Sensex fails to hold 17,000

Key benchmark indices snapped three-day winning streak after state-run India Meteorological Department (IMD) cut the expected quantum of total rainfall in the country for 2012. The barometer index, BSE Sensex, fell below the psychological 17,000 mark, a day after regaining that mark on Thursday, 21 June 2012. The Sensex shed 60.05 points or 0.35%, off 43.55 points from the day's high and up 164.71 points from the day's low. The market breadth was negative. Weakness in global stocks also weighed on sentiment. The Sensex has risen 753.98 points or 4.64% so far in this month (till 22 June 2012). The barometer index has gained 1,517.59 points or 9.81% in calendar 2012 so far (till 22 June 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,836.65 points or 12.13%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 2,159.19 points or 11.28%. Coming back to today's trade, index heavyweight Reliance Industries (RIL) extended Thursday's losses triggered by Canada's Niko Resources sharply cutting the reserves estimate at the KG D6 gas blocks, off India's east coast, where the two companies -- RIL and Niko are partners. Shares of public sector oil marketing companies (PSU OMCs) were mixed. State-run oil exploration major ONGC rose for the fourth straight day. FMCG stocks extended their recent gains triggered by reports that sowing of summer crops including rice, oilseeds and cotton has started with the monsoon covering half of India. FMCG giant Hindustan Unilever hit a record high. Index heavyweight and cigarette major ITC reversed direction after hitting a record high. Cement stocks dropped after the Competition Commission of India on Thursday levied a penalty of over Rs 6000 crore on 11 cement companies due to violation of the provisions of the Competition Act, 2002, which deals with anti-competitive agreements including cartels. Realty shares came off intraday lows after the Competition Commission of India on Thursday directed cement firms to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. Banking and auto stocks were mixed. IT stocks were mostly lower on weak US economic data. Airline shares were mostly higher after weak manufacturing reports from around the world hit global commodity prices hard on Thursday, sending crude-oil prices below $80 a barrel. Metal shares declined as weak manufacturing reports from around the world hit global commodity prices hard on Thursday, 21 June 2012. BSE Small-Cap and Mid-Cap indices clocked marginal gains, with both these indices outperforming Sensex. A weak opening took the barometer index, BSE Sensex, below the psychological 17,000 mark. Weakness on the bourses continued in morning trade. The market trimmed losses in mid-morning trade. A bout of volatility was witnessed as key benchmark indices weakened once again in early afternoon trade after staging a strong intraday recovery in mid-morning trade. Volatility continued as key benchmark indices trimmed losses after hitting fresh intraday lows in early afternoon trade. Volatility continued as key benchmark indices cut intraday losses to strike fresh intraday highs in mid-afternoon trade. The Sensex fell below the psychological 17,000 mark, soon after regaining that level for a short while in late trade. World markets declined on Friday, 22 June 2012, as signs of a deepening global economic slowdown and Moody's downgrade 15 of the world's biggest banks, wiped away investor appetite for risk. The BSE Sensex shed 60.05 points or 0.35% to settle at 16,972.51, its lowest closing level since 20 June 2012. The index fell 224.76 points at the day's low of 16,807.80 in early afternoon trade. The index lost 16.50 points at the day's high of 17,016.06 in late trade. The S&P CNX Nifty shed 18.95 points or 0.37% to settle at 5,146.05, its lowest closing level since 20 June 2012. The index hit high of 5,159.80 and a low of 5,094 in intraday trade. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,392 shares declined and 1,363 shares advanced. A total of 129 shares were unchanged. The BSE Mid-Cap index rose 0.13% and the BSE Small-Cap index rose 0.04%. Both these indices outperformed Sensex. The total turnover on BSE amounted to Rs 2078 crore, higher than Rs 1960.73 crore on Thursday, 21 June 2012. Among the 30-share Sensex pack, 16 declined while the rest gained. Index heavyweight Reliance Industries (RIL) fell 1.29% to Rs 709.30. The stock extended Thursday's 2.58% slide triggered by Canada's Niko Resources sharply cutting the reserves estimate at the KG D6 gas blocks, off India's east coast, where the two companies -- RIL and Niko are partners. The Canadian oil and gas producer late Wednesday estimated that total proved plus probable reserves at the KG D6 block, as of March 31, had decreased to 1.93 trillion cubic feet. The block had been estimated to hold more than 9 trillion cubic feet (tcf) of gas. Niko holds a 10% stake in the D6 block. RIL holds 60%, while BP Plc has a 30% stake. