BSE Small-Cap, Mid-Cap indices slide

Key benchmark indices eked out marginal gains in choppy trade after Prime Minister Dr. Manmohan Singh announced a major reshuffle of his Council of Ministers on Sunday, 28 October 2012 and after Finance Minister P. Chidambaram today, 29 October 2012, announced a plan of fiscal consolidation during the period of the 12th Plan, i.e. from 2012-13 to 2016-17. The barometer index, BSE Sensex, advanced 10.48 points or 0.06%, off close to 110 points from the day's high and up about 55 points from the day's low. Index heavyweight Reliance Industries (RIL) edged higher after a change of guard at the oil ministry following the latest cabinet reshuffle. Index heavyweight and cigarette maker ITC also edged higher. The market breadth was negative. BSE Small-Cap and Mid-Cap indices both edged lower, underperforming the Sensex. The Sensex has lost 126.92 points or 0.67% in October 2012 so far (till 29 October 2012). The Sensex has surged 3,180.90 points or 20.58% in calendar 2012 so far (till 29 October 2012). From a 52-week high of 19,137.29 on 5 October 2012, the Sensex has declined 501.47 points or 2.62%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 3,499.96 points or 23.12%. Coming back to today's trade, power equipment major Bharat Heavy Electricals (Bhel) slumped after weak Q2 results. Bhel's poor Q2 performance dragged other capital goods stocks lower. Bank of India fell after weak Q2 results. JSW Steel rose on strong Q2 results. IDFC edged higher after Q2 results. Media shares dropped after change of guard at the Ministry of Information & Broadcasting following the latest cabinet reshuffle. The market nudged higher in early trade after Prime Minister Dr. Manmohan Singh announced a major reshuffle of his Council of Ministers on Sunday, 28 October 2012. The market trimmed initial gains in morning trade. The market regained strength in mid-morning trade. Intraday volatility continued as key benchmark indices once again pared gains in early afternoon trade. Key benchmark indices slipped into the red before regaining positive zone in afternoon trade. Key benchmark alternately swung between positive and negative terrain in mid-afternoon trade. The market regained positive terrain after slipping into the red to hit fresh intraday low in late trade. The BSE Sensex advanced 10.48 points or 0.06% to settle at 18,635.82, its highest closing level since 25 October 2012. The index fell 53.32 points at the day's low of 18,572.02 in mid-afternoon trade. The index jumped 118.07 points at the day's high of 18,743.41 in early trade. The S&P CNX Nifty advanced 1.30 points or 0.02% to 5,665.60, its highest closing level since 25 October 2012. The index hit a high of 5,698.30 in intraday trade. The index hit a low of 5,645.10 in intraday trade. The BSE Mid-Cap index fell 0.43% and the BSE Small-Cap index declined 0.6%. Both these indices underperformed the Sensex. The total turnover on BSE amounted to Rs 1983 crore, higher than Rs 1942 crore on Friday, 26 October 2012. The market breadth, indicating the overall health of the market, was negative. On BSE, 1,604 shares fell and 1,234 shares fell. A total of 127 shares were unchanged. From the 30-share Sensex pack, 16 stocks rose while the rest of them fell. Index heavyweight Reliance Industries (RIL) edged higher after a change of guard at the oil ministry following the latest cabinet reshuffle. The stock advanced 1.53%. Veerappa Moily has been appointed as the new oil minister in the latest cabinet reshuffle announced by Prime Minister Dr. Mahmohan Singh on Sunday, 28 October 2012. The ministry was earlier with Jaipal Reddy. Reddy has been assigned Science & Technology and Earth Sciences portfolio. Moily was earlier at the helm of the Ministry of Power. Jyotiraditya Scindia is the new Minister of Power. Index heavyweight and cigarette maker ITC rose 0.82% to Rs 288.30. The Ministry of Health and Family Welfare last week notified new pictorial health warnings to be depicted on tobacco product packs which will come into effect from 1 April 2013. The Ministry of Health and Family Welfare said in a statement on 22 October 2012 that three sets of warnings each have been notified for smoking as well as smokeless forms of tobacco product packages. The well-designed health warnings and messages are part of a range of measures to communicate health risks due to tobacco use. Pictorial health warnings communicate health risks in a visible way, provoke a greater emotional response and increase the motivation of tobacco users to quit and to decrease their tobacco consumption, the ministry's statement said. Graphic warning labels have a greater impact than text-only labels and can be recognized by low-literacy audiences and children, the statement added. Shares of ITC had hit record high on 19 October 2012 after the company announced strong Q2 results during trading hours on that day. The stock had hit record high of Rs 299.20 in intraday trade on Friday, 19 October 2012. ITC's net profit after net profit jumped 21.27% to Rs 1836.42 crore on 18.65% growth in income from operations to Rs 7226.58 crore in Q2 September 2012 over Q2 September 2011. IDFC gained 0.73%. IDFC after trading hours on Friday, 26 October 2012, said its consolidated profit after tax (PAT) declined 9% to Rs 476 crore in Q2 September 2012 over Q2 September 2011. Net interest income jumped 32% to Rs 656 crore in Q2 September 2012 over Q2 September 2011. Non-interest income plunged 51% to Rs 189 crore in Q2 September 2012 over Q2 September 2011. Income from principal gains declined 79% to Rs 49 crore in Q2 September 2012 over Q2 September 2011. PAT, net of principal gains, jumped 27% to Rs 427 crore in Q2 September 2012 over Q2 September 2011. IDFC's