Market may open lower on weak Asian stocks

The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 42 points at the opening bell. LIC Housing Finance and Indian Bank unveil Q3 results today, 30 January 2012.

Power equipment major Bharat Heavy Electricals (Bhel) announced after market hours on Friday that net profit rose 2.09% to Rs 1432.61 crore on 19.21% growth in total income to Rs 10939.10 crore in Q3 December 2011 over Q3 December 2010.

Bhel's order backlog stood at Rs 146500 crore as on 31 December 2011. The company said order backlog was reduced to the extent of Rs 5847 crore in Q3 December 2011 as the company has seen one order cancelled during the quarter and few other small orders underwent change in scope. There is no such thing as slow moving orders in the order backlog, the company's management said in a post-result conference call with analyst. Bhel said provision (contractual obligation, LD and bad and doubtful debts) for the quarter has gone up to the extent of Rs 218 crore.



Power generation major NTPC announced after market hours on Friday that net profit fell 10.16% to Rs 2130.39 crore on 14.68% rise in total income to Rs 16245.42 crore in Q3 December 2011 over Q3 December 2010.

Sugar stocks will be in focus as the Prime Minister has constituted an Expert Committee under the Chairmanship of Dr. C. Rangarajan, Chairman Economic Advisory Council to the Prime Minister, to examine issues relating to the sugar sector. The committee will look into all the issues relating to de-regulation of the sugar sector and it has been requested to complete its task as early as possible and give its recommendations to the Prime Minister.

Indian stocks on Friday, 27 January 2012, played a catch up with rally in Asian stocks on Thursday, 26 January 2012, triggered by Federal Reserve's pledge at the end of a two-day policy meeting on Wednesday, 25 January 2012, to keep US interest rates at ultra-low levels until late 2014. India's stock market was closed on Thursday, 26 January 2012, on account of Republic Day. The BSE Sensex jumped 156.80 points or 0.92% to settle at 17,233.98, its highest closing level since 9 November 2011.

Foreign institutional investors (FIIs) have made heavy purchases of Indian stocks this month. FIIs bought shares worth Rs 1240.16 crore on Friday, 27 January 2012, as per provisional data from the stock exchanges. FII inflow totaled Rs 3188.45 crore in three trading sessions from 24 to 27 January 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth a net Rs 9018.10 this month so far, as per provisional data from the stock exchanges.

Investors' focus is currently on Q3 results. ICICI Bank, Punjab National Bank, IDBI Bank, Dabur India, TVS Motor, NMDC and Siemens unveil quarterly results tomorrow, 31 January 2012. Mahindra Satyam unveils Q3 results on Wednesday, 1 February 2012. Marico, RCF and Corporation Bank announce Q3 results on Thursday, 2 February 2012. Dr. Reddy's Laboratories, Power Finance Corporation, Hindustan Copper and HPCL report Q3 results on Friday, 3 February 2012. Hindustan Unilever, 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. ONGC and Power Grid Corporation of India unveil Q3 results on 8 February 2012. Hindalco, ACC and Ambuja Cements unveil quarterly results on 9 February 2012. Tata Power, BPCL, Britannia Industries and Sun TV Network 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. Tata Motors, Shipping Corporation of India announces Q3 results on 14 February 2012.

The Reserve Bank of India (RBI), last week, took liquidity easing measures by cutting 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.

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.

An estimated 82% of the electorate on Saturday, 28 January 2012, exercised their franchise in Manipur assembly elections which was marred by militant violence that claimed seven lives, including that of an ultra. Polling for assembly elections in Uttarakhand and Punjab takes place today, 30 January 2012. Seven-phase polling for assembly elections in Uttar Pradesh begins on Saturday, 4 February 2012.

Asian stocks dropped for the first time in four days on Monday, 30 January 2012, before a meeting of Europe's leaders to discuss the euro-zone sovereign-debt crisis. Chinese shares slid in the first day of trading after the Lunar New Year holiday. Key benchmark indices in China, Hong Kong, Japan, Indonesia, South Korea and Singapore shed by between 0.61% to 0.89%. Taiwan's Taiwan Weighted rose 2.72%.

European Union leaders gather in Brussels later in the global day today for their first summit of 2012 to put the finishing touches on a German- led deficit-control treaty and endorse the statutes of a 500 billion-euro ($661 billion) rescue fund to be set up this year. Greece and its private creditors said January 28 they expect to complete a deal in coming days after bondholders signaled they would accept European government demands for a bigger cut in their debt holdings.

Fitch downgraded the sovereign credit ratings of Belgium, Cyprus, Italy, Slovenia and Spain on Friday, indicating there was a 1-in-2 chance of further cuts in the next two years. In a statement, the ratings agency said the affected countries were vulnerable in the near-term to monetary and financial shocks. Fitch cut Italy's rating to A-minus from A-plus; Spain to A from AA-minus; Belgium to AA from AA-plus; Slovenia to A from AA-minus and Cyprus to BBB-minus from BBB, leaving the small island nation just one notch above junk status. Ireland's rating of BBB-plus was affirmed. All of the ratings were given negative outlooks. Fitch said it had weighed up a worsening economic outlook in much of the euro zone against the European Central Bank's December move to flood the banking sector with cheap three-year money and austerity efforts by governments to curb their debts.

US stocks ended mostly lower on Friday after a reading on domestic economic growth fell short of expectations. The nation's gross domestic product, the value of all goods and services produced, expanded at an annual rate of 2.8% from October to December. Though the data showed the US economy expanded at the fastest pace since the second quarter of 2010, the reading fell short of the expected 3% rate.