rs 17.90 per share for the year ended March 2011.

India's largest engineering and construction firm by net sales, L&T, rose 2.36%. L&T, early this week, reported 12% rise in net profit to Rs 746 crore on 21% rise in gross revenues to Rs 9578 crore in Q1 June 2011 over Q1 June 2010. The company garnered fresh orders of Rs 16190 crore in Q1 June 2011, taking the total order book to Rs 136172 crore as at 30 June 2011. The company said it is confident of sustaining the growth momentum in the medium term, with its proven track record, strong order book and execution excellence.

L&T has appointed R. Shankar Raman, Senior Vice President (Finance & Legal), as the Chief Financial Officer (CFO) of the company with effect from 6 September 2011, the day when the current CFO Y. M. Deosthalee retires. Deosthalee will take charge as Chairman & Managing Director (CMD) of L&T Finance Holdings, a subsidiary of L&T, from 6 September 2011.

India's largest power generation firm by capacity NTPC rose 3.31% while India's largest dam builder by sales Jaiprakash Associates gained 4.23%.

Reliance Power fell 0.39%. Reportedly the company plans to invest Rs 1500 crore to develop a 200 megawatts wind power project at Vashpet in Maharashtra. Reliance Power announces Q1 results tomorrow, 11 August 2011.

Suzlon Energy surged 4.34% after the company secured new orders aggregating Rs 483 crore for 85 megawatts. The company announced the new orders during trading hours today, 10 August 2011.

GMR Infrastructure (up 2.33%), GVK Power Infrastructure (up 4.64%), Lanco Infratech (up 1.73%), IVRCL Infrastructure (up 2.41%), and Reliance Infrastructure (up 2.26%), were the other gainers from the infrastructure and construction sector.

Interest rate sensitive realty stocks rose as a recent steep slide in global commodity prices helped ease inflation and interest rate worries. Purchases of both residential and commercial property is largely driven by finance. DLF (up 4.63%), HDIL (up 5.39%), Indiabulls Real Estate (up 1.52%), Oberoi Realty (up 1.38%), Omaxe (up 2.56%), Godrej Properties (up 0.43%), and Unitech (up 5.13%), gained.

Fertiliser shares rose on renewed buying as the government moved a step closer to decontrolling urea prices and bringing it under the nutrient-based subsidy regime. Rashtriya Chemicals and Fertilisers (RCF) (up 12.63%), Chambal Fertiliser & Chemicals (up 10.41%), National Fertilizer (up 8.93%), Zuari Industries (up 4.09%), Tata Chemicals (up 2.71%), Coromandel International (up 2.05%) and Deepak Fertilisers & Petrochemicals Corporation (up 2.65%), surged.

A Group of Ministers on fertilizers recently approved a policy for decontrol of urea prices. Under the policy, manufacturers will be allowed to hike the rates for the key farm nutrient by up to 10% in the first year. The decision of the Group of Ministers, headed Finance Minister Pranab Mukherjee, on urea decontrol will now go to the Cabinet Committee on Economic Affairs for final approval. The government has already freed potassic and phosphoric fertilisers with the introduction of NBS with effect from April 2010.

Tata Global Beverages rose 2.58% after consolidated net profit galloped 253.2% to Rs 160.92 crore on 6.45% rise in total operating income of Rs 1466.73 crore in Q1 June 2011 over Q1 June 2010. Net profit zoomed on the back of exceptional items. The company said profit after interest but before exceptional items at Rs 99 crore for Q1 June 2011 was lower compared to the corresponding previous year period due to higher commodity costs and higher expenditure on growth initiatives. The company's interest cost declined sharply during the quarter. The result was announced during market hours today, 10 August 2011.

Page Industries surged 20% after net profit jumped 102.12% to Rs 27.69 crore on 47.39% rise in net sales to Rs 176.42 crore in Q1 June 2011 over Q1 June 2010. The company declared its results during trading hours today, 10 August 2011.

J B Chemicals & Pharmaceuticals jumped 11.98% after the company said its board will meet on 19 August 2011 to consider declaration of special interim dividend. The company announced the board meeting during trading hours today, 10 August 2011.

Jubilant FoodWorks rose 8.01%. The company will announce Q1 results tomorrow, 11 August 2011.

Inventure Growth Securities clocked highest turnover of Rs 125.77 crore on BSE. Tata Steel (Rs 105.76 crore), State Bank of India (Rs 68.87 crore), JSW Steel (Rs 63.30 crore) and Reliance Industries (Rs 55.06 crore) were the other turnover toppers in that order.

