Market may extend recent losses on weak Asian stocks; food inflation data eyed

The market may extend recent losses on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 45.40 points at the opening bell.

On the macro front, the government will today, 3 November 2011, unveil data on some wholesale price indices viz. the food price index, the primary articles index and the fuel price index for the year through 22 October 2011.

Sun TV Network, Ashok Leyland and TVS Motor report Q2 results today, 3 November 2011.



Caution ahead of emergency talks among European Union leaders to discuss Greece's call for a confidence vote and referendum on a European Union plan to stem euro-zone debt crisis pulled Indian shares off highs in a choppy trading session on Wednesday, 2 November 2011. The BSE Sensex lost 15.98 points or 0.09% to settle at 17,464.85, its lowest closing level since 26 October 2011.

Foreign institutional investors (FIIs) sold shares worth Rs 7.78 crore on Wednesday as per provisional figures on the stock exchanges. FIIs had sold shares worth Rs 20.66 crore on Tuesday.

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.

ONGC, Bharti Airtel and GlaxoSmithKline Pharmaceuticals unveil quarterly results on Friday, 4 November 2011.

Infrastructure Development Finance Company, ABB, Bank of India, Reliance Infrastructure and Reliance Power unveil results on 8 November 2011. State Bank of India, Ranbaxy Laboratories, Indian Oil Corporation, GMR Infrastructure, Power Finance Corporation and Bhushan Steel unveil quarterly results on 9 November 2011. Tata Steel, Hindalco, Pantaloon Retail (India), Mahindra Satyam and CEAT unveil quarterly results on 10 November 2011. Jet Airways (India), GE Shipping and Tata Chemicals unveil Q2 results on 11 November 2011. Coal India, National Aluminium Company and Shipping Corporation of India report Q2 results on 12 November 2011. Tata Motors, Mahindra & Mahindra, Tata Power, JSW Steel and India Cements unveil Q2 results on 14 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.

India needs to guard against imported inflationary pressure as the euro-zone continues to reel under the debt crisis, Prime Minister Manmohan Singh said on Wednesday, 2 November 2011. "In an increasingly interdependent world, we have to be wary of contagion effects," Mr. Singh said in a statement before his departure to attend a conference of the Group of 20 industrial and developing economies in Cannes, France. The euro-zone debt problem is the principal concern for the global economy, Mr. Singh said. Swift and difficult decisions are needed in Europe to address the issue, he added.

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%.

Pakistan has lifted barriers to imports from India, reciprocating a similar move from New Delhi 15 years ago, giving a breath of fresh air to the relationship that has been marred by acrimony and distrust for decades. To facilitate trade, Pakistan's cabinet has agreed to grant India the Most Favoured Nation (MFN) status, which means that imports from India would enjoy the same terms as those from other trade partners. It will allow import of most goods from the country instead of just a handful of items.

Asian shares fell on Thursday as fears that Europe's debt crisis could unleash financial chaos prompted investors to continue shedding riskier assets. Key benchmark indices in Hong Kong, Indonesia, South Korea, Taiwan and Singapore fell by between 1.39% to 2.11%. China's Shanghai Composite rose 0.68%.

The leaders of France and Germany, angered at Greece's shock move to call a referendum on its latest bailout plan negotiated last week, told Prime Minister George Papandreou on Wednesday that Athens would not receive another cent in EU aid until it decides whether it wants to stay in the euro zone.

European Union leaders will hold talks in Cannes, France before the start of the Group of 20 summit today, 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 European Central Bank will take a call on whether to cut rates or not on at a policy meeting on interest rates later in the global day today, 3 November 2011.

U.S. stocks rebounded from two days of sharp losses on Wednesday after the Federal Reserve said it is prepared to do more for the economy if conditions warrant, helping to stanch the panicky reaction to Europe's debt crisis.

The Federal Reserve on Wednesday left interest rates unchanged and refrained from announcing any new steps to stimulate the world's largest economy. The Federal Reserve on Wednesday slashed its forecast for growth, raised projections for unemployment and said it was mulling the possibility of buying more mortgage debt to spur a struggling recovery. While members of the U.S. central bank's policy-setting panel voted 9-1 to hold a steady course, one official urged more stimulative action now and Fed Chairman Ben Bernanke said Europe's debt crisis posed big economic risks. At a news conference after a two-day meeting, Bernanke said buying more mortgage-backed securities was an option to help the economy and added that the U.S. central bank was still looking for ways to give clearer guidance on its policy path.

Data showed U.S. private employers added more jobs than expected last month, continuing a recent pattern of better-than-expected economic data.

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.