Market seen opening lower on weak Asian stocks

Market may kickstart trading for the week on a subdued note on negative Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 26 points at the opening bell. Asian markets edged lower on Monday as concerns about the global economy and the debt crisis in Europe continued to weigh on investor sentiment. State-run Coal India (CIL) has reportedly hiked the prices by an average of 10-15% for non-coking coal mined from selected blocks in Western Coalfields. The increase in the prices came into effect from midnight of 21 June 2012. Larsen & Toubro is reportedly looking to raise $400-500 million by selling stake in its infrastructure development subsidiary-L&T Infrastructure Development Projects. To arrest the rupee depreciation, the Reserve Bank of India (RBI) and the government are reportedly set to announce a slew of measures. The authorities may also provide interest relief for exporters. The government may also increase the cap for foreign investors buying corporate and government bonds. A higher limit will help the country attract more foreign exchange, thereby providing support to the Indian rupee. On the political front, Congress President Sonia Gandhi has reportedly convened a meeting of the Congress Working Committee today, 25 June 2012, at 11 IST to bid a formal and fond farewell to Pranab Mukherjee from the Congress party and from active politics. Pranab Mukherjee will tomorrow, 26 June 2012, step down as the country's Finance Minister before filing nomination papers for the July 19 Presidential election. On the macro front, marketmen will be closely watching balance of payment (BOP) data which is due on Saturday, 30 June 2012. Higher than expected BOP situation may further dampen the market sentiment and weaken rupee. Key benchmark indices snapped three-day winning streak on Friday after state-run India Meteorological Department (IMD) cut the expected quantum of total rainfall in the country for 2012. The BSE Sensex shed 60.05 points or 0.35% to settle at 16,972.51, its lowest closing level since 20 June 2012. Foreign institutional investors (FIIs) sold shares worth a net 174.22 crore on Friday, 22 June 2012, as per provisional data from the stock exchanges. They had sold shares worth a net Rs 257.29 crore on Thursday, 21 June 2012, as per provisional data from the stock exchanges. The India Meteorological Department (IMD) on Friday, 22 June 2012, cut the expected quantum of total rainfall in the country for 2012. The timing, distribution and quantity of the rains are vital to India's agricultural sector and economy, as more than 60% of the country's farmland is rain-fed. IMD said monsoon rains in 2012 would be 96% of the long-term average overall, down from its April forecast of 99%. A normal or average monsoon means rainfall between 96-104 percent of a 50-year average of 89 centimetres in total during the four-month season from June, according to IMD's classification. The weather office has forecast normal rains in July and August, key months for planting and maturing of crops. July rains this year are likely to be 98% of the long period average, while the rainfall in August is forecast to be 96% of the average Rainfall in the northwestern grain bowl region is likely to be a slightly deficient at 93% of the long-term average this season. Total amount of rain fall in the country as a whole was 24% below the long-term average as of 21 June 2012, IMD said. This year, the monsoon poses a different kind of challenge. The government has stored large amounts of wheat stockpiles in the open due to a shortage of space. The next major trigger for the stock market is Q1 June 2012 corporate earnings, which will start trickling from the second week of July 2012. HDFC announces Q1 results on 11 July 2012. Bajaj Auto reports Q1 results on 18 July 2012. Prime Minister Manmohan Singh at the G20 Plenary Session last week said that the Indian government is determined to create an environment that will boost investor sentiment and promote an atmosphere conducive to enterprise and creativity. He said that the government's policies will be transparent, stable and designed to provide a level playing field to both domestic and foreign investors. Singh said that the government is focusing heavily on infrastructure investment and it has set ambitious targets to keep infrastructure investment on track and also put in place a problem resolution mechanism to overcome implementation bottlenecks. Like other countries, we too allowed the fiscal deficit to expand after 2008 to impart a stimulus. We are now focussing on reversing the expansion. Singh said that the government is determined to take tough decisions, including on controlling subsidies The prospect of change of guard at the finance ministry has raised expectations of possible kick-starting of economic reforms in the country. Market men expect that either C Rangarajan, chairman of the Prime Minister's Economic Advisory Council, or P Chidambaram, Union home minister, will become the country's next finance minister if Pranab Mukherjee moves on to become the nation's next president after the upcoming presidential poll to be held next month. Election for the 13th President to succeed Pratibha Patil will be held on 19 July 2012. The counting of votes will be taken up on 22 July 2012, with the result to be out on the same day. Expectations