Sensex slides for fifth time in six days on concerns about Q2 earnings

Key benchmark indices edged lower amid intraday volatility as traders rolled over positions in the derivatives segment from the near-month September 2011 series to October 2011 series ahead of the expiry of September 2011 futures & options (F&O) contracts tomorrow, 29 September 2011. The barometer index BSE Sensex was down 78.01 points or 0.47%, up close to 80 points from the day's low and off about 220 points from the day's high. The market breadth, indicating the overall health of the market, was weak. Likely muted-to-weak Q2 September 2011 corporate earnings weighed on sentiment as the Sensex fell for the fifth time in the last six trading sessions.



The Sensex has fallen 230.73 points or 1.38% in this month so far. The index has slumped 4,063.07 points or 19.81% in calendar 2011. From a 52-week high of 21,108.64 on 5 November 2010, the Sensex has lost 4,662.62 points or 22.08%. From a 52-week low of 15,765.53 on 26 August 2011, the Sensex has risen 680.49 points or 4.31%.

Coming back to today's trade, index heavyweight Reliance Industries (RIL) dropped in volatile trade. Engineering and construction major L&T hit 52-week low. Interest rate sensitive banking stocks fell on worries that elevated interest rates would hurt borrowers' ability to repay loans and increase delinquencies. Software pivotals rose after Accenture PLC, the world's second-largest technology consulting company, on Tuesday reported fourth-quarter profit that exceeded analysts' estimates on increasing spending by businesses. Metal stocks fell on recent weak economic data in China, the world's largest consumer of aluminum and copper.

The market was volatile ahead of F&O expiry. The market lost ground soon after a firm start. The 50-unit S&P CNX Nifty fell below the psychological 5,000 level after regaining that mark in opening trade. The market alternately swung between gains and losses in early trade. A bout of volatility was witnessed as key benchmark indices cut losses after hitting fresh intraday lows in morning trade.

The intraday recovery proved short-lived. The market weakened in mid-morning trade. The market cut losses in volatile early afternoon trade. Index heavyweight Reliance Industries (RIL) led intraday recovery in key benchmark indices in afternoon trade. Volatility ruled the roost as the market hit fresh intraday low in mid-afternoon trade on weak European shares. The market cut losses in late trade as European stocks recovered from their early losses.

The BSE Sensex lost 78.01 points or 0.47% to settle at 16,446.02, its lowest closing level since 26 September 2011. The index rose 139.23 points at the day's high of 16,663.26 in early trade, its highest level since 22 September 2011. The index lost 160.40 points at the day's low of 16,363.63 in mid-afternoon trade.

The S&P CNX Nifty lost 25.35 points or 0.51% to settle at 4,945.90, its lowest closing level since 26 September 2011. The Nifty hit a high of 5,006.05 in intraday trade, its highest level since 22 September 2011. The Nifty hit a low of 4,918.45 in intraday trade.

The BSE Mid-Cap index fell 0.88% and the BSE Small-Cap index declined 0.97%. Both these indices underperformed the Sensex.

The total turnover on BSE amounted to Rs 2508 crore, higher than Tuesday's Rs 2387 crore.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,772 shares declined and 1,038 shares rose. A total of 102 shares remained unchanged. The breadth was positive earlier in the day.

Among the 30-share Sensex pack, 21 declined while the rest gained.

Index heavyweight Reliance Industries (RIL) shed 0.11% to Rs 797 after gyrating between Rs 788.65 and Rs 814 in volatile trade. BP PLC today, 28 September 2011, said it expects its partnership with RIL to boost natural gas output at the D6 block in the Krishna Godavari basin, off India's east coast. BP Chief Executive Robert Dudley and RIL Chairman Mukesh Ambani met trade minister Anand Sharma in New Delhi today, 28 September 2011.

