Market slides for the second straight day

Key benchmark indices edged lower for the second day in a row as a reduction in order growth guidance for the current year from engineering & construction giant L&T hit sentiment adversely. L&T reversed direction in late trade, with the stock tumbling nearly 4%. Another index heavyweight Reliance Industries (RIL) also edged lower in volatile trade. The BSE Sensex lost 151.25 points or 0.89%, off about 245 points from the day's high and up close to 35 points from the day's low. Except the BSE consumer durables index, all the other 12 sectoral indices on BSE were in the red.



The Sensex had lost 0.87% on Thursday, 20 October 2011, as data showing acceleration of food inflation early this month raised prospects of more rate hikes from the central bank to tame inflation, which remains uncomfortably high. The Sensex has risen 331.88 points or 2.01% in this month so far. The index has slumped 3,723.45 points or 18.15% in calendar 2011. From a 52-week high of 21,108.64 on 5 November 2010, the Sensex has lost 4,323 points or 20.47%. From a 52-week low of 15,745.43 on 4 October 2011, the Sensex has risen 1,040.21 points or 6.6%.

Coming back to today's trade, telecom stocks fell after weak Q2 results from Idea Cellular on sequential basis. DLF and HDFC dropped. Auto stocks extended recent strong gains on good Q2 results from two-wheeler majors Hero MotoCorp and Bajaj Auto recently. Metal stocks fell as global metal prices declined. The market breadth was weak.

The market slipped into the red soon after a positive start. The market came off lows later. The market regained positive terrain to hit fresh intraday high in morning trade. The Sensex regained the psychological 17,000 level. The market extended gains to hit fresh intraday high in mid-morning trade. Key benchmark indices trimmed gains in early afternoon trade, with the barometer index BSE Sensex failing to retain the psychological 17,000 mark which it had regained earlier in the day. Volatility ruled the roost in afternoon trade as the market alternately swung between gains and losses.

Key benchmark indices alternately swung between positive and negative zone near the flat line in mid-afternoon trade. The market weakened in late trade after a reduction in order growth guidance for the current year from engineering & construction giant L&T hit sentiment adversely.

Stocks may remain volatile in the immediate future as traders roll over positions in the futures & options (F&O) segment from the near-month October 2011 series to November 2011 series. The near-month October 2011 derivatives contracts expire on Tuesday, 25 October 2011.

A special Muhurat trading session is being held from 16:45 IST to 18:00 IST on Wednesday, 26 October 2011 on account of Diwali. There is no regular trading session on that day. The market also remains closed on Thursday, 27 October 2011 on account of Diwali, the festival of lights.

The BSE Sensex lost 151.25 points or 0.89% to settle at 16,785.64, its lowest closing level since 18 October 2011. The index rose 95.43 points at the day's high of 17,032.32 in mid-morning trade, its highest level since 19 October 2011. The index fell 184.68 points at the day's low of 16,752.21 in late trade.

The S&P CNX Nifty was down 41.95 points or 0.82% to settle at 5,049.95, its lowest closing level since 18 October 2011. The Nifty hit a high of a 5,120.75 in intraday trade, its highest level since 19 October 2011. The Nifty hit a low 5,037.95 in intraday trade.

The BSE Mid-Cap index fell 0.68% and the BSE Small-Cap index declined 0.6%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 2334 crore, lower than Rs 2580.57 crore on Thursday, 20 October 2011.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,689 shares fell and 1,119 rose. A total of 115 shares were unchanged. The breadth reversed direction during the course of the trading session. The breadth was strong earlier in the day.

From the 30-share Sensex pack, 23 fell and the rest rose.

India's largest engineering and construction firm by sales L&T slumped 3.54%, with the stock reversing direction in late trade, after the company cut its order growth guidance for the current fiscal year to 5%, from 15% earlier. Order flow is being hampered by investment slowdown, project deferrals and higher competition, Chief Financial Officer R Shankar Raman told reporters at the time of announcing the company's second quarter results.

