BSE Small-Cap, Mid-Cap indices off over 2% each

Key benchmark indices fell for the second straight day and reached their lowest closing level in more than seven weeks on concerns arising from erratic monsoon rains this year. The market sentiment was also hit adversely after data showed selling of Indian stocks by foreign funds on Wednesday, 25 July 2012. The barometer index, BSE Sensex, was down 206.23 points or 1.22%, up close to 40 points from the day's low and off about 260 points from the day's high. The market breadth was weak. All the 13 sectoral indices on BSE were in the red. A number of small-cap and mid-cap stocks fell. BSE Small-Cap and Mid-Cap indices lost more than 2% each. From a recent high of 16,918.08 on 24 July 212, the Sensex has declined 278.26 points or 1.64% in two trading sessions. The Sensex has lost 790.16 points or 4.53% in this month so far (till 26 July 2012). The Sensex has jumped 1,184.90 points or 7.66% in calendar 2012 so far (till 26 July 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,503.96 points or 9.93%. From a 52-week high of 18,523.78 on 22 February 2012, the Sensex has lost 1,883.96 points or 10.17%. Coming back to today's trade, index heavyweight and cigarette maker ITC edged lower in volatile trade on profit taking after announcing good Q1 results. Another index heavyweight Reliance Industries (RIL) also dropped. JSW Steel fell on weak Q1 results. Ambuja Cements rose on strong Q2 results. Reliance Communications (RCom) hit a record low. Tulip Telecom fell a staggering 25.98% at Rs 88.05 after credit rating agency Fitch Ratings downgraded Tulip's National Long-Term rating to 'Fitch A-(ind)' from 'Fitch A+(ind)' and placed the rating on Rating Watch Negative (RWN). Infosys and Jindal Steel & Power hit 52-week lows. The market pared gains after a higher start triggered by gains in Asian shares. The Sensex slipped into the red to hit fresh intraday low in morning trade. The market trimmed losses in mid-morning trade. A bout of volatility was witnessed as key benchmark indices cut losses soon after hitting fresh intraday lows in early afternoon trade. Key benchmark indices were range bound in afternoon trade. The market extended intraday losses to hit fresh intraday low in mid-afternoon trade. The market slumped in late trade. Foreign institutional investors (FIIs) sold shares worth a net Rs 246.70 crore in secondary equity markets on Wednesday, 25 July 2012, as per data from Securities & Exchange Board of India (Sebi). FIIs had offloaded shares worth a net Rs 220.20 crore in secondary equity markets on Tuesday, 24 July 2012. Earlier, FIIs made sustained purchases of Indian stocks. FIIs bought shares worth Rs 5580.50 crore from the secondary equity market during 15 trading sessions from 3 July to 23 July 2012 as per Sebi data. The BSE Sensex lost 206.23 points or 1.22% to settle at 16,639.82, its lowest level since 6 June 2012. The index declined 247.57 points at the day's low of 16,598.48 in late trade. The index rose 53.72 points at the day's high of 16,899.77 at the onset of the trading session, its highest level since 24 July 2012. The S&P CNX Nifty lost 66.60 points or 1.3% to settle at 5,043, its lowest closing level since 6 June 2012. The index hit a low of 5,032.40 in intraday trade. The Nifty hit high of 5,126.30 in intraday trade, its highest level since 24 July 2012. The BSE Mid-Cap and BSE Small-Cap indices each declined 2.07%. Both these indices underperformed the Sensex. BSE clocked turnover of Rs 2165 crore, higher than Rs 1808 crore on Wednesday, 25 July 2012. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,934 shares fell and 842 shares rose. A total of 121 shares were unchanged. From the 30-share Sensex pack, 22 stocks declined and rest of them rose. Tulip Telecom fell a staggering 25.98% at Rs 88.05 after credit rating agency Fitch Ratings downgraded Tulip's National Long-Term rating to 'Fitch A-(ind)' from 'Fitch A+(ind)' and placed the rating on Rating Watch Negative (RWN). The stock fell on heavy volumes. On BSE, 1.02 crore shares changed hands in the counter, compared with average daily volume of 2.74 lakh shares in the past one quarter. Fitch Ratings said the downgrade reflects Fitch's view that Tulip's financial leverage (adjusted net debt/EBITDAR) will remain at higher-than-expected levels in the short- to medium-term due to its subdued operating performance and higher-than-expected net debt in the 12 months ended March 2012. The RWN reflects that