Market seen opening lower on weak global cues

The market is likely to see a negative start on negative Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 22.50 points at the opening bell. Asian markets declined on Thursday as the US Federal Reserve did not signal a third round of quantitative easing. Telecom stocks may see action ahead of today's Empowered Group of Ministers (EGoM) meeting to decide on the base price for the 2G spectrum auction. The base price of Rs 3622 crore per MHz (Mega Hertz) recommended by sector regulator Trai was roundly criticised by telecom operators, after which the Telecom Commission sought a regulatory report on the base price's impact on tariffs. Key benchmark indices edged higher for the second straight trading session on Wednesday, 20 June 2012, as world stocks rose on the back of upbeat US housing data and on prospects of more monetary easing by the Federal Reserve. The BSE Sensex advanced 36.83 points or 0.22% to settle at 16,896.63, its highest closing level since 15 June 2012. Foreign institutional investors (FIIs) bought shares worth a net Rs 119.58 crore on Wednesday, 20 June 2012, as per provisional data from the stock exchanges. The next major trigger for the 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. Several major emerging-market countries early this week detailed their plans to lift the International Monetary Fund's bailout fund by more than euro 90 billion ($114 billion) to euro 456 billion to help contain the European sovereign-debt crisis. India will contribute $10 billion to the crisis management fund. The Reserve Bank of India governor D Subbarao on Tuesday warned that inflation is above acceptable levels and he called on the government to do more to support the flagging economy after a controversial decision early this week to leave rates unchanged in the face of pressure for a cut. In his first comments since the rate meeting, Subbarao said it was critical that the RBI contained demand pressures while the government works on easing supply bottlenecks in the economy, particularly in food distribution. Subbarao said there is "no new normal for inflation" in India, referring to unyielding price pressures that have plagued the economy for several months. The Reserve Bank of India's "medium-term inflation goal is still 4%-5%," Subbarao said in a presentation on the central bank's web site. Prime Minister Manmohan Singh at the G20 Plenary Session on Monday, 18 June 2012, 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 Congress-led United Progressive Alliance (UPA) coalition last week named Finance Minister Pranab Mukherjee as its nominee for the post of president in the upcoming presidential poll. Mukherjee is expected to step down as the country's finance minister later this month. Prime Minister Manmohan Singh is widely expected to handle the finance portfolio himself. Singh early this month laid out ambitious infrastructure development plans for the current fiscal year, in an effort to counter criticism over a perceived policy paralysis that has led India into its worst slowdown in nearly a decade. Asian stocks slipped on Thursday after the US Federal Reserve failed to issue measures to stimulate the economy. Key benchmark indices in Singapore, China, Taiwan, South Korea, Hong Kong and Indonesia were down by 0.34% to 0.95%. Japan's Nikkei 225 rose 0.96%. Chinese manufacturing activity weakened further in June compared to business conditions in the previous month as output and new export orders declined, according to the initial findings of a survey by HSBC released Thursday. The so-called flash Purchasing Managers' Index dropped to a seven-month low of 48.1 in June, compared with the final reading of 48.4 in May, HSBC said in a statement. A reading below 50 indicates a deterioration in business conditions at factories, while one above 50 shows an improvement. The Spanish government holds a critical bond auction today, 21 June 2012. At its bond auction Thursday, Spain will offer euro 1 billion to euro 2 billion of three bonds, maturing in 2014, 2015 and 2017. A key summit of the European Union is scheduled on 28 and 29 June 2012 to discuss the ongoing European debt crisis. Tighter European banking supervision and measures to strengthen the monetary union are largely expected to be among top proposals at an EU summit. Four members of the Bank of England's Monetary Policy Committee (MPC) voted in favor of an increase in the bank's asset purchase program, while the committee unanimously agreed on keeping interest rates at a record low of 0.5%, minutes from the latest meeting in early June showed on Wednesday. Three members recommended raising the quantitative easing program by 50 billion pounds ($78.6 billion) to 375 billion pounds, while one member preferred to increase the program to 350 billion pounds. However, most members noted that key events in the euro zone in coming weeks could affect the situation in the euro zone and that there was merit in waiting to see how matters evolved there before the MPC reached a conclusion on whether to add any further monetary stimulus, the minutes said. The MPC further discussed a cut in interest rates, but judged that lower rates would not have any advantages over the asset purchase program. Moody's Investors Service on Wednesday, 20 June 2012, upgraded Turkey's government bond ratings by one notch to Ba1 from Ba2, and maintained the positive outlook. China shouldn't allow annual economic growth to slip below 7.5%, and more support measures might be needed, Ministry of Finance researcher Jia Kang said Wednesday. The People's Bank of China has already shifted to a more accommodative monetary stance, and new easing measures can be expected if growth weakens further in the second half, Mr. Jia said at a financial seminar. He said lowering taxes for enterprises isn't enough to solve any corporate difficulties affecting growth unless combined with fiscal support. The Chinese government has set a gross domestic product growth target of 7.5% for 2012, but concern over global economic conditions has raised doubts that the target can be met US markets were mixed on Wednesday after the US Federal Reserve acted to aid the fragile economy with stimulus measures that were in line with market expectations but no further guidance on additional actions was given. The Dow Jones Industrial Average was down 12.94 points, or 0.10%, at 12,824.39. The Standard & Poor's 500 Index was down 2.29 points, or 0.17%, at 1,355.69. The Nasdaq Composite Index was up 0.69 point, or 0.02%, at 2,930.45. The two-day meeting of the Federal Open Market Committee on US interest rates concluded on Wednesday, 20 June 2012. The US Fed, as expected, extended its programme of selling short-term securities and buying longer-dated ones, a move aimed at driving down borrowing costs, but did not signal a third round of quantitative easing. Fed Chairman Ben Bernanke, after a two-day policy meeting on Wednesday said the central bank was concerned Europe's prolonged debt crisis was dampening U.S. economic activity and employment. "If we are not seeing sustained improvement in the labor market that would require additional action," he said. "We still do have considerable scope to do more and we are prepared to do more." The US Federal Reserve slashed its estimates for U.S. economic growth this year to a range of 1.9 %to 2.4%, down from an April projection of 2.4% to 2.9%. It cut forecasts for 2013 and 2014, as well. The Fed, which has held overnight interest rates near zero since December 2008, reiterated its expectation that rates would stay "exceptionally low" through at least late 2014.