The company's profit after tax from ordinary activities rose 15% to Rs 798 crore on 20% growth in gross revenue at Rs 11375 crore in Q2 September 2011 over Q2 September 2010. The company announced the results during trading hours today, 21 October 2011. The company said that order inflow of Rs 16096 crore in Q2 September 2011 took the company's order backlog at Rs 142185 crore as on 30 September 2011.

L&T said that the current slowdown in investment momentum witnessed in almost all sectors of the economy is constraining growth opportunities. Intensifying competition, high inflation, volatile financial markets and delayed policy intervention are posing considerable challenges to the decision makers, L&T said.

Telecom stocks fell after weak Q2 results from Idea Cellular on sequential basis. Idea Cellular fell 1.98% after consolidated net profit declined 40.33% to Rs 105.76 crore on 2.19% increase in total revenue to Rs 4619.90 crore in Q2 September 2011 over Q1 June 2011. The result was announced during trading hours today, 21 October 2011.

Idea Celluar said that the voice minutes of use contracted largely due to seasonality, by 2.2% to 106.20 billion compared to Q1 June 2011. The depression in the minutes has been compensated with a healthy 4.2% improvement in average realised rate (ARR) to 42.7 paise from 41 paise. Factors supporting improvement in ARR are increase in VAS contribution, up from 12.1% to 13.2%, roaming revenue and revision in promotional tariffs.

The consolidated total earnings before interest taxes depreciation and amortization (EBITDA) margin compressed by 1% to 25.7% in Q2 September 2011 compared with 26.6% in Q1 June 2011. The company said its 3G investment plans are on track and high speed broadband services are now available across 1,600 towns, in 20 service areas (including 3G roaming arrangement) in India. The 3G services will help Idea's 100 million subscribers to move to the new digital age as the company gears itself to participate in NTP 2011 vision of 'Broadband for All'.

Idea said its strategy to dig deep in 13 established service areas has helped it to sustain its position as the fastest growing large Indian telecom operator, reaching national revenue market share of 13.9% in Q1 June 2011 and retaining its MNP Leadership with a net gain of 1.3 million subscriber (as on 16th October) from other existing operators.

As hyper competitive phase draws to an inevitable close, and the consumer demand transitions from pure voice to voice and data, Idea Cellular said it is well positioned with a pan India presence, strong balance sheet, brand power and consumer traction, to profit from long term opportunities in the Wireless Telecom Market.

Among other telecom stocks, Bharti Airtel, Reliance Communications, MTNL and Tata Teleservices Maharashtra shed by between 0.66% to 3.08%.

Index heavyweight Reliance Industries (RIL) fell 0.36% to Rs 835.40. The stock was volatile. The stock hit a high of Rs 848.90 and a low of Rs 831.55. The stock extended recent losses on weak Q2 operating performance. RIL's net profit rose 15.84% to Rs 5703 crore on 34.73% rise in turnover to Rs 80790 crore in Q2 September 2011 over Q2 September 2010. Operating profit rose just 5% to Rs 9844 crore in Q2 September 2011 over Q2 September 2010. The core operating profit margin (OPM) declined sharply to 12.5% in Q2 September 2011 from 16.3% in Q2 September 2010. The result was announced on Saturday, 15 October 2011. The company's gross refining margin (GRM) stood at $10.1 a barrel in Q2 September 2011, sharply higher than $7.9 a barrel in Q2 September 2010. The GRM was at $ 10.3 a barrel in Q1 June 2011.

RIL said its Infotel Broadband Services unit is in the process of setting up a 4G broadband wireless network and finalizing arrangements with global players.

RIL recently concluded a $7.2 billion deal with BP PLC under which it sold a 30% stake in 21 oil-and-gas exploration blocks to the British explorer. RIL said it has received all the payments that were due from BP, with the final installment of Rs 14690 crore received on 3 October 2011. It said all the production-sharing contracts under the deal with BP have been revised and submitted to the government for approval. "The integration process is currently under way, and the joint teams are evolving strategies to operate across the gas value chain in India from exploration, development, distribution and marketing," RIL said.

