Sensex, Nifty attain highest closing level in more than one week

Key benchmark indices advanced for the second day in a row to scale their highest closing level in more than one-week on firm global stocks. The government's decision on Sunday, 1 January 2012, to allow qualified foreign investors to invest directly in local equities, underpinned sentiment. The barometer index, BSE Sensex, jumped 421.44 points or 2.72%, up about 299 points from the day's low and off close to 31 points from the day's high. The market breadth was strong.

The Sensex has risen 484 points or 3.13% in two trading sessions from a recent low of 15,454.92 on Friday, 30 December 2011. The Sensex lost 668.54 points or 4.14% in December 2011. The barometer index slumped 5,054.17 points or 24.64% in calendar 2011. From a 52-week high of 20,664.80 on 3 January 2011, the Sensex has lost 4725 points or 22.87%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 803 points or 5.31%.



Coming back to today's trade, all the 13 sectoral indices on BSE were in the green. Index heavyweight Reliance Industries (RIL) jumped more than 2% after the company said it is divesting a part of the interest owned by it in the ETV channels. Capital goods stocks also rose. Metal stocks rose for the second straight day as a Chinese manufacturing gauge rose in December 2011. Interest rate sensitive realty and construction stocks rose on recent comments by Reserve Bank of India's (RBI) Governor D Subbarao that RBI is likely to begin easing monetary policy to address concerns about economic growth. Bank stocks rose after the Reserve Bank of India on Friday, 30 December 2011, issued draft guidelines outlining proposed implementation of Basel III capital regulation in India.

The market surged in early trade on firm Asian stocks. The market extended initial gains to hit its highest level in nearly one week in morning trade. The market strengthened further to hit fresh intraday high in mid-morning trade. The uptrend continued as key benchmark indices hit fresh intraday highs in early afternoon trade. The market extended gains in afternoon trade to hit fresh intraday high. A bout of volatility was witnessed in mid-afternoon trade as key benchmark indices regained strength after trimming strong intraday gains in afternoon trade. The market surged in late trade.

The BSE Sensex rose 421.44 points or 2.72% to settle at 15,939.36, its highest closing level since 26 December 2011. The index surged 452.39 points at the day's high of 15,970.31 in late trade. The index rose 122.64 points at the day's low of 15,640.56 in early trade.

The S&P CNX Nifty rose 128.55 points or 2.77% to settle at 4,765.30, its highest closing level since 26 December 2011. The index hit a high of 4,773.10 in intraday trade. The index hit a low of 4,675.80 in intraday trade.

The BSE Mid-Cap index rose 2.42% and the BSE Small-Cap index rose 2.33%. Both these indices underperformed the Sensex.

The market breadth, indicating the overall health of the market, was strong. On BSE, 2,019 shares rose and 740 shares fell. A total of 109 shares were unchanged.

BSE clocked turnover of Rs 1845 crore, higher than Rs 1367.38 crore on Monday, 2 January 2012.

Among the 30-member Sensex pack, 28 rose while only two of them fell.

Index heavyweight Reliance Industries (RIL) rose 2.37% to Rs 723.70, after the company said it is divesting a part of the interest owned by it in the ETV channels. The stock extended Monday's 2.03% gains triggered by bargain hunting after a recent slide. The stock had hit a 52-week low of Rs 690 in intraday trade on Friday, 30 December 2011. RIL said that a part of the interest owned by it in the ETV channels is being divested to TV18 Broadcast, a Network18 Group firm.

RIL said as a part of the deal with TV18 Broadcast, Infotel Broad Band Services (Infotel), a subsidiary of RIL, has entered into a Memorandum of Understanding with TV18 Broadcast and Network18 Media and Investments for preferential access to all content of the latter for distribution through the 4G Broadband Network being set up by RIL. Shares of Network18 Media jumped 20% to Rs 46.40. Shares of TV18 Broadcast jumped 20% to Rs 33.70.

RIL, through investments of about Rs 2600 crore, by its group companies, currently holds interest in various ETV channels being operated and managed by Eenadu Group. A part of the above investments comprising of 100% interest in ETV's regional news channels in Hindi, 50% interest ETV's non-Telugu general entertainment channel and 24.50% interest in ETV's Telugu channels is being profitably divested to TV18 Broadcast, RIL said in a statement.

