Key benchmark indices edged lower in choppy trade after the director-general of state-run India Meteorological Department (IMD) L.S. Rathore said El Nino, which is usually associated with lower rainfall, will likely emerge in August 2012. Weakness in European shares also hurt sentiment adversely on the domestic bourses. The barometer index, BSE Sensex, lost 129.21 points or 0.73%, off close to 95 points from the day's high and up about 25 points from the day's low. The market breadth was negative.
European shares were mostly lower on Wednesday on concern that slowing global growth is pulling down company earnings.
The Sensex has risen 59.16 points or 0.33% in this month so far (till 11 July 2012). The Sensex has jumped 2,034.22 points or 13.16% in calendar 2012 so far (till 11 July 2012).
Coming back to today's trade, housing finance major HDFC declined on profit taking after the company reported good Q1 results during trading hours. IT giant Infosys rose in choppy trade ahead of its Q1 results tomorrow, 12 July 2012. TCS fell ahead of its Q1 results tomorrow, 12 July 2012. Index heavyweights Reliance Industries (RIL) and ITC both edged lower. Metal stocks fell as global commodity prices dropped on Tuesday, 10 July 2012.
Auto stocks fell across the board. Realty stocks fell on profit booking after recent strong gains triggered by the Competition Commission of India directing cement firms last month to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market.
The market edged lower in early trade on weak Asian stocks. A bout of volatility was witnessed as key benchmark indices trimmed initial losses to hit fresh intraday highs in morning trade. Volatility continued as key benchmark indices weakened once again in mid-morning trade. Weakness continued on the bourses in early afternoon trade. Key benchmark indices pared losses after hitting fresh intraday low in afternoon trade. The market extended intraday losses to hit fresh intraday low in mid-afternoon trade.
Monsoon rains have covered the entire country but the amount is unlikely to improve until next week, with overall rainfall 23% less than a long-term average, L.S. Rathore, director-general of the state-run India Meteorological Department (IMD) said on Wednesday. There is a strong chance of an El Nino weather event this season and it will likely emerge in August 2012, he told reporters. El Ninos are usually associated with lower rainfall. Lower rainfall this year is intensifying concerns that output of summer-sown crops such as oilseeds, sugar and pulses will fall compared with record-high levels in the last couple of years, hitting farm income. Monsoon rainfall has been deficient in 62% of the country's crop area so far.
Annual monsoon rainfall has improved in the past 10 days, speeding up sowing of key summer-sown crops like rice and cotton, Agriculture Minister Sharad Pawar said on Wednesday, 11 July 2012. Poor rainfall in cane and pulses growing Maharashtra and Karnataka is cause for concern, he said. Maharashtra is the top sugar producer and second-biggest producer of soybeans, while Karnataka is the No. 1 coffee producer. Sowing of crops other than coarse grains has been progressing well, Mr. Pawar said. With monsoon rains advancing to all regions, sowing of rice--the main summer staple--is expected to pick up in the next few weeks, the minister said.
The monsoon rains--which make up around 70% of India's annual rainfall--are crucial to the nation's agriculture sector and broader economy. More than 60% of the country's farmland is rain-fed. The timing, distribution and quantity of rainfall are all important for crops.
The BSE Sensex was down 129.21 points or 0.73% to 17,489.14, its lowest closing level since 9 July 2012. The index declined 151.36 points at the day's low of 17,466.99 in mid-afternoon trade. The index fell 35.36 points at the day's high of 17,582.99 in morning trade.
The S&P CNX Nifty lost 39.05 points or 0.73% to settle at 5,306.30, its lowest closing level since 9 July 2012. The index hit a high of 5,336.45 and a low of 5,300.25 in intraday trade.
The BSE Mid-Cap index fell 0.12% and the BSE Small-Cap index declined 0.24%. Both these indices outperformed the Sensex.
BSE clocked turnover of Rs 2078 crore, higher than Rs 1993 crore on Tuesday, 10 July 2012.
The market breadth, indicating the overall health of the market, was negative. On BSE, 1,617 shares fell and 1,211 shares rose. A total of 112 shares were unchanged.
