Maruti Suzuki vaults in range bound market

Key benchmark indices closed flat after swinging between gains and losses in a narrow range. The barometer index, BSE Sensex, rose 12.72 points or 0.08%, up close to 80 points from the day's low and off about 30 points from the day's high. The Sensex attained its highest closing level in more than 6-1/2 weeks. Cellular services major Idea Cellular jumped after reporting strong sequential growth in earnings in Q3 December 2011. India's largest engineering and construction firm by order book L&T edged higher after good Q3 results. Kotak Mahindra Bank fell on profit taking after strong Q3 results.

The Sensex has jumped 1,296.01 points or 8.39% so far in this month. From a 52-week high of 19,811.14 on 6 April 2011, the Sensex has lost 3,059.41 points or 15.44%. From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,615.87 points or 10.67%.



Coming back to today's trade, Sterlite Industries slumped close to 6% on weak Q3 results. Car major Maruti Suzuki India jumped nearly 6% after the company's chairman, R.C. Bhargava, told the media today, 23 January 2012, that the steep fall in the company's Q3 December 2011 earnings represents the bottom of a period of bad news and that the company would fare better in Q4 March 2012. Index heavyweight Reliance Industries (RIL) dropped nearly 3% after poor Q3 results. FMCG stocks gained. The market breadth was positive.

The market slipped into the red after moving into positive terrain for a brief period soon after a lower opening. The Sensex alternately swung between gains and losses near the flat line in morning trade. The Sensex continued to move between gains and losses in mid-morning trade. A bout of volatility was witnessed as key benchmark indices trimmed losses after weakening in early afternoon trade. Key benchmark indices pared losses in afternoon trade. The market trimmed gains after hitting fresh intraday high in mid-afternoon trade. The market swung between the gains and losses in late trade.

High volatility is expected this week as traders roll over positions in futures & options (F&O) segment from the near-month January 2012 series to February 2012 series. The near-month January 2012 F&O contracts expire on Wednesday, 25 January 2012. The stock market remains closed on Thursday, 26 January 2012, on account of Republic Day.

The BSE Sensex advanced 12.72 points or 0.08% to settle at 16,751.73, its highest closing level since 7 December 2011. The index gained 44.49 points at the day's high of 16,784 in mid-afternoon trade. The index fell 79.69 points at the day's low of 16,659.32 in early trade.

The S&P CNX Nifty lost 2.35 points or 0.05% to settle at 5,046.25, its lowest closing level since 19 January 2012. The index hit a high of 5,059.55 and a low of 5,021.35 in intraday trade.

The BSE Mid-cap index rose 0.06% and underperformed the Sensex. The BSE Small-Cap index gained 0.27% and outperformed the Sensex.

BSE clocked turnover of Rs 2149 crore, lower than Rs 2948.20 crore on Friday, 20 January 2012.

The market breadth, indicating the overall health of the market, was positive. On BSE, 1,458 shares advanced and 1,332 shares declined. A total of 129 shares were unchanged.

Among the 30-member Sensex pack, 18 gained while the rest declined.

Reliance Industries (RIL), India's biggest company by market value, fell 2.82% to Rs 771 after the company reported weak Q3 December 2011 results after trading hours on Friday, 20 January 2012. The stock hit a low of Rs 756 and a high of Rs 779.80. RIL's net profit fell 13.6% to Rs 4440 crore on 40.2% growth in turnover to Rs 87480 crore in Q3 December 2011 over Q3 December 2010. The company said it would buyback up to 12 crore shares at a maximum price of Rs 870 and payable in cash upto an aggregate amount not exceeding Rs 10440 crore from the open market through stock exchanges. The maximum buyback price represents a nearly 10% premium over Friday's (20 January 2012) closing price of Rs 793.35 on BSE.

Commenting on the Q3 results, Mukesh D. Ambani, Chairman and Managing Director, Reliance Industries said: "The global nature of our businesses and weakness in economic conditions resulted in reduced earnings in the quarter, particularly in our refining and petrochemicals businesses. Notwithstanding these challenges, RIL has delivered reasonably robust results with high operating leverage. Our focus remains on enhancing shareholder value by leveraging an exceptionally strong balance sheet, operating top decile assets and investing prudently in future growth engines".

