Sensex, Nifty settle near 6-week lows on weak Q2 earnings

Key benchmark indices fell for the sixth straight day to hit their lowest closing level in nearly six weeks as European stocks declined. The market sentiment remained weak following poor quarterly earnings. The 50-unit S&P CNX Nifty fell below the psychological 5,000 mark. The barometer index, BSE Sensex, was down 314.16 points or 1.87%, off close to 345 points from the day's high and up about 50 points from the day's low. The market breadth was weak. All the 13 sectoral indices on BSE were in the red.

The Sensex has lost 1,107.82 points or 6.3% in six trading sessions from a recent high of 17,569.53 on 8 November 2011. The Sensex has lost 1,243.30 points or 7.02% this month so far. The Sensex has slumped 4,047.38 points or 19.73% in calendar 2011. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 4,203.09 points or 20.33%. From a 52-week low of 15,745.43 on 4 October 2011, the Sensex has risen 716.28 points or 4.54%.



Coming back to today's trade, index heavyweight Reliance Industries (RIL) fell more than 4%. Diversified Jaiprakash associates tumbled more than 6%, with the stock extending losses triggered by weak Q2 operating performance. Metal stocks extended recent losses triggered by poor Q2 results from leading metal firms. Auto stocks fell on concerns higher interest rates could crimp sales of automobiles, with car major Marti Suzuki India hitting 52-week low. Capital goods stocks extended Wednesday's (16 November 2011) sharp losses triggered by growing concerns that a slowdown in industrial growth, firm interest rates and competition will hurt the sector's earnings, with Bhel and L&T hitting 52-week lows.

Corporate earnings have been weak. The combined net profit of a total of 3,560 companies declined 35.8% to Rs 67543 crore on 20.7% growth in sales to Rs 1133616 crore in Q2 September 2011 over Q2 September 2010. The Q2 earnings season got over on Tuesday, 15 November 2011.

The market moved into positive terrain soon after opening on a weak note. The initial recovery proved short-lived. The market weakened to hit fresh intraday low in morning trade. The Nifty fell below the psychological 5,000 mark. The market once again moved into positive zone in mid-morning trade as Asian stocks reversed intraday losses. The Nifty regained the psychological 5,000 mark.

The market once again slipped into the red after hitting fresh intraday high in mid-morning trade. The Sensex alternately swung between positive and negative zone later. The market weakened in mid-afternoon trade as European stocks fell in early trade. The Nifty once again fell below the psychological 5,000 mark. The market extended losses in late trade.

Data showing selling by foreign funds recently weighed on sentiment. Foreign institutional investors (FIIs) sold shares worth Rs 488.89 crore on Wednesday, 16 November 2011, as per the provisional data from the stock exchanges. FII outflow totaled Rs 898.66 crore in two trading sessions from 15 and 16 November 2011, as per data from the stock exchanges.

The BSE Sensex lost 314.16 points or 1.87% to settle at 16,461.71, its lowest closing level since 7 October 2011. The index rose 31.28 points at the day's high of 16,807.15 in mid-morning trade. The index declined 367.37 points at the day's low of 16,408.50 in late trade.

The S&P CNX Nifty tumbled 95.70 points or 1.9% to settle at 4,934.75, its lowest closing level since 7 October 2011. The Nifty hit a high of 5,036.80 in intraday trade. The index hit a low of 4,919.45 in intraday trade.

The BSE Mid-Cap index fell 1.3% and the BSE Small-Cap index shed 1.15%. Both these indices outperformed the Sensex.

BSE clocked turnover of Rs 2190 crore, lower than Rs 2513.20 crore on Wednesday, 16 November 2011.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,941 shares fell and 893 rose. A total of 121 shares were unchanged.

From the 30-share Sensex pack, 27 fell and only three rose.

Index heavyweight Reliance Industries (RIL) fell 4.51%, extending 3.94% losses in the preceding three trading sessions. RIL's unit Infotel Broadband Services recently 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.

Jaiprakash Associates slumped 6.49%, with the stock extending 15.39% losses in preceding six trading sessions triggered by weak Q2 operating performance. Net profit rose 11% to Rs 128.65 crore on 2% growth in net sales to Rs 3132.41 crore in Q2 September 2011 over Q2 September 2010. A sharp surge in other income and decline in tax rate to 42% from 60% boosted bottom line. The core operating profit margin declined 80 basis points to 23.9%, mainly due to increase in employee costs.

