Market may gain on firm Asian stocks; PSU OMCs in focus

The market may gain in the opening trade on firm Asian stocks as Greece called off a plan to hold a referendum on a bailout package for the country proposed by the European Union. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 53 points at the opening bell.

ONGC, Bharti Airtel, GlaxoSmithKline Pharmaceuticals among others unveil quarterly results today, 4 November 2011.



PSU OMCs and petrol vehicle makers, Bajaj Auto, Hero MotoCorp and Maruti Suzuki India will be watched as PSU OMCs raised petrol prices by Rs 1.80 per litre from Thursday midnight, delivering another blow to consumers who are already battling stubbornly high double-digit food inflation and potentially accelerating the shift to diesel by car buyers and factories. This is the 13th increase in petrol prices since the fuel was decontrolled in June last year, and second since the middle of last month when prices were raised by more than Rs 3.

Key benchmark indices closed the volatile trading session with small gains after staging a sharp recovery in last one hour of trade on Thursday, 3 November 2011 tracking rebound in European shares. The BSE Sensex was up 17.08 points or 0.1% to 17,481.93.

Foreign institutional investors (FIIs) bought shares worth Rs 15.45 crore on Thursday, 3 November 2011, as per provisional figures on the stock exchanges.

The week ahead is a truncated one as market remains closed on Monday, 7 November 2011 on account of Bakri-Id and on Thursday, 10 November 2011 on account of Gurunanak Jayanti.

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.

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 service sector contracted for a second straight month in October, as new business grew at its weakest pace since May 2009, a survey showed on Thursday, dragged by sagging global demand and tight monetary policy. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, slumped to 49.1 in October, its lowest reading in two-and-a-half years and below the 50-mark which separates growth from contraction. It was at 49.8 in September.

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.

The food price index rose 12.21%, its highest in 9 months, and the fuel price index climbed 14.50% in the year to October 22, government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 11.43% and 14.70% respectively. The primary articles price index was up 12.08% compared with an annual rise of 11.75% a week earlier.

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.

Asian shares rose on Friday on hopes Greece will abandon a proposed referendum over a euro-zone bailout but investors remained cautious over a confidence vote later in the day in the Greek parliament. Key benchmark indices in China, Hong Kong, Indonesia, Japan, South Korea, Taiwan and Singapore rose by between 0.4% to 3.04%.

Market sentiment was also supported by the European Central Bank's surprise rate cut of 25 basis points on Thursday, the first meeting under new President Mario Draghi. Draghi said the euro zone could enter a "mild recession" later this year.

U.S. stocks rallied for a second day on Thursday as Greece backed away from a proposed referendum that threatened its membership in the euro, which could destabilize global markets. Data on Thursday showed fewer Americans filed new claims for jobless benefits last week, a sign the U.S. economy's growth is steady.

Greek Prime Minister George Papandreou backed away from his referendum proposal that could have derailed last week's long-awaited agreement to cut Greek debt and shore up European banks.

The influential US non-farm payroll data for October 2011 is set for release on today, 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.

G20 leaders meeting in southern France will try to look beyond the Greek drama that has shaken their annual gathering and agree on measures that will convince markets the risk of further euro zone contagion can be stemmed. On Friday, heads of state from the 20 major economies slated to focus on ways to ramp up the IMF's resources and build a financial firewall to protect vulnerable euro zone peripherals like Italy and Spain from a possible Greek default.