RIL is fighting a decline in gas output at the D6 block. BP and RIL today, 28 September 2011, pitched for permission from the government to develop satellite fields adjacent to the D6 block. RIL, last month, closed a deal with UK-based BP to sell a 30% stake in its 21 oil and gas exploration blocks in India. RIL recently denied inflating costs on its D6 gas field in the Krishna-Godavari (KG) basin. RIL made the clarification after CAG said in its final report submitted to the parliament on Thursday, 8 September 2011, that RIL initially estimated capital expenditure of D-1 and D-3 gas discovery at $2.4 billion, which it later revised to $8.8 billion.

RIL, owner of the world's biggest refining complex, last week, said it is planning to take Maintenance and Inspection (M&I) shutdown of Light Cycle Oil hydrocracker (LCOHC) and Vacuum Gas Oil hydtrotreating unit (VGOHT) of SEZ refinery at Jamnagar refinery complex from 19 to 23 September 2011 respectively. These maintenance shutdowns will be for a period of approximately 4 weeks, RIL said. The routine shutdown of these units is being planned for the first time since commissioning. Both the refineries at Jamnagar complex are planned to operate at maximum crude processing capacity i.e. 1.3 million barrels per day during this period. All other major processing units at the complex are also planned to operate at normal capacity, RIL said.

RIL's advance tax payment rose 37.6% to Rs 1800 crore in Q2 September 2011 over Q2 September 2010, hinting at good Q2 results from the diversified firm.

India's largest oil exploration firm by market capitalisation ONGC rose 1.29% after the company's board on Tuesday, 27 September 2011, approved Cairn Energy PLC's proposal to sell a majority stake in its Indian unit to miner Vedanta Resources PLC. The ONGC board approved the transaction on condition that both Cairn and Vedanta agree to share royalties on crude oil output from a joint venture block in Rajasthan, and withdraw a tax arbitration case.

ONGC owns a 30% stake in India's largest onshore oil find in Rajasthan state, where Cairn India is the operator with a 70% holding. Despite owning a 30% stake in the Rajasthan field, ONGC has been paying the entire royalty on production.

The shares of Cairn India, the Indian arm of UK based Cairn Energy fell 0.18%.

India's largest engineering and construction firm by order book L&T dropped 2.9% to Rs 1,404.25. The stock hit a 52-week low of Rs 1,400.10 today, 28 September 2011.

India's largest power equipment maker by sales Bhel shed 0.68% ahead of 4 October 2011 record date for a 5-for-1 stock split.

India's largest dam builder by sales Jaiprakash Associates lost 4.37% on profit booking, reversing three-day 9.17% advance. It was the top loser from the Sensex pack.

Interest rate sensitive realty stocks declined on worries higher interest rates could dent demand for residential and commercial properties. Purchases of both residential and commercial property are largely driven by finance. Phoenix Mills, HDIL, Indiabulls Real Estate, and Unitech fell by between 0.31% to 2.7%.

But, India's largest real estate developer DLF rose 3.08% and was the top gainer from the Sensex pack. The stock extended Tuesday's 8.46% surge triggered by reports that the company has sold 10.8 acres in Gurgaon to a Dubai-based Indian investor for Rs 280 crore, as part of efforts to reduce its debt burden by a third this fiscal. DLF is also in talks with other non-resident Indian investors to sell another 20 acres in Gurgaon, which is expected to fetch around Rs 400 crore, reports suggest.

Interest rate sensitive banking stocks fell on worries that elevated interest rates would hurt borrowers' ability to repay loans and increase delinquencies. India's largest private sector bank by net profit ICICI Bank declined 2.08%, after surging 3.61% on Tuesday. India's largest bank by branch network and net profit State Bank of India (SBI) shed 1.38%, after rising 2.31% on Tuesday.

India's second largest private sector bank by net profit HDFC Bank fell 0.25% in volatile trade on high volume of 19.64 lakh shares, with multiple bulk deals executed in the counter. That's higher than two-week average daily traded volume of 2.97 lakh shares.

Software pivotals rose after Accenture PLC, the world's second-largest technology consulting company, on Tuesday reported fourth-quarter profit that exceeded analysts' estimates on increasing spending by businesses. Accenture also gave 2012 forecasts exceeding projections.

