Rising bad loans rattle PSU bank stocks

Key benchmark indices snapped two-day losing streak as euro zone debt worries eased after European Central Bank (ECB) President Mario Draghi on Thursday, 26 July 2012, said the ECB will do whatever is necessary to protect the euro zone from collapse, raising hopes for action to ease strains for highly indebted euro zone member states facing pressures to seek a bailout. The barometer index, BSE Sensex, jumped 199.37 points or 1.2%, off about 135 points from the day's high and up close to 80 points from the day's low. But, a number of small-cap and mid-cap stocks fell. The market breadth was weak. BSE Mid-Cap and Small-Cap index were both in red, underperforming the Sensex. The Sensex had declined 278.26 points or 1.64% in the preceding two trading sessions to settle at 16,639.82 on Thursday, 26 July 2012, from a recent high of 16,918.08 on 24 July 212. The Sensex has lost 590.79 points or 3.38% in this month so far (till 27 July 2012). The Sensex has jumped 1,384.27 points or 8.95% in calendar 2012 so far (till 27 July 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,703.33 points or 11.25%. From a 52-week high of 18,523.78 on 22 February 2012, the Sensex has lost 1,684.59 points or 9.09%. Coming back to today's trade, India's largest private sector bank by net profit ICICI Bank rose after strong Q1 results. PSU bank stocks declined across the board after three state-run banks -- Punjab National Bank, Union Bank of India, and Bank of India -- today, 27 July 2012, reported rise in the ratio of net non-performing assets (NPAs) at the time of announcement of first quarter results. Canara Bank hit a 52-week low. State-run power generation major NTPC gained after good Q1 result. Index heavyweight and cigarette maker ITC rose after the company reported strong Q1 results during trading hours on Thursday, 26 July 2012. Another index heavyweight Reliance Industries (RIL) also edged higher. Reliance Communications hit a record low. The market surged in early trade on firm Asian stocks. A bout of volatility was witnessed as key benchmark indices regained strength after trimming intraday gains in morning trade. The market extended gains to hit fresh intraday high in mid-morning trade. The uptrend continued as the Sensex hit fresh intraday high in early afternoon trade. The Sensex trimmed intraday gains to hit fresh intraday low in mid-afternoon trade as European stocks reversed initial gains. The market regained strength in late trade. The BSE Sensex jumped 199.37 points or 1.2% to settle at 16,839.19, its highest closing level since 25 July 2012. The index jumped 335.21 points at the day's high of 16,975.03 in early afternoon trade, its highest level since 23 July 2012. The index rose 120.90 points at the day's low of 16,760.72 in mid-afternoon trade. The S&P CNX Nifty surged 56.85 points or 1.13% to settle at 5,099.85, its highest closing level since 25 July 2012. The Nifty hit high of 5,149.95 in intraday trade, its highest level since 23 July 2012. The Nifty hit a low of 5,077.50 in intraday trade. The BSE Mid-Cap index fell 0.9% and the BSE Small-Cap index declined 0.97%. Both these indices underperformed the Sensex. The BSE Small-Cap and Mid-Cap indices had lost more than 2% each on Thursday, 26 July 2012. BSE clocked turnover of Rs 2361 crore, higher than Rs 2165 crore on Thursday, 26 July 2012. The market breadth, indicating the overall health of the market, was weak. On BSE, 1,703 shares declined and 1,060 shares rose. A total of 129 shares were unchanged. The market breadth was strong earlier during the trading session. From the 30-share Sensex pack, 24 stocks rose and rest of them fell. Index heavyweight and cigarette maker ITC rose 1.96%. The company on Thursday 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. Despite series of tax hikes, ITC's performance in cigarettes business remains robust and displays pricing power for the company. Godrej Consumer Products rose 4.83% to Rs 636.35. The stock hit a record high of Rs 658 in intraday trade today, 27 July 2012. Marico rose 0.36% to Rs 196.40 in voatile trade. The stock hit a record high of Rs 199.90 in intraday trade today, 27 July 2012. Cairn India rose 0.64% as US crude oil futures traded near 1-week high after the head of the European Central Bank predicted the euro will survive and reports signaled improving economic prospects in the US and China. US crude oil futures for September 2012 delivery were up 10 cents at $89.49 a barrel in electronic trading today, 27 July 2012. The contract gained 42 cents or 0.47% to settle at $89.39 a barrel on the New York Mercantile Exchange on Thursday, 26 July 2012, its highest closing level since 20 July 2012. Higher crude oil prices will result in higher realization from crude sales for oil exploration firms such as Cairn India. State-run power equipment maker Bhel declined 1.93%, with the stock sliding for the second straight day after 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 Thursday, 26 July 2012. L&T rose 0.08% in volatile trade. 