From the 30-share Sensex pack, 25 stocks fell and the rest of them rose.
Index heavyweight Reliance Industries (RIL) fell 1.87%. The company last week said it has selected Technip as a technology supplier and engineering contractor to implement its Refinery Off-Gas Cracker (ROGC) project. This is part of the expansion project being executed at RIL's Jamnagar refinery and petrochemical complex in Gujarat. The ROGC plant will be amongst the largest ethylene crackers in the world and will be using refinery off-gas as feedstock, RIL said. The products from the plant will be utilised for the new downstream petrochemical plants being built at Jamnagar, RIL said.
RIL has bought back 3 crore shares for Rs 2144.73 crore till 22 June 2012 under its ongoing share buyback program. RIL has set a maximum buyback price of Rs 870 for share buyback. The company has set aside Rs 10440 crore for share buyback. The buyback program opened on 1 February 2012 and closes on 19 January 2013. Last month, RIL chairman Mukesh Ambani said at the company's Annual General Meeting in Mumbai that the company's buyback program represents a highly accretive use of cash by the company and it will supplement earnings growth from operations, for higher EPS (earnings per share), in the near future.
FMCG stocks fell after the director-general of state-run India Meteorological Department (IMD) L.S. Rathore said El Nino, which is usually associated with lower rainfall, will likely emerge in August 2012. FMCG firms derive substantial revenue from rural sales. Hindustan Unilever, Marico and Godrej Consumer Products shed by between 0.06% to 1.12%.
Index heavyweight and cigarette major ITC declined 1.65%.
Housing finance major HDFC declined 0.62% to Rs 678.30 on profit taking after the company reported good Q1 results during trading hours. The stock had witnessed a pre-result rally. The scrip had jumped 6.22% to settle at Rs 682.55 on Tuesday, 10 July 2012, from a recent low of Rs 642.55 on 26 June 2012.
HDFC's net profit rose 18.63% to Rs 1001.91 crore on 29.29% growth in total income to Rs 4934.95 crore in Q1 June 2012 over Q1 June 2011. HDFC's loan book stood at Rs 1.48 lakh crore as on 30 June 2012 as against Rs 1.24 lakh crore in the previous year. This excludes loans sold during the preceding 12 months amounting to Rs 4978 crore to HDFC Bank.
India's largest engineering & construction firm by sales L&T extended Tuesday's gains triggered by the company announcing the acquisition of Malaysia based Henikwon Corporation Sdn Bhd. The stock was up 1.2%. L&T said during trading hours on Tuesday that Malaysia based Tamco Switchgear, a wholly owned subsidiary of the company and part of its electrical & automation (E&A) business, has acquired Malaysia based Henikwon Corporation Sdn Bhd. Henikwon Corporation is a leading manufacturer of low voltage and medium voltage busduct systems. Henikwon brand is globally well recognized and offers high quality products under compliance to international quality standards. The Henikwon acquisition brings a strong customer base of large corporations to Tamco, L&T said.
IT pivotals were mixed. India's largest software services exporter by revenues, Tata Consultancy Services (TCS), declined 0.21%, with the stock reversing initial gains. The company announces Q1 results on 12 July 2012. India's second largest software services exporter by revenues, Infosys, rose 0.29% in volatile trade. The company announces Q1 results on Thursday, 12 July 2012. India's third largest software services exporter by revenue, Wipro, dropped 2.68%. The company announces Q1 results on 24 July 2012.
Mahindra Satyam dropped 1.29% to Rs 80.25. Mahindra Satyam today launched a new accelerated framework Apparel & Fashion xPress for Oracle Retail implementations. Apparel & Fashion xPress caters to specific business functionality requirements of mid-market fashion and apparel retailers in the areas of global sourcing and procurement.