Meanwhile, RIL has neither confirmed nor denied media reports of a likely suspension of oil and gas drilling operations. RIL said on Monday 17 October 2011 that RIL has always communicated any material event to the stock exchanges first before disseminating to the media. Media reports had suggested recently that RIL may suspend oil and gas drilling operations for an unspecified time until an internal valuation of its exploration and production strategy.

DLF declined 2.66% after the Securities and Exchange Board of India (Sebi) said on Thursday, 20 October 2011, that it would investigate allegations against the real estate developer that it failed to disclose a police complaint against an associate firm in its share sale document in 2007. The allegations were from a complainant who alleged that Sudipti Estates, which he said was an associate of DLF, had duped him of about Rs 34 crore.

Many other realty shares fell. Unitech, Indiabulls Real Estate and HDIL dropped by between 0.93% to 2.72%.

Metal stocks fell as LMEX, a gauge of six metals traded on the London Metal Exchange dropped 5.57% on Thursday, 20 October 2011. Jindal Saw, Tata Steel, Sail, Sterlite Industries, Hindustan Zinc, Sesa Goa and Hindalco Industries shed by between 0.11% to 2.48%.

Data this week showed that China's annual economic growth eased to 9.1% in the third quarter. China is the world's largest consumer of aluminum and copper.

Jindal Steel & Power fell 1.28%, snapping gains in preceding two trading sessions post Q2 results. The company's consolidated net profit before exceptional items rose 8% to Rs 965.97 crore on 43.5% growth in turnover to Rs 4423.20 crore in Q2 September 2011 over Q2 September 2010. Net profit after exceptional items declined 0.27% to Rs 891.80 crore in Q2 September 2011 over Q2 September 2010. The result was announced after trading hours on Tuesday. The company's power generation arm Jindal Power reported a net profit of Rs 409.84 crore on turnover of Rs 737.92 crore for Q2 September 2011.

JSW Steel fell 0.37%, reversing initial gains after the company announced during market hours today that net profit fell 71.46% to Rs 127.12 crore on 29.12% rise in total income to Rs 7668.97 crore in Q2 September 2011 over Q2 September 2010.

India's largest mortgage lender by market capitalisation HDFC fell 1.66%, extending Thursday's 4.27% losses triggered by the National Housing Bank (NHB) banning the levy of pre-payment penalty on floating rate home loans.

Hindustan Construction Company fell 3.12% after the company reported a net loss of Rs 40.53 crore in Q2 September 2011 compared with a net profit of Rs 12.13 crore in Q2 September 2010. Net sales fell 6.77% to Rs 837.69 crore in Q2 September 2011 over Q2 September 2010. The result was announced during trading hours today, 21 October 2011.

United Phosphorous fell 1.34% after consolidated net profit slumped 50.35% to Rs 56.95 crore on 4.27% rise in total income to Rs 1775.70 crore in Q2 September 2011 over Q2 September 2010.

Asian Paints shed 4.4% after the company announced during market hours today that consolidated net profit fell 2.78% to Rs 208.73 crore on 24.2% rise in total income to Rs 2280.02 crore in Q2 September 2011 over Q2 September 2010.

Auto stocks extended recent strong gains on good Q2 results from two-wheeler majors Hero MotoCorp and Bajaj Auto recently. Hero MotoCorp rose 1.15%. The stock had jumped 4.13% on Wednesday on the back of good Q2 results. The company announced after market hours on Tuesday that net profit rose 19.38% to Rs 603.62 crore on 28.06% growth in total net operating income to Rs 5829.32 crore in Q2 September 2011 over Q2 September 2010. The company's core operating profit margin or OPM surged to 15.76% in Q2 September 2011 from 13.35% in Q2 September 2010.