gross NPA ratio declined to 0.28% as on 30 September 2012 from 0.3% as on 30 June 2012. Net NPA ratio declined to 0.13% as on 30 September 2012 from 0.14% as on 30 June 2012. Sesa Goa declined 1.15%, with the stock reversing initial gains. The company said on Saturday, 27 October 2012, said that the Goa State Pollution Control Board has revoked its earlier order directing the company to stop the activity at second battery of Sesa Goa's new metallurgical coke plant at Amona. Sesa Goa said it remains committed to maintain highest standards of environmental safeguards. Sesa Goa after trading hours on Friday, 26 October 2012, said its consolidated net profit excluding associate income jumped 4400.8% to Rs 57.61 crore on 63.3% decline in total income to Rs 308.63 crore in Q2 September 2012 over Q2 September 2011. Consolidated net profit including associate viz. Cairn India jumped 40684.4% to Rs 522.04 crore in Q2 September 2012 over Q2 September 2011. JSW Steel rose 0.33% on strong Q2 results. The company's net profit jumped 547% to Rs 822 crore on 16% growth in net sales to Rs 8834 crore in Q2 September 2012 over Q2 September 2011. Operating EBIDTA rose 18% to Rs 1525 crore in Q2 September 2012 over Q2 September 2012. The steel major announced the results on Sunday, 28 October 2012. Due to constraints in iron ore supplies, the company could operate at about 80% capacity utilization in Q2 September 2012. With regard to future business outlook, JSW Steel said that while domestic steel demand is expected to be steady, rising imports and availability of mineral resources will be major deterrents depriving Indian steel industry a level playing field vis a vis its global peers. Power equipment major Bharat Heavy Electricals (Bhel) dropped after weak Q2 results. The stock lost 6.42% at Rs 226.70. Bhel's net profit declined 9.74% to Rs 1274.45 crore on 0.93% decline in total income to Rs 10692.22 crore in Q2 September 2012 over Q2 September 2011. The result was announced during trading hours today, 29 October 2012. Bhel's outstanding order book stood at Rs 122300 crore as on 30 September 2012. Bhel's poor Q2 performance dragged other capital goods stocks lower. Thermax, ABB, BEML, and Crompton Greaves dropped by between 0.76% to 2.82%. India's largest engineering and construction firm by sales L&T fell 1.21% to Rs 1685.25. The stock reversed direction after hitting 52-week high of Rs 1719.50 in intraday trade today, 29 October 2012. L&T's recurring profit after tax (PAT) rose 15% to Rs 915 crore on 17% growth in gross revenue to Rs 13328 crore in Q2 September 2012 over Q2 September 2011. After considering certain exceptional and extra-ordinary items of income, the overall PAT jumped 42% to Rs 1137 crore in Q2 September 2012 over Q2 September 2011. L&T announced the second quarter results on 22 October 2012. L&T said order inflow at Rs 20967 crore in Q2 September 2012 recorded an impressive year-on-year growth 30%, thus sustaining the momentum seen during Q1 June 2012. The major orders came from buildings & factories, infrastructure and hydrocarbon sectors, L&T said. L&T's order book stood healthy at Rs 158528 crore as on 30 September 2012. International orders constituted 12% of the total order book. L&T said that uncertainty prevailing around the revival of growth in the global economies and the slow pace of reforms in India, have led to deceleration in growth across the sectors. Inflation continues to remain elevated exerting pressure on operating margins, L&T said. The rebounding of industrial production and improved credit demand was seen in many sectors towards the end of Q2 September 2012. A few steps takes by the Indian government recently underscore its commitment for accelerating the pace of economic development which provides positive signals for the prospects of the company, L&T said in a statement. L&T said that the company has been sustaining its growth momentum on the back of its strong and diversified business portfolio and increasing international presence. With its execution efficiencies and robust order book, the company is placed well to realize its near term targets and medium term plans, L&T said. Media shares dropped after change of guard at the Ministry of Information & Broadcasting following the latest cabinet reshuffle. On the occasion of taking charge as Minister of Information & Broadcasting, Manish Tewari today, 29 October 2012, said that he would take forward the comprehensive policies of the UPA Government taken recently in the Films, Information and Broadcasting Sectors. The Minister reiterated that all efforts would be taken to highlight the policies and programmes of the Central Government. Regarding the Digitization process, the Minister said that the Ministry had put in place a roadmap for achieving the target of switching over from analogue to digital. The Ministry had taken painstaking efforts to involve the key stakeholders associated with the digitization initiative, he said. The Minister further mentioned that he was confident that the targets would be met by the deadline stipulated. The deadline set by the Ministry of Information & Broadcasting for compulsory digitization in the four metro cities is 31 October 2012. Ministry of Information & Broadcasting after trading hours on Friday, 26 October 2012, said that as per the latest figures computed by the ministry, the percentage of digitization in the four Metro cities viz. Delhi, Mumbai, Chennai and Kolkata has reached 85%. This figure has been achieved by considering digitization of only the Cable Homes. Taking into account DTH, the percentage of digitization has gone up to 90%, the ministry said. Metro wise progress shows that Mumbai has nearly achieved 100% digitization. Delhi has