India's second largest software services exporter Infosys advanced 1.18% after its ADR gained 5.13% on Tuesday, 27 September 2011. India's largest software services exporter TCS rose 0.95%. But, India's third largest software services exporter Wipro fell 0.44%, reversing initial gains.

CRISIL expects Indian IT services providers to report buoyant revenue growth of around 17% on the back of strong pipeline. However, EBITDA margins are likely to decline by around 200 bps due to rising salary costs.

Shares of state-run oil-marketing companies fell as crude oil prices jumped more than 5% on the New York Mercantile Exchange on Tuesday, 27 September 2011. BPCL (down 2.75%), HPCL (down 2.09%) and Indian Oil Corporation (IOC) (down 0.96%), declined. Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government freed pricing of petrol last year.

Crude oil futures for November delivery gained $4.21 a barrel or 5.3%, to settle at $84.45 a barrel on the New York Mercantile Exchange on Tuesday, 27 September 2011 after data from the American Petroleum Institute (API) showed that domestic crude stocks rose less than expected last week.

Shares of organized retailers were mixed after Industry Secretary R.P. Singh said in an interview to a news agency that the government is moving quickly on allowing entry of foreign retailers in multi-brand retail operations. Trent rose 2.09% while Shoppers Stop (down 1.83%), and Pantaloon Retail (India) (down 4.38%), declined.

Consumer durables stocks edged lower in a weak market. Videocon Industries, Rajesh Exports, Blue Star, Gitanjali Gems and Titan Industries declined by between 0.24% to 2.9%.

Airline stocks fell as higher crude oil prices raised concerns about the impact of high jet fuel prices on operating costs of airlines. Jet Airways (down 6.2%) and SpiceJet (down 1.31%) edged lower. Aviation turbine fuel, or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices.

Kingfisher Airlines fell 1.2% in choppy trade after Chairman Vijay Mallya said the company is working with a consortium of banks to further reduce interest costs.

Auto stocks declined on worries that higher interest rates and a recent petrol price hike may adversely impact sales of cars and two-wheelers during the festive season. The timing of the latest petrol price hike has been bad for auto firms. The festive season started early this month and it will last until Diwali, the festival of lights, at the end of October 2011. Sales normally pick up during the festive season every year.

India's largest small car maker by sales Maruti Suzuki India declined 2.83%. The company on Tuesday said it has resumed manufacturing the SX4 sedan at its factory at Manesar, Haryana. Maruti added 120 technicians at the facility, increasing the total workforce to 1,500. Maruti halted operations at Manesar on 29 August 2011 after it asked 950 workers to sign a "good conduct bond" before they could enter the factory. The move came after the company said it discovered "serious and deliberate" quality problems in cars made at the plant. It also suspended or dismissed 21 employees. Some workers have yet to sign the bond, leading the auto maker to hire new workers.

Maruti has so far focused on producing only the Swift hatchback at Manesar to reduce the waiting period for the car. The company currently has about 1,08,000 orders for the car.

India's largest tractor maker by sales M&M fell 0.93%. The company is today, 28 September 2011, set to the launch of its global SUV, the XUV 500, in Pune.

India's largest commercial vehicle maker by sales Tata Motors rose 0.16%, reversing initial losses. Tata Motors has reportedly cut production of most of its car models, including the Nano minicar, this month due to sluggish demand. India's largest auto maker by sales will likely make about 12,000 cars this month. The September 2011 production figure will be 33% lower than the 17,821 cars it produced a year earlier, reports suggest.

Among two wheeler makers, Hero MotoCorp fell 1.72% and Bajaj Auto slipped 2.07%.

Metal stocks slumped on recent weak economic data in China, the world's largest consumer of aluminum and copper. Nalco, Sail, Sesa Goa, Tata Steel, and Jindal Steel & Power fell by between 1.19% to 2.26%.

JSW Steel fell 6.63%, extending Tuesday's 1.29% fall triggered by the company's announcement of cut in steel production at its Vijayangar plant in Karnataka to 30% of its capacity from Saturday, 24 September 2011.