Tulip has not yet tied up funds for redeeming its $97 million outstanding foreign currency convertible bonds (FCCBs), due in August 2012 at a premium of 44.506%. Fitch notes that the company has to rely on external funding sources, given its moderate operating cash flows, limited cash balance, insufficient undrawn facilities and high capex requirements. Fitch will resolve the RWN once the company ties up funding for redeeming FCCBs and details of the funding arrangement and its impact on credit profile of the company are available. Tulip Telecom said in a statement that no margin calls have been triggered in the company's shares and that the company's business remains as usual. Index heavyweight and cigarette maker ITC fell 2.02% to Rs 249.45 on profit taking after the company today, 26 July 2012, said its net profit jumped 20.21% to Rs 1602.14 crore on 15.34% growth in net sales to Rs 6652.21 crore in Q1 June 2012 over Q1 June 2011. The stock was volatile. The scrip hit a high of Rs 257 and a low of Rs 248. Shares of ITC had surged in the run up to the result announcement. The stock had jumped 12.7% to settle at Rs 254.60 on Wednesday, 25 July 2012, from Rs 225.85 on 5 June 2012. Index heavyweight Reliance Industries (RIL) declined 1.17%. The company last week said its net profit fell 21% to Rs 4473 crore on 13.4% growth in turnover to Rs 94926 crore in Q1 June 2012 over Q1 June 2011. The gross refining margin (GRM) stood at $7.6 per barrel in Q1 June 2012, matching the GRM of Q4 March 2012, but sharply lower than GRM of $10.3 a barrel in Q1 June 2011. Shares of organised retailers extended recent losses triggered by reports that leaders from Samajwadi Party and leftist parties have opposed foreign direct investment in multi-brand retail outlets. Samajwadi Party chief Mulayam Singh Yadav and top Left leaders have reportedly sent a letter to Prime Minister Manmohan Singh, urging him not to proceed with opening up of the sector as there was no wide-ranging consensus on the issue. Pantaloon Retail India, Shoppers Stop and Trent shed by between 1.82% to 6.33%. The government was hoping to revive the decision to throw open the sector to foreign investment after the presidential polls in a move to boost sentiment. On 24 November 2011, the government approved a rule that would allow retailers such as Wal-Mart Stores Inc. to own 51% of an Indian joint venture; they are currently prohibited. But, in the face of a firestorm of protest, including from coalition allies within the Congress party-led government, implementation was put on hold. NTPC gained 1.03% ahead of its Q1 results tomorrow, 27 July 2012. Interest rate sensitive realty stocks fell on speculation the Reserve Bank of India (RBI) will keep its key policy rate viz. the repo rate unchanged at a monetary policy review on Tuesday, 31 July 2012. Purchases of both residential and commercial property are largely driven by finance. DLF, Unitech and D B Realty dropped by between 1.34% to 6.12%. L&T fell 1.71% to Rs 1,318.85, with the stock sliding for the fourth straight day on profit booking after the company reported good Q1 results during trading hours on Monday. The company's recurring profit after tax rose 19% to Rs 890 crore on 26% growth in gross revenue to Rs 12078 crore in Q1 June 2012 over Q1 June 2011. The L&T stock had witnessed pre-result rally. The scrip had jumped 22.52% to settle at Rs 1,390.05 on Friday, 20 July 2012, from a recent low of Rs 1,134.50 on 1 June 2012. L&T said the healthy revenue growth in Q1 June 2012 was on the back of a strong order book and good progress in execution of various jobs. International sales constituted 17% of the total revenue in Q1 June 2012, L&T said in a statement. L&T's order inflow jumped 21% to Rs 19594 crore in Q1 June 2012 over Q1 June 2011 despite weak investment sentiment and prevailing global uncertainties, the company said. The major orders came from infrastructure, buildings & factories and power transmission & distribution sectors, L&T said in a statement. L&T's order book stood at Rs 153095 crore as on 30 June 2012. With regard to future business outlook, L&T said that with its enhanced capacities and presence in the diverse sectors, the company is in a good position to harness the opportunities as they emerge. The superior execution capabilities and growing order book provide visibility to sustained revenue growth in the medium term, L&T said in a statement. On the international front, select markets in the