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in Mumbai early this month that the company has cumulatively bought back a total of 2.7 crore shares under the share buyback programme, which is 22.5% of share buyback target. Ambani said the company's buyback programme represents highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future. Ambani said RIL will invest about Rs 1 lakh crore over the five years in expanding its business in India. Ambani said RIL is targeting to double its operating profit in about five years. State-run oil exploration major ONGC rose 1.65% to Rs 279.90. ONGC and China's China National Petroleum Corp. early this week decided to jointly explore oil and gas assets in other countries, cementing their existing partnerships in Myanmar, Syria and Sudan. Shares of public sector oil marketing companies (PSU OMCs) were mixed. HPCL (down 0.64%) and BPCL (down 0.43%) declined. Indian Oil Corporation rose 0.4%. A weak rupee could offset the benefit of lower global crude oil prices for Indian refiners, which rely on imports to meet most of their crude oil requirements. A weak rupee makes imports costlier. The rupee weakened beyond the psychologically important 57 per dollar mark on Friday, hitting a record low for a second consecutive session. The three public sector oil marketing companies (PSU OMCs) -- BPCL, HPCL and IOC -- suffer revenue loss on domestic sale of diesel, LPG (cooking gas) and kerosene at a controlled price. The government decontrolled pricing of petrol in 2010. Recent media reports 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. Metal shares declined after LMEX, a gauge of six metals traded on the London Metal Exchange, fell 2.58% to $3,141.30 on Thursday, 21 June 2012. Jindal Steel & Power (down 1.67%), Hindustan Zinc (down 0.79%), Sail (down 1.85%), JSW Steel (down 2.08%), and Tata Steel (down 2.79%), declined. Private sector aluminium major Hindalco Industries fell 3.34% to Rs 117.25 and was the top loser from the Sensex pack. The company will announce its audited consolidated results for the year ended 31 March 2012 on 27 June 2012. Shares of iron ore major Sesa Goa and copper major Sterlite Industries saw divergent trend. Sesa Goa shed 0.11%. The company's shareholders early this week cast their vote on the proposal to merge their firm with Vedanta Resources flagship Sterlite Industries and its various subsidiaries. Results of the vote on the merger is being closely watched as it will create the world's seventh largest diversified metals and mining conglomerate. The result will be known on 25 June 2012. At least 75% of shareholders need to approve the merger for it to become effective. Sterlite Industries (India) gained 0.15%. The company said that the court convened meeting of the shareholders of the company was held today, 21 June 2012, to consider the Scheme of Amalgamation and Arrangement. The results of the court convened meeting will be announced on 25 June 2012. Auto stocks were mixed. Small-car major Maruti Suzuki India gained 0.79%. The company early this month said that the board of directors of the company has approved a proposal to merge Suzuki Powertrain India (SPIL) with the company. SPIL, which supplies diesel engines as well as transmissions for vehicles to Maruti Suzuki, is a subsidiary of Suzuki Motor Corporation (SMC), Japan. SMC holds 70% share in SPIL and remaining 30% is held by Maruti Suzuki. As per the terms of the proposed merger, SMC will receive one share of MSIL of Rs 5 each for every 70 shares of Rs 10 each it holds in SPIL. There will be no cash outflow from MSIL due to the merger. MSIL proposes to make a fresh issue of about 1.31 crore equity shares to SMC in lieu of SMC's 70% holding in SPIL. Consequent to the merger, SMC's holding in MSIL will go up from 54.2% to 56.2%. With the merger, MSIL will be able to bring its entire diesel engine capacity under a single management control. All key initiatives to strengthen the business, including sourcing, localization, production planning, manufacturing flexibility and cost reduction can be controlled, monitored and improved by the MSIL management, MSIL said in a statement. The proposed merger also promises