Auto stocks fell across the board. India's largest commercial vehicle maker by sales Tata Motors fell 2.03%. Global rating agency S&P on Monday, 9 July 2012, said it has raised its long-term corporate credit rating on Tata Motors and given it a positive outlook as it expects the company's cash flow to improve on account of strong sales at its UK-based unit Jaguar Land Rover Plc (JLR). S&P also said that it may further upgrade Tata Motors' ratings if JLR's risk profile improves or if Tata Motors is able to bring down its consolidated debt-to-operating profit ratio to 2.5. S&P raised Tata Motors' rating to BB from BB- previously and said it assesses the company's business risk as fair.
S&P said JLR's business risk profile has improved to fair from weak due to healthy vehicle sales -- particularly in emerging markets -- strong demand for Land Rover's sport-utility vehicles and introduction of the Evoque SUV. It said Evoque is expected to be the best-selling model for JLR in 2013. The rating agency said, however, that JLR still faces a challenge in repositioning the Jaguar brand in the competitive and technologically advanced luxury car market. JLR sells luxury sedans under the Jaguar brand.
Mahindra & Mahindra (M&M) declined 0.12% after the company on Tuesday, 10 July 2012, said it has suspended its plans to develop a vehicle for the US market due to changes in the US regulatory and market situation. M&M said it will continue to monitor the US situation and remain flexible with its approach to this market.
Renault SA last week introduced sport-utility vehicle (SUV) Duster in India as part of an aggressive strategy by the French auto maker to make deeper inroads in one of the world's biggest automobile markets. The Duster has a starting price of Rs 7.19 lakh for the base gasoline model and Rs 7.99 lakh for the base diesel model at New Delhi dealerships, pitching it in competition with SUVs from market leader Mahindra & Mahindra as well as Tata Motors and Force Motors.
India's largest car maker by sales Maruti Suzuki India declined 1.49%. The company early last week said its total sales jumped 20.3% to 96,597 units in June 2012 over June 2011.
Automobile industry body -- the Society of Indian Automobile Manufacturers (SIAM) - on Tuesday, 10 July 2012, cut its forecast of domestic car sales for the year through March 2013 to 9%-11% from 10%-12% earlier. But it raised the guidance for total domestic car and sport-utility vehicle (SUV) sales to 11%-13% from 10%-12% due to expectations of higher SUV sales, most of which run on diesel. Sales of diesel cars and SUVs are surging as the price of diesel in India remains cheaper than petrol. In New Delhi diesel is 39% cheaper than petrol.
Ashok Leyland dropped 0.58%. The company's total sales rose 28% to 10,244 units in June 2012 over June 2011. Small commercial vehicle Dost clocked sales of 2,725 units in June 2012. Excluding the sales of Dost, total sales declined by 6% to 7,519 units in June 2012 over June 2011. Dost is manufactured in association with Nissan Motor Company of Japan at Ashok Leyland's facility in Tamil Nadu.
India's second largest motorcycle maker by sales Bajaj Auto declined 0.64%. As per recent reports, the company has cut prices of its products in Sri Lanka to bring back the volumes lost post the excise duty hike in that country. Bajaj Auto has reportedly cut retail prices of 3-wheelers by 10% and 2-wheelers to the tune of 5-14%, depending on the model, in Sri Lanka. The hit due to the price cut will be shared between the company and the dealers. Sri Lanka accounts for almost 5-7% of the total volumes of the company. It is one of the biggest markets for the auto major in terms of export and accounts for 17-18% of export sales.
Bajaj Auto early last week said its total sales fell 6% to 3.45 lakh units in June 2012 over June 2011. The company's commercial vehicles sales plunged 39% to 26,785 units in June 2012 over June 2011 as three-wheeler exports to Sri Lanka and Egypt were disrupted in June 2012. Bajaj Auto expects sales to normalise from July 2012 onwards.
Hero MotoCorp (HMCL) dropped 1.18%. The company launched a 125 cubic-centimeter motorcycle Ignitor last week. The Ignitor motorcycle will be available in two versions, costing Rs 55,900 and Rs 57,900 at dealerships in New Delhi, the company said. The latest model follows the 110cc Maestro scooter, which was launched in March, and the 150cc Impulse motorcycle, introduced last October. The Ignitor will add to the Glamour and the Super Splendor -- the two 125cc motorcycle models sold currently by Hero MotoCorp. Hero MotoCorp sells motorcycles with 100cc to 225cc engines. It also sells two scooter models, including the Maestro.