achieved 83% digitization of Cable Homes and with DTH, the percentage of digitization is 88%. In Kolkata, Cable homes have reached 80% digitization and with DTH, the percentage of digitization goes up to 82%. In Chennai, the Cable homes are showing 61% digitization and together with DTH, the percentage of digitization goes up to 85%. The ministry also said that there has been a sharp increase in the number of Set Top Boxes (STB) being installed in the homes of people. In the last few days, the average number of STBs installed has jumped to almost 50,000 boxes per day, it said. As per the data provided by the DTH operators, daily installation of DTH connections in the four metro cities has gone up to 8,000 boxes per day from an average of about 2000 boxes a few weeks back, it said. Some pharma stocks rose on renewed buying. Lupin, Cipla, Wockhardt, Ranbaxy Laboratories and Sun Pharmaceutical Industries rose by between 0.06% to 1.22%. Dr. Reddy's Laboratories rose 1.62% ahead of its Q2 results tomorrow, 30 October 2012. Shares of most companies operating in the power sector rose after the new Minister for Power, Mr. Jyotiraditya Scindia, today, 29 October 2012, said he is aware of the fuel shortage being faced by power generation units. GVK Power & Infra, Adani Power, Reliance Power, JSW Energy, and Tata Power Company rose by between 0.47% to 3.1%. But, NTPC fell 0.83%. Mr. Scindia said he would try and sort out issues between Ministry of Coal and Ministry of Power amicably. On the issue of priorities, he said that he would give an informed opinion only after he made a personal assessment of the Ministry of Power and the entire gamut of work ahead of him. Reliance Infrastructure (RInfra) declined 0.72% after the company said after trading hours on Friday, 26 October 2012, that credit rating agency CARE has reduced the rating on RInfra's long term Non Convertible Debentures (NCD) issue to CARE AA from CARE AA+. The reduction in the long-term rating is primarily on account of change in financial risk profile. The borrowings of RInfra has risen mainly due to cash flow mismatch arising out of Engineering, Procurement and Construction (EPC) work being executed for internal projects -- power projects being implemented by Reliance Power (RPower and roads and transmission projects of RInfra. The cash flow mismatch has led to the increase in the group exposure to support the fund requirements of various power projects implemented by associated company viz. RPower (RInfra holds 38.41% stake in RPower as on 30 June 2012). Consequently, the overall gearing ratio, on consolidated basis, increased to 0.75 times as on 31 March 2012 from 0.52 times as on 31 March 2011. Debt coverage indicators of the company changed with total debt/gross cash accruals increasing to 8.56 times for FY 2012, from 6.14 times for FY 2011. Furthermore, the liquidity position on consolidated basis reduced to Rs 1467 crore at end FY 2012 from Rs 4985 crore at end FY 2011. CARE said that the rating of RInfra continues to factor in strong and stable cash flows from the power distribution business in the Mumbai distribution area. Power Grid Corporation of India rose 1.1%. The company after trading hours on Friday, 26 October 2012, said its board of directors has approved the investment approval for 'Strengthening Scheme in Northern Region' at an estimated cost of Rs 100.55 crore with commissioning schedule of 24 months progressively from the date of investment approval. Interest rate sensitive banking stocks were mixed ahead of the announcement of Reserve Bank of India's (RBI) Second Quarter Review of Monetary Policy - 2012-13 tomorrow, 30 October 2012. Private sector banking giant ICICI Bank declined 0.9% to Rs 1068.55, with the stock extending Friday's 0.73% losses on profit taking after strong Q2 results. The scrip had hit 52-week high of Rs 1,102.40 in intraday trade Friday, 26 October 2012. Shares of ICICI Bank had witnessed pre-result rally. The stock had jumped 23.48% to settle at Rs 1,086.15 on Thursday, 25 October 2012, from Rs 879.55 on 5 September 2012. ICICI Bank's net profit jumped 30% to Rs 1956 crore in Q2 September 2012 over Q2 September 2011. Net interest income jumped 35% to Rs 3371 crore and non-interest income jumped 17% to Rs 2043 crore in Q2 September 2012 over Q2 September 2011. Net interest margin improved to 3% in Q2 September 2012 from 2.61% in Q2 September 2011. Cost-to-income ratio reduced to 40.9% in Q2 September 2012 from 44.4% in Q2 September 2011. The bank's ratio of net non-performing asset to net advances stood at 0.66% as on 30 September, 2012, higher than 0.61% as on 30 June 2012 but lower than 0.8% as on 30 September 2011. The bank's provision coverage ratio, computed in accordance with the RBI guidelines, was 78.7% as on 30 September 2012. Net restructured assets as on 30 September 2012 were at Rs 4158 crore, lower than Rs 4172 crore as on 30 June 2012. ICICI Bank's provisions and contingencies surged 59.24% to Rs 508 crore in Q2 September 2012 over Q2 September 2011. Return on average assets (annualised) was 1.59% in Q2 September 2012, compared to 1.41% in Q2 September 2011. The CASA ratio was at 40.7% at end September 2012. The average CASA ratio was at 37.5% in Q2 September 2012. In a statement announcing the second quarter results, ICICI Bank on 26 October 2012 said it has continued with its strategy of pursuing profitable growth. ICICI Bank said it has grown its retail lending volumes, resulting in an improvement in retail loan portfolio growth. The bank continued to leverage its strong corporate franchise, its international presence and its branch network in India, it said. At September 30, 2012, the Bank had 2,772 branches, the largest branch network among private