Market may open flat to slightly higher

Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 6 points at the opening bell. Dr. Reddy's Laboratories, Power Finance Corporation and Hindustan Copper report Q3 results today, 3 February 2012.

Idea Cellular said after market hours on Friday, 2 February 2012, that the government's latest decision to quash all the 122 telecom licenses granted in 2008 also includes Idea's 9 licences and 4 licences of erstwhile Spice Communications which was merged with Idea Cellular.

Idea clarified that it has unnecessarily been caught in this situation of cancelled licenses, just because the licences were granted in January 2008, which was late as 18 months from the date of application. Idea said it had applied for 9 new telecom licences in 2006, long before the government took a decision to award licences in 2008.



Idea said it will study in detail the Supreme Court judgement and explore all possibilities to protect its investment. Idea said out of the total of 13 licences of the firm which have been cancelled, six licences are non-operational. With respect to the remaining 7 licences, Idea currently has over 6 million subscribers. These account for about 5% of the company's cumulative capex, 4% of revenue and are EBITDA loss making circles.

Key benchmark indices edged higher for the third consecutive trading session on Thursday, 2 February 2012. Data showing substantial purchases of Indian stocks by foreign institutional investors underpinned sentiment. Also supporting sentiment for the second day in a row was data released during trading hours on Wednesday, 1 February 2012, showing strong manufacturing sector growth in the month just gone. The BSE Sensex rose 131.27 points or 0.76% to settle at 17,431.85, its highest closing level since 8 November 2011.

Foreign funds continued buying in first two days of February 2012 after making heavy purchases in January 2012. Foreign institutional investors (FIIs) bought shares worth Rs 1941.23 crore on Thursday, 2 February 2012 after buying shares worth Rs 1676.49 crore on Wednesday, 1 February 2012, 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. Hindustan Unilever, National Aluminium Company and India Cements announce Q3 results on Monday, 6 February 2012. Mahindra & Mahindra and GMR Infrastructure unveil Q3 results on 7 February 2012. Bharti Airtel, ONGC, Power Grid Corporation of India and Tech Mahindra unveil Q3 results on 8 February 2012. Tata Steel, Hindalco, ACC, Ambuja Cements and HPCL unveil quarterly results on 9 February 2012. Tata Power, BPCL, Britannia Industries, Sun TV Network and Neyveli Lignite Corporation unveil Q3 results on 10 February 2012. JSW Steel announces consolidated Q3 results on 10 February 2012. The company has already announced its stand-alone results.

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

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 on Wednesday. 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 on Tuesday, 31 January 2012, lowered slightly its estimate of the country's growth in gross domestic product for the last fiscal year ended 31 2011, to 8.4% from 8.5%.

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. Polling for assembly elections in five states concludes in early March 2012. The annual budget is usually presented on the last working day of February.

Seven-phase polling for assembly elections in Uttar Pradesh begins on Saturday, 4 February 2012.

Asian stocks fell on Friday after earnings reports from Japan and South Korea disappointed investors. Key benchmark indices in China, Hong Kong, Japan, South Korea, and Taiwan fell by between 0.09% to 0.54%. Key benchmark indices in Indonesia and Singapore rose by between 0.1% to 0.66%. The finance ministers of the AAA rated countries using the euro -- Germany, Luxembourg, the Netherlands and Finland -- are set to meet today in Berlin.

US stocks were unchanged on Thursday while they looked ahead to Friday for a major jobs report. Labor Department said the four-week average of unemployment claims fell to 3,75,750, the lowest since June 2008 and enough to suggest a steadily improving job market. The more important numbers come Friday, when the government releases the number of jobs created in January and the unemployment rate. In December, the country added 200,000 jobs, and the rate was 8.5 percent.