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 company announced Q1 results on 23 July 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. UltraTech Cement rose 1.03% to Rs 1627.80. The stock hit a record high of Rs 1,636 in intraday trade today, 27 July 2012. The company early this week 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. Cement major ACC rose 2.89% after the company said after market hours on Thursday, 26 July 2012, its consolidated profit after tax jumped 26.33% to Rs 414.52 crore on 15% growth in turnover to Rs 2918.98 crore in Q2 June 2012 over Q2 June 2011. ACC said there was a steep escalation in major input costs, including slag, fly ash, gypsum and power in Q2 June 2012. Further, the sharp hike in railway freight rates with effect from 6 March 2012 substantially impacted both inward and outward costs, ACC said. The cement market has been growing steadily and barring seasonal fluctuations the demand for cement is expected to maintain the steady pace of growth in the near term, ACC said with regard to future business outlook. The company's board of directors declared interim dividend of Rs 11 per share for the year ending 31 December 2012. Ambuja Cements rose 0.67% to Rs 180.50, with the stock extending Thursday's 3.05% jump triggered by strong Q2 results. The stock hit a record high of Rs 183.50 in intraday trade today, 27 July 2012. The company during on Thursday, 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. Index heavyweight Reliance Industries (RIL) gained 1.42% to Rs 720.46. RIL has bought back 3.66 crore shares for about of Rs 2617.57 crore till 24 July 2012 under its ongoing share buyback program. RIL has set maximum buyback price of Rs 870 per share. The company has set aside Rs 10440 crore for share buyback. The buyback program opened on 1 February 2012 and closes on 19 January 2013. Last month, RIL chairman Mukesh Ambani said at the company's Annual General Meeting in Mumbai that the company's buyback program represents a 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. Reliance Communications (RCom) lost 3.83% to Rs 54.05, 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 53.90 in intraday trade today, 27 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. State-run power generation major NTPC gained 0.99% after company today, 27 July 2012, said its net profit rose 20.37% to Rs 2498.67 crore on 12.62% growth in net sales to Rs 15959.96 crore in Q1 June 2012 over Q1 June 2011. India's largest private sector bank by net profit ICICI Bank rose 2.35% as profit after tax jumped 36% to Rs 1815 crore on 32% growth in net interest income to Rs 3193 crore in Q1 June 2012 over Q1 June 2011. ICICI Bank's net interest margin (NIM) improved to 3.01% for Q1 June 2012, from 2.61% for Q1 June 2011. The bank announced the results during trading hours today, 27 July 2012. ICICI Bank's net non-performing assets (NPAs) ratio decreased to 0.61% as on 30 June 2012 from 0.62% as on 31 March 2012. ICICI Bank's savings account deposits increased by 17% year-on-year to Rs 77923 crore as on 30 June 2012. Current account deposits totaled Rs 30754 crore as on 30 June 2012. The CASA ratio was at 40.6% at 30 June 2012. The average CASA ratio remained stable at 39.1% in Q1 June 2012, ICICI Bank said in a statement. ICICI Bank's consolidated profit after tax rose 25% to Rs 2077 crore in Q1 June 2012 over Q1 June 2011. The consolidated return on equity improved from 12% in Q1 June 2011 to 13.3% in Q1 June 2012. India's second biggest private sector bank in terms of branch network HDFC Bank jumped 3.13%. Yes Bank extended recent gains triggered by strong Q1 results. The stock was up 1.86%. 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 July 2012. PSU bank stocks declined across the board after three state-run banks -- Punjab National Bank, Union Bank of India, and Bank of India -- today, 27 July 2012, reported rise in the ratio of net non-performing assets (NPAs) at the time of announcement of first quarter results. Bank of India fell 5.34% as the state-run bank's ratio of net non-performing assets (NPA) rose to 1.69% of net advances as on 30 June 2012 from 1.47% as on 31 March 2012 and 1.27% at 30 June 2011. Net profit jumped 71.47% to Rs 887.45 crore on 17.22% increase in total income to Rs 8550.03 crore in Q1 June 2012 over Q1 June 2011. The state-run bank announced the first quarter results during trading hours today, 27 July 2012. Bank of India's provision coverage ratio stood at 60.86% as on 30 June 2012. Union Bank of India tumbled 7.86% as the state-run bank's ratio of net non-performing assets (NPA) rose to 2.2% of net advances as on 30 June 2012, higher than 1.7% as on 31 March 2012 and 1.32% as on 30 June 2011. The ratio of gross NPA stood at 3.76% of gross advances as on 30 June 2012, higher than 3.01% as on 31 March 2012 and 2.57% as on 30 June 2011. The bank's net profit rose 