Market may edge lower on weak Asian stocks

The market may edge lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 31 points at the opening bell. IT giants -- Infosys and TCS -- unveil Q1 results today, 12 July 2012. Asian stocks fell for a sixth day on Thursday after a lack of clarity from the minutes of US Federal Reserve's June policy meeting on future easing measures from the Fed. JSW Steel turns ex-dividend today, 12 July 2012, for dividend of Rs 7.50 per share for the year ended 31 March 2012 (FY 2012). M&M turns ex-dividend today, 12 July 2012, for dividend of Rs 12.50 per share for FY 2012. MRPL turns ex-dividend today, 12 July 2012, for dividend of Rs 1 per share for FY 2012. Mahindra Satyam after trading hours on Wednesday announced the launch of a new accelerated framework "Apparel & Fashion xPress" for Oracle Retail implementations. Apparel & Fashion xPress caters to specific business functionality requirements of mid-market fashion and apparel retailers in the areas of global sourcing and procurement. Construction shares will be focus after Union Minister for Road Transport & Highways Dr. C.P. Joshi on Wednesday, 11 July 2012, said the government is keen to ensure that road sector achieves success and that his ministry can not afford to take any chances. Buoyed by the success achieved in 2011-12, the Ministry of Road Transport & Highway has pegged the targets for the road sector to achieve 9,500 Kms of award and 3,500 Kms of completion 20012-13. A record length of 7957 Kms of roads was awarded for strengthening/up gradation and improvement and over 2,200 Kms were completed during the year 2011-12. Dr. Joshi expressed concern that the performance of road sector in Q1 June 2012 has not been quite up to the mark. Projects bid out in the first quarter have not received the kind of response the ministry got last year, with some project getting no bidders at all. One of the reasons for this may be the tightening of the purse-strings from the lenders for funding of road projects. On macro front, the Central Statistics Office (CSO) will announce data on industrial production (IIP) for May 2012 at 11:00 IST today, 12 July 2012. Industrial production is seen rising 1.7% in May 2012 as per the median estimate of a poll of economists carried out by Capital Market. Industrial production growth slowed sharply to 0.1% in April due to contraction in capital goods and dip in manufacturing output. Key benchmark indices edged lower in choppy trade on Wednesday, 11 July 2012 after the director-general of state-run India Meteorological Department (IMD) L.S. Rathore said El Nino, which is usually associated with lower rainfall, will likely emerge in August 2012. The BSE Sensex was down 129.21 points or 0.73% to 17,489.14, its lowest closing level since 9 July 2012. Foreign institutional investors are buying Indian stocks this month. Foreign institutional investors (FIIs) bought shares worth a net Rs 84.42 crore on Wednesday, 11 July 2012 as per provisional figures released by the stock exchanges. Earlier, FIIs bought shares worth a net Rs 2872.10 crore from the secondary equity markets during six trading sessions from 3 July 2012 to 10 July 2012, as per data released by Securities & Exchange Board of India (Sebi). Monsoon rains have covered the entire country but the amount is unlikely to improve until next week, with overall rainfall 23% less than a long-term average, L.S. Rathore, director-general of the state-run India Meteorological Department (IMD) said on Wednesday. There is a strong chance of an El Nino weather event this season and it will likely emerge in August 2012, he told reporters. El Ninos are usually associated with lower rainfall. Lower rainfall this year is intensifying concerns that output of summer-sown crops such as oilseeds, sugar and pulses will fall compared with record-high levels in the last couple of years, hitting farm income. Monsoon rainfall has been deficient in 62% of the country's crop area so far. Annual monsoon rainfall has improved in the past 10 days, speeding up sowing of key summer-sown crops like rice and cotton, Agriculture Minister Sharad Pawar said on Wednesday, 11 July 2012. Poor rainfall in cane and pulses growing Maharashtra and Karnataka is cause for concern, he said. Maharashtra is the top sugar producer and second-biggest producer of soybeans, while Karnataka is the No. 1 coffee producer. Sowing of crops other than coarse grains has been progressing well, Mr. Pawar said. With monsoon rains advancing to all regions, sowing of rice--the main summer staple--is expected to pick up in the next few weeks, the minister said. 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. Corporate affairs minister Veerappa Moily said in a newspaper interview published on Wednesday, 11 July 2012, that the government is hopeful of the passage of the pension bill in the monsoon session of parliament. The monsoon session of parliament begins on 7 August 2012. Prime Minister Dr. Manmohan Singh on Wednesday, 11 July 2012, said he had very fruitful discussions with the Prime Minister of Singapore Lee Hsien Loong who is on a visit to India. Singapore is not only India's foremost trading partner in ASEAN, but also a major source of FDI inflows into India, Dr. Singh said. Dr. Singh and Lee have agreed to expedite the conclusion of the ongoing second Review of the Comprehensive Economic Cooperation Agreement that would further facilitate trade in goods and services and investment between the two countries. Dr. Singh said in a statement that he has assured Lee of India's commitment to reinforce its status as an investment-friendly country and expressed hope that Singapore companies would look at India as a valued investment destination in the current scenario. An India-Mauritius joint panel will in August discuss a series of proposals to review the double taxation avoidance treaty between the two nations, Mauritius Foreign Minister Arvin Boolell said on Thursday, 5 July 2012. 