The company said the total net operating income of Rs 5829.32 crore in Q2 September 2011 was a record quarterly figure. Hero MotoCorp said that with the company registering record sales of over 3 million units for six months period April-September 2011, it is comfortably placed to surpass the initial guidance of 6 million units for the year ending March 2012 (FY 2012).

Pawan Munjal, managing director and chief executive officer of Hero MotoCorp, said, "This performance has come despite the rising food inflation and fuel costs. These two areas remain a concern for the industry, as it might adversely impact consumer spending in the coming months. However, we remain confident of carrying forward the buoyancy in our sales. We expect our retail volumes to peak during the festive month of October, and in anticipation of rising market demand for our products in the coming months, we have been augmenting capacity at our existing plants".

India's largest tractor and utility vehicles maker Mahindra & Mahindra (M&M) gained 0.11%. M&M plans to raise monthly production of its new sport-utility vehicle--XUV500--by half to 3,000 units in January and more than double it to 5,000 units in June to meet robust local demand. The company currently produces 2,000 units of XUV500 a month. M&M recently said it has received more than 8,000 bookings for the vehicle in the first 10 days of the launch, forcing it to halt taking fresh orders.

M&M's total auto sales rose 25% to a record 44,137 units in September 2011 over September 2010. The company's domestic sales stood at 41,136 units during September 2011, as against 33,866 units during September 2010, an increase of 21%. M&M's Passenger Vehicles segment (which includes the Utility vehicles and Verito) registered a growth of 11%, having sold 19,447 units in September 2011, as against 17,537 units during September 2010. The 4-wheeler commercial segment which includes the passenger and load categories registered a phenomenal growth of 45%.

India's second largest bike maker by sales Bajaj Auto rose 1.52%. The company's net profit increased 6.41% to Rs 725.80 crore on 20.70% increase in net sales to Rs 5046.48 crore in Q2 September 2011 over Q2 September 2010. The company incurred a mark-to-market (MTM) loss of Rs 95.41 crore on forward derivative contracts in the foreign exchange market. The company said this is a notional loss, which would reverse over the contract period. The company announced Q2 results during market hours on Thursday, 20 October 2011.

Maruti Suzuki India rose 1.53% after company said on Friday that a labour unrest at its Manesar plant has been resolved and the operations at the facility would start on Saturday. "The management and workers have signed the agreement in a spirit of cooperation and mutual respect, and look forward to work closely together for the benefit of all stakeholders of the company," Maruti said in a statement.

India's largest truck maker by sales, Tata Motors fell 2.81% to Rs 177.95 on profit taking after the recent strong gains. The company's global sales rose 24% to 1,07,258 units in Q2 September 2011 over Q2 September 2010. Global sales of Jaguar Land Rover were up 42% to 27,639 vehicles in September 2011 over September 2010. The total passenger vehicles sales stood at 55,539 units in September 2011, up 21% from the corresponding period last year. Commercial vehicles sales were up by 28% to 51,719 units in Q2 September 2011 over Q2 September 2010.

Thermax gained 0.3% after net profit rose 13.58% to Rs 101.69 crore on 22.80% rise in net sales to Rs 1286.73 crore in Q2 September 2011 over Q2 September 2010. As on 30 September 2011, Thermax had an order backlog of Rs 5770 crore as compared to Rs 6602 crore in September 2010. The group order backlog stood at Rs 6531 crore against last year's Rs 7276 crore.

Cairn India fell 1.63% after company announced after market hours on Thursday that consolidated net profit fell 51% to Rs 763 crore on 1% fall in revenue to Rs 2652.20 crore in Q2 September 2011 over Q2 September 2010 as the company made a one-time provision for royalty payments on crude output from a key producing block in Rajasthan.

FMCG stocks fell in a weak market. ITC, Hindustan Unilever, and United Spirits shed by between 0.76% to 1.9%.

Godrej Consumer products declined 1.49% after company announced during market hours today that consolidated net profit declined 2.56% to Rs 127.71 crore on 27.04% rise in total income to Rs 1207.96 crore in Q2 September 2011 over Q2 September 2010. The figures for the current quarter and the half year are not comparable with those of the corresponding period of the previous year because of acquisitions / amalgamations made since then.