sector banks in the country. India's largest bank by branch network State Bank of India (SBI) fell 0.13% Bank of India fell 2.06% after net profit fell 38.53% to Rs 301.85 crore on 15.15% growth in total income to Rs 8899.55 crore in Q2 September 2012 over Q2 September 2011. Bank of India's (BoI) ratio of gross non-performing assets (NPA) to gross advances stood at 3.42% as on 30 September 2012, higher than 2.56% as on 30 June 2012 and 3.02% as on 30 September 2011. The ratio of net NPA to net advances stood at 2.04% as on 30 September 2012, higher than 1.69% as on 30 June 2012 and 1.98% as on 30 September 2011. The bank announced the second quarter results during trading hours today, 29 October 2012. The bank's provisions and contingencies jumped 34.45% to Rs 1552.11 crore in Q2 September 2012 over Q2 September 2011. The bank's provision coverage ratio stood at 60.96% as on 30 September 2012. BoI's Capital Adequacy Ratio (CAR) as per Basel II norms stood at 11.1% as on 30 September 2012, lower than 11.42% as on 30 June 2012 and 11.97% as on 30 September 2011. India's second largest private sector bank by net profit HDFC Bank gained 0.53%. The bank's net profit jumped 30.06% to Rs 1559.98 crore on 24.47% growth in total income to Rs 9869.8 crore in Q2 September 2012 over Q2 September 2011. HDFC Bank announced the second quarter results during trading hours on 12 October 2012. Interest rate sensitive realty stocks were mostly lower ahead of RBI's monetary policy review. Sobha Developers, HDIL, Unitech and D B Realty fell by between 0.46% to 4.15%. But, DLF rose 0.32%. IT stocks were mixed. India's largest software services exporter by revenues TCS fell 0.67%. The company announced during market hours today, 29 October 2012, that it will set up operations in the state of Madhya Pradesh by building a new integrated campus in Indore for IT and BPO with an initial investment of Rs 550 crore in the first phase. The total development area of the campus is expected to be around 1.5 million square feet. Once all the applicable permissions are received, the construction of Phase I is expected to be completed by March 2016, TCS said. The TCS Indore Campus will be located on a 100-acre property allotted by the Madhya Pradesh state government. An agreement to this effect was signed by TCS and officials of the state government at a function in the city today, 29 October 2012, and presided over by the Chief Minister of Madhya Pradesh, Shri Shivraj Singh Chauhan. TCS said on 19 October 2012 its consolidated net profit rose 3.5% to Rs 3434 crore on 5.1% growth in revenue to Rs 15621 crore in Q2 September 2012 over Q1 June 2012. The core operating profit margin (OPM) declined to 28.4% in Q2 September 2012 from 29.1% in Q1 June 2012. TCS said growth in Q2 September 2012 was quite broad-based and seen across all industry segments led by Manufacturing, Retail, Telecom and BFSI. There was balanced growth across all service lines with new services like infrastructure growing in double digits, TCS said. Geography wise, all markets grew with major markets led by UK and Europe, TCS said. Growth markets like India, APAC, Latin America and Middle East performed well, TCS said. The company added 41 new clients in Q2 September 2012. India's third largest software services exporter by revenues Wipro rose 2.56%. India's second largest software services exporter by revenues Infosys gained 0.23%. Infosys last week said it had completed the acquisition of Lodestone Holding AG, a leading management consultancy based in Switzerland. The acquisition is in accordance with the terms set out in the agreement announced on September 10, 2012. The deal strengthens the management consulting capabilities of Infosys around the world, adding more than 750 experienced consultants and 200 clients in wide-ranging areas such as manufacturing and the automotive and life sciences industries, Infosys said in a statement. Grasim Industries declined 0.92% ahead of its Q2 results today, 29 October 2012. Automobile stocks were mixed ahead of monthly sales volume data. Auto companies will start unveiling monthly sales volume data for October 2012 from Thursday, 1 November 2012. India's largest commercial vehicle maker by sales Tata Motors declined 1.8%. The company's global sales declined 4% to 1.03 lakh units in September 2012 over September 2011. Global wholesales of all passenger vehicles declined 11% to 48,895 units in September 2012 over September 2011. Global wholesales of Tata passenger vehicles declined 17% to 22,434 units in September 2012 over September 2011. Global wholesales of Jaguar Land Rover in September 2012 were at 26,461 vehicles, lower by 4% over September 2011, which includes model year change over timings, Tata Motors said. Global wholesales of all commercial vehicles -- Tata, Tata Daewoo and the Tata Hispano Carrocera range -- were 54,761 units in September 2012, higher by 3%, over September 2011, Tata Motors said on 15 October 2012. India's largest car maker by sales Maruti Suzuki India shed 0.43% ahead of its Q2 results tomorrow, 30 October 2012. The car major on 16 October 2012 launched an upgraded model of its popular Alto car. Maruti Suzuki on 16 October 2012 said the new Alto 800 is over 15% more fuel efficient than the current Alto model. Maruti Suzuki along with its vendors have invested over Rs 470 crore towards developing the Alto 800, the company said. Alto 800 will be manufactured at Maruti's state-of-the-art Gurgaon facility and will be available in 3 petrol variants and 3 factory fitted CNG variants. Additionally, driver airbag will be available as an optional feature. The introductory price for Alto 800 ranges between Rs 2.44 lakh and Rs 2.99 lakh ex-showroom Delhi for 3 variants in petrol