Independent Media Trust, a trust set up for the benefit of Reliance Industries, has agreed to fund the promoters of Network18 and TV18 to enable them to subscribe to the proposed rights issue announced by both the companies today, 3 January 2012. The promoter companies of Network18 and TV18 and Independent Media Trust have entered into a term sheet under which the trust will be subscribing to the Optionally Convertible Debentures to be issued by the Network18 promoter companies. Mr. Raghav Bahl and his team will continue to have full operational and management control of both the Network18 group companies, RIL said.

Auto stocks rose on strong vehicle sales in December 2011 and on reports that a decision on petrol price hike has been deferred by a fortnight. Recent comments by Reserve Bank of India's (RBI) Governor D Subbarao that RBI is likely to begin easing monetary policy to address concerns about economic growth also aided gains in auto shares. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

Tata Motors rose 5.50% extending Monday's 3.03% gains triggered by strong sales in the month just gone by. The company's total sales of commercial and passenger vehicles jumped 22% to 82,278 units in December, 2011 over December 2010. The domestic sales of the vehicles in both categories for the month stood at 76,663 cars, a 24% jump compared to 61,685 in December 2010, the company said in a statement. However, exports declined 3% to 5,615 units compared to 5,809 in December 2010.

Maruti Suzuki India rose 1.49% extending Monday's 1.82% gains triggered by reports that the car major will take a call on price hike of its products tomorrow, 4 January 2012. The company's total vehicle sales fell 7.1% to 92,161 units in December 2011 over December 2010. Domestic sales dropped 13.4% to 77,475 units. Exports surged by 50.5% to 14,686 units.

Fiat India Automobiles said Tuesday it expects to conclude shortly discussions with Maruti Suzuki India for the supply of diesel engines for cars, a step that will allow the local unit of Suzuki Motor Corp. cut the waiting period on its Swift model. Maruti currently sources all its diesel engines from Suzuki Powertrain, a joint venture between Maruti and Suzuki. These engines are made using Fiat's technology.

Ashok Leyland rose 2.87% after company reported sales of 9,088 units for December 2011 including 1,099 units of the recently launched LCV for cargo transportation -- Dost. Adjusting for Dost which was launched in October 2011, sales came in at 7,989 units, up 6% year-on-year.

Mahindra & Mahindra fell 1.09%, extending Monday's 1.35% losses. The company's total automobile sales jumped 26% to 42,761 units in December 2011 over December 2010.

India's largest two-wheeler maker Hero MotoCorp fell 0.06%. The company reported 7.8% rise in sales to 5.40 lakh units in December 2011 over December 2010. The stock had tumbled 3.5% on Monday, 2 January 2012.

TVS Motor Company rose 1.14% on bargain hunting. The stock had plunged 7.32% on Monday after the company said its total sales declined 0.79% to 1.70 lakh units in December 2011 over December 2010.

Shares of Bajaj Auto rose 1.47%, with the stock recouping a small portion of Monday's 7.4% losses, after the firm unveiled an ultra-low-cost car today, its first foray into the four-wheel market. The compact "RE60" boasts of high fuel efficiency and low carbon dioxide emissions, but the firm did not release a price tag.

The Bajaj Auto stocks had tumbled on Monday on reported comments by a company official that the company doesn't expect to meet its vehicle sales target for this financial year through March. The company announced during market hours on Monday that total sales rose 10% to 3.05 lakh units in December 2011 over December 2010. Motorcycle sales rose 8% to 2.63 lakh units and commercial vehicle sales rose 27% to 41,991 units. Exports jumped 25% to 1.19 lakh units.

L&T jumped 5.04%, extending Monday's 1.37% gains triggered by the announcement of new orders. L&T during market hours on Monday said that L&T Construction bagged new orders worth over Rs 2056 crore across various business segments in December 2011. The Water and Affluent Treatment business has won two major orders totaling Rs. Rs 1262 crore. The Building and Factories segment has bagged a new order valued at Rs. 388 crore while the Rail Infrastructure segment has won orders aggregating to Rs. 406 crore.