Power stocks declined. Tata Power Company, Reliance Infrastructure, NTPC and Torrent Power dropped by between 0.31% to 1.82%.

Banking stocks reversed initial gains on profit taking after the recent strong gains. India's largest private sector bank by net profit ICICI Bank declined 0.92%.

India's second largest private sector bank by net profit HDFC Bank fell 0.65%%. The bank announced during market hours on Wednesday that its net profit rose 31.48% to Rs 1199.35 on 37.4% rise in total income to Rs 7929.38 crore in Q2 September 2011 over Q2 September 2010.

HDFC Bank's portfolio quality as of 30 September 2011 remained healthy, with gross non-performing assets (NPA) at 1% of gross advances and net non-performing assets at 0.2% of net advances (as against 1.2% gross NPAs and 0.3% net NPA ratios as on 30 September 2010). The bank's provisioning policies for specific loan loss provisions remained higher than the minimum regulatory requirements. The NPA provision coverage ratio (excluding write-offs, technical or otherwise) was at 81.3% as of 30 September 2011. Total restructured assets were 0.4% of the bank's gross advances as of 31 September 2011. Of these, restructured advances categorized as standard assets were 0.1% of the bank's gross advances.

HDFC Bank's CASA ratio stood at 47.3% as of 30 September 2011. The CASA (current and savings account) ratio is the ratio of deposits in the current and savings accounts of a bank to its total deposits. A high CASA ratio indicates that a higher portion of the banks' deposits come from current and savings accounts. This means that the bank is getting money at low cost, since no interest is paid on the current accounts and the interest paid on savings account is usually low.

The bank's total capital adequacy ratio (CAR) as at 30 September 2011 as per Basel II guidelines was at 16.5%, as against regulatory minimum of 9%. Tier I CAR was at 11.4% as at 30 September 2011.

India's largest bank by branch network State Bank of India (SBI) rose 0.73%, extending recent strong gains triggered by hopes of capital infusion from the Government of India, its majority shareholder. From a recent low of Rs 1715.30 on 5 October 2011, the stock had risen 11.88% in nine trading sessions to Rs 1919.10 on Wednesday, 19 October 2011.

The finance ministry has ruled out a rights issue for SBI in this financial year. However, it assured the lender that its capital requirements would be met by March 31, 2012.

Among other PSU banks, Punjab National Bank, Bank of India and Bank of Baroda fell by between 0.23% to 3.12%.

The finance ministry will have to opt for supplementary demand for grants to meet the capital needs of five-six public sector banks, including SBI, in the current financial year. This capital is pegged at Rs 10000 crore to Rs 20000 crore in this financial year, against Rs 6000 crore provided in the Union Budget 2011-2012.

The government last week approved amendments to the Securitisation and Reconstruction of Financial Assets and Enforcement of Security Interest (SARFAESI) Act and debt recovery acts to enable banks to effectively deal with the menace of bad loans and also encourage them to disburse credit freely to home and corporate loan seekers. The Cabinet approved the introduction of the Enforcement of Security Interest and Recovery of Debts Laws (Amendment) Bill, 2011, in the next Winter Session of Parliament.

Information and Broadcasting Minister Ambika Soni said that suggested amendments will strengthen the ability of banks to recover debts due from the borrowers, enhance the ability of banks to extend credit to both corporate and retail borrowers, reduce the cost of funds for banks and their customers and reduce the level of non-performing assets.

NMDC fell 2.47% after company said during market hours today that it has signed the share subscription agreement with Legacy Iron Ore, Australia on 20 October, 2011 for holding 50% of the total shares in the capital of Legacy Iron Ore, Australia, at a price aggregating to A$ 18.89 million subject to approval of shareholders of Legacy, Australian Stock Exchange, approval of FIRB and other compliances as applicable in this regard.