India's largest non-ferrous metals producer Sterlite Industries (India) lost 1.56% to Rs 120.05. The stock had hit 52-week low of Rs 115.05 in intraday trade on Monday, 26 September 2011.

India's largest private sector aluminium maker by sales Hindalco Industries slumped 2.12% to Rs 131.70. The stock had dived to a 52-week low of Rs 125 in intraday trade on Monday, 26 September 2011.

Cals Refineries clocked highest volume of 1.88 crore shares on BSE. PG Electroplast (67.86 lakh shares), K S Oils (43.53 lakh shares), Jaiprakash Associates (32.02 lakh shares) and Unitech (26.27 lakh shares) were the other volume toppers in that order.

PG Electroplast clocked highest turnover of Rs 268.21 crore on BSE. Infosys (Rs 109.65 crore), SBI (Rs 94.01 crore), HDFC Bank (Rs 89.82 crore) and Reliance Capital (Rs 82.21 crore) were the other turnover toppers in that order.

The finance ministry is reportedly considering some tax cuts on equities and foreign exchange trading to lower transaction costs and broaden participation in a market hurt by weak global sentiment. The ministry may cut stamp duty on forwards and options trading in equities to 0.003% and that on foreign exchange derivatives trading to 0.0001%, news reports on Monday, 26 September 2011, said quoting an unnamed finance ministry official.

The ministry may cut stamp duty on forwards and options trading in equities to 0.003% and that on foreign exchange derivatives trading to 0.0001%. The departments of revenue and economic affairs are debating the size of stamp duty cuts in the cash segment, the official said. While the stamp duty is levied by provincial governments and varies from state to state, the finance ministry is proposing it be made uniform, the official said. The final decision on stamp duty cuts will be taken by the federal cabinet, which will then need to be accepted and executed by the state governments, the official added.

The government is reportedly a considering a proposal to allow foreign individuals to invest directly in local stock markets. Currently, only individuals with a net worth of at least $50 million are allowed to buy local shares through registered foreign institutional investors. The proposed move is part of the government's efforts to boost foreign participation in local stock markets. Last month, the government had allowed foreign individuals to buy domestic mutual funds.

The near-term major trigger for the market is Q2 September 2011 results. The advance tax payment by top 100 companies rose a modest 9.9% in Q2 September 2011 from a year ago against 19% growth in Q1 June 2011, suggesting corporate profit growth is likely to be muted in the second quarter. Among the big companies that have paid lower advance tax, indicating a drop in profits, include State Bank of India (SBI), Maruti Suzuki and state-run Neyveli Lignite Corporation. SBI's advance tax payment declined 14.2% to Rs 1650 crore in Q2 September 2011. Maruti's tax payment fell 55.8% to Rs 120 crore. Neyveli Lignite tax payment plunged 50.1% to Rs 66 crore. But, Reliance Industries' (RIL) advance tax payment jumped 37.6% to Rs 1800 crore, hinting at good Q2 results from the diversified firm.

CRISIL Research expects corporate India to report a significant moderation in revenue growth and lower EBITDA (earnings before interest, taxation, deprecation and amortization) margins in Q2 September 2011, primarily due to decline in consumer confidence, on account of stubbornly high inflation, rising interest rates, and slowdown in investment growth. Based on an analysis of the aggregate financial performance of select companies across 21 industries, excluding banks and oil companies, CRISIL Research expects around 15% revenue growth in Q2 September 2011, as compared to 19% growth Q1 June 2011 and 22% growth in Q2 September 2010.

Although companies have hiked prices, slower volume growth, along with high input costs and rising wages, will put pressure on margins, CRISIL says. CRISIL expects a 100 basis points (bps) reduction in EBITDA margins in Q2 September 2011 from 19.5% in Q1 June 2011. Further, with increase in interest rates, net margins are expected to fall even more sharply.

According to CRISIL, sales volumes in consumption-linked and interest rate sensitive sectors such as automobiles, real estate, textiles, and retail have been significantly impacted. In infrastructure-linked sectors such as cement, capital goods, and construction, order book/volume growth has declined.

