Q2 results, RBI policy review in focus

Next batch of second quarter corporate earnings, Reserve Bank of India's monetary policy review and a likely reshuffle of the Union council of ministers will dictate near term trend on the bourses. Automobile and cement stocks will be in focus as companies from these two sectors will start unveiling monthly sales volume data for October 2012 from Thursday, 1 November 2012. The focus of the stock market is currently on the second quarter corporate 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. Bharat Heavy Electricals (Bhel) announces Q2 results on Monday, 29 October 2012. Maruti Suzuki India, Grasim Industries and Dr. Reddy's Laboratories unveil Q2 results on Tuesday, 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. The Reserve Bank of India (RBI) announces Second Quarter Review of Monetary Policy - 2012-13 on Tuesday, 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. 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. 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. On the political front, Prime Minister Dr. Manmohan Singh is reportedly expected to carry out a major reshuffle of his cabinet on Sunday, 28 October 2012, that could see Congress General Secretary Rahul Gandhi joining the government. The likely changes are aimed at strengthening Congress' prospects in the upcoming state elections and the 2014 general elections