Telecom stocks declined after Fitch Ratings said in a special report released today, 17 November 2011, that the 2012 outlook for most Indian telecommunications operators (telcos) is negative, as the nationally-owned and six smallest private telcos will continue to suffer operating losses. Bharti Airtel, Reliance Communications, MTNL and Idea Cellular shed by between 0.66% to 3.78%.

Fitch expects that the fifth- and sixth-largest operators may manage to break even in EBITDA terms in 2012. "Although the high level of competition is leading to very weak financial performance for most Indian telcos, Fitch believes that the credit outlook for the top-four telcos is stable," said Nitin Soni, Associate Director in Fitch's Asia-Pacific Telecommunications, Media and Technology team. "The credit metrics of the four largest telcos should improve in 2012, benefiting from a more stable pricing environment and positive free cash flow (FCF) generation. However, all operators remain exposed to significant regulatory risks," added Mr Soni.

Metal stocks extended recent losses triggered by weak Q2 results from leading metal firms. India's largest steel maker by sales Tata Steel fell 1.48%, reversing initial gains. The stock extended recent losses on weak Q2 numbers. 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.

Hindalco Industries fell 0.41%, reversing initial gains. The stock had fallen 11.74% in preceding five trading sessions on weak outlook issued by the copper and aluminium maker at the time of announcing Q2 results on Thursday, 10 November 2011. 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.

JSW Steel declined 2.57%. The company reported a consolidated net loss of Rs 669.32 crore in Q2 September 2011, compared with net profit of Rs 373.26 crore in Q2 September 2010. Total income rose 33.33% to Rs 8180.60 crore in Q2 September 2011 over Q2 September 2010. The company announced the results early this week.

National Aluminum Company declined 3.25%, extending 12.6% losses in the preceding six trading sessions triggered by weak Q2 results. Net profit fell 37.8% to Rs 139.34 crore on 11.6% growth in total income to Rs 1746.01 crore in Q2 September 2011 over Q2 September 2010.

Steel major Steel Authority of India (Sail) fell 3.36%, extending Wednesday's 5.2% losses triggered by MSCI removing the stock from MSCI India Index with effect from 1 December 2011. Sail and Oman Oil Co. S.A.O.C. have signed an initial pact to jointly set up a steel plant in Oman with an estimated investment of $3 billion, steel minister Beni Prasad Verma said Tuesday. He told reporters that the two state-run companies aim to set up the plant with a capacity of 3 million metric tons a year once a feasibility study on the project was completed.

Among other metal stocks, Jindal Saw, Hindustan Zinc, Sterlite Industries and Jindal Steel & Power shed by between 2% to 6.16%.

Auto stocks fell on concerns higher interest rates could crimp sales of automobiles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

India's largest commercial vehicle maker by sales Tata Motors fell 3.87%. The company said Tuesday its global sales in October rose 10% from a year earlier to 95,789 vehicles. India's biggest auto maker by revenue said its UK-based Jaguar Land Rover unit sold 26,158 vehicles in October, up 39% from a year earlier. Sales of Jaguar cars grew 63% to 5,231 units, while those of Land Rover sport-utility vehicles gained 34% to 20,927 units. The company said it sold 43,184 trucks and buses globally during the month, up 6% from a year earlier.

Tata Motors announced after market hours on Monday that consolidated net profit fell 15.56% to Rs 1877.30 crore on 26.9% growth in net revenue to Rs 36197.50 crore in Q2 September 2011 over Q2 September 2010. The company's EBIDTA (earnings before interest, depreciation, taxation and amortization) margin declined to 13.3% from 14.7% in Q2 September 2010.

Tata Motors' British unit Jaguar Land Rover's (JLR) profit after tax declined 2.4% to 237.5 million pounds 30.3% growth in net revenue to 2,928.5 million pounds in Q2 September 2011 over Q2 September 2010. JLR's EBIDTA margin declined sharply by 170 basis points due to unfavorable exchange rates and cost pressures. Tata Motors said the product mix and regional mix continues to be strong.