10.15% to Rs 511.59 crore on 21.5% growth in total income to Rs 6561.10 crore in Q1 June 2012 over Q1 June 2011. Provisions and contingencies jumped 21.03% to Rs 518.47 crore in Q1 June 2012 over Q1 June 2011. The state-run bank announced the first quarter results during trading hours today, 27 July 2012. State-run Punjab National Bank (PNB) dropped 5.34% as bank's ratio of net non-performing assets (NPA) to net assets rose to 1.68% of net advances as on 30 June 2012 from 1.52% as on 31 March 2012 and 0.86% as on 30 June 2011. The ratio of gross NPA to gross assets rose to 3.34% as on 30 June 2012 from 2.93% as on 31 March 2012 and 2% as on 30 June 2011. The bank's net profit rose 12.72% to Rs 1245.67 crore on 24.59% growth in total income to Rs 11710.97 crore in Q1 June 2012 over Q1 June 2011. The bank's provisions and contingencies rose 15.55% to Rs 1032.49 crore in Q1 June 2012 over Q June 2011. The provisioning coverage ratio was 62.81% as on 30 June 2012. PNB announced the first quarter results during trading hours today, 27 July 2012. State Bank of India shed 3.77%. The bank on Thursday said that it has concluded the issue of $1.25 billion Fixed Rate Senior Unsecured Notes having a maturity of 5 years at a coupon of 4.125% payable semi-annually. The bonds will be issued through the bank's London branch on 1 August 2012 and it will be listed on Singapore Stock Exchange, SBI said. Bank of Baroda declined 2.46%. Canara Bank fell 3.64% to Rs 348.10, with the stock declining for the fourth 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 stock hit a 52 week-low of Rs 345.60 in intraday trade today, 27 July 2012. 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. The Reserve Bank of India (RBI) is unlikely to cut its key policy rate viz. the repo rate at first quarter review of the Monetary Policy 2012-13 on Tuesday, 31 July 2012, to guard against higher inflation as the country faces the possibility of a drought. The RBI unexpectedly left its key lending rate unchanged at its last meeting in June 2012, citing inflationary concerns. India's largest car maker by sales Maruti Suzuki India rose 0.25% ahead of its Q1 results tomorrow, 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 declined. Bajaj Auto fell 0.07%. 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 shed 1.58%, with the stock extending 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. Sugar stocks declined as global sugar prices declined on Thursday after recent rally. Bajaj Hindusthan, Balrampur Chini Mills and Shree Renuka Sugars fell by between 1.09% to 5.62%. Parsvnath Developers was locked at 20% lower circuit at Rs 37.05. The realty firm today, 27 July 2012, said it has observed that the price of its equity shares have witnessed volatility along with that of some other listed companies. The company said it would like to clarify that the business of the company is currently going on in the normal way and that no adverse development has occurred which may have an impact on the company's business or operations. Any market rumours which may be circulating are speculative and mischievous in nature and investors are requested to not to pay any attention and ignore such rumours, Parsvnath Developers said Rural Electrification Corporation (REC) rose 2.26%. The company announced after market hours today, 27 July 2012, its net profit jumped 32.44% to Rs 876.73 crore on 30.33% growth in total income to Rs 3092.68 crore in Q1 June 2012 over Q1 June 2011 PSU OMCs rose on bargain hunting after recent slide triggered by 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 and Indian Oil Corporation (IOC) gained by between 0.36% to 0.42%. But, BPCL fell 1.37%. 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. Zee Entertainment Enterprises rose 0.44% to Rs 160. The stock hit a 52-week high of Rs 165 in intraday trade today. Zee Entertainment Enterprises last week 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. Sun TV Network slumped 11.17% to Rs 261.65. The stock hit a 52-week low of Rs 176.75 in intraday trade today. SpiceJet slumped 10.64%. As per reports the Central Bureau of Investigation (CBI) has questioned the Maran Brothers, the promoters Sun TV Network and SpiceJet, in Aircel-Maxis deal case. Former Union Textile Minister and Lok Sabha MP Dayanidhi Maran and Sun Group chairman and managing director Kalanithi Maran were questioned by the CBI on the Aircel-Maxis deal, the report suggested. Former telecom minister Dayanidhi Maran allegedly received Rs 547 crore as kickbacks from a Malaysian company in the controversial Aircel-Maxis deal. Tulip Telecom galloped 13% after company 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. The company was reacting to a massive 25.98% slide in the stock price on Thursday, 26 July 2012 triggered by credit rating agency Fitch Ratings downgrading Tulip's National Long-Term rating to 'Fitch A-(ind)' from 'Fitch A+(ind)' and placing the rating on Rating Watch Negative (RWN). 