Sensex, Nifty settle at 2-1/2-week lows

Key benchmark indices fell for the second straight day to reach 2-1/2-week closing lows as the latest data showed that industrial production rose a dismal 1.9% in September 2011, the lowest rate of growth in 2 years and that food inflation remained at elevated level in late October 2011. The BSE Sensex lost 169.28 points or 0.97%, up close to 100 points from the day's low and off close to 90 points from the day's high. The market breadth was weak.



Indian stocks today, 11 November 2011, also played a catch up with a sharp slide in Asian shares on Thursday, 10 November 2011, triggered by euro-zone debt worries. The Indian stock market was closed on Thursday, 10 November 2011, account of Gurunanak Jayanti. Asian stocks recovered on Friday, 11 November 2011, after some positive signals out of debt-stricken Europe helped improve sentiment.

The Sensex has lost 512.19 points or 2.89% this month so far. The Sensex has slumped 3,316.27 points or 16.16% in calendar 2011. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 3,471.98 points or 16.8%. From a 52-week low of 15,745.43 on 4 October 2011, the Sensex has risen 1,447.39 points or 9.19%.

A slew of bad corporate results dampened sentiment today, 11 November 2011. Tata Steel dropped after poor Q2 results. Hindalco Industries dropped more than 4% after issuing a weak outlook at the time of announcing Q2 results on Thursday, 10 November 2011. Realty majors DLF and HDIL dropped after reporting weak Q2 results.

Index heavyweight Reliance Industries (RIL) rose more than 2%, reversing initial losses. Some auto stocks gained. Capital goods stocks edged lower after the latest data showed that capital goods output in September shrank 6.8% from a year earlier after rising 4% in August. Bank stocks also fell.

The market cut losses after a weak opening. The Sensex and the 50-unit S&P CNX Nifty recovered after hitting their lowest level in nearly 2-1/2 weeks. The market weakened once again in morning trade. The market extended losses to hit fresh 2-1/2-week lows in mid-morning trade after data showing dismal 1.9% growth in industrial production in September 2011. A bout of volatility was witnessed as key benchmark indices recovered after weakening again in early afternoon trade. The intraday recovery gathered steam in mid-afternoon trade. Stocks remained volatile in late trade.

The BSE Sensex shed 169.28 points or 0.97% to settle at 17,192.82, its lowest closing level since 24 October 2011. The index fell 82.87 points at the day's high of 17,279.23 in early trade. The index shed 265.26 points at the day's low of 17,096.84 in morning trade.

The S&P CNX Nifty shed 52.20 points or 1% to settle at 5,168.85, its lowest closing level since 24 October 2011. The Nifty hit a high of 5,198.60 in intraday trade. The Nifty hit a low of 5,142.25 in intraday trade.

The BSE Mid-Cap index fell 1.13% and the BSE Small-Cap index declined 1.57%. Both these indices underperformed the Sensex.

BSE clocked turnover of Rs 2610 crore, higher than Rs 2576.35 crore on Wednesday, 10 November 2011.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,933 shares fell and 936 rose. A total of 97 shares were unchanged.

From the 30-share Sensex pack, 19 fell and the rest of them rose.

Sun Pharmaceutical Industries rose 2.48% ahead of its Q2 results on Sunday, 13 November 2011.

Reliance Capital was flat. The company announced after market hours today that consolidated net profit fell 70.53% to Rs 33 crore on 19% rise in total income to Rs 1546 crore in Q2 September 2011 over Q2 September 2010.

Index heavyweight Reliance Industries (RIL) rose 2.23% to Rs 883.85, off the day's low of Rs 850.80. Natural gas production from RIL's KG-D6 fields off the East Coast has reportedly declined to a one-year low of less than 42 million standard cubic metres per day.

RIL early this week said its unit Infotel Broadband Services has acquired a 38.5% stake in privately held digital learning firm Extramarks Education. It did not disclose the financial details of the investment. The deal will help Extramarks develop its digital distribution services and expand market penetration, RIL said. Last year, Reliance acquired Infotel Broadband, the only company to win a nationwide licence for broadband wireless spectrum in a government auction, for $1 billion, marking its return to the telecom business.

Capital goods stocks edged lower after the latest data showed that capital goods output in September shrank 6.8% from a year earlier after rising 4% in August. Engineering & construction major L&T fell 3.3%. India's largest power equipment maker by sales Bhel was down 1.46%.

