A slight decline pushed key benchmark indices to their lowest closing level in more than a week. The market breadth was weak. Political worries weighed on the bourses after Bahujan Samaj Party chief Mayawati today, 10 January 2013, sought a rollback of hike in passenger rail fares announced by the government on Wednesday, 9 January 2013, and after DMK, a key constituent of the Congress led United Progressive Alliance (UPA) alliance government at the Centre, said that it would take up the latest railway fare increase issue with Prime Minister Dr. Manmohan Singh. The barometer index, BSE Sensex, lost 3.04 points or 0.02%, off 120.20 points from the day's high and up 67.17 points from the day's low.

The BSE Sensex has risen 236.84 points or 1.22% in this month so far (till 10 January 2013). From a 52-week low of 15,748.98 on 4 June 2012, the Sensex has risen 3,914.57 points or 24.86%. The index is off 192.88 points or 0.97% from its 52-week high of 19,856.43 hit on Monday, 7 January 2013.

Coming back to today's trade, index heavyweight and cigarette maker ITC edged higher. Another index heavyweight Reliance Industries (RIL) edged lower in volatile trade. Metal stocks declined. IT major Infosys fell ahead of its Q3 results tomorrow, 11 January 2013. Pharma stocks declined on profit booking after recent gains.

Shares of PSU banks were mixed after the Union Cabinet today, 10 January 2013, approved a total infusion of Rs 12517 crore from Government of India in the form of additional equity capital in public sector banks during the current financial year. State Bank of India (SBI) hit 52-week high. Shares of private sector bank IndusInd Bank scaled record high after the bank on Wednesday, 9 January 2013, reported strong Q3 results. Shares of another private sector bank Yes Bank also hit record high.

Cement stocks edged lower on reports that . Capital goods stocks extended recent losses. Engineers India dropped after the Cabinet Committee on Economic Affairs (CCEA) today, 10 January 2013, approved disinvestment of 10% government stake in Engineers India.

The market was volatile. The market edged higher in early trade on firm Asian stocks. The market trimmed initial gains to hit fresh intraday low in morning trade. The 50-unit S&P CNX Nifty fell below the psychological 6,000 mark after regaining that mark at the onset of the trading session. The market further pared intraday gains in mid-morning trade. Intraday volatility continued as key benchmark indices regained positive terrain after slipping into negative zone from positive zone to hit fresh intraday low in early afternoon trade. The market was range bound in afternoon trade. Key benchmark indices reversed direction and slipped into the red to hit fresh intraday low in mid-afternoon trade as European stocks dropped. The Sensex and the Nifty both hit their lowest level in more than a week. High volatility was witnessed on the bourses in late trade.

The BSE Sensex shed 3.04 points or 0.02% to settle at 19,663.55, its lowest closing level since 1 January 2013. The index fell 70.21 points at the day's low of 19,596.38 in mid-afternoon trade. The index jumped 117.16 points at the day's high of 19,783.75 in early trade.

The S&P CNX Nifty lost 2.85 points or 0.05% to settle at 5,968.65, its lowest closing level since 1 January 2013. The index hit a low of 5,947.30 in intraday trade. The index hit high of 6,005.15 in intraday trade.

The total turnover on BSE amounted to Rs 3013 crore, higher than Rs 2520 crore on Wednesday, 9 January 2013.

The market breadth, indicating the overall health of the market, was weak. On BSE, 1,797 shares fell and 1,183 shares rose. A total of 124 shares were unchanged.

The BSE Mid-Cap index fell 0.49% and the BSE Small-Cap index fell 0.54%. Both these indices underperformed the Sensex.

Among the 30-share Sensex pack, 23 fell while the rest of them rose.