benefits for the combined entity through synergies in areas like finance, capital structuring, and administration and consequent reduction of transaction costs, MSIL said. India's largest utility vehicles maker Mahindra & Mahindra (M&M) rose 0.57%. The company early this month said it has received an overwhelming 7,200 plus bookings for its cheetah-inspired XUV500 from customers within just 2 days of opening all India bookings for the vehicle. All India bookings for the XUV500 were opened from 8 June 2012. India's largest truck maker by sales Tata Motors shed 0.56%. After market hours on Thursday, 21 June 2012, the company said that P.M. Telang, Managing Director of Tata Motors' India Operations retired from the company on Thursday 21 June 2012 on attaining the age of superannuation and stepped down from the board of the company. Tata Motors said it has appointed two new Executive Directors. Ravindra Pisharody, President - Commercial Vehicles Business Unit, has been appointed Executive Director (Commercial Vehicles). Satish Borwankar, Senior Vice-President (Manufacturing Operations - Commercial Vehicles Business Unit), has been appointed Executive Director - Quality, Vendor Development & Strategic Sourcing for Tata Motors. Tata Motors has decided to close its truck plant in Pune for three days from June 22 to June 24 to ensure alignment of production with demand. Tata Motors on Friday, 15 June 2012, intimated to the Bombay Stock Exchange (BSE) that Chairman Ratan N Tata purchased additional 4.25 lakh equity shares of Tata Motors from open market purchases on Thursday, 14 June 2012, for about Rs 9.94 crore. After the latest acquisition, Ratan N Tata now holds a total of 13.61 lakh ordinary equity shares of Tata Motors and 1.09 lakh 'A' Ordinary shares of Tata Motors, aggregating to 0.05% of voting rights of Tata Motors. Tata Motors on Friday, 15 June 2012, said sales of its luxury vehicles -- Jaguar Land Rover -- jumped 35% to 30,094 in May 2012 over May 2011. Tata Motors derives almost two-third of its revenue from its British unit Jaguar Land Rover. Tata Motors' global vehicle sales rose 12% to 96,089 units in May 2012 over May 2011. The company's overall global passenger vehicles sales rose 21% to 51,064 units in May 2012 over May 2011. Commercial vehicle sales rose 3% to 45,025 in May 2012 over May 2011 Shares of two-wheeler makers rose. India's second largest motorcycle maker by sales Bajaj Auto rose 0.37%. The company early this month said its total sales fell 2% to 3,52,219 units in May 2012 over May 2011, as exports to Sri Lanka were nil in May 2012 against a typical monthly average of 10,000 motorcycles and 3-wheelers each per month. The company expects recovery in Sri Lankan exports from July 2012 onwards. The company's exports rose 3% to 1,30,573 units in May 2012 over May 2011. Hero MotoCorp (HMCL) rose 0.75%. The board of directors of the company recently approved a proposal to merge Hero Investments (HIPL), the investment arm of the Hero Group, into HMCL. The shareholders of HIPL include the partnership firm Brijmohan Lall Om Prakash (BMOP) which holds 71.63%, and private equity (PE) investors BC India Private Investors (19.81%) and Lathe Investment (8.56%). BC India Private Investors is an affiliate of Bain Capital LLC, while Lathe Investment is a wholly-owned subsidiary of Government of Singapore Investment Corporation (GIC). Hero MotoCorp reported its best-ever monthly sales in May 2012, thus underlining the robust momentum the company has sustained since embarking on its solo journey. Marking its 10th consecutive month of over five lakh sales, Hero MotoCorp total sales rose 11.3% to 5,56,644 two-wheelers in May 2012 over May 2011. The company's sales in May this year surpassed its previous highest of 5,51,557, recorded only last month (April 2012). FMCG stocks extended their recent gains triggered by reports that sowing of summer crops including rice, oilseeds and cotton has started with the monsoon covering half of India. FMCG firms derive substantial sales from rural India. Good monsoon may boost farm incomes and consumer spending. India's largest FMCG firm by sales Hindustan Unilever rose 0.28% to Rs 461.40. The stock hit a record high of Rs 464 in intraday trade today, 22 June 2012. Among other FMCG stocks, Tata Global Beverages (up 0.28%), Colgate Palmolive India (up 0.80%), Godrej Consumer Products (up 0.50%) and Nestle India (up 0.94%) gained. Index heavyweight and cigarette major ITC shed 0.32% to Rs 250.55. The stock reversed direction after hitting a record high of Rs 252.90 in intraday trade