Market seen opening slightly higher

Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a gain of 4.50 points at the opening bell. Asian markets were trading lower on Tuesday as investors remained skeptical that the European leaders summit later this week will produce any substantial measures to solve the region's debt crisis. Adani Ports And Special Economic Zone's board of directors at its meeting held on 25 June 2012 had approved the re-appointment of Mr. Gautam S. Adani as a Managing Director of the company for a further period of five years with effect from 1 July 2012 Key benchmark indices dropped in choppy trade on Monday as Reserve Bank of India's announcement of measures to attract greater foreign investment in government bonds and increase in the total amount that Indian companies can borrow by way of external commercial borrowing (ECB), fell short of investors' expectations. The BSE Sensex lost 90.35 points or 0.53% to settle at 16,882.16, its lowest closing level since 19 June 2012. Foreign institutional investors (FIIs) bought shares worth a net Rs 153.10 crore on Monday, 25 June 2012, as per provisional data from the stock exchanges. The Reserve Bank of India (RBI) on Monday, 25 June 2012, said it has decided in consultation with the Government of India (GoI), to allow Indian companies in manufacturing and infrastructure sector and having foreign exchange earnings to avail of external commercial borrowing (ECB) for repayment of outstanding rupee loans towards capital expenditure and/or fresh rupee capital expenditure under the approval route. The overall ceiling for such ECBs would be $10 billion, RBI said in a statement. The RBI in consultation with GoI has also decided to raise the existing limit for investment by Securities and Exchange Board of India (Sebi ) registered foreign institutional investors (FIIs) in government securities (G-Secs) by a further amount of $5 billion. This would take the overall limit for FII investment in G-Secs from $15 billion to $20 billion, RBI said. In order to broad base the non-resident investor base for G-Secs, it has also been decided to allow long term investors like Sovereign Wealth Funds (SWFs), multilateral agencies, endowment funds, insurance funds, pension funds and foreign central banks to be registered with Sebi, to also invest in G-Secs for the entire limit of $20 billion, RBI said. The sub-limit of $10 billion (existing $5 billion with residual maturity of 5 years and additional limit of $5 billion) would have the residual maturity of three years, RBI said. The terms and conditions for the scheme for FII investment in infrastructure debt and the scheme for non-resident investment in Infrastructure Development Funds (IDFs) have been further rationalised in terms of lock-in period and residual maturity, RBI said. Further, Qualified Foreign Investors (QFIs) can now invest in those mutual fund (MF) schemes that hold at least 25% of their assets (either in debt or in equity or both) in infrastructure sector under the current $3 billion sub-limit for investment in mutual funds related to infrastructure, RBI said. The stock market had expected other measures, including steps to boost exports and cut excise duty on certain products to increase local consumption, but there was no immediate announcement of these on Monday, 25 June 2012. Expectations of a major move to revive faltering economic growth were fired on Saturday, 23 June 2012, when Finance Minister Pranab Mukherjee told reporters in Kolkata that that the government in consultation with the Reserve Bank of India, will announce a clutch of measures on Monday, 25 June 2012, to help revive market sentiment. The stock market may remain volatile this week as traders roll over positions from the near-month June 2012 series to July 2012 series. The June 2012 derivatives contracts expire on Thursday, 28 June 2012. On the political front, the Congress Working Committee on Monday bid farewell to Pranab Mukherjee, its senior-most member with Prime Minister Manmohan Singh praising the UPA's presidential nominee for his immense contribution to public life and saying the party veteran would be missed. Pranab Mukherjee will today, 26 June 2012, step down as the country's Finance Minister before filing nomination papers for the July 19 Presidential election. Moody's Investors Service on Monday, 25 June 2012, said it is maintaining its stable outlook on India's sovereign rating as the growth slowdown and deteriorating business sentiment in the economy are likely to be temporary. The decision would give the Indian government the much-needed respite as it faces heat due to a cut in outlook to negative from stable by Standard & Poor's in April and by Fitch last week. Standard & Poor's and Fitch had warned that India could lose its investment grade rating if swift measures weren't taken to revive investment climate and boost growth in the economy. Moody's said India's Baa3 rating already reflected challenges such as a weak fiscal performance of the government, high inflation and an uncertain investment policy environment, which have characterized the economy for decades. "Certain recent negative trends -- such as lower growth, slowing investment and poor business sentiment -- are unlikely to become permanent or even medium-term features of the Indian economy, although global and domestic factors, including potential shocks in agriculture, could keep India's growth below trend for the next few quarters," Moody's said in a statement. Moody's said the slowdown in growth and high inflation will hurt India's credit profile, but not enough to lead to a revision in its rating. India's limited foreign currency debt is also likely to shield the government from any significant increase in its external debt burden due to the sharp fall in the rupee, the ratings firm added. 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. As per reports, sowing of most Kharif crops has been below last year's level so far, except sugarcane where it increased. The monsoon rains -- which make up around 70% of India's annual rainfall -- are crucial to the nation's agriculture sector and broader economy. 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. Infosys announces its Q1 results on 12 July 2012. HDFC Bank declares its Q1 results on 13 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 which he is expected to announce in September 2012. 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. Meanwhile, Italy is scheduled to sell inflation-linked securities maturing in 2016 and 2026 today, 26 June 2012 as well as 3 billion euros ($3.8 billion) of zero-coupon bonds. Spain will offer three- and six-month bills on the same day. Late on Monday, Moody's Investors Service downgraded the long-term debt and deposit ratings for 28 Spanish banks and two issuer ratings, following a cut to Spain's sovereign rating to just above junk status earlier this month. The Spanish government made its formal request Monday for bank aid from the European Union, but it mentioned no specific sum outside of the previously stated maximum of €100 billion ($125 billion). The government said a memo of understanding should be signed by July 9. Fitch Ratings on Monday cut Cyprus's credit rating to BB+ from BBB-, with a negative outlook maintained. The European Central Bank (ECB) said Friday, 22 June 2012, it will widen the range of securities it will accept from euro-zone banks in exchange for its loans with the aim of helping boost lending to companies and households. The ECB will now accept certain mortgage-backed securities, car loans and loans to small and medium-size firms. The measure is to come into force once approved in a legal act and expected to be adopted 28 June 2012, the ECB said. 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. Asian shares edged lower on Tuesday as investors remained skeptical that the European leaders summit later this week will produce any substantial measures to solve the region's debt crisis. Key benchmark indices in Singapore, Japan, China, Taiwan, South Korea and Indonesia were down by 0.16% to 0.59%. Hong Kong's Hang Seng index rose 0.08%. 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 declined on Monday as investors saw little reason to be optimistic about a European Union summit which is due later this week. The Dow Jones Industrial Average dropped 137.97 points, or 1.09%, to 12,502.81. The Standard & Poor's 500 Index lost 21.30 points, or 1.60%, to 1,313.72. The Nasdaq Composite Index declined 56.26 points, or 1.95%, to 2,836.16.