Index heavyweight Reliance Industries (RIL) fell 0.23% to Rs 849.60. The stock hit high of Rs 858.50 and low of Rs 847.05. Hardy Oil and Gas plc today, 10 January 2013, said it is in negotiations with RIL, the operator of GS-01 exploration block located offshore the west coast of India, for increasing its interest in the block. Hardy Oil currently has 10% participating interest in this offshore exploration licence. Hardy Oil said that no agreement has been reached yet with RIL and any such agreement would be subject to Government of India's approval. Hardy Oil and Gas plc is an upstream oil and gas company focused on India.

Shares of upstream oil companies rose on reports that the government will soon announce a hike of Rs 4.50 per litre in diesel prices and that of Rs 100 per cylinder for LPG prices. State-run Oil India rose 4.04% to Rs 495.15. State-run ONGC rose 3.41% to Rs 301.90. Three state-run firms -- ONGC, Oil India and GAIL (India) -- share part of the under-recoveries of state-run oil refining-cum-marketing firms (PSU OMCs ) arising from the government-imposed price caps on three key fuels -- diesel, LPG for domestic use and kerosene sold through the public distribution system

Coal India rose 0.22%, with the stock extending Wednesday's 1.01% rise triggered by the Ministry of Coal inviting expression of interest for providing consultancy services for restructuring the company. The planning Commission and a number of high level committees have recommended restructuring of Coal India (CIL), a maharatna public sector undertaking, keeping in view the rapidly increasing demand for coal and the need for enhancing coal production and to make the coal industry competitive in the rapidly changing economic scenario, the coal ministry said in a statement early this week.

Since establishment of CIL in 1975, there have been significant changes in the energy policy of the country particularly after the onset of economic liberalization in the early 1990s. The coal sector has been partially opened for private investment to captive consumption. Coal development policy has evolved over a period of time leading to doing away with the administrative price mechanism/decontrol of coal price and distribution, empowerment of performing public sector coal companies, etc, the coal ministry on 8 January 2013.

Index heavyweight and cigarette maker ITC rose 0.52% to Rs 281.25. The stock hit high of Rs 281.75 and low of Rs 278.60. The Ministry of Health and Family Welfare in October 2012 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 PSU banks were mixed after the Union Cabinet today, 10 January 2013, approved a total infusion of Rs 12517 crore from Government of India in the form of additional equity capital in public sector banks during the current financial year. Punjab National Bank and Bank of Baroda rose by 0.01% to 1.48%.

Shares of banking giant State Bank of India (SBI) rose 0.72% to Rs 2,539.90 after striking a 52-week high of Rs 2,550 in intraday trade today, 10 January 2013. The bank on 24 December 2012 said it has signed a Preliminary Non-Binding Memorandum of Understanding with Russian Direct Investment Fund (RDIF), to facilitate advancing bilateral economic cooperation and trade between Russia and India which is aimed at exploring investment opportunities in both the countries. The modalities of the Joint Venture are expected to be further discussed and finalised between the parties in due course. The fund will be operationalised on receipt of requisite regulatory approvals, SBI said in a statement.

Among other PSU bank stocks, Canara Bank, Union Bank of India and Bank of India shed by 0.02% to 1.64%.

The Union Cabinet today, 10 January 2013, approved a total infusion of Rs 12517 crore from Government of India in the form of additional equity capital in public sector banks during the current financial year so as to enable them to expand their credit growth. The exact amount, mode of recapitalization and other terms and conditions in each bank would be decided in consultation with them at the time of infusion, the government said in a statement. The Union Cabinet also gave an in principle approval for need based additional capital infusion in public sector banks from the year 2013-14 to 2018-19 for ensuring compliance to Capital Adequacy norms under Basel-III.

Private sector banks gained. HDFC Bank gained 1.02%. The private sector bank has lowered its base rate--or the minimum rate of interest it can charge borrowers--by 0.1 percentage point, factoring in a reduction in its funding cost. HDFC Bank's new base rate at 9.7% is the lowest in India. The reduction in base rate took effect from 31 December 2012. The benchmark prime lending rate (BPLR), the main rate for the bank's old borrowers, has also been cut by 10 bps to 18.2%.