segment. The introductory price for 3 variants in CNG segment ranges between Rs 3.19 lakh and Rs 3.56 lakh ex-showroom Delhi, Maruti said. India's largest utility vehicle maker by sales M&M gained 0.96% to Rs 888.05, with the stock extending recent gains triggered by the company reporting strong Q2 results. The stock hit a record high of Rs 899.10 in intraday trade today, 29 October 2012. The combined net profit of M&M and its 100% subsidiary -- Mahindra Vehicle Manufacturers (MVML) -- jumped 28.4% to Rs 978.10 crore on 31% growth in gross revenue plus other income to Rs 10786.70 crore in Q2 September 2012 over Q2 September 2011. MVML, located at Chakan near Pune in Maharashtra, has been set up as a 100% subsidiary of M&M with a view to source contemporary products for expanding the market offering of M&M. M&M announced the second quarter results during trading hours on 25 October 2012. With regard to future business outlook, M&M said while the current economic situation is quite challenging, M&M through its continuous focus on new product introduction, process innovation and cost control expects to rise to this challenge adequately. Motorcycle major Bajaj Auto gained 0.8%, with the stock extending Friday's 1.31% gains. The company on 20 October 2012 said its profit after tax rose 2% to Rs 741 crore on 4% decline in turnover to Rs 5139 crore in Q2 September 2012 over Q2 September 2011. Operating EBITDA declined 6% to Rs 992 crore in Q2 September 2012 over Q2 September 2011. Operating EBITDA margin declined to 19.7% in Q2 September 2012 from 20.1% in Q2 September 2011. The operating EBITDA margin improved to 19.7% in Q2 September 2012 from 19.4% in Q1 June 2012. Bajaj Auto had cash and cash equivalents of Rs 4521 crore as on 30 September 2012, lower than Rs 5682 crore as on 30 June 2012. The reduction in cash was mainly due to payment of annual dividend to shareholders in July 2012. Bajaj Auto said Q2 September 2012 was a challenging quarter for the industry at large. The motorcycle industry which witnessed a CAGR growth of 15% over last 4 years, witnessed a decline of about 9% in Q2 September 2012. Added to this was the overall inflationary pressures, rise in input cost and depreciating rupee forcing the government to increase fuel prices. In this environment, the company's performance has been more than satisfying, Baja Auto said in a statement. Bajaj Auto said that the company's strategy to focus on the high end motorcycle segment of the market together with its variable cost structure ensured that in a subdued market there was no negative impact on operating leverage. Bajaj Auto launched Pulsar 200 NS and Discover ST motorcycles pan-India in Q2 September 2012. Both the products have received an over-whelming response, Bajaj Auto said. In September 2012, Discover became the largest selling motorcycle brand in the country, having dislodged Splendor from the coveted spot. With the success of new launches, Bajaj Auto increased its share in domestic motorcycle market to 27% in September 2012 from 23% in April 2012. With regard to motorcycle exports, Bajaj Auto said that the African region continues to do well. In other markets, in-line with overall global slowdown, demand remained subdued. In Sri Lanka, as against an average sale of 12,000 motorcycles per month, the company's current sales are at about 6,500 units per month. The company's overall market share in motorcycles across the world stood at about 33% in Q2 September 2012. With regard to three-wheeler sales in the domestic market, Bajaj Auto said that the company has performed better than the industry on the back of the success of the recently launched diesel variants. Bajaj Auto said it continues to dominate the gasoline and alternate fuel passenger segment. With the opening of new permits, the outlook for three-wheeler sales in coming quarters in the domestic market is encouraging, Bajaj Auto said. As regards three-wheeler exports, with price rationalization in Sri Lanka, average sales have recovered to about 7,500 units per month. The loss on sales in Sri Lanka is being partially off-set with gains in Egypt, Bajaj Auto said. India's largest motorcycle maker by sales Hero MotoCorp rose for the third straight day after the company said at the time of announcement of Q2 results early last week that its retail sales crossed two lakh units during Navratri. The stock advanced 1.95%. The company's net profit declined 27.01% to Rs 440.58 crore on 10.94% fall in net sales to Rs 5151.18 crore in Q2 September 2012 over Q2 September 2011. The result hit the market after trading hours on 23 October 2012. Hero MotoCorp (HMCL) said the overwhelming customer response in the form of over 2 lakh units in retail sales during the Navratras has come about thanks to a combination of strategic initiatives -- the new exciting range of products, new advertising campaigns comprising premium segment offerings and ground-level activation. Hero MotoCorp (HMCL) completed the process of brand migration of its models from the erstwhile joint brand to the new Hero brand during the quarter. HMCL has recently started dispatching its new 110cc motorcycle Passion X Pro, further broadening its range of products to offer more exciting options for the customers in the forthcoming festive season, HMCL said in a statement. The focus of the stock market is currently on the second quarter earnings. Investors and analysts will closely watch the management commentary that would accompany the results which could cause revision in their future earnings forecast of the company for the current year or the next year. Maruti Suzuki India and Dr. Reddy's Laboratories unveil Q2 results tomorrow, 30 October 2012. Power Grid Corporation of India announces Q2 