Middle East, South East Asia and CIS countries hold promising prospects where the company is strengthening its presence, L&T said in a statement. State-run power equipment maker Bhel declined 1.8%, with the stock reversing intraday gains as company's order book position declined to Rs 132900 crore as on 30 June 2012 from Rs 134681 crore as on 31 March 2012. Net profit rose 12.92% to Rs 920.90 crore on 16.46% growth in total income to Rs 8805.28 crore in Q1 June 2012 over Q1 June 2011. The company announced the results during trading hours today, 26 July 2012. Bank stocks dropped on speculation the Reserve Bank of India (RBI) will keep its key policy rate viz. the repo rate unchanged at a monetary policy review on Tuesday, 31 July 2012. The country's biggest commercial bank in terms of branch network State Bank of India declined 2.58%. The bank has raised the rate of interest on NRE Rupee Term Deposits for tenor of 3 years to less than 5 years from 8.75% to 9% on deposits of less than Rs 15 lakhs with effect from 17 July 2012. Among other PSU banks, Bank of India and Bank of Baroda fell by between 1.68% to 3.22%. Punjab National Bank declined 4.5% ahead of its Q1 results tomorrow, 27 July 2012. India's second biggest private sector bank in terms of branch network HDFC Bank declined 1.56%. India's largest private sector bank by net profit ICICI Bank shed 1.23% ahead of its Q1 results tomorrow, 27 July 2012. Yes Bank extended Wednesday's gains triggered by strong Q1 results. The stock was up 0.2%. The bank's net profit jumped 34.3% to Rs 290.14 crore on 39% growth in total income to Rs 2174.44 crore in Q1 June 2012 over Q1 June 2011. The result was announced during trading hours on Wednesday, 25 June 2012. Canara Bank fell 3.64%, with the stock declining for the third straight day as the state-run bank's ratio of net non-performing assets rose to 1.66% of net advances as on 30 June 2012 from 1.46% as on 31 March 2012 and 1.33% as on 30 June 2011. The ratio of gross non-performing assets (NPA) stood at 1.98% of gross advances as on 30 June 2012, higher than 1.73% as on 31 March 2012 and 1.69% as on 30 June 2011. Canara Bank's net profit rose 6.8% to Rs 775.24 crore on 18.91% growth in total income to Rs 9165.47 crore in Q1 June 2012 over Q1 June 2011. Canara Bank's Capital Adequacy Ratio (CAR) stood at 13.22% as on 30 June 2012, lower than 13.76% as on 31 March 2012 and 13.37% as on 30 June 2011. Zee Entertainment Enterprises fell 0.53% to Rs 159.30. The stock reversed direction after hitting 52-week high of Rs 163.80 in intraday trade today. Zee Entertainment Enterprises on Friday, 20 July 2012, said its consolidated profit after tax rose 21% to Rs 157 crore on 21% growth in operating revenue to Rs 843 crore in Q1 June 2012 over Q1 June 2011. Reliance Anil Dhirubhai Ambani (ADA) Group shares dropped across the board. Reliance Infrastructure, Reliance Broadcast Network, Reliance Capital, Reliance MediaWorks and Reliance Power shed by between 0.82% to 6.44%. Reliance Communications (RCom) lost 4.5% to Rs 56.20, with the stock extending recent losses as company has deferred the initial public offering of a unit that holds its undersea-cable assets. The stock hit a record low of Rs 55.55 in intraday trade today, 26 July 2012. The company has said it would list the unit at a later date when there were more "supportive market conditions and easing of prevailing global uncertainties." The company didn't elaborate on a time frame for a subsequent IPO. India's largest car maker by sales Maruti Suzuki India rose 0.44% ahead of its Q1 results on Saturday, 28 July 2012. The company has reportedly decided to stop using contract workers in direct manufacturing. Maruti last week declared lockout at its Manesar, Haryana plant after labour unrest. Two wheeler makers gained. Bajaj Auto rose 1.37%. The company at the time of Q1 June 2012 results last week said that it has undertaken proactive measures like rationalizing the end-user cost of vehicles in Sri Lanka and with these measures the company expects normalcy in exports to resume by end of Q2 September 2012. Bajaj Auto lost exports of about 20,000 units in Sri Lanka in Q1 June 2012 due to introduction of import barriers by that country. The company also lost export of about 25,000 commercial vehicles in Q1 June 2012 due to restrictions by importing countries and due to political unrest in Egypt, Bajaj Auto said in a statement on Wednesday. Bajaj Auto has said that domestic demand for