Market may extend recent gains on firm Asian stocks

The market may extend recent strong gains on firm Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 37 points at the opening bell. High volatility is expected on the bourses today as traders roll over positions in futures & options (F&O) segment from the near-month January 2012 series to February 2012 series. The near-month January 2012 F&O contracts expire today, 25 January 2012. The stock market remains closed tomorrow, 26 January 2012, on account of Republic Day.

Cairn India announced after market hours on Tuesday, 24 January 2012 that consolidated net profit rose 12.52% to Rs 2261.93 crore on 12.13% growth in total income to Rs 3510.58 crore in Q3 December 2011 over Q3 December 2010.



Rahul Dhir, Managing Director and Chief Executive Officer, Cairn India said: "The commencement of production from the Bhagyam field is yet another significant milestone for the Cairn-ONGC Joint Venture in Rajasthan. With the support of the Government of India and the Government of Rajasthan, the Cairn-ONGC Joint Venture is well placed to further develop the hydrocarbon-rich Barmer Basin in Rajasthan, increase of production and create value for our nation. Our successive discoveries in Sri Lanka have established a working hydrocarbon system in the frontier Mannar Basin. This success demonstrates Cairn India's strong skill set, which we will continue to leverage for future opportunities. We have also notified the Sri Lankan Government about our intention to enter the second phase of exploration. With the new board now in place, Cairn India remains well poised for the next phase of growth".

Biocon announced after market hours on Tuesday that consolidated net profit fell 15.79% to Rs 84.85 crore on 2.65% growth in total income to Rs 532.18 crore in Q3 December 2011 over Q3 December 2010.

Grasim's consolidated net profit jumped 33% to Rs 669 crore on 17% growth in revenue to Rs 6364 crore in Q3 December 2011 over Q3 December 2010. The results was announced after trading hours on Tuesday, 24 January 2012.

Bank of Baroda, Sesa Goa, Union Bank of India, Rural Electrification Corporation, Indian Hotels and Tata Communications unveil Q3 results today, 25 January 2012.

Key benchmark indices reached their highest closing level in more than 10 weeks on Tuesday, 24 January 2012, as the Reserve Bank of India (RBI)'s latest move to cut the cash reserve ratio (CRR) requirement for banks by 50 basis points to 5.5% from 6% at a quarterly policy review on Tuesday, 24 January 2012, boosted investor sentiment. The BSE Sensex jumped 244.04 points or 1.46% to settle at 16,995.77, its highest closing level since 14 November 2011.

Foreign institutional investors (FIIs) bought shares worth Rs 801.29 crore on Tuesday, 24 January 2012, as per provisional data from the stock exchanges. FIIs had sold shares worth Rs 58.80 on Monday, 23 January 2012, after buying shares worth Rs 5261.21 crore in nine trading sessions from 10 to 20 January 2012, as per provisional data from the stock exchanges.

The Reserve Bank of India (RBI) on Tuesday cut the cash reserve ratio (CRR) requirement for banks by 50 basis points to 5.5% from 6% at Third Quarter Review of Monetary Policy 2011-12. The central bank said that as a result of the reduction in the CRR by 50 basis points, around Rs 32000 crore of primary liquidity will be injected into the banking system. The central bank said the large structural deficit in the system presents a strong case for injecting permanent primary liquidity into the system.

The RBI kept its key lending rate viz. the repo rate unchanged at 8.5%. RBI has cut the baseline projection of GDP growth for 2011-12 to 7% from 7.6%. The growth-inflation balance of the monetary policy stance has now shifted to support growth, while at the same time ensuring that inflationary pressures remain contained, the central bank said.

The reduction in CRR can be viewed as a reinforcement of the guidance that future rate actions will be towards lowering interest rates, RBI said. However, the timing and magnitude of future rate actions is contingent on a number of factors, RBI said. In the absence of credible fiscal consolidation, the Reserve Bank of India will be constrained from lowering the policy rate in response to decelerating private consumption and investment spending, it said. The forthcoming Union Budget must exploit the opportunity to begin this process in a credible and sustainable way, the RBI said.