IT stocks were mixed on a weak rupee. The Indian rupee slid to its weakest level in 30 months on Friday. The partially convertible rupee was at 50.07/08 per dollar, after hitting 50.18, its lowest since 29 April 2009 and below its Thursday's close of 49.79/80. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports.

India's largest IT company by sales, TCS, rose 0.34% after company announced that CUA, Australia's largest customer-owned financial institution, has selected TCS BaNCS Online Banking Platform to revitalize and transform its online banking system. The online banking transformation program is expected to be delivered over the next two years. Financial details of the deal were not disclosed.

The stock had plunged 7.71% on Tuesday after disappointing Q2 results, which the company announced after market hours on Monday, 17 October 2011. TCS chief financial officer and executive director S Mahalingam on Tuesday, 18 October 2011, said that TCS will cut costs and focus on high-margin services to maintain its profitability in the traditionally weak October-December quarter.

TCS' consolidated net profit fell 4.7% to Rs 2301 crore on 7.7% growth in revenue to Rs 11633 crore in Q2 September 2011 over Q1 June 2011. The company's operating profit rose 11.4% to Rs 3143 crore in Q2 September 2011 over Q1 June 2011. Commenting on the results TCS Chief Executive Officer and Managing Director N Chandrasekaran said, "Our domain-rich solutions and disciplined execution helped us capture business across major markets and deliver stellar growth in international revenues. We see strong momentum for our full services strategy from customers who are looking for agility and growth. We have created a nimble organization on the ground to stay close and stay relevant to our customers as there are ambiguities in the external environment in the short term".

Commenting on the results Mahalingam had said on Monday that TCS continues to make the necessary investments to support the future business growth in different markets as the company remains in expansion mode. "We are also working to optimize our cost structure and keeping a close watch on economic signals. Given the breadth of our global operations across 45 countries, the recent unprecedented volatility in the foreign currency markets is fresh cause for concern," Mahalingam had said on Monday.

HCL Technologies rose 0.05%, with the stock gaining for the second straight day. The stock had plunged 8.58% on Tuesday on disappointing Q1 results. Consolidated net profit as per US accounting standards fell 2.7% to Rs 496.70 crore on 8.2% increase in revenue to Rs 4651.30 crore in Q1 September 2011 over Q4 June 2011. The company announced results before market hours on Tuesday.

Commenting on the results, Vineet Nayar, Vice Chairman and CEO, HCL Technologies said, "We have doubled our quarterly revenues in just three years to record a billion dollar quarter despite the tough economic environment. This tremendous momentum has been achieved thanks to our Employees First philosophy which has fuelled a high performance organization, ensured enhanced customer delight and created disruptive thought leadership which is today recognized globally. I want to thank all our 80,520 employees, more than 500 customers, investors and partners who have supported us in this journey".

Anil Chanana, CFO, HCL Technologies said, "We continue to see growth both in revenue and earnings. Our revenues grew 5.1% sequentially in constant currency and 25% YoY this quarter, accompanied by operating and net income growth of 38% YoY and 49% YoY, respectively. While the currency markets continue to be volatile, we at HCL follow layered hedging program to cover our foreign currency exposure".

India's third largest software services exporter Wipro fell 0.21%. The company announces its Q2 results on 31 October 2011.

Infosys fell 0.85% to Rs 2722.70 on profit taking. The stock had surged recently on good Q2 results and upward revision in full year earnings guidance. From a recent low of Rs 2509.20 on 11 October 2011 the stock gained 9.43% in seven trading sessions to Rs 2745.95 on Thursday, 20 October 2011. Infosys' consolidated net profit as per International Financial Reporting Standards (IFRS) rose 10.68% to Rs 1906 crore on 8.2% growth in revenue to Rs 8099 crore in Q2 September 2011 over Q1 June 2011. The company announced the results on 12 October 2011.

Infosys has forecast 9.72% to 11.11% growth in non-annualized earnings per American Depositary Share at $0.79 to $0.80 in Q3 December 2011 over Q2 September 2011. It has forecast 3.2% to 5.3% growth in revenue at $1.802 to $1.84 billion in Q3 December 2011 over Q2 September 2011.