Realty major DLF declined 2.31% after the company announced on Thursday that consolidated net profit fell 10.98% to Rs 372.41 crore on 2.27% rise in total income to Rs 2577.16 crore in Q2 September 2011 over Q2 September 2010.

DLF said it expects second half of the year ending March 2012 (FY 2012) to witness a stronger operational performance, both in terms of a scale up in launches in the plotted and group housing segments and deliveries of its projects across the cities of Gurgaon, Chennai and Cochin. DLF also expects the momentum on the non-core divestment plan to continue with increasing traction in the proposed divestment of its hospitality assets which would further help in moderation of its debt levels. With strategic capital expenditures being undertaken on improving the quality of its land bank and the build out of select commercial and infrastructure assets, the company is well positioned to capitalize on the growth opportunities as and when the demand scenario revives, DLF said in a statement.

DLF said that the Competition Appellate Tribunal has on 9 November 2011 issued a stay order on the demand on penalty and kept in abeyance the directions relating to modifications of conditions. This pertains to the order passed by the Competition Commission of India dated 12 the August 2011. While this is an interim order, the company believes that it has a strong case based on merits, DLF said. It may be recalled that the Competition Commission of India had imposed a Rs 630-crore penalty on the country's biggest property developer by sales in August as it found the company abusing its marker leadership position to the disadvantage of residents at a housing complex.

HDIL fell 4.56% after consolidated net profit declined 24.41% to Rs 148.55 crore on 13.89% rise in total income to Rs 450.09 crore in Q2 September 2011 over Q2 September 2010.

Consumer durables stocks edged lower in a weak market. Blue Star, Gitanjali Gems, Rajesh Exports, Videocon Industries and Titan Industries dropped by between 0.15% to 3.01%.

Bank stocks fell as the 10-year benchmark bond yield approached 9% level in intraday trade. The yield came off highs later. The yield on the benchmark 8.79%, 2021 bond was hovering at 8.9122, compared with Wednesday's close of 8.9047%. Bond yields and bond prices are inversely related. Lower bond prices may result in depreciation in valuation of banks' portfolio of government securities.

Meanwhile, global rating agency Standard & Poor's (S&P) has upgraded the Indian banking sector, saying its domestic regulations are in line with international standards differing with the downgrade accorded by Moody's. "In our view, banking regulations in India are in line with international standards and the regulator (RBI) has a moderately successful track record," S&P said while upgrading the risk profile (BICRA) a notch higher to 'Group 5'. The latest BICRA (Banking Industry Country Risk Assessments) of S&P comes a day after US-based Moody's changed the outlook for the sector to negative from stable on Wednesday, 9 November 2011, a move which evoked sharp criticism from Indian government and bankers.

India's largest bank by branch network State Bank of India (SBI) fell 3.48%, extending Wednesday's 6.76% slump triggered by an increase in bad loans. The ratio of bank's gross non-performing assets (NPAs) to gross advances increased to 4.19% as on 30 September 2011 from 3.35% as on 30 September 2010. The ratio of net non-performing assets to net advances increase to 2.04% as on 30 September 2011 from 1.7% as 30 September 2010. Net profit rose 12.35% to Rs 2810.43 crore on 23.43% rise in total income to Rs 29394.32 crore in Q2 September 2011 over Q2 September 2010. Provision for non-performing assets rose 35.08% to Rs 2921.22 crore in Q2 September 2011 over Q2 September 2010. The bank announced Q2 results during market hours on Wednesday.

The bank's consolidated net profit rose 46.8% to Rs 3470.43 crore on 8.76% rise in total income to Rs 41249.08 crore in Q2 September 2011 over Q2 September 2010.

India's largest private sector bank by net profit ICICI Bank shed 4.55%, with the stock falling for the third straight day. ICICI Bank's consolidated net profit rose 43% to Rs 1992 crore in Q2 September 2011 over Q2 September 2010. Standalone profit after tax increased 22% to Rs 1503 crore in Q2 September 2011 over Q2 September 2010. Net interest income increased 14% to Rs 2506 crore in Q2 September 2011 over Q2 September 2010. Fee income increased 7% to Rs 1700 crore in Q2 September 2011 over Q2 September 2010. Provisions decreased 50% to Rs 319 crore in Q2 September 2011 over Q2 September 2010. The result was announced during trading hours on Monday, 31 October 2011.

ICICI Bank's current and savings account (CASA) ratio stood at 42.1% as on 30 September 2011. Net non-performing asset ratio decreased to 0.8% as at 30 September 2011 from 1.37% as at 30 September 2010 and 0.91% as at 30 June 2011.