September 2012 results on Wednesday, 31 October 2012. Wipro announces Q2 results on Friday, 2 November 2012. Cipla announces Q2 results on 5 November 2012. Tata Power, Reliance Infrastructure and Hindalco Industries unveil Q2 results on 6 November 2012. Bharti Airtel and Tata Motors unveil Q2 results on 7 November 2012. Sun Pharmaceuticals Industries and ONGC announce Q2 September 2012 results on 8 November 2012. Ranbaxy Laboratories unveils Q3 September 2012 results on the same day. Tata Steel, Coal India, Tata Steel and BPCL unveil Q2 results on 9 November 2012. India's bourses are working with the country's stock-market regulator to prevent a recurrence of the "flash crash" this month, National Stock Exchange (NSE) Chief Executive Ravi Narain said in an interview to international daily newspaper on 14 October 2012. Erroneous orders placed by a single brokerage firm on 5 October 2012 sent the NSE's main index, the 50-unit S&P CNX Nifty, falling a massive 899.40 points or 15.5% in just a few seconds. Although most of the stocks recovered soon after a 15-minute trading halt, the incident created panic among traders, highlighting concerns that high-speed traders have brought instability to the markets. On the macro front, Markit Economics will unveil HSBC India Manufacturing purchasing managers' index (PMI) for October 2012 on Thursday, 1 November 2012. Markit Economics will unveil HSBC India Services PMI for October 2012 on 5 November 2012. Finance Minister P. Chidambaram today, 29 October 2012, laid out a roadmap to put the government's fiscal house in order, stressing the need to control expenses and generate more revenue as it targets budget deficits of 5.3% of gross domestic product this fiscal year and 4.8% next year. The fiscal deficit stood at 5.8% in the year ended 31 March 2012. The government is "very serious" about implementing the fiscal consolidation plan, Chidambaram told reporters. The plan that Mr. Chidambaram unveiled also envisages bringing down the government's budget deficit to 4.2% of GDP in the fiscal year ending March 31, 2015; 3.6% in fiscal 2016 and 3% in fiscal 2017. His statement comes at a time when there are concerns that the government may increase its expenditure on social-sector programs in its budget for the next fiscal year through March 2014 as it prepares for next general elections, due before May 2014. The Finance Minister said that the Kelkar Committee on fiscal consolidation has recommended a number of reform measures in taxation, disinvestment and expenditure. On the taxation side, the committee has strongly advocated a transition to the Goods and Services Tax (GST) and a quick review of the Direct Taxes Code (DTC) before its introduction and passing in parliament. Besides, the committee has recommended administrative measures to improve tax collection. On disinvestment, the committee has suggested a number of new models for disinvestment and has also urged the government to disinvest its residual stake in some companies that were privatised earlier. On the expenditure side, the committee has suggested rationalisation of schemes and strict control and monitoring of expenditure. The Finance Minister said that committee's recommendation are wholesome and have been accepted by the government. The Department of Revenue and the Department of Expenditure have initiated action on the recommendations of the committee. The Department of Disinvestment has obtained approval of the Cabinet for disinvestment in Hindustan Copper, Nalco, Sail, RINL, Bhel, Oil India, MMTC and NMDC. The government expects to realise the budgeted receipts under 'disinvestment' and 'non-tax receipts', Chidambaram said. Every effort will also be made to realise the revenues budgeted under 'tax receipts', he added. The government also expects to be able to contain and economise on expenditure, both on the Plan and the non-Plan side, he said. While funds will be made available for essential expenditure, especially capital expenditure, every effort will be made to avoid parking or idling of funds, the finance minister said in a statement. As regards subsidies, the government will increasingly rely on Aadhaar-enabled direct cash transfers of merit subsidies to eliminate duplication or falsification, he said. The burden of fiscal correction must be shared, fairly and equitably, by different classes of stakeholders, Chidambaram said. The poor must be protected and others must bear their fair share of the burden, he said. "In particular, I would like to emphasise that all the flagship programmes designed to help the poor and bring about inclusive development will be fully protected under the revised fiscal consolidation plan", Chidambaram said. The finance minister also said that the government is determined to address the twin challenges of current account deficit (CAD) and fiscal deficit (FD). During 2011-12, the CAD increased to $78.2 billion or 4.2 per cent of GDP. The Department of Economic Affairs, in consultation with the RBI, has projected a CAD of $70.3 billion in 2012-13 or 3.7 per cent of GDP. Any moderation in CAD would be welcome, Chidambaram said. He also said that the government is confident that the CAD will be fully financed by capital inflows, and expects that a substantial part of it will be in the form of Foreign Direct Investments (FDI), Foreign Institutional Investments (FII) and External Commercial Borrowings (ECB). The Reserve Bank of India (RBI) announces Second Quarter Review of Monetary Policy - 2012-13 tomorrow, 30 October 2012. The RBI left interest rates unchanged at its last policy meeting on 17 September 2012 citing sticky inflation. RBI Deputy Governor Subir Gokarn said on 3 October 2012 that the central bank will factor in the impact of