Market may continue uptrend

The market may extend recent strong gains buoyed by strong foreign fund inflows. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 27 points at the opening bell. Mahindra & Mahindra and GMR Infrastructure unveil Q3 results today, 7 February 2012.

Key benchmark indices gained for the fifth straight trading session on Monday, 6 February 2012 as the Congress led coalition government at the centre got a relief after a special court investigating the telecom licenses scam on Saturday, 4 February 2012, dismissed a petition to investigate Home Minister P Chidambaram's alleged role in a 2008 telecom scandal. The BSE Sensex jumped 102.35 points or 0.58% to settle at 17,707.31, its highest closing level since 28 October 2011.



Foreign institutional investors (FIIs) continued purchases of Indian stocks. FIIs bought shares worth Rs 997 crore on Monday, 6 February 2012, as per provisional data from the stock exchanges. FIIs have bought shares worth Rs 5688.93 crore in first four trading sessions this month, as per provisional data from the stock exchanges. FIIs made substantial purchases of Indian stocks last month. FIIs bought shares worth a net Rs 10357.70 crore in January 2012, as per data from Securities & Exchange Board of India (Sebi).

The 3rd quarter earnings season is at its peak. Bharti Airtel, ONGC, Power Grid Corporation of India and Tech Mahindra unveil Q3 results tomorrow, 8 February 2012. Tata Steel, Hindalco, ACC, Ambuja Cements and HPCL unveil quarterly results on Thursday, 9 February 2012.

DFL, Tata Power, BPCL, Reliance Communications (RCom), Britannia Industries, Sun TV Network, Essar Oil and Neyveli Lignite Corporation unveil Q3 results on Friday, 10 February 2012. JSW Steel announces consolidated Q3 results on Friday, 10 February 2012. The company has already announced its stand-alone results.

Aditya Birla Nuvo, Oil India and Ashok Leyland announce Q3 results on Saturday, 11 February 2012. State Bank of India, Cipla, Reliance Power, Indian Oil Corporation, Coal India, Sun Pharmaceuticals Industries and Steel Authority of India (Sail) unveil Q3 results on 13 February 2012. Tata Motors, Jaiprakash Associates and Shipping Corporation of India unveil Q3 results on 14 February 2012. Ranbaxy Laboratories announces Q4 December 2011 results on 23 February 2012.

India is facing some challenges on its stable rating outlook and the balance of risk factors for its rating may be shifting slightly toward the negative, said Standard & Poor's Ratings Services on Monday, 6 February 2012, in a report titled "Several Factors Could Weigh On India's Current Stable Sovereign Rating In 2012." High inflation, a weak government fiscal position, and slower economic growth have hurt investor confidence in the rupee, triggered a capital outflow, and weighed on the stable sovereign outlook on India in 2012, the report said. S&P has an investment grade BBB- rating with a stable outlook on India.

A trial court Saturday, 4 February 2012, dismissed a petition to investigate Home Minister P Chidambaram's alleged role in a 2008 telecom scandal, handing a much-needed victory to the Congress party-led national government. The scandal, which revolves around alleged fraud in the distribution of second-generation cellphone licenses, has destabilized the Congress government over the past 18 months. The Supreme Court citing the manner of the allocation recently ordered the scrapping of more than 100 licenses, putting at risk millions of dollars of investment by foreign telecom companies. Former Telecommunications Minister A Raja was arrested last year for his alleged role in the scandal. Mr. Raja, although a former minister in the Congress-led coalition, is a member of a smaller regional party.

The court ruled on Saturday that there was insufficient evidence to make Mr. Chidambaram a co-defendant alongside Mr. Raja and other politicians and corporate executives who are being investigated. Mr. Chidambaram has denied any wrongdoing.

India's services sector grew at its fastest pace in six months during January 2012 as new business swelled, extending the previous couple of months' positive trend into the new calendar year, a survey showed on Friday, 3 February 2012. The HSBC Business Activity Index, compiled by Markit and based on a survey of around 400 firms, bounced to 58 in January from 54.2 in December. That was the third month the index has been above the 50-mark separating growth from contraction.

India's manufacturing sector grew at its fastest pace in eight months in January 2012 as factory output surged the most on record on increased domestic and foreign demand, a survey showed last week. The HSBC manufacturing purchasing managers' index (PMI), compiled by Markit, jumped to 57.5 from 54.2 in December. The factory output sub-index jumped to 62.9 in January from 55.8 in December, the biggest rise from one month to the next on record. Both the output and the new orders indexes rose to their highest level since May last year.

India's trade deficit widened to $12.7 billion in December from $8.0 billion a year earlier as export growth slowed due to falling global demand. But imports, specially in the non-oil segments, continued to grow. For the April-December period, the trade gap was $133.2 billion, compared with $96.2 billion a year earlier. India's merchandise exports in December grew 6.7% from a year earlier to $25.0 billion while imports rose 19.8% to $37.7 billion.

The government last week lowered slightly its estimate of the country's growth in gross domestic product for the last fiscal year ended 31 March 2011, to 8.4% from 8.5%.

The Union Budget 2012-13 is likely to be presented in the parliament in mid-March 2012. The annual budget is usually presented on the last working day of February. However, the budget is likely to delayed this time due to the ongoing assembly polls. Polling for assembly elections in five states concludes in early March 2012.

Asian shares were mixed on Tuesday, as renewed fears of a messy debt default by Greece gave pause to mounting hopes the global economy is improving. Key benchmark indices in China, Japan, and Indonesia fell by between 0.18% to 1.42%. Key benchmark indices in South Korea, Taiwan, Hong Kong and Singapore rose by between 0.05% to 0.35%.

Greece's political leaders pushed back their decision for another day on Monday, resisting terms of a proposed new bailout deal which demands strict labour reforms and other austerity steps. The full package must be approved by the euro zone, the European Central Bank and the International Monetary Fund before February 15 in order to complete legal procedures for a bond swap deal for a March 20 bond redemption.

US stocks fell on Monday after a five-week rally on concerns Greece may be unable to avoid a chaotic default as it struggles to reach terms on a new bailout package.