Firm opening on the cards

The market may extend recent strong gains on firm Asian stocks. The sentiment remains firm on sustained buying by foreign funds over the past few days. Trading of S&P CNX Nifty on the Singapore stock exchange indicates a gain of 50.50 points at the opening bell.

Foreign institutional investors (FIIs) bought shares worth a net Rs 599.66 crore on Friday, 1 July 2011, as per provisional data from the stock exchanges. FII inflow totaled Rs 2662.74 crore in June 2011, as per the data from the stock exchanges.



Tata Consultancy Services (TCS) Chairman Ratan Tata on Friday, 1 July 2011, said growth prospects for firm will remain robust. "One of the major beneficiaries of the global outsourcing spends is India and so the prospects for TCS are going to continue to be quite robust," Tata said while speaking at the annual meeting of the company's shareholders. Tata said the company is seeking to expand its share of business from the Latin American market, which currently accounts for 3.6% of the more than $8 billion revenue. The company also plans to spend Rs 2300 crore in capital expenditure in the current fiscal year through March, he added.

Tata also said the company may look at merging CMC, a provider of computer system integration and services in which the technology major held 51% stake, back into TCS, when the right time comes.

Iran will not cut oil supplies to India despite warning refiners it could do so if months of unpaid bills are not settled soon, the Iranian Oil Ministry's news website SHANA said on Sunday, 3 July 2011. "A warning has been sent to those refineries that are debtors, but sending such a letter does not mean Iran's oil exports have been cut, and we have no intention to cut our exports to the Indian market," SHANA quoted Mohsen Ghamsari, head of international affairs at the National Iranian Oil Co. (NIOC), as saying.

"Iran's crude exports to India are continuing, and the news reported in some media that Iran has cut its crude exports to India is absolutely wrong," SHANA quoted him as saying. India owes Iran $2 billion for oil imports in recent months due to the payments dispute related to US moves to isolate Iran, which Washington suspects of seeking nuclear weapons. Tehran denies the charge. The payments impasse was triggered in December when the Reserve Bank of India ended a regional clearing mechanism under US pressure.

The market soon enters the crucial period of corporate earnings. Investors will closely watch the post-Q1 June 2011 result management commentary to gauge the future earnings outlook at a time when firms are witnessing cost pressures amid rising interest rates and staff costs. A hike in transportation costs will add to cost pressure of India Inc. As per reports, freight rates have gone up by 8% to 9% on all routes across India following the recent hike in diesel prices.

Housing finance major HDFC unveils Q1 June 2011 results on Friday, 8 July 2011. IT bellwether Infosys Technologies will unveil Q1 results on 12 July 2011.

The manufacturing sector lost steam last month with marked declines in output indicating taut monetary conditions may be taking hold even as prices remained at elevated levels, a survey showed on Friday, 1 July 2011. The HSBC Markit Purchasing Managers' Index, based on a survey of around 500 companies, showed a sharp fall to 55.3 in June from 57.5 in May, its lowest level since September last year and the steepest monthly fall since November 2008.

The India Meteorological Department (IMD) on Thursday, 30 June 2011, said widespread rainfall is expected over Uttar Pradesh, the largest sugarcane growing state, in the next three to five days. The IMD said a slight increase in rainfall activity is also expected in the southern regions, while scattered rains are likely over central parts. Rainfall from the start of the monsoon season until 30 June 2011 was 182 millimeters, 11% above the long-term average.

According to reports, there could be a lull in the rains in the first week of July 2011 and that may continue until mid-July 2011. Rainfall in the month of July is considered crucial as sowing of a number of crops starts in June and good July rains determine the soil moisture and ensure proper development of the crops planted in June.

Merchandise exports rose 56.9% to $25.9 billion in May 2011 from a year earlier, according to provisional data issued Friday by the Ministry of Commerce. Imports rose 54.1% to $40.9 billion, largely due to a rise in non-oil imports, which were up 71% from a year earlier at $30.75 billion. Oil imports in May rose 18.6% to $10.2 billion.

During the April-May period--the first two months of the current fiscal year--exports rose 45.3% to $49.8 billion, while imports rose 33.3% to $73.7 billion.

Asian stocks advanced on Monday, 4 July 2011, as exporters climbed after US manufacturing unexpectedly accelerated in June 2011. The key benchmark indices in Hong Kong, China, Indonesia, Japan, Singapore, South Korea and Taiwan were up by between 0.6% to 1.79%.