Market may extend losses on weak Asian stocks

The market may extend losses on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 54 points at the opening bell.

PSU OMCs and auto stocks will be in action on reports oil companies plan to raise petrol prices by Rs 1.50 a liter the 13th hike since June last year, as state-run firms have reported losses for the second consecutive quarter



Key benchmark indices dropped for the second consecutive session on Tuesday, 1 November 2011 as softer-than-expected Chinese manufacturing data and fresh worries about the euro-zone debt crisis caused global risk aversion. The BSE Sensex fell 224.18 points or 1.27% to settle at 17,480.83, its lowest closing level since 26 October 2011.

Foreign institutional investors (FIIs) sold shares worth Rs 20.66 crore on Tuesday, 1 November 2011 as per provisional figure on the stock exchanges. FIIs had bought shares worth Rs 358.78 crore and Rs 2166.21 crore on Monday, 31 October 2011 and Friday, 28 October 2011 respectively.

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.

Sun TV Network, Ashok Leyland and TVS Motor report Q2 results on Thursday, 3 November 2011. ONGC, Bharti Airtel and GlaxoSmithKline Pharmaceuticals unveil quarterly results on Friday, 4 November 2011.

Infrastructure Development Finance Company, ABB, Bank of India and Reliance Power unveil results on 8 November 2011. Ranbaxy Laboratories, Indian Oil Corporation, GMR Infrastructure and Power Finance Corporation unveil quarterly results on 9 November 2011. Tata Steel, Hindalco, Pantaloon Retail (India) and Mahindra Satyam unveil quarterly results on 10 November 2011. Jet Airways (India) and Tata Chemicals unveil Q2 results on 11 November 2011. Coal India and Shipping Corporation of India report 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.

Exports rose 36.36% to $24.82 billion in September 2011 over in September 2010. The cumulative value of exports for the first half of the current fiscal has risen 52.08% at $160.04 billion against $105.24 billion during the like period last year. Meanwhile, imports grew 17.2% to $34.58 billion in September 2011 over September 2010, resulting in a monthly trade deficit of $9.67 billion. The total imports in the current fiscal till September went up to $233.5 billion, a rise of 32.41% against $176.36 billion in the first six months of 2010-11. The trade deficit for the April-September period now stands at $73.46 billion.

India's manufacturing activity in October expanded--though modestly--indicating an improvement in business conditions from a month ago as growth in new orders accelerated, a survey showed Tuesday, 1 November 2011. The seasonally adjusted HSBC Purchasing Managers' Index, prepared by Markit, rose to 52 in October from 50.4 in September. A figure above 50 indicates expansion.

"Tight capacity is evident from a rising backlog of work, lengthening supplier delivery times and reported difficulties filling vacancies," said Leif Eskesen, chief economist for India and Asean at HSBC. "Not surprisingly, input and output prices continued to rise at a rapid pace," he added. HSBC said the pace of growth in new orders in October was the fastest in three months, but still remained below the historic average as export demand was muted.

The recent data show employment in the Indian manufacturing sector fell for the third straight month and demand for higher wages made it difficult to fill vacant positions. But input prices rose substantially in October, suggesting that inflationary pressures remain firmly in place.

RBI announced a 25 basis points hike in its key policy rate viz. the repo rate to 8.5% after half-yearly review of the monetary policy on 25 October 2011. The central bank cut its GDP growth forecast for the current fiscal year through March 2012 to 7.6% from 8% earlier. But it retained its March-end inflation projection of 7%. RBI said the projected inflation trajectory indicates that the inflation rate will begin falling in December 2011 (January 2012 release) and then continue down a steady path to 7% by March 2012. It is expected to moderate further in the first half of 2012-13. This reflects a combination of commodity price movements and the cumulative impact of monetary tightening. Further, moderating inflation rates are likely to impact expectations favourably.

Food inflation has accelerated to a six-month high, propelled by soaring vegetable prices and highlighting limitations of the Reserve Bank of India's monetary intervention after it raised rates for the 13th time in 19 months recently. Data released by the government last week showed food inflation rose to 11.43% year on year for the week to October 15, compared with 10.6% in the preceding week, driven by a 25% jump in vegetable prices even as prices of food articles increased 0.25%.

Asian stocks fell on Wednesday as concern heightened that Europe's bailout of Greece will unravel and a report showed U.S. manufacturing slowed. Key benchmark indices in China, Hong Kong, Indonesia, Japan South Korea, Taiwan and Singapore were down by between 0.7% to 1.93%.

European Union leaders will hold talks in Cannes, France before the start of the Group of 20 summit tomorrow, where they will tell Greek Prime Minister George Papandreou there is no alternative to budget cuts imposed in a bailout plan hammered out last week. The Federal Reserve will release a policy statement and economic projections today.

German Chancellor Angela Merkel and French President Nicolas Sarkozy held emergency talks on Greece yesterday and in a joint statement called on Europe to implement the package of measures.

The Federal Reserve looks set to take a breather from monetary stimulus measures on Wednesday, even if financial market turbulence heightens the chances of action later.

US stocks dropped 2.8% yesterday, extending its two-day retreat as Greece said it will proceed with plans to submit the Greek financing package to a referendum and a report showed U.S. manufacturing grew less than economists' estimates. The U.S. Institute for Supply Management's factory index dropped to 50.8 last month from 51.6 in September, the Tempe, Arizona-based group's data showed yesterday.

The influential US non-farm payroll data for October 2011 is set for release on Friday, 4 November 2011. The report is expected to show non-farm payrolls rose by just 90,000 in October, after a rise of 103,000 in September.