are that if either Rangarajan or Chidambaram becomes the new finance minister, he would push through some economic reforms. Media reports suggest that Prime Minister Manmohan Singh is likely to handle the finance portfolio until a cabinet reshuffle next month. Recent media reports also suggested that the government will raise prices of diesel and cooking gas shortly as part of broader policy measures that the government is planning to unveil to attract capital inflows and boost investor confidence. These measures are reportedly aimed at averting a possible sovereign downgrade to junk status by rating agencies and reviving faltering growth. The BJP has decided to support P A Sangma for President of India against Pranab Mukherjee. The Congress-led United Progressive Alliance (UPA) coalition this month named Finance Minister Pranab Mukherjee as its nominee for the post of president in the upcoming presidential poll. Mukherjee is expected to step down soon as the country's finance minister. Adding to investor concerns, independent stress tests of Spanish banks on Thursday revealed capital needs for Spanish financial institutions in an adverse scenario could be as high as 62 billion euro (78.8 billion). Moody's Investor Service on Thursday downgraded 15 global banks citing volatility and risks in capital markets. The closely watched Ifo gauge of German business sentiment in June fell to 105.3 versus a forecast for a reading of 105.6 for the month, or slightly more than expected, as the euro-zone sovereign debt crisis clouded the economic outlook. In May, the index showed a reading of 106.9. The German June Ifo index, which is put together by the Munich-based Ifo Institute, is based on around 7,000 monthly survey responses from German firms in the manufacturing, construction, wholesale and retail sectors, according to Ifo. Germany is Europe's biggest economy. The latest German data comes as weak manufacturing reports from around the world on Thursday and disappointing housing and labour market data in the United States on the same day, heightened fears of slowdown in the global economy A key summit of the European Union is scheduled on 28 and 29 June 2012 to discuss the ongoing European debt crisis. At the upcoming EU summit, European officials will reportedly launch the long process of deeper integration within Europe, starting with a push for a banking union, with the aim of finalizing a broad plan by December 2012. European nations will take all necessary measures to safeguard the integrity and stability of the euro zone, improve the functioning of financial markets and break the feedback loop between sovereign debts and banks, according to the statement released at the end of the G20 summit in the Mexican resort of Los Cabos on 19 June 2012. Italian prime minister Mario Monti has warned about the likely consequences of failure to reach a breakthrough on Europe's debt problems at next week's European Union leaders summit, according to a latest newspaper report. There would be greater "speculative attacks on individual countries, with harassment of the weaker countries," Monti said, according to the report. A plan to stem debt contagion though the region was an "absolutely necessary" outcome of the meeting, he said, the report stated. Italian Prime Minister Mario Monti said Italy won't ask for a bailout from the European Union, according to an interview published Friday in the German daily Sueddeutsche Zeitung. He noted that EU forecasters have pencilled in a budget deficit of 2% of gross domestic product for Italy this year, while Holland and France have projected rates above 4%. Mr. Monti said Italy would have a structural surplus next year of 0.6%. But he said "something isn't right" when a euro zone country makes an enormous effort yet still has to pay high interest rates on its debt. Asian stocks declined today as concerns about the global economy and the debt crisis in Europe continued to weigh on investor sentiment. Key benchmark indices in Singapore, Japan, China, Taiwan, South Korea and Indonesia were down by 0.15% to 1.60%. Hong Kong's Hang Seng rose 0.15%. China and Brazil have agreed a currency swap arrangement that enables each country to access up to $30 billion as part of efforts to build a financial buffer to help guard against a freeze up in global markets, according to reports on Thursday. Each country will be able to tap the other's central bank for funds to help bolster reserves in the event of a crisis, according to newswire reports which cited Brazilian Finance Minister Guido Mantega as saying Thursday. The agreement was part of a 10-year accord also designed to promote two way investment and trade, reports said. An initial reading of HSBC's China manufacturing Purchasing Managers' Index on Thursday showed activity slowing in June from the previous month. HSBC China chief economist Hongbin Qu said the sharp fall in prices and moderation of new orders pointed to weak domestic demand. With external headwinds remaining strong, exports are likely to decelerate in the coming months, he said in a statement. US stocks ended higher on Friday, led by gains in bank shares. The Dow Jones Industrial Average rose 67.21 points, or 0.5%, to 12640.78. The Standard & Poor's 500 Index gained 9.51 points, or 0.72%, at 1,335.02. The Nasdaq Composite Index advanced 33.33 points, or 1.17%, at 2,892.42.