Among other capital goods stocks, BGR Energy Systems, Punj Lloyd, Bhel, Siemens, Areva T&D India, Alstom Projects, Havells India, Praj Industries, Thermax, Suzlon Energy, Usha Martin, Bharat Electronics, ABB, BEML, Pipavav Defence, SKF India, Lakshmi Machine Works and Crompton Greaves gained by between 1% to 7.20%.

Metal stocks rose for the second straight day as a Chinese manufacturing gauge rose in December 2011. China is the world's largest consumer of copper and aluminum. JSW Steel, NMDC, Tata Steel, Jindal Steel & Power, Bhushan Steel, Sterlite Industries, Sesa Goa, Hindustan Zinc, Sail, Hindalco Industries and Nalco rose by 1.80% to 9.64%. Shares of steel makers got additional boost from the government recently raising the export tax on iron ore to 30% from 20% earlier, which may increase local supplies of the steel-making raw material.

Coal India rose 4.84%, extending Monday's 3.61% gains. The company's board of directors at a meeting held on 30 December 2011 approved switching over of non-coking coal pricing from useful heat value (UHV) based grading system to gross caloric value (GCV) based classification with effect from 1 January 2012. It is difficult to assess the exact impact, as it will be based on the calorie value, Coal India said.

Interest rate sensitive realty stocks rose on recent comments by Reserve Bank of India's (RBI) Governor D Subbarao that RBI is likely to begin easing monetary policy to address concerns about economic growth. Lower interest rates may help revive demand for properties. Purchases of both residential and commercial property are largely driven by finance.

DLF, D B Realty, Indiabulls Real Estate, Phoenix Mills, HDIL, Unitech, Sobha Developers, Prestige Estates, Parsvnath Developers, Godrej Properties and Sunteck Realty rose by 1.91% to 6.84%.

Bank stocks rose on recent comments by Reserve Bank of India's (RBI) Governor D Subbarao that RBI is likely to begin easing monetary policy to address concerns about economic growth. India's largest private sector bank by branch network ICICI Bank gained 4.16%. ICICI Bank has raised the interest rate for NRE deposits. ICICI Bank is now offering up to 9.25% on non-resident external (NRE) deposits.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) rose 4.72%. The bank said today it has cancelled the negotiations for establishing a joint venture entity with Visa Inc and Elavon Inc for conducting the merchant acquiring business. In terms of the bank's earlier letter dated 4 May 2010, a joint venture was proposed between SBI Payment Services, the wholly owned subsidiary of SBI and Visa Inc and Elavon Inc.

SBI expects the government to inject capital "any time", although it is yet to get a formal commitment on the amount, SBI's chief financial officer Diwakar Gupta said in a recent interview to a news agency. Gupta said the government will ensure the bank has 8% tier I capital adequacy by March-end. At the end of September, it stood at 7.47%.

India's second largest private sector bank by branch network HDFC Bank gained 2.80%. The bank raised interest rates on non-resident savings deposits to 9% from 3.82% from Friday, 23 December 2011, taking advantage of recent deregulation to attract dollars.

Among other banks, Bank of India, IndusInd Bank, Kotak Mahindra Bank, Axis Bank, Yes Bank, Federal Bank, Canara Bank, Punjab National Bank, Bank of Baroda, IDBI Bank and Union Bank of India rose by 1.21% to 7.68%.

Banks are announcing sharp hikes in deposit rates for the Indian diaspora following a Reserve Bank of India move to deregulate interest rates on NRE deposits earlier this month to attract more dollars into the economy in its bid to arrest steep fall in the rupee value.

In its draft guidelines on Basel III capital regulation norms for banks, the RBI has suggested that Common Equity Tier 1 (CET1) capital must be at least 5.5% of risk-weighted assets (RWAs). Tier 1 capital must be at least 7% of RWAs and total capital must be at least 9% of RWAs, according to the draft guidelines. RBI has suggested capital conservation buffer in the form of Common Equity of 2.5% of RWAs.