Jet Airways (India) rose 4.3% as an encouraging outlook by the company overshadowed its weak Q3 December 2011 results. The company reported net loss of Rs 101.22 crore for Q3 December 2011 as against net profit of Rs 118.23 crore in Q3 December 2010. Net sales rose 13.33% to Rs 3696.26 crore in Q3 December 2011 over Q3 December 2010. The company announced Q3 results after market hours on Friday, 20 January 2012.

The company said that the domestic market will continue to grow at 12-15% in the short to medium term. The capacity induction in the market has slowed down, thereby giving considerable scope for airlines to push for higher yields, Jet Airways said. The Jet Group continues to maintain its leadership position in the Indian aviation industry with the highest market share of 26.5% for the quarter ending December 2011. The company said its international operations continue to achieve seat factor of around 80% even in a troubled financial environment in the west.

Jet Airways said its relentless focus on cost cutting measures through contract re-negotiations, process improvements and improving ancillary revenues is helping the airline to remain competitive and this should augur well for the future. The company said its fund-raising initiatives are well on track. It has realised monies from the BKC property deal as well as through sale and lease back of engines in Q3.

Going forward, the firm expects to complete the sale and lease back of some of its B737 aircraft during the fourth quarter, which will not only help it pay off high cost rupee debt but also in paying off some working capital loans from the surplus cash that it will generate.

Asian Paints rose 3.54% after consolidated net profit rose 16.6% to Rs 256.86 crore on 22% growth in net sales to Rs 2560.53 in Q3 December 2011 over Q3 December 2010. The company announced Q3 results on Saturday, 21 January 2012.

Zee Entertainment Enterprises fell 0.38% after the company's consolidated net profit fell 12.9% to Rs 139.33 crore on 8.5% decline in net sales to Rs 754.83 in Q3 December 2011 over Q3 December 2010. The result was announced on Saturday, 21 January 2012.

Most FMCG stocks rose. Godrej Consumer Products jumped 3.95% after consolidated net profit rose 40.6% to Rs 167.10 crore on 35.9% rise in net sales to Rs 1344.06 crore in Q3 December 2011 over Q3 December 2010. The company announced Q3 results on Saturday, 21 January 2012.

Godrej Consumer Products said Baytree Investments (Mauritius) Pte, an indirect wholly-owned subsidiary of Temasek, will invest Rs 685 crore in the company. Godrej Consumer Products said it will issue 1.67 crore shares to Baytree Investments (Mauritius) at Rs 409 per share on preferential allotment basis.

Separately, Godrej Consumer Products said it has entered into an agreement to acquire 60% stake in Cosmetica Nacional, a market leading hair colorant and cosmetics company in Chile. Cosmetica Nacional (CN) enjoys greater than 30% market share (by volume) in the hair colorant space in Chile. CN had sales of about 36 million dollars in the year 2011 and enjoys EBITDA margins of about 20%, Godrej Consumer Products said in a statement.

Cigarette maker ITC rose 1.44%, after slumping 3.59% on Friday. The company reported 22.45% growth in net profit to Rs 1700.98 crore on 15.31% growth in total income to Rs 6532.96 crore in Q3 December 2011 over Q3 December 2010. The result hit the market during trading hours on Friday, 20 January 2012.

FMCG major Hindustan Unilever gained 1.1%.

GAIL (India) was down 0.83% at Rs 369.95. Net profit rose 12.79% to Rs 1091.42 crore on 31.97% increase in total income to Rs 11315.50 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours today, 23 January 2012. The company's board declared interim dividend of Rs 3 per share for the year ending March 2012.

United Spirits fell 5.01% after net profit declined 63.79% to Rs 47.06 crore on 0.31% decline in net sales to Rs 1953.94 crore in Q3 December 2011 over Q3 December 2010. The result was announced after trading hours on Friday, 21 January 2012.

