Sensex seen extending seven-day 6.81% slide on weak Asian equities

The market is poised for a weak start for the eight straight session mirroring weak Asian markets ahead of further details on plans from European leaders to contain burgeoning eurozone debt crisis. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 48.50 points at the opening bell.

Reliance Industries (RIL) after market hours on Friday said that RIL and BP have established India Gas Solutions a 50:50 joint venture company which will focus on global sourcing and marketing of natural gas in India. The joint venture will also develop infrastructure to accelerate transportation and marketing of natural gas within the country.



Bharti Airtel said Friday it will start selling Apple Inc.'s latest iPhone 4S on 25 November 2011. The smartphone from the Cupertino, California-based company is priced at $867 for the 16GB version. India, with 865.71 million wireless users at the end of August, is the world's second-largest telecoms market after China.

Meanwhile, the Central Bureau of Investigation (CBI) reportedly searched Bharti Airtel headquarters in Gurgaon on Saturday, as the agency widens its probe into the alleged irregularities and losses in the allocation of airwaves when BJP-led National Democratic Alliance was in power.

Key benchmark fell for the seventh straight day on Friday, 18 November 2011 to hit six-week closing lows as poor Q2 September 2011 earnings and euro-zone debt worries dampened sentiment. The BSE Sensex lost 90.20 points or 0.55% to settle at 16,371.51, its lowest closing level since 7 October 2011. The Sensex lost 1,198.02 points or 6.81% in the past seven trading sessions from a recent high of 17,569.53 on 8 November 2011.

High volatility is expected to continue as traders roll over positions in futures & options (F&O) segment from the near-month November 2011 series to December 2011 series. The near-month November 2011 F&O contracts expire on Thursday, 24 November 2011.

Foreign institutional investors (FIIs) sold shares worth Rs 871.62 crore on Friday, 18 November 2011, as per the provisional data from the stock exchanges. Their outflow totaled Rs 1965.48 crore in four trading session from 15 to 18 November 2011.

Corporate earnings have been weak. The combined net profit of a total of 3,741 companies declined 35.9% to Rs 67522 crore on 20.6% growth in sales to Rs 1135936 crore in Q2 September 2011 over Q2 September 2010. The Q2 earnings season got over on Tuesday, 15 November 2011.

The government recently 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 1 April 2011. Thomas Mathew, joint secretary of capital markets, told reporters on 17 November 2011, that the incremental limit of $5 billion can be invested in securities without any residual maturity criterion.

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, Pavan Kumar Bansal on 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 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 17 November 2011, showed. In the previous corresponding period, 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 RBI 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.

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 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.

Asian stocks fell on Monday as a change of government in Spain and Singapore's warning of a growth slowdown ignites fares of worsening global outlook. Key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea, Taiwan and Singapore fell by between 0.19% to 2.37%.

US stocks closed higher Friday while some broader indexes fell slightly, as investors considered a potential proposal for future European bailouts while they continued to worry over Washington's debt talks. The Dow Jones Industrial Average gained 25.43 points, or 0.22%, to 11796.16. The Standard & Poor's 500-stock index dropped 0.48 point, or 0.04%, to 1215.65 and the Nasdaq Composite fell 15.49 points, or 0.60%, to 2572.50.

As per reports, the notion that the International Monetary Fund may call on the European Central Bank to lend it money to finance bailouts is gaining traction. If all parties agree, a deal could be announced at the 9 December 2011 European Union summit.