India's largest car maker by sales Maruti Suzuki India fell 4.44% to Rs 948.10. The stock hit 52-week low of Rs 941.05 today. Maruti had clarified recently 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.

India's largest motorcycle maker by sales Hero MotoCorp gained 0.71%. 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.

Bajaj Auto declined 0.44%. 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 tractor maker by sales Mahindra & Mahindra (M&M) fell 1.91%, extending recent losses triggered by weak Q2 standalone results. The company said during market hours today that consolidated net profit fell 2.69% to Rs 682 crore on 62.1% growth in gross revenue plus other income to Rs 15250.40 crore in Q2 September 2011 over Q2 September 2010. The figures are not strictly comparable as Q2 September 2010 results do not include results of Ssangyong Motor Company and its subsidiaries and share in PAT of Satyam Computer Services. On a comparable basis, net profit rose 5.1% to Rs 682 crore on 29.6% growth in revenue to Rs 15250.40 crore in Q2 September 2011 over Q2 September 2010, M&M said in a statement.

M&M's standalone net profit fell 2.78% to Rs 737.38 crore on 34.75% increase in total income to Rs 7592.14 crore in Q2 September 2011 over Q2 September 2010. The result was announced early this week.

M&M and Telephonics Corp, a unit of US-based Griffon Corp, today, 17 November 2011, signed an initial agreement to form a joint venture to build airborne radar systems in India. The two companies said also that they have sought approval from the Indian government's foreign investment promotion board for the joint venture.

Capital goods stocks extended Wednesday's (16 November 2011) sharp losses triggered by growing concerns that a slowdown in industrial growth, firm interest rates and competition will hurt the sector's earnings. Suzlon Energy, Thermax, Siemens, Crompton Greaves, Punj Lloyd, ABB, SKF India, Alstom Projects, Areva T&D India, Lakshmi Machine Works, Pipavav Defence, Usha Martin, Bharat Electronics declined by between 0.63% to 13.26%.

India's largest engineering and construction firm by sales, L&T, fell 0.34% to Rs 1232.50, after tumbling 4.04% on Wednesday. The stock hit 52-week low of Rs 1221.25 today.

India's largest power equipment maker by sales Bhel shed 4.37% to Rs 284.65, after declining 4.15% on Wednesday. The stock hit 52-week low of Rs 281.90 today. The company announced after market hours on Monday 14 November 2011 that net profit rose 23.61% to Rs 1412 crore on 24.41% growth in total income to Rs 10765.37 crore in Q2 September 2011 over Q2 September 2010.

The growth in both topline and bottomline was despite a 60 basis point drop in operating margin to 18.6% due largely on account of higher other income and lower tax incidence. In addition, the company during the quarter has changed its policy of accounting leave encashment to 30 days a month (earlier 26 days a month) and thus the profit before tax was escalated to the extent of Rs 166 crore. But for this one item which moderated the staff cost, the contraction in operating margin would have been higher

Bhel had order backlog of Rs 1.61 lakh crore as on 30 September 2011. Bhel has decided to set up a new power equipment fabrication plant in Bhandara district in Maharashtra.

Bank stocks also declined. India's largest private sector bank by net profit ICICI Bank fell 1.51%, extending 10.85% losses in past six trading sessions. 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 largest bank by branch network State Bank of India (SBI) fell 0.42%. The stock extended recent losses after the second quarter results of the bank showed an increase in bad loans of the bank. The ratio of the 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.

SBI's 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, 9 November 2011.

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.

SBI will not like to currently raise funds from overseas given the current market conditions, said Hemant Contractor, a managing director at the bank, on Monday, 14 November 2011. In September 2011, the state-owned bank had doubled its overseas borrowing aim to $10 billion.

India's second largest private sector bank by net profit HDFC Bank fell 1.52%, extending 1.24% losses on Wednesday. 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.

The asset quality of commercial banks needs to be closely watched in the changing interest rate environment as the sticky loan portfolio of small and medium enterprises might rise, the Reserve Bank of India (RBI) said in its 'Report on Trend and Progress of Banking in India 2010-11' released on Monday, 14 November 2011.