Yes Bank gained 2.34% to Rs 516.40. The stock hit record high of Rs 516.50 in intraday trade today, 10 January 2013.

IndusInd Bank advanced 1.53% to Rs 440.85 after striking a record high of Rs 445 in intraday trade today, 10 January 2013. IndusInd Bank's net profit rose 29.8% to Rs 267.27 crore on 30.3% growth in total income to Rs 2156.29 crore in Q3 December 2012 over Q3 December 2011. IndusInd Bank announced Q3 result during market hours Wednesday, 9 January 2013.

The bank expects to attain CASA ratio of over 35% by March 2014. The bank's CASA ratio stood at 28.67% as on 31 December 2012.

India's largest private sector bank by net profit ICICI Bank was unchanged at Rs 1,180. The stock had hit 52-week high of Rs 1,188 in intraday trade on Wednesday, 9 January 2013.

IT stocks were mixed. India's second largest software services exporter by revenues Infosys fell 0.55%. The company announces Q3 results tomorrow, 11 January 2013. At the time of announcement of Q2 September 2012 results on 12 October 2012, Infosys had cut both revenue and earnings guidance for the year ending 31 March 2013 (FY 2013) due to appreciation of the rupee against the dollar. The company had cut revenue growth forecast for FY 2013 to 17.3% from its July guidance of 19.7% growth. As per the new guidance, the projected revenue for FY 2013 is at least Rs 39582 crore.

The company had cut the projected growth in earnings per share (EPS) for FY 2013 to 10.3% from its July guidance of 14.4% growth. As per the new guidance, the projected EPS for FY 2013 is at least Rs 160.61.

Infosys had retained its revenue growth guidance for FY 2013 in dollar terms while lowering the guidance on earnings per American depository receipt (EPADS). Infosys retained its forecast of 5% growth in revenue to at least $7.343 billion for FY 2013. The company had reduced the guidance on FY 2013 EPADS to $2.97 from the guidance of $3.03 which the company had given on 12 July 2012 at the time of announcement of Q1 June 2012 results.

IT major Tata Consultancy Services declined 0.7%. TCS chief executive N Chandrasekaran said in a 2012 year-end review that the challenge before the company is to scale up its presence significantly in geographies like China, Japan, Latin America, Europe and the Middle East. There are plenty of opportunities in all these markets and the aim is to address them, he said. He said that TCS is winning lots of transformation deals in Europe. He said that TCS is always looking at inorganic growth opportunities, but they have to make business sense.

India's third largest software services exporter by revenues Wipro fell 0.2%.

HCL Technologies (up 0.43%), Tech Mahindra (up 3.78%) and Mahindra Satyam (up 3.08%) rose.

Oracle Financial Service Software rose 0.05% to Rs 3,324. The stock hit record high of Rs 3,414 in intraday trade today, 10 January 2013.

Metal stocks declined. Sterlite Industries (India) (down 1.79%), Tata Steel (down 0.76%), Sail (down 1.94%), Hindalco Industries (down 1.89%), Sesa Goa (down 1.67%), Nalco (down 1.31%), Hindustan Zinc (down 2.16%) and Jindal Steel & Power (down 0.09%) edged lower.

Bhushan Steel shed 0.36%. The company after market hours on Wednesday, 9 January 2013, denied media reports that the company has given inter-corporate deposits to Arshiya International. The company has not given any inter-corporate deposits to, and has no outstanding inter-corporate deposits with Arshiya International, Bhushan Steel said in a statement.

Arshiya International was locked at the 20% lower circuit at Rs 77.95 on BSE. Arshiya International during trading hours on Wednesday, 9 January 2013, said that the company has taken a call on rationalizing its employee costs/removing non-performers in the overall interest of the company. The company said it has real assets that it has created in the West and North of India, including Pan-India rail assets. All of these assets created by the company are operational and continue to remain operationally strong, Arshiya added. The company issued this clarification after media reports said Arshiya International had fired several senior employees on alleged financial irregularities at the company.