Idea Cellular rose 3.68% after consolidated net profit jumped 90.03% to Rs 200.98 crore on 8.95% increase in net sales to Rs 5,020.37 crore in Q3 December 2011 over Q2 September 2011.

Strong Q3 results from Idea Cellular boosted other telecom stocks. MTNL, Tata Teleservices (Maharashtra), Reliance Communications, and Bharti Airtel rose by between 1.11% to 3.03%.

India's largest engineering and construction firm by sales, L&T, rose 0.3% after strong Q3 results. The company announced during market hours today that recurring profit after tax (PAT) rose 22% to Rs 992 crore on 23% growth in gross revenue to Rs 14155 crore in Q3 December 2011 over Q3 December 2010. The company said that order inflow rose 28% to Rs 17129 crore in Q3 December 2011 over Q3 December 2010. The company's order book stood at Rs 145768 crore as on 31 December 2011.

Strong Q3 results from L&T boosted other capital goods stocks. ABB, BEML, and Bhel rose by between 0.21% to 2.99%.

UltraTech Cement fell 0.29% to Rs 1207.65 after the company issued weak future outlook after reporting strong Q3 results. The company on Saturday, 21 January 2012, reported 93.4% growth in profit after tax to Rs 617 crore on 23% growth in net sales to Rs 4572 crore in Q3 December 2011 over Q3 December 2010. The stock hit a record high of Rs 1,280.50 today.

UltraTech Cement said the quarter witnessed improved demand growth of around 10% on account of a lower base effect in the corresponding period of the previous year. The sector capacity utilisation during the quarter improved to 73% as compared to 68% in the preceding quarter. Although post-monsoon, the pricing scenario indicated some improvement, the uncertain price scenario is expected to continue, UltraTech Cement said in a statement.

Variable cost rose by 16%, mainly on account of increase in energy cost. This is attributable to the 30% rise in the price of domestic coal by Coal India during Q4 March 2011, continuous spike in prices of imported coal as also the rupee devaluation by approximately 14%. Energy cost is expected to escalate with the change in pricing mechanism from Useful Heat Value (UHV) to Gross Calorific Value (GCV) implemented by Coal India with effect from 1 January 2012. This will put pressure on the company's margins, UltraTech Cement said.

The company has a capital outlay of over Rs 11000 crores to be spent on various projects. These include, among others -- clinkerisation plants through brownfield expansion at Chhattisgarh and Karnataka together with additional grinding units, installing waste-heat recovery systems, instituting bulk packaging terminals, and setting up of readymix concrete plants. The progress on expansion of capacity at Chhattisgarh and Karnataka are almost in line with the schedule. These are expected to be operational by Q1 FY 2014, and will augment the company's cement capacity by 9.2 mtpa bringing it to a total of 59 mtpa. The expansion projects are being funded through a judicious mix of internal accruals and borrowings, UltraTech Cement said.

With regard to future outlook, UltraTech Cement said cement demand is likely to grow around 8% per annum. However, the surplus scenario is likely to continue over the next three years, the company said in a statement. At the same time, growing input costs will result in a squeeze in margins, the company added.

Shares of other cement makers rose after strong Q3 results from UltraTech Cement. ACC, Ambuja Cement and Jaiprakash Associates rose by between 0.1% to 1.02%.

Most interest rate sensitive auto stocks rose on expectations that the Reserve Bank of India will start cutting interest rates in the coming months to prop up slowing economy. Lower interest rates may help revive demand for vehicles. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing.

India's largest tractor maker by sales Mahindra & Mahindra (M&M) rose 0.79%. Reports on Tuesday, 17 January 2012 indicated the company will reopen bookings for its latest sport-utility vehicle, XUV500, from 25 January 2012 to meet higher demand. M&M in September introduced the XUV500 and received 8,000 bookings within 10 days, prompting it to stop taking fresh orders as it was working on monthly output of 2,000 units.