today, 22 June 2012. Bank pivotals were mixed. India's largest private sector bank by net profit ICICI Bank rose 0.19%. India's second largest private sector bank by net profit HDFC Bank gained 0.37%. India's largest commercial bank in terms of branch network State Bank of India (SBI) declined 1.33%. As per recent reports, the bank has slashed interest rates on term loans, agriculture loans and loans to small and medium enterprises (SMEs) by 50-350 basis points (bps), or 0.5%-3.5% with effect from 1 June 2012. SBI has kept the base rate unchanged at 10%. Axis Bank fell 1.41%. The board of directors of the bank has at its meeting held on 22 June 2012 approved borrowing/raising funds by issue of debt instruments on private placement basis within the limits prescribed by RBI and other regulatory authorities from eligible investors, in one or more tranches. The bank proposes to raise the funds in domestic and/or overseas market, eligible for inclusion in Tier I and Tier II capital. Oriental Bank of Commerce rose 0.53%. During market hours today, 22 June 2012, the bank said it has reduced interest rate on Rupee Export Credit by 25 basis points effective from 1 July 2012. HDFC fell 1.19% after the stock turned ex-dividend for dividend of Rs 11 per share for the year ended March 2012. IT stocks were mostly lower on weak US economic data. US is the biggest outsourcing market for the Indian IT firms. India's second largest software services exporter by revenues, Infosys fell 0.69%. As per recent reports, the company may be forced to pare its already low revenue growth guidance in dollar terms for the year ending March 2013 due to the wild swings of global currencies, including pound sterling, Australian dollar and euro, against the US dollar. India's third largest software services exporter by revenue, Wipro, fell 0.06%. But, India's largest IT company by revenue Tata Consultancy Services (TCS) rose 0.67%. The rupee weakened beyond the psychologically important 57 per dollar mark on Friday, hitting a record low for a second consecutive session. A weak rupee boosts revenue of IT firms in rupee terms as the sector derives a lion's share of revenue from exports. India's largest power equipment maker by capacity Bhel fell 0.65% on profit taking after surging 5.29% in the preceding two trading sessions. As per recent media reports, the power ministry will shortly move a note to the Union Cabinet, proposing a levy of 21% on imported power equipment in a bid to protect domestic manufacturers from Chinese and Korean competitors. Realty shares came off intraday lows after the Competition Commission of India on Thursday directed cement firms to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. Cement is a key raw material in housing construction. HDIL (up 3.15%), DLF (up 0.03%) and Indiabulls Real Estate (up 1.04%) gained. Cement stocks dropped after the Competition Commission of India on Thursday levied a penalty of over Rs 6000 crore on 11 cement companies due to violation of the provisions of the Competition Act, 2002, which deals with anti-competitive agreements including cartels. ACC (down 3.42%), Ambuja Cements (down 2.51%), UltraTech Cement (down 0.86%), India Cements (down 2.01%), and Madras Cements (down 4.07%), declined. The CCI said it passed the order following an investigation carried out by the Director General upon information filed by Builders Association of India. CCI has imposed penalty on 11 cement manufacturers at 0.5 times of their profit for the year 2009-10 and 2010-11. The news of penalty hit the market after trading hours on Thursday, 21 June 2012. The cement manufacturers upon whom the penalty has been imposed are ACC, Ambuja Cements, UltraTech Cements, Grasim Cements (now merged with UltraTech Cements), JK Cements, India Cements, Madras Cements, Century Cements, Binani Cements, Lafarge India and Jaypee Cements. While imposing penalty, CCI has considered the parallel and coordinated behaviour of cement companies on price, dispatch and supplies in the market. ACC said that the company feels aggrieved by this order and it will appeal against it before the Competition Appellate Tribunal. For ACC, the penalty works out to Rs 1147.59 crore. UltraTech Cement said the company will take appropriate action after having fully examined the order. For UltraTech Cement, the penalty works out to Rs 11 75 crore. Ambuja Cements said the CCI has fined the company Rs 1163 crore. The company said it contests the allegations and findings against the company. Ambuja Cements said it will appeal against this order to the Appellate