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. India and Mauritius will discuss the renegotiation of the tax pact between 22-24 August 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 recently for implementing the controversial anti-avoidance tax proposal viz. the General Anti-Avoidance Rules (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 last week 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 scheduled on 19 July 2012. Mr. Mukherjee is the leading contender in the July 19 presidential election, having been nominated by the Congress party-led United Progressive Alliance government for the largely ceremonial post. The next major trigger for the stock market is Q1 June 2012 corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the result which could cause revision in their future earnings forecast of the company for the current year or the next year. A deceleration in top line growth of India Inc amid economic slowdown and slowdown in investment cycle will weigh on bottom line growth in Q1 June 2012 as the core operating profit margin could be negatively impacted by deceleration in top line growth. HDFC Bank declares its Q1 results tomorrow, 13 July 2012. Axis Bank announces Q1 results on 17 July 2012. Bajaj Auto reports Q1 results on 18 July 2012. Kotak Mahindra Bank, Hero MotoCorp and Dr Reddy's Laboratories unveil Q1 results on 19 July 2012. Asian Paints announces Q1 results on 20 July 2012. Hindustan Unilever, L&T and Cairn India unveil Q1 results on 23 July 2012. Wipro announces Q1 results on 24 July 2012. Bhel announces Q1 results on 26 July 2012. Ambuja Cements announces Q2 June 2012 results on the same day. ICICI Bank announces Q1 results on 27 July 2012. Maruti Suzuki India announces Q1 results on 28 July 2012. Mahindra & Mahindra announces Q1 results on 8 August 2012. Ranbaxy Laboratories announces Q2 June 2012 results on 9 August 2012. BPCL announces Q1 results on 10 August 2012. Inflation based on the wholesale price index (WPI) is seen rising further to 7.62% in June 2012 from 7.55% in May 2012, as per the median estimate of a poll of economists carried out by Capital Market. The CSO will announce data on WPI inflation for June 2012 at 11:30 IST on 16 July 2012. The Reserve Bank of India (RBI) announces first quarter review of the Monetary Policy 2012-13 on 31 July 2012. The RBI unexpectedly left its key lending rate unchanged at its last meeting in June 2012, citing inflationary concerns. Asian stocks fell for a sixth day on Thursday after a lack of clarity from minutes of US Federal Reserve's June policy meeting on future easing measures from the Fed. The Fed released the minutes of the meeting on Wednesday. Key benchmark indices in China, Hong Kong, Indonesia, Japan, Taiwan, South Korea and Singapore fell by between 0.37% to 1.83%. Chinese Premier Wen Jiabao said on Tuesday that the government's top priority was now stabilizing economic growth rather than long-term restructuring, with policies to include business-tax cuts and more targeted investment, according to state-run media reports. China is due to release Q2 June 2012 GDP growth data, along with industrial output and other June metrics, tomorrow, 13 July 2012. The Bank of Japan, while highly unlikely to adjust ultra-low interest rates, is likely to consider whether to expand its asset-buying program at its policy meeting later on Thursday. The Bank of Korea on Thursday unexpectedly cut borrowing costs for the first time in more than three years, joining an international push for monetary stimulus as Europe's debt crisis threatens to undermine global growth. Governor Kim Choong Soo and his board lowered the benchmark seven-day repurchase rate to 3% the first cut since February 2009, the central bank said in a statement in Seoul today. Lack of clarity from the US Federal Reserve on future easing measures, sent US stocks lower on Wednesday. A few Federal Reserve policy makers said the central bank will probably need to take more action to boost the labor market and meet its inflation target, according to minutes of their June meeting. "A few members expressed the view that further policy stimulus likely would be necessary to promote satisfactory growth in employment and to ensure that the inflation rate would be at the Committee's goal," according to the record of the Federal Open Market Committee's June 19-20 gathering released on Wednesday. Two participants said additional bond purchases are appropriate, while two others said they would be warranted in the absence of "satisfactory progress" in cutting unemployment or if downside risks increase. FOMC members also said strains in global markets stemming from Europe's debt crisis had increased since their April meeting, and that US fiscal policy would be more contractionary than anticipated. Italian government tests sentiment in debt markets with a bond sale scheduled tomorrow, 13 July 2012.