Engineers India (EIL) dropped 4.38% after the Cabinet Committee on Economic Affairs (CCEA) today, 10 January 2013, approved disinvestment of 10% government stake in Engineers India in the domestic market. After this disinvestment, Government of India's shareholding in the company would come down to 70.4% from current 80.4%. EIL is a Mini-Ratna Central Public Sector Enterprise under the administrative control of the Ministry of Petroleum and Natural Gas. It is one of India's largest companies to provide design, engineering and related project management and consultancy services for the hydrocarbon sector and the process plants industry in the country.

Cement stocks dropped on reports that the government will soon announce a hike of Rs 4.50 per litre in diesel prices. Diesel is a key transportation fuel in India. A hike in diesel price could raise freight cost for cement firms. ACC (down 1.27%), Ambuja Cement (down 2.61%), UltraTech Cement (down 3.23%), India Cements (down 3.3%), J K Cement (down 2.3%), Birla Corporation (down 4.95%), Madras Cement (down 0.87%), Shree Cement (down 0.9%) declined.

Capital goods stocks extended recent losses. ABB, BEML, Bhel, L&T dropped by 0.27% to 2.19%.

Pharma stocks declined on profit booking after recent gains. Cipla, Dr Reddy's Laboratories, Lupin, Ranbaxy Laboratories and Sun Pharmaceutical Industries dropped by 0.06% to 1.2%.

Real estate developer Unitech rose 3.88% to Rs 38.85. The stock hit a 52-week high of Rs 39.10 in intraday today, 10 January 2013.

LIC Housing Finance was the top traded counter on the BSE with turnover of Rs 656.81 crore followed by SBI (Rs 101.43 crore), Tata Motors (Rs 67.80 crore), United Spirits (Rs 50.99 crore) and L&T (Rs 45.81 crore).

LIC Housing Finance was the volume topper on the BSE with volume of 2.34 crore shares followed by Suzlon Energy (2.07 crore shares), Aadhar Ventures (1.54 crore shares), Birla Cotsyn (1.45 crore shares) and Kingfisher Airlines (1.05 crore shares).

Finance Minister P. Chidambaram last week said attracting foreign funds to India has become an economic imperative.

The focus on the market is currently on Q3 December 2012 results. Investors and analysts will closely watch the management commentary that would accompany the result which could cause revision in their future earnings forecast of the company for the current year and or next year. Infosys announces Q3 results tomorrow, 11 January 2013. TCS announces Q3 results on 14 January 2013. Axis Bank announces Q3 results on 15 January 2013. Bajaj Auto unveils Q3 results on 16 January 2013.

Hero MotoCorp announces Q3 results on 17 January 2013. HCL Technologies announces its Q2 December 2012 results on the same day. Reliance Industries, Wipro, HDFC Bank and ITC unveil Q3 results on 18 January 2013. UltraTech Cement unveils Q3 results on 19 January 2013. HDFC, Asian Paints and Cairn India unveil Q3 results on 21 January 2013. Kotak Mahindra Bank unveils Q3 results on 22 January 2013. Maruti Suzuki India unveils Q3 results on 25 January 2013. ICICI Bank and Grasim Industries unveil Q3 results on 31 January 2013. Siemens will unveil its Q1 December 2012 results on 31 January 2013. IDFC announces Q3 results on 1 February 2013. Mahindra & Mahindra will announce Q3 results on 8 February 2013.

The Ministry of Railways on Wednesday, 9 January 2013, said it has decided to increase passenger fares ranging from 2 paise per kilometer (km) to 10 paise per km with effective from the midnight of 21 January 2013 and 22 January 2013. The railways has decided to do away with the present practice of levying Development Charge on passenger tickets. It has also decided to have all chargeable fares in multiples of Rs 5.