motorcycles remains subdued. Hero MotoCorp rose 0.26% on bargain hunting after recent losses triggered by the company's announcement at the time of Q1 June 2012 results last week that consumers in rural and upcountry markets could postpone buying of motorcycles if the monsoon remains weak. Hero MotoCorp's net profit rose 10.31% to Rs 615.46 crore on 9.95% growth in turnover to a record Rs 6247.28 crore in Q1 June 2012 over Q1 June 2011. Hero MotoCorp also said last week that currency volatility is a point of concern and the rupee depreciation is likely to impact the company's margins. PSU OMCs declined for the second straight day on reports the government is unlikely to raise prices of diesel, cooking gas and kerosene in the near future for fear of opposition across the political spectrum. HPCL, Indian Oil Corporation (IOC) and BPCL dropped by between 1.46% to 3.03%. Oil marketing companies (PSU OMCs) incur under recoveries on domestic sale of diesel, LPG and kerosene at controlled prices. The government has already freed pricing of petrol. Metal stocks fell after the International Monetary Fund on Wednesday said China's economy faces significant downside risks. China is the World's largest consumer of copper and aluminum. Hindustan Zinc and Hindalco Industries shed by between 0.48% to 1.8%. Sterlite Industries (India) fell 2.64% ahead of its Q1 result today, 26 July 2012. Sesa Goa declined 1.7%, with the stock declining for the second straight day as company's consolidated net profit before associate income tumbled 76% to Rs 199 crore on 18% fall in net sales/income from operations to Rs 1733 crore in Q1 June 2012 over Q1 June 2011. Sesa Goa attributed the steep decline in net profit to lower volumes, higher export duty, higher interest cost, foreign exchange losses, and decline in iron ore price. Consolidated net profit including associate income rose 15% to Rs 964 crore in Q1 June 2012 over Q1 June 2011. The company announced the results after trading hours on Tuesday, 24 July 2012. Steel stocks fell for the second straight day after ArcelorMittal, the world's largest steelmaker by volume, on Wednesday, 25 July 2012, lowered its global apparent steel demand forecast due slower demand growth in China and shrinking demand in the European Union where the sovereign debt crisis continues to take its toll on the regional economy and consumer sentiment. ArcelorMittal now expects global apparent steel demand to rise 3.5% to 4% in 2012, compared with its previous forecast in May for a 4% to 4.5% rise. Bhushan Steel and Tata Steel fell by between 0.85% to 1.14%. JSW Steel fell 3.67% after net profit fell 53.49% to Rs 269 crore on 28% increase in total income to Rs 9109.87 crore in Q1 June 2012 over Q1 June 2011. The company said the availability and quality of iron ore in E-auction in Karnataka remained a bottleneck during Q1 June 2012 due to reduced inventory in stock pile being auctioned and delay in reopening of category 'A' mines, which led to loss of production and increase in cost. Vijaynagar works could operate at about 80% capacity utilisation during Q1 June 2012. With regard to future business outlook, JSW Steel said the world's crude steel production has marginally grown by 1% to 767 million tons during the first half of 2012 due to the continuing recessionary trend in Europe and slowing economy in China. The base level demand of steel still remains positive. However, the growth is expected to be lower at about 3.3% in 2012, vis-à-vis earlier forecast of 3.9% owing to global economic slowdown. It added that weakness in prices of major inputs like iron ore and coal coupled with supply side corrections in high cost regions will keep global steel prices range bound in coming months. In the background of such challenging situation, India registered a growth in steel consumption at 7.6% in Q1 June 2012 over Q1 June 2011 as per the recent report of Joint Planning Committee. Though a weak monsoon, slowing industrial activities and investments will certainly pose challenges for the Indian steel industry, however with the expectation of economic reforms being undertaken, the medium and long term steel consumption should remain intact, the company said in a statement. Steel Authority of India (Sail) slipped 3.57%, with the stock extending recent steep losses. The cabinet committee on economic affairs last week approved disinvestment 10.82% government stake in the state-run steel firm. The cabinet committee on economic affairs (CCEA) on Thursday, 19 July 2012, approved the disinvestment of 10.82% equity of Sail out of Government of India's shareholding of 85.82% through an offer of sale of shares through stock exchanges. After this disinvestment Government of India's shareholding in the company would come down to 75%. Jindal Steel & Power (JSPL) fell 0.76% to Rs 393.75, with the stock extending Wednesday's 4.33% slide. The stock hit a 52-week low of Rs 390.05 in intraday trade today, 26 July 2012. The company's consolidated profit after tax declined 58.6% to Rs 385.48 crore on 19% growth in turnover to Rs 4701.47 crore in Q1 June 2012 over Q1 June 2011. JSPL's consolidated net profit before exceptional items rose 3% to Rs 959.60 crore in Q1 June 2012 over Q1 June 2011. The company announced the results after trading hours on Tuesday, 24 July 2012. Ambuja Cements rose 3.05% after the company today, 26 July 2012, said its net profit jumped 34.9% to Rs 469 crore on 17.9% growth in net sales to Rs 2566 crore in Q2 June 2012 over Q2 June 2011. Ambuja Cements said increase in realization was barely sufficient to make up for cost increase. The profit margin still improved due to higher sales volumes and improved operational efficiencies, the company said. With regard to future business outlook, Ambuja Cements warned that the company's profit margins are expected to be under pressure due steep increase in costs. The company said it will continue its thrust on improving productivity and operational efficiency to partly mitigate cost pressures. Cement demand is expected to remain low during the ongoing monsoon season, the company said. UltraTech Cement rose 0.18% to Rs 1619. The stock hit a record high of Rs 1,630.95 in intraday trade today, 26 July 2012. The company on Tuesday said it has signed an agreement with the shareholders of Gotan Lime Stone Khanij Udyog (GKUPL), Rajasthan to acquire 100% equity shares of GKUPL. With this acquisition, GKUPL has become a wholly owned subsidiary of the Company. UltraTech last week reported 13.9% growth in net profit to Rs 778.39 crore on 16.6% growth in net sales to Rs 5074.76 crore in Q1 June 2012 over Q1 June 2011. With regard to future business outlook, the company said the cement demand is likely to grow over 8% on the back of government's focus on infrastructure development. The surplus cement scenario is expected to continue over the next three years. Any rise in input costs will impact margins, it added. ACC fell 1.23% ahead of its Q2 result today, 26 July 2012. Gujarat Gas Company and Gujarat State Petronet rose by 0.9% and 0.29% respectively on reports the Gujarat high court has made it compulsory for all four-wheelers registered in Gujarat to convert to natural gas within one year. Further, the court gave two months to the state government to issue necessary orders to impose stringent restrictions to reduce pollution by fixing levels of emission to the minimum, at par with international norms. The order applies to both public and private vehicles running on petrol and diesel, reports added. Gujarat State Petronet (GSPL) transmits natural gas across the state of Gujarat. GSPL has a pipeline network of about 1960 kilometre. The company has signed gas transmission agreements with various industries for the transportation of natural gas from various supply sources in Gujarat. Presently, the company transmits over 35 million metric standard cubic metre per day (MMSCMD) of natural gas. Gujarat Gas Company is India's largest private sector player in the natural gas transmission and distribution business. It supplies gas to more than 3.49 lakh domestic, commercial and industrial customers and serves over 1.75 lakh compressed natural gas (CNG) users. Most pharma stocks bucked weak market. Cipla, Dr. Reddy's Laboratories, and Sun Pharmaceutical Industries rose by between 0.3% to 2.32%. Lupin fell 3.14% to Rs 566.05 on profit booking after recent gains triggered by the company reporting good Q1 earnings. The stock had hit a record high of Rs 593.85 in intraday trade on Wednesday, 25 July 2012. Lupin's consolidated net profit jumped 33.5% to Rs 280.39 crore on 43.8% growth in net sales to Rs 2219.15 crore in Q1 June 2012 over Q1 June 2011. Biocon fell 4.98%. The company's consolidated net profit rose 12.49% to Rs 78.80 crore on 27.85% increase in total income to Rs 592.60 crore in Q1 June 2012 over Q1 June 2011. The result was announced after market hours on Wednesday, 25 July 2012. IT stocks fell on weak economic data