Hero MotoCorp's total sales rose 4.26% to 5,34,091 units in June 2012 over June 2011. With sales of 5,34,091 units in the month of June, HMCL's cumulative sales for the first quarter (April-June) of this financial year (2012-13) has touched 16,42,292 units -- its highest-ever sales in any single quarter.
TVS Motor Company rose 3.13%, with the stock extending recent strong rally. The company early this week said it is in talks with German auto-maker BMW's motorcycle division -- BMW Motorrad -- for a technology tie up. However, nothing has been firmed up as yet, TVS Motor said in a statement.
Metal stocks fell as global commodity prices fell on Tuesday, 10 July 2012. Jindal Steel & Power, Hindalco Industries, Hindustan Zinc, Sterlite Industries, Bhushan Steel, and Tata Steel fell by between 0.32% to 2.74%.
JSW Steel rose 0.27% after the company said during market hours today its crude steel production jumped 27% to 2.14 million tonnes in Q1 June 2012 over Q1 June 2011. The company said its Vijayanagar, Karnataka works could operate at about 80% capacity utilisation during Q1 June 2012 due to constraints in availability and quality of iron ore in E-Auction in Karnataka.
Sail fell 0.53%, with the stock reversing initial gains. The company and Kobe Steel of Japan signed a Memorandum of Agreement (MoA) at Kobe's headquarters in Tokyo on Tuesday for setting up a 0.5 million tonnes per annum iron nugget making plant using Kobe's patented ITmK3 technology at Sail's alloy steel plant in Durgapur, West Bengal, India. As per the agreement, Sail and Kobe Steel will be entitled to equal share of production from the plant for captive use.
The joint venture project will harness the strengths of both the leading steel companies. While Sail will contribute land, iron ore and other engineering services for the project, Kobe steel will provide the technology for setting up the plant and its operation.
Realty stocks fell on profit booking after recent strong gains triggered by the Competition Commission of India directing cement firms last month to cease and desist from indulging in any activity relating to agreement, understanding or arrangement on prices, production and supply of cement in the market. Cement is a key raw material in housing construction. Oberoi Realty, DLF, D B Realty and HDIL dropped by between 0.49% to 2.09%. But, Unitech rose 0.83%.
The Union Cabinet early this month approved the proposal for extending the scheme of interest subvention of 1% on housing loans upto Rs 15 lakh where the cost of the house does not exceed Rs 25 lakh for the year 2012-13 and to amend the operational part of guidelines for release of funds. A budgetary provision of Rs 400 crore has been made for Financial Year 2012-13 for implementing the scheme. Consequent upon the extension of scheme, the limit of subsidy for an individual borrower would be Rs 14,912 for a loan of Rs 15 lakh and Rs 9,925 for a loan of Rs10 lakh. The extended scheme will benefit all house loans availed in Financial Year 2012-13.
UltraTech Cement rose 1.23% to Rs 1,584.20. The stock hit a record high of Rs 1,595.70 in intraday trade today, 11 July 2012.
Prime Minister Manmohan Singh last month laid out ambitious infrastructure development plans for the current fiscal year. Singh said that the government plans to award 9,500 kms of roads for construction this year and over 4,000 kms for maintenance under the new system.
Dr. C.P. Joshi, Union Minister for Road Transport & Highways, today, 11 July 2012, said that the government is keen to ensure that road sector achieves success and that his ministry can not afford to take any chances. Buoyed by the success achieved in 2011-12, the Ministry of Road Transport & Highway has pegged the targets for the road sector to achieve 9,500 Kms of award and 3,500 Kms of completion 20012-13. A record length of 7957 Kms of roads was awarded for strengthening/up gradation and improvement and over 2,200 Kms were completed during the year 2011-12.