Tribunal and will seek a stay on the penalty. India Cements said that CCI has imposed a penalty of Rs 187.48 crore on the company. The company said it has been advised that there is no basis for passing orders against the company. The company is taking necessary action to file an appeal before the relevant appellate authority for withdrawal or cancellation of the order against the company, India Cements said. CCI found that the cement companies have not utilised the available capacity so as to reduce supplies and raise prices in times of higher demand. CCI has also observed that the act of these cement companies in limiting and controlling supplies in the market and determining prices through an anti-competitive agreement is not only detrimental to the cause of the consumers but also to the whole economy since cement is a crucial input in construction and infrastructure industry vital for economic development of the country. The contravening cement manufacturers have been directed to deposit the penalty amount within 90 days. They have also been directed to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. CCI has also imposed penalty on the Cement Manufacturers Association (CMA). CMA has been asked to disengage and disassociate itself from collecting wholesale and retail prices through the member cement companies and also from circulating the details on production and dispatches of cement companies to its members. Shree Cement surged 8.2% as investors shifted positions from other cement counters to Shree Cements since Shree Cement was not penalised by CCI. Telecom stocks fell across the board as the much-awaited meeting of the high-power ministerial panel on auction of telecom spectrum on Thursday was reportedly deferred indefinitely. Bharti Airtel (down 0.50%), Reliance Communications (down 2.80%), Idea Cellular (down 1.81%), Tata Teleservices (Maharashtra) (down 1.33%) and MTNL (down 1.53%) declined. Airline shares were mostly higher after weak manufacturing reports from around the world hit global commodity prices hard on Thursday, sending crude-oil prices below $80 a barrel. Jet Airways (India) (up 2.15%) SpiceJet (up 1.98%) gained. Kingfisher Airlines fell 1.37%. Jet fuel or aviation turbine fuel (ATF) typically makes up almost half of an airline's operating cost. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies -- Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation -- revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight. The Indian Hotels Company jumped 6.21%. The company said at the fag end of the day's trading session today, 22 June 2012, that its committee of directors has approved allotment of 4.80 crore ordinary equity shares of Rs 103.64 per share to Tata Sons upon conversion of warrants. HDIL clocked highest volume of 1.03 crore shares on BSE. Lanco Infratech (63.06 lakh shares), Cals Refineries (57.76 lakh shares), SpiceJet (55.61 lakh shares) and Manappuram Finance (55.44 lakh shares) were the other volume toppers in that order. SBI was the top traded counter on the BSE with turnover of Rs 184.32 crore followed by HDIL (Rs 83.09 crore), Tata Motors (Rs 63.95 crore), Reliance Capital (Rs 54.89 crore) and L&T (Rs 54.86 crore). The India Meteorological Department (IMD) today, 22 June 2012, cut the expected quantum of total rainfall in the counter 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 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 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 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 soon as the country's finance minister. European stock markets edged lower on Friday, with banks reacting negatively after a sharp plunge on Wall Street the prior day, triggered by a Moody's Investors Service downgrade of a clutch of banks and poor economic data. Key benchmark indices in France, Germany and UK dropped by 0.57% to 0.81%. 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 markets declined on Friday, 22 June 2012, as signs of a deepening global economic slowdown and Moody's downgrade 15 of the world's biggest banks, wiped away investor appetite for risk. Key benchmark indices in Singapore, Taiwan, South Korea, Hong Kong, Japan and Indonesia were down by 0.07% to 2.21%. The stock market in China was closed for a holiday. 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. Trading in US index futures indicated that the Dow could gain 53 points at opening bell on Friday, 22 June 2012. US stocks tumbled on Thursday on mounting evidence that slowing manufacturing growth worldwide threatened corporate profits.