The company has for the second quarter in a row revised upwards its dollar earnings guidance for the year ending March 2012 (FY 2012). The company expects 15.3% to 16.8% growth in earnings per American Depositary Share at $3.02 to $3.06 in FY 2012 over the year ending March 2011 (FY 2011). However, the company has revised downwards dollar revenue growth guidance for FY 2012. The company expects 17.1% to 19.1% growth in revenue at $7.08 billion to $7.20 billion in FY 2012 over FY 2011.

Cals Refineries clocked highest volume of 2.86 crore on BSE. M and B Switchgears (1.2 crore shares), Nu Tek India (63.01 lakh shares), Birla Pacific (31.58 lakh shares) and Resurgence Mines (31.09 lakh shares) were the other volume toppers in that order.

M and B Switchgears clocked highest turnover of Rs 456.07 crore on BSE. L&T (Rs 160.62 crore), SBI (Rs 02.27 crore), TCS (Rs 48.37 crore) and Flexituff International (Rs 46.18 crore) were the other turnover toppers in that order.

Finance Minister Pranab Mukherjee on Wednesday, 19 October 2011, said that the government is concerned about the volatility of FII flows. Mukherjee said loose monetary policies adopted by central banks in advanced economies have added to global liquidity, driving investments into better off emerging economies and fueling inflation in these countries.

India's economy will grow at a rate less than the earlier government projection in 2011/12, Mukherjee said. "With the crude prices remaining where they are it will be a great challenge to maintain the fiscal deficit numbers to 4.6% this year," Mukherjee said.

Stock-specific activity may dominate trade in the near-term as earnings flow in. 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.

Axis Bank, Power Grid Corporation and Grasim unveil Q2 results on Saturday, 22 October 2011. Cigarette major ITC, Sterlite Industries and Titan Industries unveil Q2 results on 24 October 2011. NTPC, Kotak Mahindra Bank and Dr. Reddy's Lab unveil Q2 results on 25 October 2011. Indian Hotels unveils Q2 results on 28 October 2011. Maruti Suzuki and LIC Housing Finance report Q2 results on 29 October 2011. ICICI Bank, Wipro, Hindustan Unilever, Dabur India, Colgate Palmolive (India), Bank of Baroda, NMDC and BPCL unveil Q2 results on 31 October 2011

Cement majors ACC and Ambuja Cements, Punjab National Bank and Aditya Birla Nuvo unveil quarterly results on 1 November 2011. Sun TV Network, Ashok Leyland and TVS Motor report Q2 results on 3 November 2011. ONGC, Bharti Airtel and GlaxoSmithKline Pharmaceuticals unveil quarterly results on 4 November 2011.

Infrastructure Development Finance Company and ABB unveil results on 8 November 2011. Ranbaxy Laboratories and Power Finance Corporation unveil quarterly results on 9 November 2011. Hindalco unveils Q2 results on 10 November 2011. Jet Airways (India) and Tata Chemicals unveil Q2 results on 11 November 2011. Shipping Corporation of India reports Q2 results on 12 November 2011. Tata Motors, Mahindra & Mahindra and India Cements unveil Q2 results on 14 November 2011. Tata Power unveils Q2 results on 15 November 2011.

The market regulator Securities and Exchange Board of India recently set a minimum net worth of Rs 100 crore for companies that wish to issue structured products or market-linked debentures to raise funds. Sebi also set the minimum size for such issues at Rs 10 lakh. Market-linked debentures are hybrid products which have the features of usual debt securities, but offer market-linked returns like an exchange-traded derivative. The issuer company will have to appoint a third party, a credit-rating company registered with the regulator, which will provide the value of the security at least once a week, Sebi said in a circular.

The government last month 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.

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. 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.