India's second largest private sector bank by net profit HDFC Bank fell 2.83%. The bank's net profit rose 31.48% to Rs 1199.35 crore on 37.4% rise in total income to Rs 7929.38 crore in Q2 September 2011 over Q2 September 2010. The result was announced during market hours on 19 October 2011.

Poor Q2 results from Tata Steel and weak outlook for the second half of the current year from copper and aluminium major Hindalco weighed on metal stocks. Lower global metal prices also weighed on mining and metal shares. LMEX, a gauge of six metals traded on the London Metal Exchange dropped 1.14% on Thursday, 10 November 2011.

India's largest steel maker by sales Tata Steel tumbled 4.19% after the company announced on Thursday, 10 November 2011, that consolidated net profit fell 89.26% to Rs 212.43 crore on 11.73% rise in total income to Rs 32918.33 crore in Q2 September 2011 over Q2 September 2010. The company said its performance was adversely impacted by higher global raw materials costs and lower average selling prices at Tata Steel Europe. Tata Steel's net debt at the end of September 2011 stood at Rs 45056 crore, compared to Rs 46627 crore at the end of March 2011.

Tata Steel Managing Director Mr HM Nerurkar said, "Tata Steel's Indian operations performed strongly despite the overall soft market situation. The continued interest rate hikes impacted steel demand growth, but the company sequentially increased sales volumes due to enhanced market reach and customer focus. Higher raw material prices and adverse currency movements impacted profits in Q2 September 2011, but the focus on company-wide cost saving initiatives yielded desired results. We remain committed to commission the 2.9 million tonnes per annum expansion in Jamshedpur in the last quarter of this fiscal year and we are making good progress on the greenfield project in Odisha. Efforts to reinvigorate the South East Asian operations are continuing through new product launches, branding initiatives, increased market access and improvements in operating parameters".

Tata Steel Europe MD & CEO Dr Karl-Ulrich Köhler said, "Higher raw material costs and lower average selling prices made the normally quiet summer quarter particularly testing. Despite these headwinds, Tata Steel in Europe succeeded in matching the delivery volumes achieved in Q1. The actions taken after 2008 to weather the financial crisis has strengthened the European operations' ability to cope with market disturbances. The restructuring and performance improvement initiatives that we launched in the first half will build on that progress and yield further competitive edge. Our focus on product and service innovation is also achieving breakthroughs in pursuit of our mission to be the long-term preferred partner of customers in our chosen markets".

Hindalco Industries fell 4.31%. The company announced on Thursday that net profit rose 16% to 503 crore on 7% rise in revenues to Rs 6272 crore in Q2 September 2011 over Q2 September 2010.

Hindalco Industries said that the second half of FY 2012 (year ending March 2012) will be difficult due to global uncertainties, falling LME prices, and persisting cost pressures. The intensity of resource challenge, which accentuated in the first half of FY 2012 due to monsoon related issues is expected to moderate, the company said. Overall, the second half of FY 2012 is expected to be challenging in terms of cost pressure, domestic demand and realizations, Hindalco said in a statement. Various initiatives of asset sweating and cost optimization are expected to cushion the results, the company said. With some of the projects slated to go on stream in second half of FY 2012, the start-up, quick ramp-up and speedy stabilization of production are going to be key focus areas for the company, Hindalco said.

Among other metal and mining shares, NMDC, Jindal Steel & Power, Hindustan Zinc, Bhushan Steel, Sail, Sterlite Industries, and Nalco dropped by between 1.63% to 3.32%.

Tata Chemicals rose 0.44% after consolidated net profit jumped 116.5% to Rs 275 crore on 19.7% rise in net sales to Rs 3571 crore in Q2 September 2011 over Q2 September 2010.

Kingfisher Airlines tumbled 9.45% to Rs 19.65 on reports that the airline was forced to cancel dozens of flights on Friday, 11 November 2011, amid a burgeoning crisis at the country's second-largest carrier. The stock hit record low of Rs 17.55 today. Kingfisher has canceled more than 120 flights this week as pilots and crew called in sick after their October salaries were delayed. The airline says flights were canceled because it was reconfiguring planes, according to news reports. Kingfisher is currently struggling under debt of $1.4 billion and shut down its budget carrier in September after it ran up losses.

Jet Airways rose 2.16% ahead of its Q2 results today.