Dr. Joshi expressed concern that the performance of road sector in Q1 June 2012 has not been quite up to the mark. Projects bid out in the first quarter have not received the kind of response the ministry got last year, with some project getting no bidders at all. One of the reasons for this may be the tightening of the purse-strings from the lenders for funding of road projects.
Tata Power Company fell 1.33%. Global rating agency Standard & Poor's Ratings Services (S&P) has cut its outlook on the power generation major to negative from stable while affirming its 'BB-' long term corporate credit rating on the firm and its 'BB-' issue rating on the company's senior unsecured notes. S&P said it may lower the rating on Tata Power if the company is unable to secure waiver from its lenders on the breach of covenant. Another trigger for the rating downgrade could be increase in expenditure due to the Mundra ultra mega power (UMPP) project or otherwise resulting into substantial weakness in Tata Power's financial risk profile.
S&P said it could upgrade the outlook on Tata Power to stable if Tata Power secures the necessary waiver and if the construction at the Mundra UMPP continues as planned and is within budget. S&P may also consider an upward revision in outlook in case if Tata Power faces no material deterioration in its business and sustainably maintains its financials risk profile such that its ratio of funds from operations to adjusted debt is 10% to 12%.
Telecom stocks fell across the board ahead of a meeting of the empowered group of ministers on spectrum pricing which is scheduled tomorrow, 12 July 2012, under its new head -- Home Minister P Chidambaram. MTNL, Tata Teleservices (Maharashtra), Reliance Communications, Idea Celluar and Bharti Airtel dropped by between 0.47% to 1.87%.
On April 23, the Telecom Regulatory Authority of India (Trai) had recommended a base price of Rs 3622 crore for a megahertz of spectrum at pan-India level which is around 10 times higher than the price for 2G licences in 2008 when A Raja was the Telecom Minister. According to Trai recommendations, a minimum of 5 Mhz should be allotted which would mean that a pan-India spectrum in 1800 MHz band will cost Rs 18000 crore. The reserve price is five times the base price of Rs 3500 crore for 3G auction. However, telecom operators have been opposing the Trai recommendations, saying that it will hurt investment in the sector further and expansion of the industry in rural areas.
Hospitality shares rose after data released by the government early this week showed increase in foreign tourist arrival in June 2012. Indian Hotels, EIH, EIH Associated Hotels and Royal Orchid Hotel rose by between 0.55% to 2.96%. Hotel Leela Ventures fell 0.77%.
Foreign Tourist Arrivals (FTAs) during the month of June 2012 was 4.32 lakh as compared to FTAs of 4.12 lakh during the month of June 2011 and 3.85 lakh in June 2010. There has been a growth of 4.8% in June 2012 over June 2011 as compared to a growth of 4.6% registered in May 2012 over May 2011. FTAs during the period January-June 2012 were 32.37 lakh with a growth of 7.4%, as compared to the FTAs of 30.15 lakh with a growth of 10.8% during January-June 2011 over the corresponding period of 2010.
Foreign Exchange Earnings (FEE) during the month of June 2012 were Rs 6485 crore as compared to Rs 5440 crore in June 2011 and Rs 4751 crore in June 2010. The growth rate in FEE in June 2012 over June 2011 was 19.2% as compared to 14.5% in June 2011 over June 2010. FEE from tourism during January-June 2012 were Rs 43760 crore, with a growth of 24.4%, as compared to the FEE of Rs 35163 crore with a growth of 12.1% during January-June 2011 over the corresponding period of 2010.
FEE in US dollar terms during the month of June 2012 were $1.158 billion as compared to FEE of $1.213 billion during the month of June 2011 and $1.02 billion in June 2010. The decline in FEE in dollar terms in June 2012 over June 2011 could be partly due to substantially depreciated value of rupee in June 2012 as compared to June 2011, the Ministry of Tourism said in a statement issued on Tuesday, 10 July 2012. FEE from tourism in dollar terms during January-June 2012 were US$ 8.455 billion, with a growth of 8.2%, as compared to $7.811 billion with a growth of 14.2% during January-June 2011 over the corresponding period of 2010.