Elaborating the rational for fare hike, Railway Minister, Pawan Kumar Bansal said that basic fares had not been revised upwards in the last ten years (except for the increase implemented w.e.f. 1 April 2012 in respect of only First Class, AC 2Tier and AC First/Executive Class). He pointed out that losses in passenger segment which were Rs 6159 crore in 2004-05 had risen to Rs 19964 crore in 2010-11 (18% per annum) and are expected to increase to Rs 25000 crore in 2012-13.

Mr. Bansal said that Railway's input costs have increased by 10.6% per annum between 2004-05 and 2010-11, whereas fares stagnated or were reduced in lower classes aggravating passenger losses. He emphasized that cross subsidy through freight business is no more viable in view of fast evolving competition from other modes. The Railway Minister pointed out that as a consequence Railway's internal resource generation was seriously impacted, resulting in scaling down of Annual Plan size, which has now been limited to Rs 51000 crore in 2012-13 as against Rs 61000 crore that was originally targeted. Similarly, Railway's fund balances became negative in 2011-12, thereby adversely affecting essential replacement/renewal of assets, operation and maintenance activities and critical safety and passenger amenity works. The Railway Minister emphasized that it was in view of these factors, that increasing passenger fares had became unavoidable. It was also necessary to do so in the overall interests of this critical infrastructure as well as its users on a sustainable basis, he said.

Bahujan Samaj Party (BSP) chief Mayawati today, 10 January 2013, said that the government's decision to raise passenger rail fares was against the common man. Demanding a rollback, Mayawati said hike in railway fares was one of the many anti-common man policies of the government. BSP provides outside support to the Congress led UPA government which has already been reduced to a minority government after Trinamool Congress withdrew support to the government in September last year.

Separately, the Dravida Munnetra Kazhagam (DMK), a key constituent of the United Progressive Alliance, today, 10 January 2013, said that it would take up the latest railway fare increase issue with Prime Minister Manmohan Singh. Party chief M Karunanidhi said that he would not support any hike that would hit the poor.

Commerce, Industry and Textiles Minister Mr. Anand Sharma, who is on a two day visit to Mauritius, on Wednesday, 9 January 2013, said that the Joint Working Group on Indo-Mauritius Double Taxation Avoidance Convention (DTAC), which is scheduled to meet in February 2013, would be able to take the deliberations forward.

Fitch Ratings on Tuesday, 8 January 2013, reiterated its negative outlook on India's sovereign rating and said it is now worried more about the country's deteriorating fiscal outlook than a slowdown in economic growth and price pressures. Inflation and growth are likely to stabilize in the near term, but India's widening current-account and fiscal deficits have become a greater concern, it said.

The Central Statistics Office (CSO) will unveil industrial production data for November 2012 tomorrow, 11 January 2013. Industrial production is seen declining 0.3% in November 2012, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production had jumped 8.2% in October 2012. Apart from the exceptionally low base effect, industrial production growth in October was boosted by festival demand.

The CSO will unveil data on inflation based on the combined consumer price index CPI) for urban and rural India and also inflation based on the wholesale price index (WPI) both for December 2012, on 14 January 2013. WPI inflation is projected to rise to 7.3% in December 2012 from 7.24% in November 2012, as per the median estimate of a poll of economists carried out by Capital Market. Among the components of WPI inflation, the non-food manufacturing inflation or core inflation had hit 2-1/2-year hit low at 4.49% in November 2012. Inflation based on the consumer price index (CPI) edged up to 9.9% in November 2012 from 9.75% in October 2012.