FMCG stocks rose on defensive buying. FMCG giant Hindustan Unilever (HUL) rose 1.24% to 396.15, extending recent strong gains. The stock hit a record high of Rs 397.80 today. HUL's net profit rose 21.69% to Rs 688.92 crore on 17.75% rise in total income to Rs 5610.48 crore in Q2 September 2011 over Q2 September 2010. The result was announced on 31 October 201

India's biggest cigarette maker by sales, ITC, rose 0.35%.

IT stocks were mixed amid a weak rupee. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. The Indian rupee was marginally lower on Friday after pulling back from its lowest level in more than two-and-a-half years, as weak local shares continued to weigh. The partially convertible rupee was at 50.22/23 per dollar, compared with Wednesday's close of 50.105/115, after falling to 50.42, a level last seen on 28 April 2009.

India's largest software services exporter TCS rose 0.69%, extending Wednesday's 1.77% triggered by a new order win. The company announced during market hours on Wednesday said that Diligenta, a subsidiary of the company, has won a $2.2 billion 15-year contract from UK-based pensions and insurance provider Friends Life.

India's third largest software services exporter Wipro gained 1.35% extending Wednesday's 2.14% gains triggered by a new order win. The company announced after market hours on Tuesday that Premier Foods has selected Wipro Technologies, the global IT, consulting and outsourcing business of Wipro, as a strategic technology partner. As part of the five year strategic relationship, Wipro will be supporting both systems and processes to enhance efficiency of Premier Foods' supply chain. This relationship will enable Premier Foods to realise quantifiable benefits for a known budgetary expenditure with minimal exposure to variable costs.

Mahindra Satyam jumped 3.63% after company announced on Thursday that consolidated net profit as per Indian GAAP rose 5.7% to Rs 238 crore on 10% rise in revenues to Rs 1578 crore in Q2 September 2011 over Q1 June 2011.

Vineet Nayyar, Chairman, Mahindra Satyam, said, "Our growth momentum continues, for the 5th consecutive quarter. As we come towards the end of our 3-year transformation journey, it is indeed satisfying to see that all our key business performance indicators such as growth, profitability and talent retention, are on course. We have shown significant improvement quarter on quarter, in spite of an uncertain macro-economic environment".

C P Gurnani, CEO, Mahindra Satyam, said, "This was an eventful quarter for us. Our emphasis on differentiation and scaling up our market share through verticalized solutions is bearing fruit. Investments into emerging areas such as Enterprise Mobility and Smart Grid are gaining momentum".

India's second largest software services exporter Infosys fell 1.99% as a US federal judge refused to allow the IT major Infosys an out-of-court settlement in a case filed by one of the firm's employees, a setback to the company, which is facing allegations of visa rule violations. Jack Palmer, a principal consultant at Infosys, filed a lawsuit against Infosys in the Alabama state court earlier this year, alleging the company sought his help to circumvent US visa laws. The lawsuit was later moved to the federal court. Mr. Palmer accused Infosys of using short-term business visit visas to circumvent the fewer and expensive work visas meant for high-skilled labor. His suit led to a probe by US authorities, including an inquiry by a US Senate subcommittee. Infosys has previously denied any wrongdoing.

Interest rate sensitive auto stocks were mixed. India's largest motorcycle maker by sales Hero MotoCorp gained 1.85%. Early this month, Hero MotoCorp reported 1.3% growth in its October sales at 5.12 lakh units. The company had sold 5.05 lakh units in the corresponding month last year.

India's largest car maker by sales Maruti Suzuki India fell 1.94%, with the stock falling for the fourth straight day. Maruti had clarified last week that the decision to purchase land in Gujarat is towards building additional capacity. It had also said that the board of directors approved the purchase of land in Gujarat for future capacity requirements of the company. The logistics for reaching the finished cars to the large domestic markets in West and South India and the close proximity of the Mundra port for future exports, played an important role in the decision, Maruti said.

The company also clarified that its investment plans for Haryana stay on course. These include installation of the 2.5 lakh units capacity assembly line in Manesar (Manesar C), a world class R&D center and test course in Rohtak. The company has lined up a direct investment of over Rs 3400 crores towards these facilities In addition to company's investment, its vendors and joint venture partners will continue to appropriately invest in Haryana for the future expansion, Maruti said.

