Next batch of Q1 results, inflation data to dictate near-term trend

The next batch of Q1 June 2012 corporate earnings, monthly inflation data and progress of the monsoon rains will dictate near term trend on the bourses. The first quarter June 2012 earnings season has just begun. In the next one month, investors and analysts will closely watch the management commentary that would accompany the result to see if there is any 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. Axis Bank announces Q1 results on Tuesday, 17 July 2012. Bajaj Auto reports Q1 results on Wednesday, 18 July 2012. Kotak Mahindra Bank, Hero MotoCorp and Dr Reddy's Laboratories unveil Q1 results on Thursday, 19 July 2012. Reliance Industries and Asian Paints unveil Q1 results on Friday, 20 July 2012. Shares of PSU OMCs and automobile and logistics firms will be in focus on speculation the government will raise fuel prices after presidential election on July 19 or after the appointment of new vice president on August 7. The Central Statistics Office (CSO) will announce data on inflation based on the wholesale price index (WPI) for June 2012 at 11:30 IST on Monday, 16 July 2012. WPI inflation 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 also announce data on consumer price index (rural)/consumer price index (urban)/consumer price index (combined) for June 2012 on Wednesday, 18 July 2012. On Friday, 20 July 2012, CSO will announce data on consumer price index (agricultural labourers/rural labourers) for June 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. Concerns on the monsoon front remain after director-general of the state-run India Meteorological Department L.S. Rathore, (IMD) on 11 July 2012 said there is a strong chance of an El Nino weather event this season and it will likely emerge in August 2012. 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. Poor rainfall in cane and pulses growing Maharashtra and Karnataka is cause for concern, Agriculture Minister Sharad Pawar said on 11 July 2012. Maharashtra is the top sugar producer and second-biggest producer of soybeans, while Karnataka is the No. 1 coffee producer. 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.