the government's economic reforms on growth and inflation while formulating its monetary policy. Data released on 15 October 2012 showed that inflation based on the wholesale price index (WPI) rose to the highest level in 10 months in September 2012, limiting the central bank's ability to cut rates to help support the slowing economy. WPI inflation edged up to 7.81% in September 2012 from 7.55% in August 2012 due to a steep hike in diesel price in mid-September 2012. The core inflation, which is manufactured products inflation excluding food products, remained steady at 5.57% in September 2012. Consumer price inflation in India also remains high. Inflation based on the consumer price index stood at 9.73 % in September 2012, compared with 10.03% in August 2012. Economic Affairs Secretary Arvind Mayaram on 14 October 2012 said that he hoped the RBI would match the government's efforts with a rate cut on 30 October 2012. The outlook for Rabi or winter crops has improved following wide-spread rains in August and September. 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. Winter crops will gain from high soil moisture and brimming water reservoirs. The government has set food grain target for 2012-13 at 249.52 million tonnes. The Ministry of Agriculture on 24 September 2012 said as per the first advance estimates of production of Kharif crops, 117.18 million tonnes (MT) foodgrains is likely to be produced in the current Kharif season. On the political front, Prime Minister Dr. Manmohan Singh announced a major reshuffle of his Council of Ministers on Sunday, 28 October 2012. In the biggest reshuffle of the Congress-led United Progressive Alliance Cabinet, Dr. Singh inducted 17 new faces and a total of 22 ministers giving several new and young faces a chance to prove their mettle as his government tries to remove the taint of scams and non-performance from its progress report. The Congress has also shown that it is the big brother in the UPA by having 69 of the 79 ministers, including the Railways. On the occasion of taking additional charge as Minister of Parliamentary Affairs, Union Urban Development Minister Mr. Kamal Nath today, 29 October 2012, said that he will attempt to bring consensus among all political parties on national policies that are formed in the national interest that is dear to all parties. Answering queries from the media persons how he intends to face the challenge of running a smooth winter session of parliament starting next month, the minister highlighted the prominence of the parliament in the democratic system of the country and expressed desire that all political parties will discuss and debate the issues of national interest without resorting to politics of disruption rising above narrow political interests. Bahujan Samaj Party's (BSP) chief Mayawati on 10 October 2012 said she has not taken a decision yet on whether or not to continue support to the UPA. Mayawati said that her party has left the final decision on her and she will soon take a decision. The BSP chief said the BSP is ready for early Lok Sabha elections. Attacking the UPA over corruption, Mayawati said that the government has not taken any strong steps to control corruption. BSP provides outside support to the Congress led UPA government at the Centre which has been reduced to a minority government after Trinamool Congress (TMC) withdrew support to UPA last month. The TMC withdrew support from the UPA last month to register its protest against the reformist decisions viz. allowing 51% FDI in multi-brand retail, increasing the diesel price by Rs 5 per litre, and imposing a cap on the number of subsidized LPG cylinders per family at six. Prime Minister Dr. Manmohan Singh on 21 September 2012 said that the time has come for hard decisions. Explaining the rationale for the hike in diesel price, capping of subsidised LPG cylinders per household per year and allowing foreign direct investment in multi-brand retail trade, Dr. Singh said that rapid growth in the economy is necessary to raise the government's revenue for financing its programmes in education, health care, housing and rural employment. Dr. Singh said that India must avoid high fiscal deficit which could cause a loss of confidence in the economy. The government last month braved intense political opposition to notify the rules for allowing 51% foreign direct investment (FDI) in multi-brand retail. The government also notified the relaxed conditions for single brand retail as well as the norms for allowing 49% investment by foreign airlines in Indian carries and permitted greater foreign investment in some sections of the broadcasting sector. The Cabinet Committee on Political Affairs (CCPA) raised price of heavily subsidised diesel by Rs 5 per liter on 13 September 2012 to balance government's fiscal deficit situation. The CCPA also restricted the supply of subsidized LPG cylinders to each consumer to six cylinders (of 14.2 kg) per annum. The Union Cabinet on 4 October 2012 approved a long-pending proposal to raise the foreign investment limit in insurance companies to 49% from 26%. It also approved a plan to open up the pension sector to overseas investors, allowing them to own stakes of up to 49% in local companies. Both the proposals viz. the increase in foreign investment ceiling in insurance sector and opening of pension sector to overseas investors will require Parliament's approval. The Finance Ministry early this month said that the government has decided not to proceed for the time being with the initial public offer for divestment 10% equity in Rashtriya Ispat Nigam (RINL). The government remains committed to the disinvestment programme and it will evaluate the decision in due course keeping in view all