Next batch of Q3 results, RBI policy in focus

A number of third quarter corporate results, monetary policy review from the central bank and expiry of the near month derivatives contracts, may cause volatility on the domestic bourses next week. The central bank holds a quarterly policy review on Tuesday, 25 January 2011. As per a poll by Capital Market, economists widely expect 25 basis points increase each in repo rate and reverse repo rate at 25 January 2011 policy review. Reserve Bank of India governor Duvvuri Subbarao said on Monday, 17 January 2011, that the country is facing surging inflation and that the RBI needs to calibrate monetary policy in order to manage inflation and also support growth. Financial markets are closed on Wednesday, 26 January 2011 on account of Republic Day.




Shares of Reliance Industries (RIL), State Bank of India (SBI) and Ashok Leyland will react to their third quarter results when trading starts on Monday, 24 January 2011. RIL is due to report earnings after trading hours on Friday, 21 January 2011. SBI and Ashok Leyland are due to report earnings on Saturday, 22 January 2011.

ICICI Bank, HDFC Bank, Sterlite Industries, Dr Reddys Laboratories, Jindal Steel & Power, Hindustan Unilever, Idea Cellular, Bharat Forge, Chambal Fertiliser & Chemicals, Godrej Consumer Products, Asian Paints, Godrej Industries, Indian Bank, Karnataka Bank, SKS Microfinance, Sesa Goa, Sobha Developers, Union Bank of India, Welspun Corp, Indian Oil Corporation, UltraTech Cement, HPCL, JSW Steel, Lupin, Neyveli Lignite Corporation, Tata Chemicals, Thermax, UTV Software, Procter & Gamble Hygiene and Healthcare, Siemens, Sun TV Network, EIH and Titan Industries, among others will announce their October-December 2010 quarter results next week.

So far, the combined net profit of 228 companies rose 22.5% to Rs 23,116 crore on 27% increase in sales to Rs 159909 crore in the quarter ended December 2010 over the quarter ended December 2009.

Investors are concerned about the pace of inflow from foreign investors in India amid an improving economic outlook in the developed world. As per reports, foreign investors are looking to buy more US stocks, or stocks of countries which benefit from US recovery. For instance, South Korean and Taiwanese companies that export products to the US would benefit from US growth, so they may be more attractive options.

Foreign institutional investors (FII) have pulled out Rs 2649.90 crore since the start of the New Year (till 19 January 2011). FII inflow in the calendar year 2010 totaled Rs 133266 crore. The annual inflow in 2010 was at record level.