Maruti's total sales slumped 53.2% to 55,595 units in October 2011 over October 2010. Domestic sales fell 52.2% to 51,458 units while exports tumbled 63.6% to 4,137 units in October 2011 over October 2010. Labour unrest at Maruti's Manesar unit during October 2011 adversely impacted the company's sales. The firm lost production of 40,000 units during the month. Maruti announced the monthly sales data on 1 November 2011.

Bajaj Auto rose 1.64%. The company's total sales rose 7% to 3.95 lakh unit in October 2011 over October 2010. the company announced the monthly sales data early this month. The company said that there was production loss of 25,000 motorcycles at Pantnagar plant in October 2011 as curfew imposed in the region in early October constrained sales.

India's largest commercial vehicle maker by sales Tata Motors fell 1.62%, extending Wednesday's 2.56% losses. Tata Motors' total sales (including exports) of Tata commercial and passenger vehicles in October 2011 were 68,009 vehicles, higher by 5% over October 2010. The company's domestic sales of Tata commercial and passenger vehicles for October 2011 were 63,838 units, higher by 9% over 58,806 units, sold in October last year.

Tractor and SUVs maker Mahindra & Mahindra rose 3.12%, with the stock snapping a four-day losing streak. The company's total sales rose 20.3% to 41,506 units in October 2011 over October 2010. Domestic sales rose 21.1% to 39,352 units while exports rose 7.5% to 2,154 units in October 2011 over October 2010.

Oil exploration stocks rose along with crude oil prices. Cairn India, and Oil India rose by between 0.43% to 0.8%. Higher crude oil prices will result in higher realizations from crude sales for oil exploration firms.

India's largest state-run oil & gas exploration firm by sales, ONGC fell 2.01%, extending recent losses triggered by fears of higher subsidy burden due to higher global crude oil prices. The company announced after market hours on Friday, 4 November 2011 that net profit rose 60.37% to Rs 8642.23 crore on 24.41% growth in total income to Rs 24058.33 crore in Q2 September 2011 over Q2 September 2010.

Shares of public sector oil marketing companies (PSU OMCs) fell for the third straight day as higher crude oil prices will increase under-recoveries of PSU OMCs on domestic sale of diesel, LPG and kerosene at controlled prices. BPCL, HPCL and Indian Oil Corporation fell by between 1.2% to 2.31%. PSU OMCs, last week, raised petrol prices by Rs 1.80 per litre to Rs 1.91 per litre. That was 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 a litre.

Oil rose to the highest level in more than three months on Thursday after a government report showed US jobless claims unexpectedly declined, spurring optimism that a recovering economy will boost fuel demand. Crude for December delivery climbed $2.04 to $97.78 a barrel on the New York Mercantile Exchange, the highest settlement since July 26.

HDFC fell 1.77%. The lender has announced strategic plans to enter the education Sector. HDFC's strategy is to enter India's vast education sector by way of participating in the segment of schools. The long-term objective is to create a visible impact on school systems across the country by providing school management and other allied services, apart from setting up initial flagship schools. HDFC also plans to enter the segment of vocational education and training by undertaking career enhancement programs, initially offered to graduates across the country. The objective is to address the twin challenges of employability and deployability being increasingly experienced across several industry sectors including the financial sector. HDFC had earlier entered the education finance sector through its subsidiary, Credila Financial Services. Credila is India's first and only fully dedicated education loan company.

Reliance Infrastructure fell 3.29%. The company bought back 2 lakh equity shares from the open market on Wednesday, 9 November 2011. The company has announced a program for buyback of equity shares for the aggregate amount of upto Rs 1000 crore. Since the launch of the programme, the company has bought back 42.25 lakh shares from the market for an aggregate amount of Rs 226.05 crore.

Cals Refineries clocked highest volume of 2.81 crore shares on BSE. Kingfisher Airlines (72.65 lakh shares), Shree Ashtavinayak Cine Vision (63.62 lakh shares), Rockon Fintech (53.56 lakh shares) and SpiceJet (53.11 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 274.52 crore on BSE. ICICI Bank (Rs 98.32 crore), Tata Steel (Rs 76.81 crore), RIL (Rs 70.09 crore) and Tata Motors (Rs 55.50 crore) were the other turnover toppers in that order.

The earnings season is drawing to a close. Coal India and National Aluminium Company report Q2 results on Saturday, 12 November 2011. Sun Pharma unveils Q2 results on Sunday, 13 November 2011. Tata Motors, Mahindra & Mahindra, Tata Power, Bhel, Jaiprakash Associates, Bhushan Steel, JSW Steel and India Cements unveil Q2 results on 14 November 2011. Tech Mahindra unveils Q2 results on 15 November 2011.