RBI said the implementation period of minimum capital requirements and deductions from Common Equity will begin from January 1, 2013 and be fully implemented as on March 31, 2017. Capital conservation buffer requirement is proposed to be implemented between March 31, 2014 and March 31, 2017. Instruments which no longer qualify as regulatory capital instruments will be phased-out during the period beginning from January 1, 2013 to March 31, 2022.

For OTC derivatives, in addition to the capital charge for counterparty default risk under Current Exposure Method, banks will be required to compute an additional credit value adjustments (CVA) risk capital charge. The parallel run for the leverage ratio will be from January 1, 2013 to January 1, 2017, during which banks would be expected to strive to operate at a minimum Tier 1 leverage ratio of 5%. The leverage ratio requirement will be finalized taking into account the final proposal of the Basel Committee.

Shares of state-run oil marketing companies (PSU OMCs) declined as a hike in petrol price was deferred again on Monday, 2 January 2012. As per reports, the the oil ministry has refused to allow PSU OMCs to hike petrol price following the parliamentary debacle last week over the Lokpal Bill and due to impending assembly polls in five states. BPCL (down 1.27%) and Indian Oil Corporation (down 0.95%), declined. PSU OMCs, which review petrol prices on the 15th and last day of each month, wanted to raise petrol price by about Rs 2 per litre to offset the rupee's fall against the dollar.

HPCL fell 0.41%. The company said during market hours today that subsequent to transfer of entire equity shareholding of ICICI Group and HDFC in Prize Petroleum Co. (PPLL) in favour of Hindustan Petroleum Corporation (HPCL) and consequent upon necessary amendments to the Articles of Association of PPCL, Prize Petroleum Company has become a wholly owned subsidiary of HPCL.

Higher crude oil prices also weighed on PSU OMCs. Higher crude oil prices will increase under-recoveries of state-run oil marketing companies (PSU OMCs) on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol.

Oil exploration stocks rose as crude oil futures topped $100 a barrel mark in Asian trade today, 3 January 2012, spurred by gains in Asian equities, a weaker dollar and geopolitical concerns involving Iran. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms. Cairn India rose 4.54%.

ONGC rose 1.78%. ONGC Videsh (OVL), the overseas investment arm of state-run oil exploration giant ONGC, will pursue acquisitions of unconventional energy assets like oil sands and shale gas to spread its portfolio, its director of exploration said. "We see that the profitability of unconventional hydrocarbon resources is increasing as the prices are driven up by intensifying competition for acquisition of conventional oil and gas assets," Narendra Verma said on the company's website. Mr. Verma replaced Joeman Thomas as OVL's exploration head on Monday after Thomas retired last month. OVL. which produced 9.43 million tons oil and oil-equivalent gas in the year through March 2011, has a target of producing 20 million tons of oil equivalent by March 2018 and 35 million tons by March 2030, Mr. Verma said.

Oil India fell 3.19% after the stock turned ex-dividend today, 3 January 2012, for an interim final dividend of Rs 25 per share for the year ending March 2012.

Crude oil futures for February 2012 delivery were up $2.47 a barrel to $101.30 a barrel in Asian electronic trading today, 3 January 2012, spurred by higher equity markets, a weaker dollar and geopolitical concerns involving Iran. Crude-oil prices also got a lift from news that Iran test-fired a surface-to-surface cruise missile during a drill on Monday, 2 January 2012 -- on top of another test over the weekend -- to prove its control over the Strait of Hormuz, a key channel for crude shipments. Iran's move came after the US imposed new sanctions on Iran over the weekend.

Aviation stocks rose after state-owned oil companies recently cut jet fuel price by over 1% in line with softening in the commodity's international rates. Jet Airways (India), SpiceJet and Kingfisher Airlines rose by between 2.14% to 4.28%. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost and the latest cut in prices will slightly ease burden on the cash-strapped airlines.

