Market may open flat; RIL in focus

Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a flat opening. High volatility is expected this week 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 on Wednesday, 25 January 2012. The stock market remains closed on Thursday, 26 January 2012, on account of Republic Day.

Reliance, India's biggest company by market value, said after market hours on Friday, 20 January 2012 that net profit fell 13.6% to Rs 4440 crore on 42.4% rise in sales to Rs 85135 crore in Q3 December 2011 over Q3 December 2010. The company said it would buy back up to 12 crore shares at a maximum price of Rs 870 and payable in cash upto an aggregate amount not exceeding Rs. 10,440 crore from the open market through stock exchanges.



Commenting on the results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries Limited said: “The global nature of our businesses and weakness in economic conditions resulted in reduced earnings in the quarter, particularly in our refining and petrochemicals businesses. Notwithstanding these challenges, Reliance has delivered reasonably robust results with high operating leverage. Our focus remains on enhancing shareholder value by leveraging an exceptionally strong balance sheet, operating top decile assets and investing prudently in future growth engines.”

Among prominent corporate results, L&T, Maruti Suzuki India, Sterlite Industries (India), Idea Cellular, GAIL (India) and Kotak Mahindra Bank unveil Q3 results today, 23 January 2012.

Key benchmark indices reached their highest closing level in more than six weeks on Friday, 20 January 2012 on data showing heavy buying of Indian stocks over the past few days by foreign funds. The BSE Sensex jumped 95.27 points or 0.57% to settle at 16,739.01, its highest closing level since 7 December 2011.

Foreign institutional investors (FIIs) bought shares worth Rs 819.84 crore on Friday, 20 January 2012, as per provisional data from the stock exchanges. FII inflow totaled Rs 5261.21 crore in eight trading sessions from 10 to 20 January 2012, as per provisional data from the stock exchanges.

Investors' focus is currently on Q3 results. Analysts expect weak Q3 December 2011 results due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges. The focus will be on guidance from the company managements on outlook for the remaining part of the year and for the next year.

Cairn India, Grasim and Biocon unveil Q3 results on 24 January 2012. Bank of Baroda, Sesa Goa, Union Bank of India, Rural Electrification Corporation, Indian Hotels and Tata Communications unveil Q3 results on 25 January 2012. Bharat Heavy Electricals (Bhel), NTPC, Bank of India, Pfizer and Canara Bank unveil Q3 results on 27 January 2012. LIC Housing Finance, Indian Bank, Corporation Bank and NMDC unveil Q3 results on 30 January 2012.

ICICI Bank, Punjab National Bank, Dabur India, TVS Motor and Siemens unveil quarterly results on 31 January 2012. Mahindra Satyam announces Q3 reusults on 1 February 2012. ONGC and Marico announce Q3 results on 2 February 2012. Dr. Reddy's Laboratories, Power Finance Corporation and HPCL report Q3 results on 3 February 2012. India Cements announces Q3 results on 6 February 2012. Mahindra & Mahindra unveils Q3 results on 7 February 2012. Hindalco unveils Q3 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. Shipping Corporation of India announces Q3 results on 14 February 2012.

Stronger-than-expected growth in industrial production in November 2011 has raised doubts about the timing and pace at which the Reserve Bank of India would likely ease its monetary policy. Industrial output rose 5.9% in November 2011, compared with a revised contraction of 4.74% in October 2011, data released by the government on 12 January 2012, showed. Manufacturing output, which constitutes about 76% of the industrial production, grew an annual 6.6% in November 2011. Industrial production had contracted in October 2011, snapping consistent growth for the preceding 29 months in a row.

The Reserve Bank of India (RBI) is widely expected to keep its key lending rate viz. the repo rate steady at the Third Quarter Review of Monetary Policy 2011-12 on Tuesday, 24 January 2012, as headline inflation remains high. Data released early last week showed headline inflation eased to two-year low of 7.47% in December 2011 from 9.11% in November 2011. But prices of manufactured products -- a key gauge of core inflationary pressures -- remained elevated.

At its mid-quarterly monetary policy review meet on 16 December 2011, the RBI left its main lending rate unchanged in order to support faltering economic growth as inflation shows signs of cooling. While inflation remains on its projected trajectory, downside risks to growth have clearly increased, RBI had said in a statement on 16 December 2011. From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth, RBI had said.

RBI had said inflation risks remain high and inflation could quickly recur as a result of both supply and demand forces. RBI also said that the rupee remains under stress. The timing and magnitude of further actions will depend on a continuing assessment of how these factors shape up in the months ahead, RBI said. The RBI has raised rates 13 times since March 2010.

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.

Japanese markets rose as increasing home sales in the U.S. added to signs the world's biggest economy is recovering, overshadowing uncertainties over continuing debt negotiations in Greece. Japan's Nikkei Average gained 0.15%.

The Chinese markets are closed for the whole of this week, while Hong Kong bourses are shut from today, 23 January 2012 to Wednesday, 25 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. Stock markets in Indonesia, South Korea and Singapore were also closed for a holiday today.

U.S. stocks ended mixed on Friday as investors were cautiously awaiting the result of Greece debt talk. On economic news front, the National Association of Realtors reported that the annual sales in December reached 4.6 million homes, up 5% from November and 3.6% from a year ago

The Federal Open Market Committee (FOMC) holds a meeting on US interest rates on 24-25 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.