CRISIL expects real estate players to report a 5% year-on-year (yoy) decline in revenue and a sharp reduction in EBITDA margins. Automakers, textiles and steel manufacturers are also expected to see a sharp decline in margins on the back of slower offtake and high raw material costs. For cement and construction players too, EBITDA margins are likely to remain under pressure owing to slowdown in pace of project execution as well as rising input costs. But, IT services providers are expected to report buoyant revenue growth of around 17% on the back of strong pipeline. However, EBITDA margins are likely to decline by around 200 bps due to rising salary costs, CRISIL says.

Investors will closely watch the management commentary at the time of announcement of Q2 September 2011 results, which will provide cues on futures earnings outlook. IT bellwether Infosys kickstarts the Q2 September 2011 earnings season on 12 October 2011. Housing finance major HDFC unveils Q2 results on 17 October 2011. HDFC Bank unveils Q2 results on 19 October 2011. Bajaj Auto reveals Q2 results on 20 October 2011. Colgate Palmolive (India) and BPCL unveil Q2 results on 31 October 2011.

Market regulator Securities and Exchange Board of India (Sebi) on Friday, 23 September 2011, notified the new takeover code which makes it mandatory for entities buying more than 25% stake in a listed firm to buy an additional 26% from the public. The new code will come into effect from 23 October 2011. Under existing norms, the trigger for making an open offer is 15% while the offer size has to be 20%. In July, Sebi board had approved the recommendations of the takeover panel with some changes. The new norm exempts inter se transfers of shares among promoters from making an open offer. The new norms also does away with the non-compete fee.

A news agency on Monday, 26 September 2011, quoted principal economic adviser to the ministry of finance Dipak Dasgupta as saying that the government has no plans to tax or impose restrictions on capital outflows. He said the government will instead focus on liberalising fund inflows into the economy, particularly via overseas borrowing.

Finance Minister Pranab Mukherjee recently said central banks in emerging economies have been forced to raise interest rates repeatedly as they battle high inflation, exposing them to volatile capital flows. "An issue of immediate concern for emerging economies is managing large capital flows," he said. "Large and volatile capital flows to emerging markets can be destabilizing as they lead to high exchange rate volatility and in some cases make it incumbent to maintain high levels of foreign exchange reserves as an insurance against sudden and large-scale flight of international capital."

The government recently raised the limit of overseas borrowing for companies to $750 million from $500 million. Indian companies can also now raise loans up to $1 billion in Chinese yuan. The relaxation of overseas borrowing rules will help Indian companies tap cheaper cash abroad amid rising credit costs in the local market. US and European countries have near-zero interest rates in a bid to support weak economic growth.

The government recently cleared the ambitious $90-billion Delhi-Mumbai industrial corridor. The Delhi-Mumbai industrial corridor project will set up nine mega industrial zones of about 200-250 square kilometre (km) along with a 1,500 km high speed freight line connecting the two cities. It will include three ports and six airports, as well as a six-lane intersection-free expressway connecting the two cities and a 4,000 megawatts (MW) power plant and also set up seven new cities.

The public private partnership (PPP) approval committee recently approved projects worth Rs 18000 crore that include a housing project for para-military forces and a road project among others.

A memorandum of understanding (MoU) was signed recently between India Infrastructure Finance Company (IIFCL), LIC and IDFC with respect to the Takeout Finance Scheme (TFS). Under the MoU, the project lender(s) will offer eligible infrastructure projects to IIFCL for availing takeout financing. Finance Minister Pranab Mukherjee said he expects this mechanism will help financing to the tune of Rs 30000 crore, adding this will facilitate banks to take more exposure in new projects, which in turn will help in bridging the gap in infrastructure financing.