in the US, the biggest outsourcing market for the Indian IT firms. HCL Technologies fell 0.35% after Wednesday's 6.68% jump triggered by strong Q1 results. The company's consolidated net profit as per US accounting standards surged 28.7% to $156 million on 3% growth in revenue to $1.08 billion in Q4 June 2012 over Q3 March 2012. The result was announced before trading hours on Wednesday, 25 July 2012. Tata Consultancy Services (TCS) declined 0.83%. The company announced after market hours on Tuesday that TCS BaNCS has signed an agreement with Sawis, a CenturyLink Company and global leader in cloud infrastructure and hosted IT solutions for enterprises, that will allow the TCS BaNCS suite of products to be offered on a cloud-enabled hosted environment in North America. Infosys was down 1.97% to Rs 2,125. The stock hit a 52-week low of Rs 2,101.65 in intraday trade today, 26 July 2012. Infosys revised downwards both earnings and revenue growth guidance for the year ending March 2013 (FY 2013) in dollar terms after reporting disappointing Q1 June 2012 results on 12 July 2012. India's third largest software services exporter by revenues Wipro extended recent losses triggered by the company issuing a muted revenue growth guidance for Q2 September 2012. The stock was down 2.64%. Wipro on Tuesday said net profit as per International Financial Reporting Standards (IFRS) rose 18% to Rs 1580 crore on 24% rise in total revenue to Rs 10653 crore in Q1 June 2012 over Q1 June 2011. Wipro has projected a between 0.33% growth to 2.31% growth in revenue from IT services business at $1.52 billion to $1.55 billion in Q2 September 2012 over Q1 June 2012. Tulip Telecom clocked highest volume of 1.02 crore shares on BSE. Lanco Infratech (73.96 lakh shares), Pipavav Defence (62.60 lakh shares), SpiceJet (59.58 lakh shares), and MTNL (59.19 lakh shares) were the other volume toppers in that order. HDFC clocked highest turnover of Rs 94.74 crore on BSE. Tulip Telecom (Rs 90.44 crore), SBI (Rs 82.33 crore), TCS (Rs 75.32 crore) and Ambuja Cements (Rs 45.88 crore) were the other turnover toppers in that order. Inflation is way above the desired threshold level of Reserve Bank of India, central bank governor D Subbarao said last week. The RBI's threshold level for inflation is around 5%, he said. However, the governor did issue a disclaimer that his statements did not imply RBI's decision in its July 31 policy. India's potential growth rate may have fallen to around 7.5% as the uncertainty surrounding economic activity has increased after the financial crisis of 2008-09, Subbarao said in a speech last week The Reserve Bank of India (RBI) announces first quarter review of the Monetary Policy 2012-13 on Tuesday, 31 July 2012. The RBI unexpectedly left its key lending rate unchanged at its last meeting in June 2012, citing inflationary concerns. Director General of state-run India Meteorological Department (IMD) L.S. Rathore today, 26 July 2012, said the rainfall situation is a cause of concern in the grain-bowl northwest region and southern parts of India, the main coffee and spice growing region. But the department is hopeful that rainfall will improve in the coming days, L.S. Rathore said. The IMD last month predicted that rainfall this monsoon would likely be 96% of the 50-year average, with an error margin of 4%. The Prime Minister's Office said actual rainfall could be at the lower end of that range, which means around 92% of the 50-year average. Monsoon rains have been erratic this year. With the monsoon season almost halfway through, India is staring at the possibility of a drought in some regions, with rains 22% below a 50-year average so far. The monsoon rains--which make up around 70% of India's annual rainfall--are crucial to the nation's agriculture sector and broader economy. More than 60% of the country's farmland is rain-fed. The timing, distribution and quantity of rainfall are all important for crops. The four-month southwest monsoon season that starts from June accounts for almost 70% of total annual moisture that Indian soil receives in a year. The central government has prepared extensive plans to deal with the deficiency in the monsoon/rainfall in some parts of the country, the Prime Minister's Office (PMO) said early this week. There has been reduction of around eight million hectares in the crop area sown compared to last year. While the reduction in area sown in case of rice could be covered over time, area reduction in coarse