Investors' focus is currently on Q3 results. Bharat Heavy Electricals (Bhel), NTPC, Bank of India, Pfizer and Canara Bank unveil Q3 results on Friday, 27 January 2012. LIC Housing Finance, and Indian Bank unveil Q3 results on 30 January 2012.

ICICI Bank, Punjab National Bank, IDBI Bank, Dabur India, TVS Motor, NMDC and Siemens unveil quarterly results on 31 January 2012. Mahindra Satyam announces Q3 reusults on 1 February 2012. ONGC, Marico and Corporation Bank announce Q3 results on 2 February 2012. Dr. Reddy's Laboratories, Power Finance Corporation and HPCL report Q3 results on 3 February 2012. National Aluminium Company and India Cements announce Q3 results on 6 February 2012.

Mahindra & Mahindra and GMR Infrastructure unveil Q3 results on 7 February 2012. Hindalco, ACC and Ambuja Cements unveil quarterly results on 9 February 2012. Tata Power and BPCL unveil Q3 results on 10 February 2012. Aditya Birla Nuvo and Ashok Leyland announce Q3 results on 11 February 2012. Steel Authority of India (Sail) unveils Q3 results on 13 February 2012. Shipping Corporation of India announces Q3 results on 14 February 2012.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on 2 January 2012. State elections are scheduled between the end of January and early March 2012. The annual budget is usually presented on the last working day of February. The Election Commission on 24 December 2011 announced the dates for the assembly polls in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Uttar Pradesh will have polling on February 4, 8, 11, 15, 19, 23 and 28, while Uttarakhand and Punjab will go to polls on January 30. Manipur will have polls on January 28 and Goa on March 3.

The Euro-zone debt crisis is escalating and dragging down the world economy, the International Monetary Fund (IMF) said on Tuesday, as it sharply cut its outlook for global growth and called for policies to restore confidence. The IMF chopped its 2012 forecast for global growth to 3.3% from 4% just three months ago, saying the outlook had deteriorated in most regions. It projected world growth would strengthen to 3.9% in 2013. The Washington-based lender said economic activity was decelerating but not collapsing. However, it warned that global growth would come in about 2 percentage points below its already soft forecast if European leaders allowed the crisis to fester.

Global foreign direct investment flows jumped by 17% in 2011 despite worldwide economic turmoil and there is reason to be cautiously optimistic of another rise in 2012, a United Nations report said on Tuesday.

Asian shares rose on Wednesday, underpinned by strong earnings from US technology giant Apple, stabilising European money markets and falling euro zone debt yields. Key benchmark indices in Japan, Singapore and South Korea rose by between 0.88% to 0.97%. Indonesia's Jakarta Composite fell 0.42%.

The Chinese markets are closed for the whole of this week, while Hong Kong bourses are shut for three days starting Monday, 23 January 2012, for Lunar New Year holidays. The stock market in Taiwan which has been shut since 19 January 2012 for Lunar New Year holidays remains closed for the whole of this week.

Japan logged its first annual trade deficit in 2011 for over 30 years as the aftermath of the March earthquake raised fuel import costs even as slowing global growth and the yen's strength hit exports, threatening to erode the country's ability to fund its huge public debt with domestic savings. Japan logged a trade deficit of 2.49 trillion yen for 2011, Ministry of Finance data showed on Wednesday, the first annual deficit since 1980. Total exports shrank 2.7% last year while imports surged 12.0% reflecting reduced earnings from goods and services and higher spending on crude and fuel oil.

US stocks closed with losses for two of three main indexes on Tuesday, 24 January 2012, as investors mulled a European standoff over Greece's debt and the latest slew of earnings, though the Nasdaq Composite closed higher ahead of a batch of tech results.

A two-day meeting of Federal Open Market Committee (FOMC) on US interest rates began on Tuesday, 24 January 2012. FOMC has held its funds rate target inside a record-low range of 0% to 0.25% since December 2008. The committee at its past four policy meetings indicated it intends to hold the rate stable until at least the middle of 2013. The US central bank will begin a new practice of announcing policymakers' interest-rate projections when this week's meeting ends on Wednesday.