Given the lackluster initial FII response to the government's sharply raising the ceiling of FII investment in long-term corporate bonds issued by the companies in the infrastructure sector in March 2011, the government on 12 September 2011, further relaxed the norms on FII investment in such bonds. The Finance Ministry said in a statement that FIIs can now invest in long-term infra bonds, subject a ceiling of $5 billion limit, which have an initial maturity of five years or more at the time of issue and residual maturity of one year at the time of first purchase by FIIs. These investments are subject to a lock-in period of one year. FIIs can trade amongst themselves in these bonds but cannot sell to domestic investors during the lock-in period of one year.

FIIs can also now invest, subject to a ceiling of $17 billion, in long-term infra bonds which have an initial maturity of five years or more at the time of issue and residual maturity of three years at the time of first purchase by FIIs. These investments are subject to a lock-in period of three years. During the three-year lock-in period, FIIs can trade amongst themselves but cannot sell to domestic investors. The Securities & Exchange Board of India (Sebi) is expected to issue notifications incorporating these changes in the scheme by 15 October 2011.

Sebi had in early August 2011 allowed Qualified Foreign Investors (QFIs) to subscribe to Mutual Fund Debt Schemes which invest in the infrastructure sector subject to a total overall ceiling of $3 billion within the total ceiling of $25 billion.

Planning Commission deputy chairman Montek Singh Ahluwalia on 12 September 2011, said at a conference that private funding has to make up half of the infrastructure investment of $1 trillion planned for in the five years during 2012-2017. Prime Minister Manmohan Singh also said at that conference that to overcome the fund crunch for infrastructure projects, the government has proposed to set up a $11 billion fund to help finance infrastructure projects. "We have also constituted a high-level committee to suggest measures necessary for financing our ambitious program in infrastructure development," Mr. Singh said.

The Reserve Bank of India (RBI) said at a monetary policy review on 16 September 2011 that it is imperative to persist with the current anti-inflationary stance because a premature change in the policy stance could harden inflationary expectations, thereby diluting the impact of past policy actions. The RBI raised repo rate by 25 basis points on 16 September 2011.

For India, a weak rupee will offset the benefit of the recent steep fall in global commodity prices triggered by global growth worries. Most commodities imported by India, particularly oil, are denominated in dollars making these expensive for India. The rupee shed 4.4% of its value during the week ended 23 September 2011, its biggest fall since the week ended 12 July 1996.

Going forward, the stance of the monetary will be influenced by signs of downward movement in the inflation trajectory, to which the moderation in demand is expected to contribute, and the implications of global developments, RBI said in its 16 September 2011 policy statement. The overall tone of the RBI's latest policy was softer than the previous policy announcement which was extremely hawkish.

Reserve Bank of India Deputy Governor Subir Gokarn on Sunday, 25 September 2011, said the decline in the rupee in "so short a time" is a concern that reflects volatility in global financial markets. Sharp movements in the currency can be disruptive and tend to trigger panic, he said in a speech in Washington. India has not intervened with an exchange-rate target in mind for a long time and there are no plans to change the policy, he said.

Inflation in India remains high and will probably remain in a range of 9% to 10% until November 2011, Gokarn said. RBI said on 16 September 2011 that corporate margins moderated across several sectors in Q1 June 2011 compared to levels in Q4 March 2011. However, barring a few sectors, significant pass-through of rising input costs is still visible, RBI said.

RBI governor D Subbarao on Monday, 26 September 2011, said inflation rate remains above the level the central bank deems acceptable. Inflation has been fairly stubborn, Subbarao said in New York. "Above a threshold, you can't accept high inflation to have higher growth," he said, adding that the price-rise limit is as much as 6% for the nation. A rate of 4% to 6% is the short-term comfort range for inflation, Subbarao said. He said the central expects inflation to slow by March 2012, but more slowly than initially expected. Intervention in forex markets brings unexpected consequences, Subbarao said.

Finance Minister Pranab Mukherjee said at a conference in the US on 21 September 2011, that India's vibrant services sector, which makes up nearly 58% of GDP, could hold the economy from further slippage.