Castrol India rose 1.52% after the company said during market hours today its board of directors will consider proposal for bonus share issue on 16 July 2012.
BPCL rose 1.1% to Rs 777.05 ahead of record date for liberal 1:1 bonus issue. The stock hit a 52-week high of Rs 787.45 in intraday trade today, 11 July 2012. BPCL has fixed 17 July 2012 as the book closure date for determining the eligibility of shareholders entitled to receive the 1:1 bonus shares
Bank stocks reversed initial gains. The country's biggest commercial bank in terms of branch network State Bank of India declined 0.28%. The bank has raised interest rate by 25 basis points to 9% on fixed deposits for the tenure of three years to less than five years with effect from 1 July 2012. This is applicable for deposits below Rs 15 lakh.
India's second biggest private sector bank in terms of branch network HDFC Bank shed 0.23% to Rs 587.05. The stock reversed direction after hitting record high of Rs 593.55 in intraday trade today, 11 July 2012. The bank reduced lending rates by 20 basis points with effect from 30 June 2012. The bank has cut base rate to 9.8% from 10% and the benchmark prime lending rate (PLR) to 18.3% from 18.5%.
India's largest private sector bank by net profit ICICI Bank declined 0.59%.
Grasim Industries declined 0.55%. The company on Tuesday, 10 July 2012, said that due to water shortage at Nagda (Madhya Pradesh), the company has temporarily suspended production at its Staple Fibre Plant at Nagda fully and that of Chlor-Alkali Plant at Nagda by half. The company has now said that with the onset of monsoon, the availability of water has improved and accordingly the production in these plants is being restarted in gradual manner and the full production is expected to be restored by 12 July 2012.
Kingfisher Airlines clocked highest volume of 82.42 lakh shares on BSE. Cals Refineries (68.32 lakh shares), Suzlon Energy (55.51 lakh shares), OnMobile Global (43.69 lakh shares) and Infotech Enterprises (41.93 lakh shares) were the other volume toppers in that order.
SBI clocked highest turnover of Rs 102.75 crore on BSE. MCX (India) (Rs 86.90 crore), Infotech Enterprises (Rs 78,85 crore), Financial Technologies (Rs 55.93 crore) and Andhra Pradesh Paper Mills (Rs 47.76 crore) were the other turnover toppers in that order.
Corporate affairs minister Veerappa Moily said in a newspaper interview published on Wednesday, 11 July 2012, that the government is hopeful of the passage of the pension bill in the monsoon session of parliament. The monsoon session of parliament begins on 7 August 2012.
An India-Mauritius joint panel will in August discuss a series of proposals to review the double taxation avoidance treaty between the two nations, Mauritius Foreign Minister Arvin Boolell said on Thursday, 5 July 2012. India has been looking to negotiate the double taxation avoidance agreement with Mauritius for the past few years to check so-called round tripping and other potential abuses. Round tripping entails moving money out of one country to another, and getting it back under the garb of foreign capital. Capital gains tax is close to zero in Mauritius and almost 40% of investments into India come through the island nation.
Under the bilateral agreement, capital gains from sale of securities can be taxed only in Mauritius. India and Mauritius will discuss the renegotiation of the tax pact between 22-24 August in Mauritius. The India-Mauritius joint working group will also discuss the inclusion of a so-called limitation of benefit clause, similar to the Singapore tax treaty with India, to ensure only genuine Mauritius-based companies are benefited. India's tax agreement with Singapore says that only those companies that spend a minimum of $200,000 (about Rs 1 crore) in Singapore can avail the benefits of the treaty.
Sanctity of tax residency certificates issued by a country to companies operating in its jurisdiction to enable the firms to claim tax benefits under various treaties is another issue between India and Mauritius. While India in this year's national budget said the certificates are a necessary but not sufficient condition, Mauritius wants those issued by it honoured.
Draft guidelines issued by Indian government recently for implementing the controversial anti-avoidance tax proposal viz. the General Anti-Avoidance Rules (GAAR) state that GAAR provisions should be invoked on a foreign institutional investor (FII), if it chooses to take a treaty benefit, but would not in any case be invoked in the case of the non-resident investors of the FII. The draft guidelines suggested that the onus of proving wrongdoing should be on the authorities.
