Market may open lower on weak Asian stocks; DLF in focus

The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty on the Singapore stock exchange indicates a fall of 47.50 points at the opening bell. Asian stocks dropped on Tuesday, 2 August 2011, with exporters broadly pressured after fresh indications that US manufacturing is slowing, and with Japanese companies straining under the weight of a strong yen.

FIIs bought shares worth a net Rs 86.83 crore on Monday, 1 August 2011, as per provisional data from the stock exchanges. Domestic institutional investors (DIIs) sold shares worth Rs 95.26 crore on that day.



A rally in world stocks triggered by US President Barack Obama's announcement over the weekend that he and Senate leaders had agreed on a "framework" debt deal to cut spending and raise the debt ceiling, helped Indian shares recover on Monday, 1 August 2011 from a recent steep slide triggered by worries that higher interest rates will crimp corporate profit growth. US is the world's biggest economy. The BSE Sensex jumped 117.13 points or 0.64% to settle at 18,314.33, its highest closing level since 27 July 2011.

Ambuja Cements' cement sales rose 14.09% to 1.7 million tonnes in July 2011 over July 2010. Jaiprakash Associates' cement sales rose 18.85% to 1.45 million tonnes in July 2011 over July 2010.

Investors' focus continues on Q1 corporate earnings. 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.

DLF and Power Grid Corporation unveil Q1 results today, 2 August 2011. Bharti Airtel and United Spirits unveil Q1 results tomorrow, 3 August 2011. Adani Power, Mundra Port And Special Economic Zone and Indian Hotels announce Q1 results on Thursday, 4 August 2011. Cipla and IL&FS Transportation Networks are set to announce Q1 results on Friday, 5 August 2011.

M&M announces Q1 results on 8 August 2011. ABB, Tata Communications, Mahindra Satyam, GMR Infrastructure and VIP Industries announce quarterly results on 9 August 2011. Tata Power and Rural Electrification Corporation unveil Q1 results on 10 August 2011. Tata Motors, Castrol India and Shipping Corporation of India unveil quarterly results on 11 August 2011. Tata Steel, Hindalco, Coal India, National Aluminium Company and HPCL unveil Q1 results on 12 August 2011. Aditya Birla Nuvo unveils Q1 results on 13 August 2011.

The economy will grow at 8.2% in the year to March 2012, but it faces a challenge in achieving the fiscal targets set in the annual budget, a top economic advisory panel said in a report released on Monday. Headline inflation would remain close to 9% till October, before beginning to ease, and would be at 6.5% in March, the prime minister's Economic Advisory Council said.

Exports grew by an impressive 46% to $29 billion in June 2011, despite uncertainty in the US and European markets. Merchandise exports had aggregated to $20 billion in June 2010. During the April-June quarter, overseas shipments grew by 46% to $79 billion, according to Commerce Ministry data released on Monday, 1 August 2011. Though imports grew by 42% to $37 billion in June, the trade deficit of $7.6 billion was almost half the level of $15 billion seen in May, lessening concerns over the country's balance of payments situation.

Growth in manufacturing sector fell for the third month in a row in July as a long series of interest rate hikes and faltering global demand weighed on new orders and output growth, a survey showed on Monday, 1 August 2011. The HSBC Markit Business Activity Index, based on a survey of around 500 companies, fell to a 20-month low of 53.6 in July from 55.3 in June, though it remained above the 50 mark that separates growth from contraction for the 28th consecutive month.

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. The RBI has raised its end March 2012 inflation target to 7% as against the previous estimate of 6%, saying inflation has been higher than its expectations. It kept its economic growth forecast of 8% for this fiscal year. The RBI revised downwards non-food bank credit growth projection to 18% for the year ending March 2012 (FY 2012) from 19% earlier.

Although the impact of past monetary policy actions is still getting transmitted, considering the overall growth and inflation scenario, there is a need to persevere with the anti-inflationary stance, the RBI said. 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, the RBI said. A change in stance will be motivated by signs of a sustainable downturn in inflation, it added.

The uncertain global macro-economic environment poses a challenge for the domestic economy from the perspective of financing the current account deficit, RBI said. In this context, the composition of capital flows remains a concern. In recent months, some shift in composition of capital flows towards foreign direct investment (FDI) has been observed. This trend needs to be reinforced through policy actions to improve the quality of financing of the current account deficit, RBI said.

Asian stocks dropped on Tuesday, 2 August 2011, with exporters broadly pressured after fresh indications that US manufacturing is slowing, and with Japanese companies straining under the weight of a strong yen. The key benchmark indices in China, South Korea, Indonesia, Singapore, Hong Kong, Japan, and Taiwan rose by between 0.26% to 1.68%.

The Japanese government is reportedly preparing to intervene in the currency market to weaken the Japanese yen. Meanwhile, the Bank of Japan is reportedly looking into additional monetary easing.

HSBC reported Monday, 1 August 2011, that its China manufacturing purchasing managers' index fell to 49.3 during the month from 50.1 in June. A separate, official survey by the China Federation of Logistics and Purchasing showed the nation's PMI slipped to 50.7 in July from 50.9 in June, but remained above the expansion/contraction boundary of 50

US stocks fell for the sixth day in a row on Monday after the Institute for Supply Management said the US manufacturing sector grew at the slowest pace in two years in July 2011. The new-orders component of the Institute for Supply Management's manufacturing report fell to its lowest level for 25 months.

The House of Representatives on Monday approved a last-gasp deal to raise the US borrowing limit in a decisive step toward averting a catastrophic debt default by the world's largest economy. The bill now heads to the US Senate, which is expected to vote in favor of the bill on Tuesday, 2 August 2011.