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. Metal stocks gained as metal stocks rose on the London Metal Exchange on Thursday, 26 July 2012. Hindustan Zinc, Hindalco Industries and Bhushan Steel rose by between 0.59% to 3.12%. Higher metal prices on the London Metal Exchange on Thursday helped Sterlite Industries (India) shrug off weak Q1 results. The stock jumped 3.22%. The company said after trading hours on Thursday that its consolidated net profit declined 27% to Rs 1202 crore on 8% growth in net sales/income from operations to Rs 10591 crore in Q1 June 2012 over Q1 June 2011. Sterlite said its earnings before interest, taxation, deprecation and amortization (EBITDA) declined 15% to Rs 2337 crore Q1 June 2012 over Q1 June 2011. Sterlite said higher sales realization on account of steep rupee depreciation was offset by lower metal prices, lower volume of zinc, lower power sales at Balco and higher cost of production. The bottom line was additionally impacted by mark-to-market loss of Rs 217 crore on account of foreign currency loans and higher interest cost of Rs 78 crore, Sterlite said. Depreciation cost jumped 23.33% to Rs 518 crore in Q1 June 2012 over Q1 June 2011 due to the capitalization of new plants at Zinc India operations and Sterlite Energy (SEL), Sterlite said. Tata Steel rose 3.94% as euro zone debt worries eased. Global rating agency Standard & Poor's (S&P) on Thursday, July 26, 2012, lowered the outlook of Tata Steel and its UK-based subsidiary Tata Steel UK Holdings (TSUKH) to 'negative' from 'stable' citing continued weak performance. 'We assess Tata Steel on a consolidated basis, including TSUKH, which represents about half of the company's total consolidated assets. We expect the company's consolidated profit margin to continue to be weak, resulting in its debt-to-EBITDA ratio staying above 4 times,' S&P said in a statement. Sesa Goa rose 2.21% on bargain hunting after recent losses triggered by weak Q1 results. The 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 Authority of India (Sail) rose 0.91% on bargain hunting after 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) rose 0.22% to Rs 394.60. The stock had hit 52-week low of Rs 390.05 in intraday trade on Thursday, 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. JSW Steel fell 0.09% with the stock extending Thursday's 3.67% slide triggered by poor Q1 results. JSW Steel's 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. Spicejet clocked highest volume of 1.4 crore shares on BSE. Pipavav Defence (1.07 crore shares), Parsvnath Developers (81.65 lakh shares), HDIL (54.16 lakh shares) and Lanco Infratech (52.35 lakh shares) were the other volume toppers in that order. TCS clocked highest turnover of Rs 272.77 crore on BSE. SBI (Rs 185.48 crore), ICICI Bank (Rs 72.47 crore), Pipavav Defence (Rs 59.53 crore) and Sun TV Network (Rs 53.28 crore) were the other turnover toppers in that order. The Reserve Bank of India (RBI) is unlikely to cut its key policy rate viz. the repo rate at first quarter review of the Monetary Policy 2012-13 on Tuesday, 31 July 2012, to guard against higher inflation as the country faces the possibility of a drought. The RBI unexpectedly left its key lending rate unchanged at its last meeting in June 2012, citing inflationary concerns. The volume of monsoon rain in India in the week ended July 25 was 20% below the long-term average, as rainfall remained deficient in northern and western parts of the country, the India Meteorological Department said on Thursday, 26 July 2012. Total rainfall so far this season is 22% below the long-period average. The monsoon's slow progress across the country has heightened concerns that output of summer-sown crops such as oilseeds, sugar and pulses may fall. A ministerial panel may soon review the drought-like situation in the country, Farm Minister Sharad Pawar said on Thursday, 26 July 2012, after a meeting with the country's food minister. 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. Sowing of summer crops has picked up pace during the past few days. According to data released by the Ministry of Agriculture, rice was sown in 191.06 lakh hectares (lh) till Friday, 27 July 2012, sharply higher than 144.59 lh a week back. It, however, remains lower than 199.77 lh of normal area for this time of the year. Cumulative sowing of coarse cereals totaled 117.48 lh as on 27 July 2012, compared with 95.43 lh a week back. It, however, remains much lower than 160.86 lh of normal area for this time of the year. Sowing of pulses totaled 62.99 lh as on 27 July 2012, sharply higher than 40.19 lh a week back. It, however, remains lower than 79.82 lh of normal area for this time of the year. Sowing of oilseeds totaled 138.33 lh as on 27 July 2012, compared with 108.84 lh a week back. The normal oilseeds sowing area of 134.45 lh by this time of the year has already been surpassed. Sowing of cotton totaled 97.24 lh as on 27 July 2012, compared with 83.74 lh as on 20 July 2012. The normal cotton sowing area of 94.02 lh by this time of the year has already been surpassed. Sowing of jute and mesta totaled 8.29 lh as on 27 July 2012, exceeding the normal area of 8.22 lk for the crop by this time of the 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 statement added. While the prices of wheat and rice are stable, the prices of sugar, pulses and vegetable are showing an upward trend, the government 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. 