A late surge in rainfall has pushed this season's rains 4% above the 50-year average. India is aiming for record foodgrain output of more than 245 million metric tonnes this crop year that began on July 1, as well as bumper cotton, sugarcane and other crops. A good monsoon season can typically boost rural farm incomes and have an impact on the wider economy through increased spending on consumer goods as well as reduced prices of food items.

Prime Minister Manmohan Singh, seeking to defend his government amid a growing political crisis, on Tuesday, 27 September 2011, denied there was infighting in his cabinet over a corruption scandal and accused the leading opposition party of being "prematurely restless" for early elections. The disclosure last week of a Finance Ministry memo about a controversial 2008 sale of mobile-phone spectrum was widely interpreted by the media as an attempt by Finance Minister Pranab Mukherjee to blame Home Minister P. Chidambaram, his predecessor as finance minister, for failing to prevent what turned into a massive alleged telecom corruption scam. Reports of a battle between the two top ministers have dominated the news for the past several days, especially after both of them met Congress President Sonia Gandhi on Monday, 26 September 2011.

Singh on Tuesday said there is no room for dissension in his cabinet. Mukherjee had told reporters on Monday that Chidambaram is a "valued colleague" and a "pillar of strength for the party and government."

The government is still hopeful of meeting the divestment target of Rs 40000 crore budgeted for the current fiscal year that ends in March, economic affairs secretary, R. Gopalan, said on Wednesday, 28 September 2011. Earlier this month, the government deferred the about Rs 11000-crore follow-on public offer plan in state-run energy major ONGC.

European stocks recovered from their early losses in choppy trading on Wednesday, 28 September 2011, as gains for some defensive stocks such as drug makers and utilities helped offset losses for most banks. Key benchmark indices in France, Germany and UK were up by between 0.05% to 0.81%.

Equity markets had climbed across the globe on Tuesday, 27 September 2011, after reports suggested that governments and financial institutions were working to increase the size of a bailout fund for Europe and were planning to recapitalize selected banks. However, a Financial Times report out near the end of the US trading day on Tuesday suggested that deep rifts remained between leaders in the region, with the report helping crimp late performance for the US equity markets. The report said that euro-zone members were split on the terms of Greece's second bailout package, with several members reportedly looking for private creditors to take bigger debt write-downs.

Greek lawmakers on Tuesday, 27 September 2011, approved a controversial new property tax that aims to boost revenue as the country struggles to obtain a critical installment of international bailout loans that will prevent it from default. The new tax passed 154 votes to 143 against in the 300-member parliament.

Slovenia's parliament on Tuesday, 27 September 2011, voted in favor of boosting the powers of Europe's rescue fund, part of an effort by euro-zone nations to fight the debt crisis that threatens their currency union.

Finland's parliament votes on Wednesday, 28 September 2011, to approve the expanded powers of the European Financial Stability Fund.

The German parliament is set to vote on Thursday, 29 September 2011, on expanding the 440 billion euro ($596 billion) European Financial Stability Facility's powers to recapitalize banks and lend to troubled countries.

Most Asian stocks fell on Wednesday, 28 September 2011, as concern returned to the market about Europe's ability to tackle its debt problems. Key benchmark indices in Singapore, South Korea, China and Hong Kong were down by between 0.66% to 0.95%. Key benchmark indices in Indonesia, Japan and Taiwan were up by between 0.07% to 1.13%.

China's economic growth is likely to be over 9% in 2011, Lu Zhongyuan, vice director of a key state think tank, said Wednesday, 28 September 2011, the state television reported. The gross domestic product growth of the world's second-largest economy in 2011 is expected to be the fastest in the world, Lu of the Development Research Center of the State Council said, according to the report. This would help boost the global economic recovery and prevent a double dip in the world economy, he added.

Lu said that China's GDP growth will gradually slow in the coming years, the report said. GDP will likely grow at above 8% in the next five years, he said.

Trading in US index futures indicated that the Dow could gain 95 points at the opening bell on Wednesday, 28 September 2011.

The Federal Reserve said at the end of a two-day policy meeting on 21 September 2011 that there are significant downside risks to the US economic outlook and also noted strain in global financial markets.