A little rain, hopefully less pain

The misfortune seems to be the seemingly never-ending policy impasse at the Centre and the recurring nature of the Parliamentary logjams.Curtains will soon come down on the ongoing monsoon session. "The longer we dwell on our misfortunes, the greater is their power to harm us.” – Voltaire. Fortunately, the monsoon seems to have revived, albeit belatedly. Even the late showers are likely to help the crucial agriculture sector. The pick-up in rains could help swell up the reservoirs and will aid farmers in the Rabi season. The misfortune seems to be the seemingly never-ending policy impasse at the Centre and the recurring nature of the Parliamentary logjams.Curtains will soon come down on the ongoing monsoon session. Market participants will now keenly watch the stance of the Government on pending reforms. On Monday, the Indian markets were rather lukewarm in responding to the recommendations of a high-powered Government panel on the controversial GAAR. Meanwhile, the FM has ruled out "rash" action in the Vodafone tax row and other such cases. The Government has said that coal blocks’ de-allocation would have to be done through a fair process which is already underway. Finance Minister P. Chidambaram on Monday rejected the Opposition's demand for cancellation of coal blocks that have come under the CAG scrutiny. Infosys CEO and Managing Director, SD Shibulal has said the industry is facing a tough environment, and warned that there has not been enough change in the global economy to allow the software services exporter to make a quick turnaround. Tech Mahindra is reportedly set to buy Hutch's India BPO business for close to US$100mn. As part of the deal, Hutch has also made a revenue commitment of US$1bn over the next 5-7 years to Tech Mahindra. Moody's has slapped a negative outlook on the EU’s "AAA" debt rating amid concerns about the core members of the bloc. All eyes will be on Thursday’s ECB policy meeting. The president of the European Central Bank (ECB) has dropped more hints about how the central bank could support struggling countries. Mario Draghi has said that the ECB is free to buy government bonds maturing in three years or less. The comments by Draghi in a closed hearing at the European Parliament on Monday. EU President Herman Van Rompuy is traveling to Berlin for talks with Merkel today as Italian Prime Minister Mario Monti welcomes French President Francois Hollande to Rome. Merkel has indicated that she would back a more active crisis-fighting role at the ECB and was yesterday quoted as saying that Germany must show solidarity with Europe. The euro approached a two-month high against the dollar even after the European Union’s outlook was cut to negative by Moody’s. Oil futures in New York climbed to the highest intraday price in more than a week on speculation that central banks will take more steps to boost growth. The US markets closed for the Labour Day holiday. The NSE Nifty ended on a flat note on Monday, as renewed selling in index heavyweights capped the upside to 5300 levels. The Nifty closing was almost at day's low. We expect cautious outlook to prevail in the near term. Key Results Today: Ankur Drugs and Patel Engineering. Trend in FII flows: The FIIs were net sellers of Rs. 547.9mn in the cash segment on Monday while the domestic institutional investors (DIIs) were net sellers of Rs. 1.6bn, as per the provisional figures released by the NSE. The FIIs were net buyers of Rs. 7.04bn in the F&O segment on Monday, according to the provisional NSE data. The foreign funds were net sellers of Rs. 1.46bn in the cash segment on Friday and the mutual funds were net sellers of Rs. 579mn on the same day, according to the SEBI figures. Global Data Watch today: Japan Monetary Base (Aug), Australia Current Account Balance (Q2), Japan Labor Cash Earnings (Jul), Australia RBA Interest Rate Decision (Sep 4), Spain unemployment change, UK Halifax House Prices (Aug), UK PMI Construction (Aug), EU Producer Price Index (Jul), US Markit Manufacturing PMI (Aug), EU ECB Asmussen Speech, US Construction Spending (Jul), US ISM Manufacturing PMI (Aug), US ISM Prices Paid (Aug) and US Total Vehicle Sales (Aug).