Market seen halting three-day gains on subdued Asian equities

The market is likely to open slightly lower on Wednesday after logging gains in prior three trading sessions. Asian markets were trading mixed. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 11 points at the opening bell. Jindal Steel & Power's Q3 December 2011 quarterly results due today, 18 January 2012 will be closely watched.

India's largest software services exporter by revenue TCS after market hours on Tuesday, 17 January 2012, on a consolidated basis, reported 21.8% rise in net profit to Rs 2,803 crore on 13.5% rise in revenue to Rs 13,204 crore in Q3 December 2011 over Q2 September 2011.



Aviation stocks may see action on reports that the ministry of civil aviation will move a cabinet note to allow foreign airlines to take up 49% stakes in Indian carriers to rescue the debt-laden aviation sector. The decision came following the meeting of civil aviation minister Ajit Singh with the finance minister Pranab Mukherjee on Tuesday, 17 January 2012.

Gains in world stocks triggered by stronger-than-expected GDP growth in China, the world's second biggest economy, in the fourth quarter of 2011, strong Q2 December 2011 results from IT major HCL Technologies and data showing buying of Indian stocks by foreign funds over the past few days, triggered a rally on the domestic bourses on Tuesday, 17 January 2012. The BSE Sensex jumped 276.69 points or 1.71% to settle at 16,466.05, its highest closing level since 8 December 2011. The barometer index has jumped 1,011.13 points or 6.54% so far in this month. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 3,345.09 points or 16.88%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,330.19 points or 8.78%.

Data showing buying by foreign funds over the past few days underpinned sentiment. Foreign institutional investors (FIIs) bought shares worth Rs 1,025.75 crore on Tuesday, 17 January 2012, as per provisional data from the stock exchanges. FII inflow totaled Rs 2939.37 crore in six trading sessions from 10 to 17 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.

HDFC Bank, Hero MotoCorp and Bajaj Auto unveil Q3 results on 19 January 2012. Reliance Industries, Wipro, ITC, Axis Bank, Jet Airways (India) and Hindustan Zinc unveil Q3 results on 20 January 2012. JSW Steel reports its Q3 standalone results on 20 January 2012. UltraTech Cement, Asian Paints, Zee Entertainment Enterprises and Godrej Consumer Products unveil Q3 results on 21 January 2012. L&T, Maruti Suzuki India, Sterlite Industries (India), Idea Cellular, GAIL (India) and Kotak Mahindra Bank unveil Q3 results on 23 January 2012.

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 and Canara Bank unveil Q3 results on 27 January 2012. NMDC announces Q3 results on 30 January 2012.

ICICI Bank, Punjab National Bank, Dabur India and Siemens unveil quarterly results on 31 January 2012. ONGC announces Q3 results on 2 February 2012. Dr. Reddy's Laboratories reports 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.

Inflation based on the wholesale price index cooled off to 7.47% in December 2011, compared to 9.11% rise in November 2011, government data released on Monday, 16 January 2012, showed. Inflation in December 2011 was the lowest since December 2009. However, prices of manufactured products--a gauge the RBI uses to assess core inflationary pressures--rose 7.41% in December 2011 from a year earlier, and 0.57% from November 2011. Moreover, December's lower inflation print is partly due to a high statistical base a year earlier. That means inflationary pressures could again emerge when the base effect fades in the next few months.

Meanwhile, October 2011 inflation was revised upward to 9.87% from 9.73% reported earlier

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.

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 Thursday, 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 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.

India's December exports rose an estimated annual 6.7% to $25 billion, while imports for the month were at $37.8 billion, leaving a trade deficit of $12.8 billion, Trade Secretary Rahul Khullar said on Monday.

Asia markets were trading mixed Wednesday ahead of Portugal's sale of treasury bills in its biggest debt auction since last year's bailout and Germany debt auction. Key benchmark indices in Taiwan, China, Singapore and South Korea were down by between 0.05% to 0.60%. Key benchmark indices in Hong Kong, Indonesia and Japan were up by between 0.12% to 0.27%.

Data released earlier on Tuesday showed that China's fourth-quarter gross domestic product rose 8.9% from the year-ago period, topping estimates. Monthly data also showed better-than-expected retail sales and industrial production in December.

US stocks advanced on Tuesday pushing the S&P 500 to its highest since early August, but sharply pared most of its gains towards the end of the session after Citigroup reported sharp drop in profits.

The Dow Jones Industrial Average rose 60.01 points, or 0.48%, to 12,482.07. The Standard & Poor's 500 index added 4.58 points, or 0.36%, to 1,293.67 and the Nasdaq Composite index gained 17.41 points, or 0.64%, to 2,728.08.