The government recently raised its borrowing target for the current fiscal year by Rs 52800 crore, surprising the market and fueling worries that it may even overshoot the new estimate because of muted revenue growth amid a slowing economy and swelling subsidies. The government will borrow Rs 2.2 lakh crore during October 2011-March 2012 period, or the second half of the fiscal year, compared with the target of Rs 1.67 lakh crore announced in budget in February 2011. C. Rangarajan, Chairman of the Prime Minister's Economic Advisory Council on 29 September 2011 said it is going to be difficult to achieve fiscal deficit target of 4.6% of GDP for the year ending March 2012.

The government's new borrowing programme may crowd out private borrowers who come into the market in the second half of the year. Credit growth normally picks up after October every year when the busy season starts.

With inflation remaining at uncomfortably high level, the Reserve Bank of India (RBI) is seen delivering another rate hike at its half-yearly review of the monetary policy on Tuesday, 25 October 2011. A 25 basis points hike in repo rate is expected from the central bank on 25 October 2011. The annual rate of inflation in the food space increased in early October while inflation in the fuel group also edged up, data released by the government showed recently.

Boosting farm output on a sustainable basis is the only long-term solution to address supply constraints and cool high commodity prices that have often hurt economic growth, Mukherjee said on Monday, 17 October 2011.

While its tolerance of inflation has gone up with rising income levels, the Reserve Bank of India (RBI) will raise rates further if high inflation persists, central bank deputy governor Subir Gokarn said on 12 October 2011. On the same day, RBI governor D Subbarao reiterated that controlling inflation is the main focus of monetary policy.

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.

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 September policy was softer than the previous policy announcement which was extremely hawkish.

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.

European stock markets edged higher on Friday, helped by hopes that European leaders can find a solution to the European-debt crisis in forthcoming days, even if an agreement cannot be reached at the European Union summit this weekend. Key benchmark indices in UK, France and Germany were up by 0.4% to 0.89%.

French President Nicolas Sarkozy and German Chancellor Angela Merkel on Thursday said that they would "provide a comprehensive and ambitious response to the current crisis in the euro area." The measures will be discussed on Sunday at the summit meeting of European leaders and adopted at a second summit meeting no later than Wednesday, 26 October 2011, a statement released by both parties said.

European states are working "very intensively" on ways to boost the euro-zone's rescue fund, but giving the fund access to the European Central Bank's refinancing operations could be legally problematic, Olli Rehn, European Commissioner for Economic and Financial Affairs, said in an interview published on Friday. "We must watch what the EU treaty allows and what it doesn't," Rehn told German newspaper Handelsblatt. A "direct link" between the European Financial Stability Facility and the ECB "could be difficult", he warned. Still, it is essential that the EFSF be strengthened, and its successor, the European Stability Mechanism, should be activated in 2012 rather than 2013, Rehn said.

The Greek parliament approved a painful set of austerity measures on Thursday, defying violent protests in central Athens and a general strike which shut down much of the country. The struggling government of Socialist Prime Minister George Papandreou won the parliamentary vote with 154 votes in favour and 144 against. The victory should ensure the European Union and International Monetary Fund release a vital 8 billion euro ($11 billion) loan tranche which the government needs to keep paying its bills past November.

Asian shares rose in volatile trade on Friday, 21 October 2011, as investors welcomed a statement from France and Germany promising to provide firm details of a rescue plan for the euro zone in the next few days. Key benchmark indices in South Korea, Hong Kong, Taiwan and Singapore were up by between 0.14% to 1.84%. Key benchmark indices in China, Japan, and Indonesia fell by between 0.04% to 0.60%.

Trading in US index futures indicated that the Dow could gain 32 points at the opening bell on Friday, 21 October 2011.

US stocks ended with modest gains on Thursday, shifting back and forth on incremental developments in Europe where leaders sought to reassure investors that a solution to the debt crisis would come soon. US economic data showed factory activity in the US Mid-Atlantic region rebounded in October while a separate report showed US jobless claims fell last week. On the negative side, other data showed a drop in sales of existing-homes last month and only a small rise in a gauge of future growth.