PRE-SESSION

Market may open lower on weak Asian stocks; Bhel in focus after good Q2 results

The market may open lower on weak Asian stocks. Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 28 points at the opening bell.

Tech Mahindra unveils Q2 results today.

India's largest electric equipment maker by sales Bhel announced after market hours on Monday that net profit rose 23.61% to Rs 1412.03 crore on 24.41% rise in total income to Rs 10765.37 crore in Q2 September 2011 over Q2 September 2010.

India's largest commercial vehicle maker by sales Tata Motors announced after market hours on Monday that consolidated net profit fell 15.56% to Rs 1877 crore on 26.9% growth in revenues (net of excise) to Rs 36198 crore in Q2 September 2011 over Q2 September 2010.

Cipla announced after market hours on Monday that net profit rose 17.47% to Rs 308.97 crore on 9.8% growth in income from operations to Rs 1804.28 crore in Q2 September 2011 over Q2 September 2010.

Tata Power Company announced after market hours on Monday that standalone net profit rose 13.17% to Rs 281.50 crore on 18.92% rise in total income to Rs 1948.05 crore in Q2 September 2011 over Q2 September 2010.

Jaiprakash Associates announced after market hours on Monday that net profit rose 11.36% to Rs 18.65 crore on 1.99% rise in total income to Rs 3132.41 crore in Q2 September 2011 over Q2 September 2010.

India's top carmaker, Maruti Suzuki India has raised prices of its diesel models by Rs 2,000-Rs 10,000, a company's spokesman told media reporters on Monday.

Key benchmark indices fell for the third straight day to settle at their lowest level in three weeks on Monday, 14 November 2011 as the latest data showed that inflation remains uncomfortably high. The BSE Sensex lost 74.08 points or 0.43% to settle at 17,118.74, its lowest closing level since 24 October 2011.

Foreign institutional investors (FIIs) bought shares worth Rs 321.62 crore on Monday, 14 November 2011 as per the provisional data from the stock exchanges.

The latest data showed that inflation remains uncomfortably high in India. Inflation, as measured by the wholesale price index (WPI), stood at 9.73% in October 2011, as against 9.72% in September 2011, the latest data showed. The annual inflation rate was at 9.08% during the corresponding month of the previous year. The government left unchanged inflation rate for August at 9.7%.

Industrial production grew 1.9% in September 2011 from a year earlier, far below market expectations, reflecting weakening economic activity due to the central bank's aggressive tightening of monetary policy. The reading was also significantly lower than the revised 3.5% industrial output growth in August, government data showed on Friday, 11 November 2011.

Manufacturing output, which has a 75.5% weight in the index, rose 2.1% year on year in September, compared with a revised 4% increase in August. Mining output shrank 5.6%, compared with a revised 4.1% contraction in August. Capital goods output in September shrank 6.8% from a year earlier after rising 4.0% in August.

The food price index rose 11.81% and the fuel price index climbed 14.50% in the year to October 29, government data on Friday, 11 November 2011, showed. In the previous week, annual food and fuel inflation stood at 12.21% and 14.50%, respectively. The primary articles price index was up 11.43%, compared with an annual rise of 12.08% a week earlier.

India's October exports rose an annual 10.8% to $19.9 billion, while imports for the month rose 21.7 percent to $39.5 billion, the trade secretary said on Tuesday, citing provisional data. India's trade deficit in October is seen at $19.6 billion, the highest in four years, Rahul Khullar said. At this rate, the trade deficit for the year could breach the $150 billion mark, he added.

India's service sector contracted for a second straight month in October, as new business grew at its weakest pace since May 2009, dragged by sagging global demand and tight monetary policy, a survey showed on Thursday, 3 November 2011. The seasonally adjusted HSBC Markit Business Activity Index, based on a survey of around 400 firms, slumped to 49.1 in October, its lowest reading in two-and-a-half years and below the 50-mark which separates growth from contraction. It was at 49.8 in September.

India's manufacturing activity in October expanded--though modestly--indicating an improvement in business conditions from a month ago asgrowth in new orders accelerated, a survey showed Tuesday, 1 November 2011. The seasonally adjusted HSBC Purchasing Managers' Index, prepared by Markit, rose to 52 in October from 50.4 in September. A figure above 50 indicates expansion.

India needs to guard against imported inflationary pressure as the euro-zone continues to reel under the debt crisis, Prime Minister Manmohan Singh said on Wednesday, 2 November 2011. "In an increasingly interdependent world, we have to be wary of contagion effects," Mr. Singh said in a statement before his departure to attend a conference of the Group of 20 industrial and developing economies in Cannes, France.

RBI announced a 25 basis points hike in its key policy rate viz. the repo rate to 8.5% after half-yearly review of the monetary policy on 25 October 2011. The central bank cut its GDP growth forecast for the current fiscal year through March 2012 to 7.6% from 8% earlier. But it retained its March-end inflation projection of 7%. RBI said the projected inflation trajectory indicates that the inflation rate will begin falling in December 2011 (January 2012 release) and then continue down a steady path to 7% by March 2012. It is expected to moderate further in the first half of 2012-13. This reflects a combination of commodity price movements and the cumulative impact of monetary tightening. Further, moderating inflation rates are likely to impact expectations favourably.

Mr. Sudipto Mundle, a member of the Reserve Bank of India's technical advisory committee on monetary policy, on 3 November 2011 said he expects inflation to ease in the January-March quarter as global commodity prices will begin to cool by then, helped by a favorable base. However, it will still overshoot the RBI's March-end projection of 7%, possibly ending the fiscal year at as high as 8%, he added. Mr. Mundle expects the economy to grow 7%-7.5% this fiscal year, below the RBI's 7.6% forecast.

Asian shares fell on Tuesday, as a rise in euro zone bond yields reflected lingering doubts about the ability of politicians in Italy and Greece to push through painful reforms to resolve their debt crises and win market confidence. Key benchmark indices in Hong Kong, China, Indonesia, South Korea, Singapore, Japan, and Taiwan fell by between 0.19% to 0.91%.

Industrial production in the euro zone fell in September, the most since early 2009. Output at factories in the 17-nation group declined 2% for the month

U.S. stocks fell on Monday as rising bond yields in Italy and other euro-zone countries reminded investors that despite changes in governments, the region's debt crisis could still spin out of control.

- Dr S H Kazmi

Sr. Technical Analyst