The Reserve Bank of India (RBI) undertakes Third Quarter Review of Monetary Policy 2012-13 on 29 January 2013. RBI kept its key policy rate viz. the repo rate unchanged at 8% after mid-quarter monetary policy review on 18 December 2012. The central bank said that in view of inflation pressures ebbing, monetary policy has to increasingly shift focus and respond to the threats to growth from this point onwards. Liquidity conditions will be managed with a view to supporting growth as stated in the Second Quarter Review (SQR) of Monetary Policy 2012-13 on 30 October 2012, thereby preparing the ground for further shifting the policy stance to support growth, RBI said. Overall, recent inflation patterns and projections provide a basis for reinforcing October guidance about policy easing in the fourth quarter, RBI said. However, risks to inflation remain and accordingly, even as the policy emphasis shifts towards growth, the policy stance will remain sensitive to these risks, RBI said.

RBI said it is closely monitoring the evolving growth-inflation dynamic and will update the formal numerical assessment of its growth and inflation projections for 2012-13 as part of the third quarter review in January 2013.

The government on 2 January 2013 constituted the Fourteenth Finance Commission. Former Reserve Bank of India Governor Dr. Y. V. Reddy has been appointed as the Chairman of the Fourteenth Finance Commission. The Commission will make recommendations to the Centre regarding the sharing of union taxes, principles governing Grants-in-aid to states and transfer of resources to local bodies.

The Planning Commission last month lowered its economic growth forecast for the country for the five years through 2017 to 8% from a previous estimate of 8.2%.

Finance Minister P. Chidambaram on 3 January 2013 said that there is a need to revive investment in manufacturing and service sector in order to create higher job opportunities. The Finance Minister said that the economy is passing through a difficult phase mainly due to external factors and, therefore, there is immediate need to tide over the current situation and then move to the path of higher growth. The Finance Minister was making opening remarks during his second pre-budget meeting with the representatives of various Central Trade Unions on Thursday, 3 January 2013.

The Finance Minister said that there was a slowdown in investment in manufacturing sector and as a result not enough jobs were created. He added that due to the various steps and measures taken by the government in the last few months, there seems to be a change in the investment sentiments both in public and private sectors. He said trade unions can play an important role in reviving the manufacturing sector which in turn can lead to creation of more job opportunities in the sector.

It remains to be seen if the Union Budget for 2013-2014 due in February 2013 is a reformist budget or a populist budget. Given that next general elections in India must be held before May 2014, it will be the last full-fledged budget of the Congress-led UPA government at the Centre and hence could be a populist one.

Europeans stocks were mostly higher on Thursday, 10 January 2013, ahead of interest-rate decision later in the global day from the European Central Bank (ECB) and the Bank of England (BoE). Key benchmark indices in Germany and UK rose 0.13% to 0.22%. France's CAC 40 fell 0.22%.

ECB and BoE are both widely expected to keep rates on hold and make no changes to their easing programs.

Asian stocks rose on Thursday, 10 January 2013, after China reported December exports were far larger than expected. China is the world's second biggest economy after the United States. Key benchmark indices in China, Hong Kong, Singapore, Japan, Taiwan and South Korea rose by 0.18% to 0.94%. Indonesia's Jakarta Composite fell 1.04%.

China's trade surplus soared to $31.6 billion in December, trouncing estimates and widening sharply from a $19.6 billion surplus in November, aided by a strong growth in the country's exports. Official data released Thursday showed exports expanded 14.1% during the month from the year-earlier period, while imports grew 6%

Japan's Prime Minister Shinzo Abe urged central bank Governor Masaaki Shirakawa raise the nation's inflation target. Abe yesterday talked with Shirakawa at a meeting of Japan's Council on Economic and Fiscal Policy, which has been revived following its abolition by the previous government. Abe said the BoJ should aim for 2% inflation.

Bank of Japan holds a two-day meeting on interest rates in Japan on 21 and 22 January 2013.

Trading in US index futures indicated that the Dow could gain 33 points at the opening bell on Thursday, 10 January 2013. US stocks edged higher on Wednesday, 9 January 2013, as earnings season got off to a positive start, with aluminum major Alcoa Inc. announcing that it swung to a profit in the fourth quarter.

The Federal Open Market Committee (FOMC) holds a two-day meeting on interest rates in the United States on 29 and 30 January 2013.