IT stocks rose on a slew of positive economic data in US in recent months. US is the biggest outsourcing market for the Indian IT firms. India's second largest software services exporter by revenue Infosys rose 2.13%. The company announces Q3 December 2011 results on 12 January 2012. The company said recently its business process outsourcing subsidiary -- Infosys BPO has signed a definitive agreement to acquire all of the outstanding share capital in Australia-based Portland Group Pty, a leading provider of strategic sourcing and category management services. The purchase consideration for the deal is Australian dollar (AUD) 37 million. Portland Group reported revenue of about AUD 31.3 million for the year ended 30 June 2011.

India's largest software services exporter by revenues Tata Consultancy Services (TCS) gained 1.57%. TCS recently announced that it will expand its operations in the state of Maharashtra by building a new software development campus in Nagpur with an investment of Rs 600 crore in the first phase.

India's third largest software services exporter by revenues Wipro jumped 4.59%.

Shares of organized retailers edged higher in a firm market. Store One Retail, Pantaloon Retail (India), Provogue (India), Shoppers Stop, Koutons Retail and Trent rose by between 0.32% to 4.80%.

Shares of construction companies rallied across the board. Valecha Engineering, IVRCL, PBA Infrastructure, Hindustan Construction Company, NCC, Roman Tarmat, Unity Infraprojects, C & C Constructions, KNR Constructions, Pratibha Industries, Gammon India, Sadbhav Engineering, Madhucon Projects and Era Infra Engineering rose by between 0.40% to 19.93%.

State Bank of India clocked a highest turnover of Rs 99.92 crore on BSE. JSW Steel (Rs 7022 crore), RIL (Rs 59.55 crore), Infosys (Rs 55.05 crore) and Tata Steel (Rs 52.38 crore), were the other turnover toppers on BSE in that order.

IFCI reported a highest volume of 47.69 lakh shares on BSE. Sujana Towers (37.70 lakh shares), Dazzel Confindive (37.37 lakh shares), Delta Corp (37.07 lakh shares) and Suzlon Energy (30.69 lakh shares), were the other volume toppers on BSE in that order.

Foreign institutional investors (FIIs) sold shares worth Rs 93.87 crore on Monday, 2 January 2012, as per provisional data from the stock exchanges. FIIs offloaded shares worth a net Rs 1287.84 crore in three trading sessions from 29 December 2011 to 2 January 2012, as per provisional data from stock exchanges.

Starting off the New Year on a liberalisation note, the government on Sunday, 1 January 2012, announced its decision to allow Qualified Foreign Investors (QFIs) to directly invest in the Indian equity market from 15 January 2012. The move comes against the backdrop of significant foreign capital outflows from the domestic equity market in recent times, which has resulted in rupee volatility. A QFI is an individual, group or association resident in a foreign country that is compliant with Financial Action Task Force (FATF) standards. QFIs do not include FIIs/sub accounts. In August last year, the government allowed foreign investors to directly invest up to $13 billion in equity and debt schemes of mutual funds.

Qualified foreign investors, or QFIs, will now be able to invest individually up to 5% of the capital of the Indian company. Cumulatively, QFIs can invest up to 10% of the capital of the company being invested in. These limits are over and above the FII and NRI investment ceilings prescribed under the PIS route for foreign investment in India, a government statement said. QFIs include pension funds which normally tend to stay invested for a longer period of time.

The next major trigger for the market is Q3 December 2011 corporate earnings, which will start tricking from the second week of January 2012. The focus will be on guidance from the company managements on outlook for the remaining part of the year and for the next year. Analysts expect weak Q3 December 2011 results due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges.

IT bellwether Infosys and housing finance major HDFC report Q3 results on 12 January 2012. HDFC Bank and Bajaj Auto unveil Q3 results on 19 January 2012. Axis Bank unveils Q3 results on 20 January 2012. Dabur India unveils Q3 results on 31 January 2012. Mahindra & Mahindra unveils Q3 results on 7 February 2012.

India's manufacturing activity surged to a six-month high in December thanks to a spike in factory output and new orders from domestic and international firms, a survey of purchasing managers showed on Monday. The HSBC Markit India Manufacturing PMI jumped to 54.2 from 51 in November, its biggest monthly rise since April 2009. The index has stayed above the 50 mark that separates growth from contraction for 33 months now.