cereals is likely to persist, the PMO said. While the prices of wheat and rice are stable, the prices of sugar, pulses and vegetable are showing an upward trend, the PMO said. A proposal for increase in subsidy for supply of pulses through Public Distribution System to BPL families is being brought before Cabinet Committee on Economic Affairs by the Ministry of Consumer Affairs, Food and Public Distribution, it said. The government will increase the availability of electricity and diesel to the grain-bowl northern region to help farmers draw ground water so that the yield of rice isn't affected, it added. It also said there is a proposal to increase the subsidy for the supply of pulses through the government's welfare program to poor families. Principal adviser to the Planning Commission Pronab Sen early this week said rate cuts weren't the remedy for India's growth slowdown. Slowing investment due to weak confidence in the economy, and not a shortage of credit, is hurting growth, he said. Mr. Sen said Indian companies aren't facing any shortage of funds. Many of them are sitting on piles of cash and aren't even repatriating overseas borrowings, he added. The government should take steps to meet the fiscal deficit target set out in the budget and that would improve sentiment and revive investments, Mr. Sen said. He said the government should scale back its spending and slash subsidies on fuels, food and fertilizers to help check its budget deficit. Mr. Sen said food prices would rise if rains don't improve in two weeks. With presidential poll over, the focus now shifts to the Vice-President's poll, which is due on August 7 -- a day before the monsoon session of parliament kicks off. An India-Mauritius joint panel will discuss a series of proposals to review the double taxation avoidance treaty between the two nations on 22-24 August in Mauritius. India has been looking to negotiate the double taxation avoidance agreement with Mauritius for the past few years to check so-called round tripping and other potential abuses. Round tripping entails moving money out of one country to another, and getting it back under the garb of foreign capital. Capital gains tax is close to zero in Mauritius and almost 40% of investments into India come through the island nation. Under the bilateral agreement, capital gains from sale of securities can be taxed only in Mauritius. The India-Mauritius joint working group will also discuss the inclusion of a so-called limitation of benefit clause, similar to the Singapore tax treaty with India, to ensure only genuine Mauritius-based companies are benefited. India's tax agreement with Singapore says that only those companies that spend a minimum of $200,000 (about Rs 1 crore) in Singapore can avail the benefits of the treaty. Sanctity of tax residency certificates issued by a country to companies operating in its jurisdiction to enable the firms to claim tax benefits under various treaties is another issue between India and Mauritius. While India in this year's national budget said the certificates are a necessary but not sufficient condition, Mauritius wants those issued by it honoured. Draft guidelines issued by Indian government for implementing the controversial anti-avoidance tax proposal viz. the GAAR state that GAAR provisions should be invoked on a foreign institutional investor (FII), if it chooses to take a treaty benefit, but would not in any case be invoked in the case of the non-resident investors of the FII. The draft guidelines suggested that the onus of proving wrongdoing should be on the authorities. Prime Minister Dr. Manmohan Singh said in a newspaper interview this month that he has identified controlling the fiscal deficit, achieving clarity on tax matters, reviving the mutual funds and insurance industries, clearing a backlog of foreign investment proposals and boosting infrastructure as his focus areas in the short term. Singh said there will be no arbitrariness in tax matters. The statement assumes significance in the context of a raging controversy over the Income Tax amendment to re-open tax demands with retrospective effect from companies like Vodafone over acquisition of companies having operations in India but registered abroad to avoid taxes. Singh last month said he is chalking out plan for the country's economic revival. Singh last month took additional charge at the finance ministry after Pranab Mukherjee resigned as finance minister on 26 June 2012 to contest the