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. Slowing growth in investment remains a cause for concern for India. Investment makes up 35% of India's economic activity. 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. The manufacturing Managers' Index (PMI) for July 2012 will be out 1 August 2012. The HSBC manufacturing Purchasing Managers' Index (PMI) rose to 55 in June, a four-month high, from 54.8 in May. It has kept above the 50 mark that divides growth and contraction for more than three years. The services purchasing managers' index for July 2012 is expected to be released in early August 2012. HSBC's services purchasing managers' index, which gauges the activity of around 400 firms in India, dropped to 54.3 in June from 54.7 in May. However, it has kept above the 50 mark that signifies growth since November. 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. 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. 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. Maruti Suzuki India announces Q1 results tomorrow 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 stock markets give up an earlier attempt to add to the prior day's rally on Friday, 27 July 2012, after a mixed bag of earnings results and as investors turned cautious ahead of Q2 June 2012 US GDP growth data, which is expected to show a cooling of growth in the world's biggest economy. Key benchmark indices in UK and Germany were down 0.1% to 0.18%. France's CAC 40 rose 1.03%. ECB President Mario Draghi on Thursday said the bank would do whatever is necessary to protect the euro zone from collapse, raising hopes for action to ease strains for highly indebted member states facing pressures to seek a bailout. Spanish unemployment rose to the highest on record after Prime Minister Mariano Rajoy made it easier to fire workers while implementing the steepest budget cuts in the country's democratic history. Unemployment, already the highest in the European Union, rose to 24.6% in the second quarter from 24.4% in the prior three months, the National Statistics Institute said in Madrid today. 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. Greek Prime Minister Antonis Samaras is set to meet international creditors to try to persuade them that Athens deserves its final installment of bailout money. The EU, IMF and European Central Bank are due to examine Greece's finances before deciding whether to hand over 31.5 billion euros. Without the funds, Greece would face bankruptcy and probably leave the euro. Mr. Samaras said on Thursday that the government would do all it could to get Greece back on track. Asian shares rose on Friday after the European Central Bank signalled its resolve to defend the euro zone, raising expectations it will move quickly to tackle skyrocketing borrowing costs in countries like Spain. Key benchmark indices in Indonesia, South Korea, Japan, Hong Kong, China, and Taiwan rose by between 0.13% to 2.62%. Singapore's Straits Times fell 0.2%. Fitch Ratings said Friday that China's banking sector faces growing risks from small banks' aggressive issuance of wealth management products to attract and retain depositors. At the end of the second quarter of this year, such wealth management products stood at an estimated 10.4 trillion yuan ($1.6 trillion), or 11.5% of total deposits, largely unchanged from the first quarter, but recent issuance has been driven by non-state banks, while state banks have been reining in activity, the ratings agency said in a press release. Japan's consumer prices unexpectedly fell and retail sales missed analysts' forecasts, adding to evidence that the economy's expansion is faltering as gains in the yen and austerity measures in Europe hit exports. Consumer prices excluding fresh food fell 0.2% in June from a year earlier, the statistics bureau said in Tokyo today. Retail sales rose 0.2% a separate report showed, the smallest gain since November Trading in US index futures indicated that the Dow could gain 25 points at the opening bell on Friday, 27 July 2012. US stocks rallied on Thursday on a wave of hope inspired by comments from European Central Bank President Mario Draghi on Thursday. Thursday's data showed new US claims for jobless benefits fell last week to near a four-year low, and overall orders for long-lasting US manufactured goods rose more than expected in June. But other data has on housing and jobs markets has disappointed. 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.