relevant factors, the statement from the Finance Ministry added. Investors will watch developments on the taxation front. Finance Minister P. Chidambaram had said on 1 October 2012 that the government will set final rules on tax avoidance within 20 days after considering recommendations made by a government panel. The panel was set up by Prime Minister Dr. Manmohan Singh to examine controversial laws known as general anti-avoidance rules (GAAR), first proposed in the budget in March, that target firms and investors routing money through tax havens. The committee in an earlier report submitted to the government last month had suggested deferring the implementation of GAAR by three years. The committee had also recommended that the government should abolish the tax on gains arising from transfer of listed securities, whether in the nature of capital gains or business income, to both residents as well as non-residents. The committee had said that the government might consider increasing the rate of Securities Transaction Tax (STT) appropriately to make the proposal tax neutral. At present, short-term capital gains on equities are taxable at the rate of 15%. Holding period of less than one year is considered as short term. There is no long term capital gains tax on sale of shares. Business income is taxed at 30%. Distinguishing capital gains and business income depends on several factors, and disagreements have resulted in numerous litigation cases between the Revenue Department and taxpayers, the committee had said last month. The Election Commission of India on 3 October 2012 announced the schedule of assembly elections in Gujarat and Himachal Pradesh. Assembly polls in Gujarat will take place in two phases on 13 and 17 December 2012. Assembly polls in Himachal Pradesh will take place on 4 November 2012. Counting of votes of assembly elections in Gujarat and Himachal Pradesh will take place on the same day on 20 December 2012. European stocks dropped Monday, 29 October 2012, snapping a three-day advance, as Hurricane Sandy headed toward New York City, prompting the US to suspend equity trading on all markets on Monday. Key benchmark indices in France, Germany and UK shed by between 0.57% to 0.91%. Asian stocks edged lower on Monday, 29 October 2012, due to weak corporate earnings. Key benchmark indices in Indonesia, Japan, Taiwan, and Singapore fell by between 0.04% to 0.91%. South Korea's Kospi was flat. Key benchmark indices in China and Hong Kong Hong shed 0.35% and 0.16% respectively. Hong Kong's government announced a new stamp duty which will require Hong Kong residents and companies buying local residential real estate to pay an extra 15%, in addition to other measures aimed at curbing property-price gains. Bank of Japan holds a policy meeting on interest rates tomorrow, 30 October 2012. There has been speculation of more easing from the Japanese central bank. Japan's retail sales rose less than forecast in September as the expiry of government subsidies for car purchases sapped consumer demand. Retail sales rose 0.4% from a year earlier, the Trade Ministry said in Tokyo today, after a revised 1.7% rise in August. Moody's Investors Service on Monday upgraded Philippines's foreign- and local-currency long-term bond ratings to Ba1 from Ba2 with a stable outlook. The ratings agency said the country's "improved economic performance and continued fiscal revenue buoyancy in the face of deteriorating global demand" was a key driver for its decision. Leading US stock exchanges said late on Sunday, 28 October 2012, that they will close for both floor and electronic trading on Monday, 29 October 2012, and possibly beyond, as a safety measure because of Hurricane Sandy, a monster storm expected to hit New York City early in the week. "We support the consensus of the markets and the regulatory community that the dangerous conditions developing as a result of Hurricane Sandy will make it extremely difficult to ensure the safety of our people and communities, and safety must be our first priority," NYSE Euronext said in a statement on its website. The Nasdaq OMX Group Inc. and BATS also announced that stock and option trading would be closed on Monday, 29 October 2012, and that the trading schedule for Tuesday, 30 October 2012, would be confirmed later. US shares ended Friday's session little changed but recorded weekly losses, as downbeat earnings offset data showing that the US economy grew at a faster pace than expected in the third quarter and that consumer sentiment picked up in October. US GDP grew at a 2% annual rate in the third quarter, slightly above a 1.9% forecast, and picking up from the second quarter's 1.3% rise. More information about the US labor picture will come from ADP's October report on private-sector jobs and from the government's tally of weekly jobless claims, each due Thursday, 1 November 2012. The influential US non-farms payroll data for October 2012 is due for release on Friday, 2 November 2012. Market expectation are for increase of more than 100,000 nonfarm payrolls in October 2012, and an uptick in the unemployment rate to 7.9% from 7.8%. Election for a new president in the United States, the world's biggest economy, is scheduled on 6 November 2012. Investors are worried about US fiscal cliff. The "cliff" refers to the year-end deadline for the expiration of hundreds of billions of dollars worth of tax cuts and the triggering of $109 billion in across-the-board spending cuts. The non-partisan Congressional Budget Office has said the scenario could throw the country into recession. Congress created the hazardous deadline of 31 December 2012 in August 2011 when it agreed to a deficit deal as a way out of a deadlock over raising the US debt ceiling.