Industrial production grew 1.9% in September 2011 from a year earlier, far below market expectations, reflecting weakening economic activity due to the central bank's aggressive tightening of monetary policy. The reading was also significantly lower than the revised 3.5% industrial output growth in August, government data showed on Friday, 11 November 2011.

Manufacturing output, which has a 75.5% weight in the index, rose 2.1% year on year in September, compared with a revised 4% increase in August. Mining output shrank 5.6%, compared with a revised 4.1% contraction in August. Capital goods output in September shrank 6.8% from a year earlier after rising 4.0% in August.

The food price index rose 11.81% and the fuel price index climbed 14.50% in the year to October 29, government data on Friday, 11 November 2011, showed. In the previous week, annual food and fuel inflation stood at 12.21% and 14.50%, respectively. The primary articles price index was up 11.43%, compared with an annual rise of 12.08% a week earlier.

Data on wholesale price inflation (WPI) for October 2011 is due on Monday, 14 November 2011. Inflation, as measured by the wholesale price index (WPI), rose 9.72% in September 2011.

India's October exports rose an annual 10.8% to $19.9 billion, while imports for the month rose 21.7 percent to $39.5 billion, the trade secretary said on Tuesday, citing provisional data. India's trade deficit in October is seen at $19.6 billion, the highest in four years, Rahul Khullar said. At this rate, the trade deficit for the year could breach the $150 billion mark, he added.

India's service sector contracted for a second straight month in October, as new business grew at its weakest pace since May 2009, dragged by sagging global demand and tight monetary policy, a survey showed on Thursday, 3 November 2011. 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.

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.

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.

Mr. Sudipto Mundle, a member of the Reserve Bank of India's technical advisory committee on monetary policy, on Thursday, 3 November 2011, said he expects inflation to ease in the January-March quarter as global commodity prices will begin to cool by then, helped by a favorable base. However, it will still overshoot the RBI's March-end projection of 7%, possibly ending the fiscal year at as high as 8%, he added. Mr. Mundle expects the economy to grow 7%-7.5% this fiscal year, below the RBI's 7.6% forecast.

India and Pakistan hailed progress in diplomatic ties on Thursday, promising to open a "new chapter" in their fraught relationship at a next round of formal peace talks due to take place by the end of this month. Indian Prime Minister Manmohan Singh and his Pakistani counterpart Yusuf Raza Gilani held nearly an hour-long discussion at a resort island in the Maldives.

European stocks rose on Friday, 11 November 2011, as investors reacted positively to political developments in Italy and Greece that could bring some stability to markets following a tumultuous week. Key benchmark indices in France, Germany and UK rose by between 0.2% to 0.45%.

Italy, the latest euro zone nation to find itself in the bond market's crosshairs, moved closer to a national unity government Thursday, while its treasury managed to sell 1-year bills at yields of less than 7 percent -- the threshold that investors believe renders its debt burden unsustainable.

In Greece, former European Central Bank vice president Lucas Papademos was appointed to head the country's new crisis coalition.

Asian shares rose on Friday, 11 November 2011, after brighter corporate news lifted US stocks and debt-ladened Italy was able to fund itself at a bond auction. Key benchmark indices in Hong Kong, China, South Korea, Singapore, Japan, and Taiwan rose by between 0.06% to 2.77%. Indonesia's Jakarta Composite fell 0.13%.

China's exports in October rose at their weakest pace in eight months, underlining official concern about the sector that has dragged on economic growth this year while imports jumped much more than expected. Customs figures showed Chinese exports rose 15.9% in October over the year earlier month. Imports though jumped 28.7% reflective of a buoyant domestic economy. The October trade surplus came in at $17 billion.

A key gauge of Japan's corporate capital spending fell more than expected in September and manufacturers expect a further drop this quarter as business confidence sags in the face of the strong yen and slowing global growth.

Trading in US index futures indicated that the Dow could gain 40 points at the opening bell on Friday, 11 November 2011. US stocks bounced back on Thursday from the previous session's steep losses as investors latched onto positive corporate and economic news. Merck raised its dividend and Cisco reported strong earnings, reinforcing the view that corporate America is showing strength even as problems in Europe weigh on investors' minds.

Thursday's economic data showed new US weekly jobless claims declined to the lowest level since April, while the trade deficit unexpectedly shrank in September to its narrowest level since December.