presidential polls. The monsoon session of the parliament will begin on 8 August 2012 and the session will conclude on 7 September 2012, Parliamentary Affairs Minister Pawan Kumar Bansal said on Wednesday, 18 July 2012. The government hasn't yet finalized the agenda for the session, but the expectation is that Prime Minister Dr. Manmohan Singh -- who took charge of the finance ministry after Mr. Pranab Mukherjee resigned to contest the presidential elections -- will try and push through long-pending legislations. These could include the Direct Tax Code and the insurance, pension and banking bills. The government would also place before lawmakers the first demand for additional spending for this fiscal year which began April 1. Corporate affairs minister Veerappa Moily said in a newspaper interview published on 11 July 2012 that the government is hopeful of the passage of the pension bill in the monsoon session of parliament. Investors' focus is currently on Q1 June 2012 earnings. ICICI Bank, Grasim Industries, NTPC and Punjab National Bank unveil Q1 results tomorrow, 27 July 2012. Maruti Suzuki India announces Q1 results on 28 July 2012. HDFC announces its consolidated Q1 June 2012 results on the same day. HDFC has already announced its standalone results. Bank of Baroda and GAIL (India) unveil Q1 results on 30 July 2012. Jaiprakash Associates and Cipla unveil Q1 results on 31 July 2012. Steel Authority of India announces Q1 results on 6 August 2012. Mahindra & Mahindra and Bharti Airtel unveil Q1 results on 8 August 2012. Ranbaxy Laboratories announces Q2 June 2012 results on 9 August 2012. Siemens unveils Q3 June 2012 results on 10 August 2012. BPCL announces Q1 results on the same day. ONGC announces Q1 results on 11 August 2012. Hindalco Industries and IDFC will unveil Q1 results on 14 August 2012. European shares reversed losses on Thursday after news reports quoted European Central Bank (ECB) President Mario Draghi as saying the ECB would do whatever it takes to preserve the euro. Key benchmark indices in UK, France and Germany were up by 0.31% to 1.67%. Draghi's comments boosted expectations the ECB will take steps to bring down borrowing costs for Spain and Italy, which are at or near crisis levels. Italian government will sell up to 2.5 billion euros ($3.04 billion) in debt later in the global day today, 26 July 2012. European Central Bank (ECB) policy maker Ewald Nowotny said in a media interview recently that arguments can be made in favor of giving Europe's future, permanent rescue fund a banking license. Nowotny said he's not aware of specific discussions on the issue. A banking license would give the European Stability Mechanism access to loans via the ECB, boosting its firepower Germany's Federal Constitutional Court will announce a decision on lawsuits challenging the country's participation in the permanent euro-zone rescue fund, the European Stability Mechanism, and the fiscal pact on 12 September 2012. The court held a public hearing earlier this month to examine complaints that participation in the fund and the fiscal pact violated German law by taking some authority over the national budget away from parliament. Most Asian stocks rose on Thursday as hopes grew for more US stimulus to support growth and new European policy measures to keep the euro zone's debt crisis from deepening further, but sentiment was fragile. Key benchmark indices in South Korea, Singapore, Japan, Indonesia, and Hong Kong rose by between 0.08% to 0.92%. Key benchmark indices in China and Taiwan fell by between 0.12% to 0.47%. Changsha, the capital city of central China's Hunan province, on Wednesday unveiled a plan to develop its infrastructure and industry that would require total investments of 829.2 billion yuan ($130.7 billion). South Korea's economy expanded 0.4% during the April-June quarter, for a rise of 2.4% from a year earlier, according to reported government data Thursday. Trading in US index futures indicated that the Dow could gain 60 points at the opening bell on Thursday, 26 July 2012. US Commerce Department on Wednesday said sales of new homes plunged 8% last month to the slowest pace in five months. Data on weekly jobless claims, durable-goods orders, and pending-home sales data is due on Thursday, 26 July 2012. Data on US GDP growth figure for the second quarter is due on Friday, 27 July 2012. The Federal Open Market Committee holds a two-day policy meeting on US interest rates on 31 July and 1 August 2012.