- Positive start – no convincing turnaround

He's turned his life around. He used to be depressed and miserable. Now he's miserable and depressed. - David Frost

It’s an F&O expiry week and the usual volatility associated is more or less expected. Speculation remains on whether the ‘Septaper’ will happen; in other words whether
the Federal Reserve will pull back on asset purchases in September.

The outlook is a positive start to begin with. The rupee, which closed at 63.20 on Friday will remain in focus. Asian stocks are in the green after a fall in US home sales raised hopes that Federal Reserve may not reduce economic stimulus next month. Data showed new home purchases in the US plunged in July by the most in three years.

Back home in India, the GDP number, the broadest measure of economic activity, will be closely eyed and is expected later this week.

Finance Minister P Chidambaram during the weekend reassured FIIs and banks
that once the rupee’s slide was curbed and stability returns to the currency markets, interest rates would start falling, according to a report.

FIIs were eager to know what new steps and policy action the government is taking to ensure stability in the market, the report added.

US indices ended mixed last week. The Nasdaq added 1.5% and the S&P 500 rose slightly, while the Dow Jones fell for the third straight week.

Japan's Nikkei 225 index was trading marginally higher and so was Hong Kong's Hang Seng index. South Korea's Kospi index rose 0.7% while China's Shanghai index was flat.

ITC will be closely eyed as the company board is meeting on Wednesday to consider a proposal for demerger of West Indian Match Company’s (Wimco) arms.

Hexaware Technologies will remain in focus after private equity major Baring Asia announced it was set to acquire the company in a deal worth US$465mn.

Thanks to a double whammy of high crude prices ($105/barrel) and a weak rupee, IndianOil, Bharat Petroleum Corporation and Hindustan Petroleum Corporation are up against fuel losses of Rs 140,000 crore this fiscal, a report stated.

The government is counting on recent big-ticket deals and a pickup in acquisitions to keep dollars flowing while it tries to rein in the current account deficit, says a report.

The Prime Minister’s Office is in favour of opening up the fast growing e-retail sector to foreign direct investment — a move that will allow global majors such as Amazon and eBay to invest in the country, says a report.

Results watch: C&C Const, Ikab Securities, Indsil Hydro, Krebs Bio, Oasis Sec, Priyadarshini Spn, S Mobility, Spectrum Foods, Surya Indl.

Trends in FII flows: Overseas investors have pulled out nearly Rs 30bn from Indian stock market in a week. The FIIs were net sellers of Rs1.48bn in the cash segment on Friday, while the domestic institutional investors (DIIs) were net buyers of Rs7.55bn, as per the provisional figures released by the NSE.

Global Data Watch: Summer Bank Holiday GBP, Nationwide Housing Prices n.s.a (YoY) (Aug) GBP, Nationwide Housing Prices s.a (MoM) (Aug) GBP, 10-y Bond Auction EUR, Durable Goods Orders (Jul) USD, Durable Goods Orders ex Transportation (Jul) USD, Dallas Fed Manufacturing Business Index (Aug) USD, 3-Month Bill Auction USD, 6-Month Bill Auction USD

In other news in the media:

Faced with slowing demand for heavy commercial vehicles, light commercial vehicles and passenger cars, Bosch, has embarked on a cost- cutting exercise to improve margins and profitability. (BS)

Reliance Industries Ltd and its partner, BP, announced a new gas condensate discovery off the east coast. (BS)

Jindal Steel and Power Ltd has acquired a majority stake in Gujarat NRE Coking Coal, the Australian subsidiary of Gujarat NRE Coke, which would enable it to secure resource supply and minimise risk in prices. (BS)

Maruti Suzuki India Ltd, would decide on its investments plan for a third facility in Gujarat at a board meeting next week, amid a sales slump in the home market. (BS)

ONGC has decided to go ahead on its own to develop its deep-sea block in the Krishna Godavari Basin, as its over-a-year-long hunt for a suitable partner has yielded no results. (BL)

ONGC Videsh Ltd is set to buy US energy major Anadarko Corp’s 10% stake in a Mozambique gas field for US$2.6bn this week. (BL)

Indicating a shift in its business strategy, Ranbaxy could withdraw from some global markets in the near future, while consolidating in others. (BS)

Maruti Suzuki India Ltd is working at making an operational integrated R&D centre in Rohtak. (BS)

Jindal Steel and Power Ltd has secured five exploration licences for iron ore mining in African countries. (BS)

National Stock Exchange has sold off almost its entire stake in MCX over the past three weeks to insulate itself from the current controversy. (ET)

Wipro has asked Prime Minister Manmohan Singh to seek the Obama administration’s intervention to remove provisions in a proposed US immigration bill that are discriminatory towards Indian IT firms. (ET)

Gail India is negotiating with Qatar to secure 3mn tons of LNG at a price lower than the offered US$14 per unit, and is offering to help Qatar Petroleum acquire 5% equity in Petronet LNG. (ET)

Oil India plans to invest in Petronet LNG’s upcoming 5 MT LNG terminal on the east coast. (ET)

The Cabinet Committee on Investment is likely to set the ball rolling for 28 stalled mega power projects, involving investments of Rs1.72tn. These projects, slated for discussion at the CCI meeting, are expected to get cleared. (BS)

The government is planning to a give easier exit window to foreign investors in construction, housing and township projects, hoping to spur greater equity inflow into the debt burdened sector and help faster completion of delayed projects. (ET)

An internal department of telecommunications panel is learnt to have proposed creation of a new body to regulate both telecom and broadcast sectors, with greater teeth than the existing regulator, the Telecom Regulatory Authority of India. (BS)

Faced with a steep fall in the value of rupee, the Reserve Bank of India would scrutinise all pending applications, including that of Apollo Tyres, in the light of revised norms for outward investments. (BS)