Prime Minister Dr Manmohan Singh said in a newspaper interview last week that he has identified controlling the fiscal deficit, achieving clarity on tax matters, reviving the mutual funds and insurance industries, clearing a backlog of foreign investment proposals and boosting infrastructure as his focus areas in the short term. Singh said there will be no arbitrariness in tax matters. The statement assumes significance in the context of a raging controversy over the Income Tax amendment to re-open tax demands with retrospective effect from companies like Vodafone over acquisition of companies having operations in India but registered abroad to avoid taxes.
Singh last month said he is chalking out plan for the country's economic revival. Singh last month took additional charge at the finance ministry after Pranab Mukherjee resigned as finance minister on 26 June 2012 to contest the presidential polls scheduled on 19 July 2012. Mr. Mukherjee is the leading contender in the July 19 presidential election, having been nominated by the Congress party-led United Progressive Alliance government for the largely ceremonial post.
The next major trigger for the stock market is Q1 June 2012 corporate earnings, which will start trickling from this week. 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 or the next year. A deceleration in top line growth of India Inc amid economic slowdown and slowdown in investment cycle will weigh on bottom line growth in Q1 June 2012 as the core operating profit margin could be negatively impacted by deceleration in top line growth.
IT heavyweights -- Infosys and TCS -- unveil Q1 results tomorrow, 12 July 2012. HDFC Bank declares its Q1 results on Friday, 13 July 2012. Axis Bank announces Q1 results on 17 July 2012. Bajaj Auto reports Q1 results on 18 July 2012. Kotak Mahindra Bank, Hero MotoCorp and Dr Reddy's Laboratories unveil Q1 results on 19 July 2012. Asian Paints announces Q1 results on 20 July 2012.
Hindustan Unilever, L&T and Cairn India unveil Q1 results on 23 July 2012. Wipro announces Q1 results on 24 July 2012. Bhel announces Q1 results on 26 July 2012. Ambuja Cements announces Q2 June 2012 results on the same day. ICICI Bank announces Q1 results on 27 July 2012. Maruti Suzuki India announces Q1 results on 28 July 2012. Mahindra & Mahindra announces Q1 results on 8 August 2012. Ranbaxy Laboratories announces Q2 June 2012 results on 9 August 2012. BPCL announces Q1 results on 10 August 2012.
On macro front, India's industrial production is seen rising 1.7% in May 2012 as per the median estimate of a poll of economists carried out by Capital Market. Industrial production growth slowed sharply to 0.1% in April due to contraction in capital goods and dip in manufacturing output. The Central Statistics Office (CSO) will announce data on industrial production (IIP) for May 2012 at 11:00 IST tomorrow, 12 July 2012.
Inflation based on the wholesale price index (WPI) is seen rising further to 7.62% in June 2012 from 7.55% in May 2012, as per the median estimate of a poll of economists carried out by Capital Market. The CSO will announce data on WPI inflation for June 2012 at 11:30 IST on 16 July 2012.
The Reserve Bank of India (RBI) announces first quarter review of the Monetary Policy 2012-13 on 31 July 2012. The RBI unexpectedly left its key lending rate unchanged at its last meeting in June 2012, citing inflationary concerns.
European shares were mostly lower on Wednesday on concern that slowing global growth is pulling down company earnings. Key benchmark indices in UK and France were down by 0.1% to 0.21%. But, Germany's DAX rose 0.6%.
Media reports on Wednesday said that Spain will be required to cede most control over its banks to Europe in exchange for assistance according to a draft agreement of the bank bailout agreement. The requirements could mean holders of junior bonds and preferred shares issued by banks that are bailed out will face losses. The bailout agreement is expected to be signed off by European Union (EU) officials on July 20. European Union officials agreed this week to give Spain more leeway on its deficit targets and said some 30 billion euros ($37 billion) would be available by the end of this month for banks.