Food inflation rose at its slowest pace in more than five years in the third week of December 2011, bolstering hopes of a steady easing in overall price pressures which could prompt Reserve Bank of India to consider cut in interest rates to revive a slowing economy. Food inflation eased to 0.42% in the week ended December 17 from 1.81% in the preceding week, the Commerce & Industry Ministry said on 29 December 2011. Inflation in the Primary Articles group eased to 2.7% in the week under review, from 3.78% in the week ended December 10. Inflation in the Fuel & Power group stood at 14.37% in the week ended December 17, from 15.24% in the previous week.

The Reserve Bank of India is likely to begin easing monetary policy to address concerns about economic growth, Governor D Subbarao said in an interview to a foreign electronic media house, reiterating comments made by the RBI when it kept rates unchanged on 16 December 2011. At its mid-quarterly monetary policy review meet on 16 December 2011, the Reserve Bank of India (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 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.

Credit rating agency Moody's Investors Service on 14 December 2011 said that the sharp decline in the value of the Indian rupee against the dollar over the past few months is generally exerting only a moderate impact on rated Indian companies. Risks for companies holding large amounts of dollar denominated debt are also manageable in the near term, given that debt maturities are limited for this time frame, Moody's said in a new report. This means Indian companies rated by Moody's do not have a significant dollar outflow at a time when the Indian rupee is losing ground.

The infrastructure sector output grew 6.8% in November from a year earlier, sharply higher than the annual growth of 3.7% in November last year, data released by the government on Monday, 26 December 2011, showed. The infrastructure sector accounts for 37.9% of India's industrial output.

India may face the risk of stagflation if the government doesn't take urgent steps to tame inflation and stimulate growth, a parliamentary panel on finance warned on 22 December 2011. The Standing Committee on Finance blamed the Reserve Bank of India's 13 interest-rate increases over the past 21 months for stalling economic growth. "Measures taken by the government and the RBI so far have squarely failed to rescue the economy from unabated inflation. Instead, monetary measures initiated for this purpose have only resulted in worsening the condition of the economy further," the report said.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on Monday, 2 January 2012. State elections are scheduled between the end of January and early March. "We have not yet decided the time, but naturally it (the budget) will be after the elections," Mukherjee told media reporters. 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 November exports rose an annual 3.87% to $22.3 billion, while imports for the month rose 24.55% to $35.9 billion, the government said in a statement on Monday. India's trade deficit in November was at $13.6 billion.

European stocks rose on Tuesday before a report that may show manufacturing in the US expanded in December at the fastest pace in six months. Key benchmark indices in UK and Germany rose by between 1.08% to 1.28%. France's CAC 40 fell 0.43%.

French President Nicolas Sarkozy will meet German Chancellor Angela Merkel in Berlin on 9 January 2012 for talks that are likely to centre on new rules to enforce budget discipline across the European Union (EU). The two leaders are anxious to flesh out a plan agreed at a December 2011 summit by all EU members except Britain for a new treaty to forge closer fiscal integration, as Europe battles to stem a sovereign debt crisis in the euro zone.

Finance ministers from the EU's 27 members will meet on 23 January 2012 before their leaders hold a summit a week later. They will be under intense pressure to find a definitive solution to the crisis which threatens the very survival of the single currency, 10 years after it came into circulation.

Asian stocks rose on Tuesday amid signs of increased manufacturing output around the world. Key benchmark indices in Hong Kong, Indonesia Singapore, South Korea and Taiwan rose by between 1.28% to 2.69%. Stock markets in China and Japan were closed for holidays.

Economic growth in Singapore contracted for the second time in three quarters, as manufacturing output softened, prompting policy makers to forecast slower GDP expansion this year. Singapore's GDP fell at an annualized pace of 4.9% in the fourth quarter of 2011 from the previous three months, when it climbed a revised 1.5%, the trade ministry said in a statement today.

The US ISM Manufacturing Index due later in the global day today, 2 January 2012, is widely expected to show an improvement in the December reading. The key US economic indicator due this week is the non-farm payrolls data for December 2011 due on Friday, 6 January 2012.