Market may fall on weak Asian stocks

The market may edge lower in early trade tracking weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 3.50 points at the opening bell.

Among corporate news, Reliance Infrastructure said after market hours on Monday that it bought back 1 lakh shares on Monday under the buyback program. It added it so far bought back 8 lakh shares under the buyback program. The company has announced buyback of shares for an aggregate amount of upto Rs 1000 crore.



ACC, Ambuja Cements and UltraTech Cement will unveil January to March 2011 quarter results today.

Tata Steel will reportedly not sell its stake in Australian mining entity Riversdale, which was acquired by Anglo-Australian miner Rio Tinto earlier this month. Tata Steel, through its wholly-owned subsidiary TS Global Minerals Holdings, is the single largest shareholder of Riversdale owning 27.14%.

Volatility may remain high on the bourses in the near term as traders rollover positions in the futures & options (F&O) segment ahead of the expiry of the near-month April 2011 contracts on Thursday, 28 April 2011.

The near term major trigger for the market is Q4 March 2011 results of India Inc. Investors will scrutinize post-result management commentary to gauge outlook on earnings at a time when rising salaries, raw materials prices and interest rates are pressurizing profit margins of India Inc. High global commodity prices will add to pressure on profit margins of Indian firms.

The combined net profit of a total of 172 companies rose 23.1% to Rs 21280 crore on 27.3% rise in sales to Rs 178140 crore in Q4 March 2011 over Q4 March 2010.

Foreign institutional investors (FIIs) sold shares worth Rs 377.59 crore and domestic institutional investors bought shares worth Rs 236.62 crore on Monday as per provisional data. FIIs bought shares worth a net Rs 633.50 crore from the secondary equity markets on Thursday, 21 April 2011. FIIs bought shares worth a Rs 402.30 crore from the secondary equity markets on Wednesday, 20 April 2011. FIIs had bought shares worth a net Rs 1836 crore from the secondary equity markets on Tuesday, 19 April 2011.

The food price index rose 8.74% and the fuel price index climbed 13.05% in the year to 9 April 2011 government data on Thursday showed. In the previous week, annual food and fuel inflation stood at 8.28% and 12.97% respectively. The primary articles price index was up 11.96% compared with an annual rise of 11.40% a week earlier.

India Meteorological Department (IMD) has predicted the southwest monsoon 2011 to be 98% (normal) of the long period average (LPA) with a model error of plus/minus 5%. IMD has indicated that there is very low probability for the season rainfall to be deficient (below 90% of LPA) or excess (above 110% of LPA). The IMD released its initial forecast for the June to September monsoon on Tuesday 19 April 2011. The forecast is made in two stages in April and in June. The forecast for the season as a whole (June-September) is issued in the first stage.

Normal monsoon this year could help ease food inflation and boost rural income. The quantity and geographical spread of rainfall during the monsoon season is crucial for India's agriculture sector as the country lacks irrigation facilities on more than half of its farm land. The South Asia Climate Outlook Forum predicted that South Asia is likely to receive normal monsoon rains in 2011. It said the La Nina weather phenomenon, which aids monsoon in the region, would continue until June.

With inflation remaining above its comfort level, the Reserve Bank of India (RBI) is seen raising key short term policy rates by 25 basis points at its annual 2011-2012 monetary policy review on 3 May 2011.

A sharp surge in global crude oil prices over the past few months has raised macroeconomic worries. India imports majority of its crude oil requirements and high oil prices had raised concerns about widening current account deficit. High oil prices had also raised concerns about higher oil subsidy bill for the government and its negative impact on the government's fiscal position. US crude futures were down 97 cents or 0.86% at 111.31 a barrel.

The Central Bureau of Investigation (CBI) arrested Suresh Kalmadi, the former chief organiser of the Delhi Commonwealth Games on Monday as part of a crackdown on corruption, embarrassing the government as it fights major state polls. Kalmadi, also a senior lawmaker from the ruling Congress Party, was sacked in November after games organisers were accused of manipulating contracts and inflating bills in an event which was meant to showcase India's rise as a global power but was instead beset by problems. Hours after his arrest on Monday, Kalmadi was suspended from the Congress Party.

In a separate case, Kanimozhi, the daughter of a key ally in Prime Minister Manmohan Singh's government was among those charged on Monday with taking bribes in the multi-billion dollar 2G licensing scandal. Kanimozhi, the daughter of Dravida Munnetra Kazhagam (DMK) party's head and herself a lawmaker, was among those charged with handling bribes along with several business executives.

Asian stock markets inched lower on profit taking on Tuesday before this week's Federal Reserve meeting where investors will look for indicators on its plans to exit the ultra-easy monetary policy. The key benchmark indices in China, Hong Kong, Indonesia, Japan, Singapore, South Korea and Taiwan fell by between 0.04% to 0.98%.

In the lightest volume session of the year, U.S. stocks fell on Monday after a lowered outlook from Kimberly-Clark increased concerns about higher commodity costs squeezing profits in coming quarters.

Investors will parse the US Federal Reserve's policy statement and every word Fed Chairman Ben Bernanke says in a news conference that follows a two-day meeting of the Fed on interest rates on Tuesday-Wednesday (26-27 April 2011). Global markets will react favorably to some indication that the Fed feels inflation is under control, and recent spikes are only temporary. Any signs of worry about rising prices will telegraph a faster end to the ultra-low rate policy.