Cals Refineries clocked highest volume of 6.13 crore shares on BSE. Birla Pacific Medspa (93.06 lakh shares), Suzlon Energy (65.89 lakh shares), FCS Software (58.65 lakh shares) and Inventure Growth Securities (55.18 lakh shares) were the other volume toppers in that order.

The Q1 June 2011 earnings season is drawing towards a close. Investors are focusing on the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when Indian firms are witnessing cost pressures amid rising interest rates and staff costs.

Tata Motors, Reliance Infrastructure, Reliance Power, Castrol India and Shipping Corporation of India unveil quarterly results tomorrow, 11 August 2011. Tata Steel, Hindalco Industries, Coal India, National Aluminium Company, Jaiprakash Associates, Unitech, BPCL and HPCL unveil Q1 results on Friday, 12 August 2011. State Bank of India, Aditya Birla Nuvo, Reliance Communications, Reliance Capital and Shipping Corporation of India unveil Q1 results on Saturday, 13 August 2011.

Finance Minister Pranab Mukherjee today, 10 August 2011, said the Indian government and the Reserve Bank of India (RBI) are working together to ensure stability in local markets, which have been partly influenced by the US Federal Reserve's comments on interest rates. There won't be any cash crunch in Indian markets, Mukherjee said adding that the markets' movements are reflecting a return of investors' confidence after jittery trades for the past two days following the US rating downgrade.

Mukherjee early this week said the government will fast-track economic reforms and that the Indian economy remains an attractive investment destination for foreign investors despite the global growth slowdown worries. Mukherjee on Tuesday, 9 August 2011, said the decline in global crude prices will help in managing India's inflation.

The government on Tuesday, 9 August 2011, approved the extension of the term of Dr. D. Subbarao as the Governor of the Reserve Bank of India (RBI). Dr. Subbarao's term has been extended for a period of two years with effect from 5 September 2011 up to 4 September 2013. Commenting upon his re-appointment, Subbarao said, "I am happy that the government has reposed its confidence in me at this difficult juncture in the world economy. I look forward to working with a great team in the RBI to meet the many challenges ahead."

Thomas Mathew, joint secretary of capital markets on Tuesday, 9 August 2011, said the country's stock markets are likely to remain volatile in the near term, tracking pan-Asian jitters following the US credit downgrade and local state-run companies should decide themselves when to step in to support the market. India's economic fundamentals remain strong and its share markets would attract strong overseas capital amid the global uncertainty, Mathew said. He doesn't expect any payment problems to plague Indian share markets after a recent steep slide.

The Reserve Bank of India (RBI) on Monday, 8 August 2011, said that the US rating downgrade has raised concerns of continuing turmoil in global financial markets as investors re-allocate portfolios in response to heightened risk perceptions stemming from the latest developments. As Friday's (5 August 2011) market behaviour demonstrated, India is not insulated from such developments, RBI said. It may, however, be noted that in the worst phase of the recent global financial crisis, the Indian economy grew by 6.8%, suggesting high resilience emerging from domestic factors, the RBI said in a statement.

While downside risks to growth may have increased in the wake of global developments, they are likely to have limited impact, RBI said. However, the policy and regulatory framework must anticipate and be prepared to respond to turbulent financial market conditions arising out of external developments, RBI said. In the immediate future, the RBI's priority is to ensure that adequate rupee and forex liquidity are maintained in domestic markets to prevent excessive volatility in interest rates and exchange rates.

Rupee liquidity is being provided through the Repo window of the Liquidity Adjustment Facility (LAF). As of now, the banking system does not face any liquidity pressures as evident from the low level of dependence on liquidity injections under the LAF, RBI said. In any case, the banking system currently has an adequate stock of Statutory Liquidity Ratio (SLR) securities, which are eligible for Repo transactions, RBI said. Further, the capacity of the LAF to inject liquidity has recently been augmented by the introduction of the Marginal Standing Facility (MSF), which allows banks to draw down SLR securities up to a further one per cent of their Net Demand and Time Liabilities (NDTL) in order to meet liquidity requirements. This will help stabilize the call rate within the LAF corridor, which is currently 7% to 9%, RBI said.

As regards forex liquidity, in anticipation of financial market turbulence related to the US debt ceiling impasse, the RBI recently made an assessment of the ability of the forex reserve portfolio to meet potential forex requirements in the event of significant capital outflows. This exercise indicated that there were sufficient liquid reserves to meet the demand for forex even in stress scenarios, RBI said.

