Market seen opening lower on weak Asian equities

Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 17 points at the opening bell. Asian markets edged lower on Wednesday, 28 March 2012, as investors waited for more clues on the state of the US economy. State Bank of India (SBI) has raised fixed deposit rates on select maturities by up to 1% with effect from Wednesday, 27 March 2012, amid tight liquidity situation. Fixed deposits with maturity period of 7-90 days will earn 8% interest against existing 7%. Interest rates on 91-179 day and 181-240 day period fixed deposits have been raised by 0.75% and 1%, respectively. The rate of interest will be 8% now. Interest rate on 241-day to one-year deposits has been raised by 0.25% to 8%. The announcement was made after market hours on Tuesday, 27 March 2012. GAIL (India) on Tuesday said it has set gas transmission target of 121.55 MMSCMD and gas marketing target of 85.75 MMSCMD from domestic sources and through LNG route for the year ending March 2013 (FY 2013) under the annual memorandum of understanding (MoU) signed with the Ministry of Petroleum and Natural Gas. The MoU provides for production target of 430 TMT of polymers (HDPE & LLDPE) and 1,370 TMT of liquid hydrocarbons, GAIL (India) said. The financial targets are set at Rs 43430 crore of gross sales and gross margin of Rs 6287 crore, the company said. The announcement was made after market hours on Tuesday, 27 March 2012. The upstream oil regulator Directorate General of Hydrocarbons (DGH) has reportedly rejected Reliance Industries' (RIL) plea that geological complexities are hindering drilling new wells on KG-D6 gas fields, and has asked RIL to drill new wells to boost output. Tata Steel reportedly plans to borrow up to Rs 50000 crore in loans as the company is now more comfortable to raise funds for capacity expansion and purchase of mines to consolidate its position as the world's seventh-largest steelmaker. Key benchmark indices surged in choppy trade on Tuesday, 27 March 2012, after media reports said the government will not target participatory notes or P-Notes in a blanket manner under its newly proposed General Anti-Avoidance Rule (GAAR) targeting tax avoidance which comes into effect from 1 April 2012. The BSE Sensex jumped 204.58 points or 1.2% to settle at 17,257.36, its highest closing level since 23 March 2012. TV reports citing unnamed finance ministry officials on Tuesday, 27 March 2012 said that the finance ministry will not be chasing after P-Notes, or derivative products that allow foreign investors to invest anonymously into Indian equities, as part of its recently proposed General Anti-Avoidance Rule (GAAR) which comes into effect from 1 April 2012. Finance Minister Pranab Mukherjee on Tuesday made it clear the new rules were meant to check tax avoidance through complicated deals, and not directed against any particular mode of investment like participatory notes (PNs). There have been concerns that investments coming to India through tax havens like Mauritius could also be subject to General Anti-Avoidance Rules. A large portion of FIIs investing into India are domiciled in Mauritius. The double taxation avoidance agreement (DTAA) that India has signed with Mauritius enables tax on securities transaction to be taxed in the country where the company is resident. Since capital gains tax rate in Mauritius is zero, foreign investors buying or selling Indian stocks through the Mauritius route get away by paying no capital gains tax. The market may remain volatile in the immediate future as traders roll over positions from the near-month March 2012 series to April 2012 series. The March 2012 derivatives contracts expire on Thursday, 29 March 2012. The government plans to raise Rs 3.7 lakh crore from the market by issuing bonds during the first half of 2012-13. This works out to around 65% of the total market borrowings estimated at Rs 5.7 lakh crore in the next financial year. Typically, the government completes two-thirds of its borrowings in the first half, the so-called lean season for private sector fund raising. On an average, the government will borrow around Rs 15,000 crore every week. The announcement, which came after market hours on Tuesday, 27 March 2012, is likely to send bond yields higher on concerns of large supplies. Meanwhile, the Bombay Stock Exchange (BSE) on Tuesday suspended trading in securities of 49 companies from 20 April 2012 on account of non-compliance with the provisions of the listing agreement. The stock exchange, however, said if a company complies with the provisions of the listing agreement by 13 April 2012, then the trading will be suspended till 26 April 2012. In case a company fails to comply with the provisions till 20 April 2012, then its trading will be suspended till it complies with the norms. Foreign institutional investors (FIIs) bought shares worth a net Rs 42.99 crore on Tuesday, 27 March 2012, as per provisional data from the stock exchanges. They had sold shares worth a net Rs 135.29 crore on Monday, 26 March 2012. Earlier FIIs had made substantial purchases of Indian stocks with their inflow totaling Rs 7305.48 crore in 11 trading sessions from 9 to 23 March 2012, as per provisional data from the stock exchanges. The next major trigger for the market is Q4 March 2012 earnings. Investors will focus on the guidance provided by the management for the year ending March 2013 (FY 2013) to gauge the earnings outlook. The Q4 earnings season will begin in mid April 2012. Advance tax payout of top Indian firms for the last installment of 15 March 2012 was largely flat. A muted advance tax payment indicates that the revenues and profits of companies are under stress. Companies have to pay advance tax on their projected earnings a fortnight before the end of every quarter. Asian markets edged lower on Wednesday as investors waited for more clues on the state of the US economy. Key benchmark indices in China, Japan, Hong Kong, Indonesia, Singapore and South Korea were down by between 0.15% to 1.01%. Taiwan's Taiwan Weighted index was up 0.16%. US stocks retreated from near four-year peaks on Tuesday, 27 March 2012, as investors took a breather following a strong market rally. The Dow Jones industrial average shed 43.90 points, or 0.33%, to 13,197.73. The Standard & Poor's 500 index dropped 3.99 points, or 0.28%, to 1,412.52 and the Nasdaq Composite index dipped 2.22 points, or 0.07%, to 3,120.35. A report quoted the US Federal Reserve Chairman Ben Bernanke as saying on Tuesday that it was too soon to declare victory in the US economic recovery, warning against complacency in policymaking as the outlook brightens. German Chancellor Angela Merkel on Monday said Germany may back plans for the temporary and permanent euro-area rescue funds to run in parallel. European finance ministers meet on Friday, 30 March 2012 to discuss raising a 500 billion-euro ($664 billion) ceiling on the region's financial firewall.