Market may remain volatile as August F&O contracts expire

The market may remain volatile as traders roll over positions in the futures & options (F&O) segment from the near-month August 2012 series to September 2012 series. The August 2012 derivatives contracts expire on Thursday, 30 August 2012. The quantum and distribution of rains towards the close of the crucial month of August, Q1 June 2012 GDP data, news out of Greece, a speech of Federal Reserve Chairman Ben Bernanke, and outcome of the monthly policy meetings of European Central Bank (ECB) and Bank of England in early September 2012 will determine the near term trend on the bourses. The government has very limited time to take economic reform measures given that assembly elections in Gujarat and Himachal Pradesh (HP) are scheduled in December this year. It will difficult for the government to enact controversial measures close to the assembly polls. After elections in Gujarat and HP, assembly elections are planned in a total of 10 states during the period from March 2013 to January 2014. The next general election is due in May 2014. The Union Cabinet on Thursday, 23 August 2012, deferred a decision on changes proposed in a draft land acquisition law that is aimed at streamlining the land acquisition process for projects. The Central Statistics Office will unveil Q1 June 2012 GDP data on Friday 31 August 2012. India's GDP growth slowed to a nine-year low of 5.3% in Q4 March 2012 due to high interest rates, sluggish global demand and the government's failure to carry out economic reforms. Automobile and cement stocks will be focus as companies from these two sector start unveil monthly sales volume data for August 2012 from Saturday 1 September 2012. Markit Economics will unveil HSBC India Manufacturing Managers' Index (PMI) for August 2012 on 3 September 2012. On 5 September 2012, Markit Economics will unveil HSBC India Services PMI for August 2012. The ECB holds its monthly policy meeting on euro area interest rates on 6 September 2012. UK's central bank -- the Bank of England -- holds its monthly meeting on interest rates on the same day. Federal Reserve Chairman Ben Bernanke is scheduled to talk on Friday, 31 August 2012 at the Kansas City Federal Reserve Bank's annual symposium in Jackson Hole, Wyo.