RBI said it is closely monitoring all key indicators and will continuously assess the impact of global developments on rupee and forex liquidity and macroeconomic stability. "We will respond quickly and appropriately to the evolving situation, "RBI said.

Chief economic adviser Kaushik Basu on Monday, 8 August 2011, said while India would be affected in the short term by a US economic slowdown, it had potential to benefit in the future. "We have a slew of instruments available with the finance ministry, the government and the Reserve Bank of India, and, should the need arise, the government and the central bank are in a position to step in," Basu told reporters on Monday. Basu expects India's brisk economic growth could be a magnet for global capital inflows, a thought shared by the finance minister.

Monsoon rains were 22% below normal in the week to 3 August 2011, recording marginal improvement from 23% below average showers in the previous week. Total rainfall since the beginning of the June-September monsoon season has been 6% below average. Rainfall has been normal or above in 73% of the country so far this season, while 27% of the country is facing a deficit. In some parts of eastern India such as Orissa, Bihar and Jharkhand, rainfall is below normal, but in the key rice-growing state of West Bengal rainfall is above normal. A rainfall deficit in the southern state of Andhra Pradesh, a top rice-producer, has largely been bridged.

In the northern grain bowl region of Punjab, the monsoon rain deficit is 26%. However, since most farmland in Punjab is irrigated, rice production may not be adversely affected in the state. But, low rainfall in the western regions is likely to adversely affect the output of groundnut, the second biggest summer-sown oilseed crop after soybean. In Gujarat, rainfall is 37% below average.

The Reserve Bank of India (RBI) raised its key lending rates by 50 basis points at a policy review on 26 July 2011, to tame high inflation. RBI had at time said that going forward, the monetary policy stance will depend on the evolving inflation trajectory, which, in turn, will be determined by trends in domestic growth and global commodity prices. A change in stance will be motivated by signs of a sustainable downturn in inflation, it had added.

European stocks rose in volatile trade on Wednesday, 10 August 2011, after the US Federal Reserve on Tuesday, 9 August 2011, pledged to keep US interest rates low at least through mid-2013. The key benchmark indices in Germany, France and UK were up by between 0.04% to 1.38%.

French President Nicolas Sarkozy today, 10 August 2011, held an unscheduled meeting with a number of government ministers and Christian Noyer, governor of the Bank of France, to discuss the country's economic and financial situation. The meeting comes amid fears that France's triple-A credit rating could come under threat if the European sovereign debt crisis worsens.

Asian stock markets rose on Wednesday, 10 August 2011, with sentiment helped by a Wall Street rally after the US Federal Reserve on Tuesday, 9 August 2011, pledged to keep US interest rates low at least through mid-2013. The key benchmark indices in Taiwan, South Korea, Hong Kong, Indonesia, China and Japan were up by between 0.27% to 3.44%. Singapore's Straits Times was down 2.18%.

China today, 10 August 2011, its trade surplus widened sharply in July 2011, boosted by above-forecast export growth.

Singapore on Wednesday revised its GDP growth forecast for 2011 while also lowering its projection for export growth amid concern of a slowdown in the US and the Eurozone. The Trade & Industry Ministry revised its growth forecast for this year to 5-6%, down from the original projection of 5-7%.

Trading in US index futures indicated that the Dow could fall 99 points at the opening bell on Wednesday, 10 August 2011. US stocks notched the biggest gain in more than two years amid a seesaw session on Tuesday, 9 August 2011, following the worst sell-off since the financial crisis, as investors applauded the Federal Reserve's pledge to keep interest rates near zero for two more years. The Dow Jones Industrial Average finished up 429.92, or 3.98%, at 11239.47. The Standard & Poor's 500-stock index rose 53.07 points, or 4.74%, to 1172.53 and the Nasdaq Composite gained 124.83 points, or 5.29%, to 2482.52.

The Federal Reserve said on Tuesday it will keep its hefty monetary policy stimulus for at least another two years, an effort to support a flagging economy and fragile global markets that faced considerable internal dissent. The Fed said US economic growth was proving considerably weaker than expected, suggesting inflation, which has already moderated recently, will remain contained for the foreseeable future.

Standard & Poor's on Friday, 5 August 2011, downgraded the US long-term debt rating to AA+ from AAA with a negative outlook, meaning it can be lowered again within two years