Spanish Prime Minister Mariano Rajoy on Wednesday announced €65 billion ($79 billion) of new austerity measures in an effort to meet new budget-deficit targets agreed with euro-zone partners. The new measures, which will be applied all the way through to the end of 2014, are likely to raise fresh questions about how quickly the country's economy will emerge from recession. The additional austerity includes an increase in the standard rate of value-added tax to 21% from 18%, and the lower rate to 10% from 8%. And the measures include a cut in jobless benefits for new claimants, a salary cut of around 7% for state employees, and billions of euros in savings from local government reforms.
Italian Prime Minister Mario Monti reiterated on Tuesday that Italy won't need a Greek-style bailout but suggested that the country might at some point need the European Stability Mechanism, or ESM, to buy Italian bonds and keep soaring yield spreads under control. It wouldn't be prudent to say that Italy will never need to use that fund, Mr. Monti told reporters at a news conference closing a two-day Eurogroup and European Union finance ministers' meeting in Brussels.
The Italian premier, however, confirmed that Italy won't be asked to comply with further country-specific commitments in case it decides to activate the so-called stabilization mechanism, which was brokered at a key EU summit at the end of June and backed by Eurogroup members in a final statement on Tuesday. The agreement on bailout funds' bond-buying was backed by all euro-zone members with no exceptions, Mr. Monti said, hinting that the opposition voiced by countries like the Netherlands and Finland has been overcome.
Italian government tests sentiment in debt markets with a bond sale scheduled on Friday, 13 July 2012.
Germany's top court agreed on Tuesday to examine complaints lodged against the EU's bailout fund and new budget rules but gave no date for its verdict, keeping investors on tenterhooks over the prospects for overcoming the euro zone crisis. European Union (EU) leaders agreed in June 2012 that the European Stability Mechanism (ESM), a bailout program, should be allowed to inject capital directly into ailing Spanish banks, once the euro zone created a banking regulator. Germany's Finance Ministry said in a statement after the court hearing on Tuesday that Chancellor Angela Merkel's government is confident the ESM and the fiscal pact are in accord with the constitution of Europe's biggest economy.
Asian stocks rose in choppy trade on Wednesday. Key benchmark indices in China, Hong Kong, Taiwan, Singapore and Indonesia rose by between 0.09% to 0.83%. Key benchmark indices in Japan and South Korea fell 0.08% and 0.17%, respectively.
Chinese Premier Wen Jiabao said on Tuesday that the government's top priority was now stabilizing economic growth rather than long-term restructuring, with policies to include business-tax cuts and more targeted investment, according to state-run media reports.
China is due to release Q2 June 2012 GDP growth data, along with industrial output and other June metrics, on Friday, 13 July 2012.
The Bank of Japan started a two-day policy meeting on Wednesday, 11 July 2012
Economic growth across emerging markets eased in the second quarter of 2012, dragged down by lacklustre manufacturing sector activity, especially in China and Brazil, an HSBC survey showed on Wednesday. HSBC's emerging markets index (EMI), based on 21 service and manufacturing sector surveys in 16 emerging economies, slipped to 53 in the second quarter of the year. It stood at 53.6 in the first three months of 2012.
Trading in US index futures indicated that the Dow could gain 53 points at the opening bell on Wednesday, 11 July 2012. US stocks dropped on Tuesday as earnings warnings from US companies hit sentiment. US engine maker Cummins Inc cut its sales forecast for 2012 on Tuesday, citing weaker US orders from truck and power generation customers, a stronger dollar and softer demand in emerging markets.
Fitch Ratings on Tuesday affirmed its AAA credit rating on the United States and maintained a negative outlook, citing a diversified and wealthy economy that is undermined by the government's inability to agree on deficit reduction measures. The uncertainty over tax and spending policies associated with the so-called 'fiscal cliff' weighs on the near-term economic outlook, Fitch said in a statement.
Minutes of the US Federal Open Market Committee's mid-June policy meeting on US interest rates will be released later in the global day today, 11 July 2012. This could provide clues on how policy makers view the economy and how seriously they are considering new stimulus measures.
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