Cipla rose 0.42%, with the stock gaining for the third straight day on good Q2 results. Net profit rose 17.47% to Rs 308.97 crore on 9.8% growth in income from operations to Rs 1804.28 crore in Q2 September 2011 over Q2 September 2010.

Realty major DLF fell 3.34%, extending recent losses on weak Q2 results. The company announced on Thursday, 10 November 2011, 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 declined 1.53%, extending 25.86% losses in the preceding six trading sessions on weak Q2 results. MSCI said it will exclude the stock from the MSCI India Index with effect from 1 December 2011. 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. The stock will be excluded from the MSCI India Index effective 1 December 2011.

Unitech shed 6.46% after gaining 2.27% on Wednesday. The stock had lost 5.84% on Tuesday on weak Q2 results. Consolidated net profit dropped 46.8% to Rs 92.46 crore on 2.9% decline in net sales to Rs 626.06 crore in Q2 September 2011 over Q2 September 2010. The company announced Q2 results after market hours on Monday.

Unitech reiterated that the ongoing telecom matter pertains to Unitech Wireless Tamilnadu (Uninor), which is a separate legal entity engaged in the telecom business, and will not impact Unitech. The company said it will continue to focus on its real estate business, in the normal course.

Sobha Developers gained 6.2%. The stock had fallen recently on weak Q2 results. Net profit declined 30.56% to Rs 40.90 crore on 22.91% decline in net sales to Rs 329.40 crore in Q2 September 2011 over Q2 September 2010.

IT stocks fell on euro-zone debt worries. Europe is the second biggest outsourcing market for Indian IT firms after the US. India's largest software services exporter TCS declined 0.29%, with the stock falling for the fourth straight day. The company announced during market hours on Wednesday, 9 November 2011, 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 second largest software services exporter Infosys shed 0.91%, with the stock falling for the third straight day. A US federal judge, last week, refused to allow 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.

India's third largest software services exporter Wipro shed 1.83%, with the stock falling for the third straight day. The company announced after market hours on Tuesday, 8 November 2011, 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.

iGate Patni spurted 10.28% after the company said its US-based major shareholder, iGATE, plans to delist iGate Patni from Indian bourses and its American depository receipts from the New York Stock Exchange. iGATE said in a separate statement that the floor price, or the minimum price it will offer for buying back the Patni shares, is Rs 356.74.

BPCL and HPCL shed 1.48% to 2.61% as crude oil prices surged. Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. PSU OMCs cut petrol prices by Rs 1.85 per litre from Wednesday, 16 November 2011, the first reduction in three years as well as since pricing controls ended 18 months ago.

Indian Oil Corporation (IOCL) fell 2.47%. The state-run refiner plans to raise its group refining capacity by 87% by March 2021, buoyed by demand for fuel products in the world's second-fastest-growing major economy. Indian Oil, along with its subsidiary Chennai Petroleum Corp., will have a capacity of 2.46 million barrels a day by March 2021, refineries director Rajkumar Ghosh said in a statement on Wednesday, 16 November 2011. Indian Oil and Chennai Petroleum, which control almost half of the nation's 21 refineries, currently have a combined nameplate capacity of 1.31 million barrels a day.

US crude oil prices surged on Wednesday to settle above $100 a barrel for the first time since June 2011.

Unitech clocked highest volume of 1.54 crore shares on BSE. Suzlon Energy (1.1 crore shares), Cals Refineries (89 lakh shares), Shree Renuka Sugars (61.41 lakh shares) and Kingfisher Airlines (51.95 lakh shares) were the other volume toppers in that order.

SBI clocked highest turnover of Rs 147.80 crore on BSE. RIL (Rs 102.08 crore), iGate Patni (Rs 85.54 crore), Tata Steel (Rs 58.91 crore) and L&T (Rs 55.28 crore) were the other turnover toppersin that order.

The government has raised the limit for foreign investments in government and corporate bonds by $5 billion each. The move is aimed at boosting overseas capital inflows, which have remained muted so far this year, and it is likely to support the Indian currency that has shed nearly 13% against the dollar this fiscal year that started April 1. Thomas Mathew, joint secretary of capital markets, told reporters on Thursday, 17 November 2011, that the incremental limit of $5 billion can be invested in securities without any residual maturity criterion.

In what seems to be a setback for economic reforms, the government has put off introduction or consideration and passing of key bills such as the Land Acquisition Bill, Direct Taxes Code Bill, the Banking and Insurance Bills during the winter session of Parliament. The winter session is scheduled to start from 22 November 2011. The Banking Bill was referred to the standing committee in March, while the Insurance Bill was sent to the committee in 2009. Giving details about the business of the proposed session, Parliamentary Affairs Minister, Mr Pavan Kumar Bansal on Wednesday, 16 November 2011, said that the Standing Committee on Rural Development needs more time on the land acquisition bill.

Bansal announced a list of 31 bills for consideration and passage during the winter session. It government also aims to introduce 23 new bills during the 21 sittings of the session. The Finance Ministry will also seek the approval of Parliament for additional expenditure.

The Union Cabinet on Wednesday, 16 November 2011, cleared the pension bill but decided not to limit foreign direct investment in the sector, retaining the flexibility to prescribe or change limit through an executive decision. The government will place the Pension Fund Regulatory and Development Authority Bill 2011 in the winter session of Parliament.

Food price index rose 10.63% and the fuel price index climbed 15.49% in the year to 5 November 2011, data released by the government on Thursday, 17 November 2011, showed. In the previous week, annual food and fuel inflation stood at 11.81% and 14.50%, respectively. The primary articles price index was up 10.39%, compared with an annual rise of 11.43% a week earlier.

The Reserve Bank of India (RBI) has announced its first government bond buyback under its open-market-operations program this year, in a move aimed at easing liquidity in the cash-strapped banking system. The plan to buy up to Rs 10000 crore of government bonds on 24 November 2011 comes as banks have been borrowing between Rs 80000 crore and Rs 1.3 lakh crore daily for the past week, underscoring the cash crunch in the local banking system. The Reserve Bank of India said it will buy the bonds through a multi-security auction using the multiple price method. It will announce the details of the bonds that it will buy back at the auction shortly, it added.

The latest data showed that inflation remains uncomfortably high in India. Inflation, as measured by the wholesale price index (WPI), stood at 9.73% in October 2011, as against 9.72% in September 2011, the latest data showed. The annual inflation rate was at 9.08% during the corresponding month of the previous year. The government left unchanged inflation rate for August at 9.7%.

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.

Emerging markets such as India must take measures to boost long-term foreign direct investment to blunt volatility in exchange rates, and any capital control measures must be selective and temporary, a senior executive of the Asian Development Bank said on Monday, 14 November 2011. While capital flows and exchange rates are likely to be volatile in the short-term amid ongoing euro-zone debt concerns, India must focus on improving its investment climate by providing better infrastructure, putting in place a coherent manufacturing policy and developing financial markets, Managing Director General Rajat M. Nag said on the sidelines of the India Economic Summit.

European stocks edged lower on Thursday amid mounting concerns about euro-zone debt. Key benchmark indices in France, Germany and UK fell by between 1.13% to 1.49%.

The Spanish Treasury on Thursday sold euro 3.562 billion ($4.79 billion) of benchmark 10-year paper at a maximum yield of 7.088%, which was the highest yield paid since the euro's inception. Spanish 10-year government bond yields rose to 6.61% after the auction. Yields on 10-year Italian government bonds were above 7%. The market is also awaiting results on a French government bond auction. France will today, 17 November 2011, auction notes maturing from 2013 to 2016.

Asia-listed shares fell in volatile trade as worries about Europe's debt troubles worked to depress sentiment across the region. Key benchmark indices in Japan and South Korea rose by between 0.19% to 1.11%. Taiwan's Taiwan Weighted was flat. Key benchmark indices in China, Hong Kong, Indonesia, and Singapore and fell by between 0.16% to 1.04%.

Asian shares have been hit this week by further worries about Europe's debt crisis expanding to other members of the euro zone, as bond yields for some nations rose.

Trading in US index futures indicated a flat opening of US stocks on Thursday, 17 November 2011. US stocks fell on Wednesday, with selling accelerating late in the session on more warnings about the potential impact of the euro zone's debt crisis on the global economy and the banking system. Losses deepened after ratings agency Fitch said even though the outlook on the US banking industry is stable, it could worsen if the euro-zone's debt crisis is not resolved quickly.