India's largest car maker by sales Maruti Suzuki India jumped 5.77%, with the stock reversing initial losses, after the company's chairman, R.C. Bhargava, told the media today, 23 January 2012, that the steep fall in the company's Q3 December 2011 earnings represents the bottom of a period of bad news and that the company would fare better in Q4 March 2012. The stock was the top gainer from the Sensex pack. The company announced during market hours that net profit fell 63.6% to Rs 205.60 crore on 17.4% decline in net sales (net of excise) to Rs 7663.60 crore in Q3 December 2011 over Q3 December 2010.

Maruti Suzuki said its total vehicle sales in the domestic market declined 29.43% to 2.11 lakh units in Q3 December 2011 over Q3 December 2010. Total exports fell 11.02% to 27,725 units. Maruti said vehicle sales during the quarter were impacted by sluggish market conditions caused by higher fuel prices and interest rates. Additionally, the company lost around 40,000 units in production due to labour unrest at the Manesar plant. The company said depreciation of rupee during the quarter adversely impacted the bottomline through higher cost of imports for the company and its vendors and royalty.

India's largest truck maker by sales Tata Motors was flat. Tata Motors' global sales rose 33% to 99,853 units in December 2011 over December 2010. Its UK-based Jaguar Land Rover unit sold 30,981 vehicles in December, up 45% from a year earlier. Sales of Jaguar sedans grew 9% to 4,726 autos while those of Land Rover sport-utility vehicles surged 54% to 26,255 units. Tata Motors said it sold 48,099 trucks and buses globally in December, up 28% from a year earlier.

India's second largest bike maker by sales Bajaj Auto rose 0.72% after jumping 6.18% on Friday. Profit after tax (PAT) jumped 19% to Rs 795 crore on 21% growth in turnover to Rs 5154 crore in Q3 December 2011 over Q3 December 2010. The company said PAT before exceptional items jumped 25% to Rs 834 crore in Q3 December 2011 over Q3 December 2010. The company announced the results during trading hours on Thursday, 19 January 2012.

Bajaj Auto said in a challenging business environment, the company has improved its operating EBITDA margin from 20.1% in Q2 September 2011 to 21% in Q3 December 2011. The improvement in margin was primarily due to higher realization from exports. The company said its operating EBITDA margin of 21% is the best in the industry.

Bajaj Auto said sales of motorcycles during the festive season were satisfactory. However, towards the end of November 2011, the industry witnessed a slowdown, the company said. The company said the overall demand for commercial vehicles remains strong. Bajaj Auto said exports sales continue to be robust and ahead of the company's plan. Overseas markets now contribute over 35% of Bajaj Auto's vehicle sales. Bajaj Auto said it is on course to exceed its target of 1.5 million of exports for the year ending March 2012 (FY 2012).

But, India's largest two-wheeler maker by sales Hero MotoCorp fell 4.11% on profit taking after recent gains. During market hours on Thursday, 19 January 2012, the company reported 42.89% growth in net profit to Rs 613.03 crore 16.85% growth in turnover to Rs 6031.45 crore in Q3 December 2011 over Q3 December 2010. Hero MotoCorp said it notched up highest ever quarterly turnover (net sales plus other operating income) in Q3 December 2011.

TVS Motor Company fell 0.49%. The company announces Q3 results on 31 January 2012.

Exide Industries rose 1.59%, with the stock extending Friday's 4.62% rally after the company said during trading hours on Friday, 20 January 2012 that it has entered into technical collaboration and assistance agreements with East Penn Manufacturing Co Inc, USA. Under these arrangements, East Penn will provide technical assistance and support for the manufacture of automotive, motive power, standby, telecom, UPS, solar and traction batteries for Exide's various plants in India. This technical assistance will include a wide range of activities including the enhancement of processes for manufacturing, designs, quality control, and procurement, Exide said in a statement.

Exide also announced during market hours on Friday that its net profit jumped 103.9% to Rs 104.30 crore on 6.3% growth in total income to Rs 1250.22 crore in Q3 December 2011 over Q2 September 2011. Net profit fell 16.17% to Rs 104.30 crore on 19.04% in total income to Rs 1250.22 crore in Q3 December 2011 over Q3 December 2010.

IT stocks rose on positive economic data in the US, the biggest outsourcing market for the Indian IT firms. India's third largest software services exporter by revenues Wipro advanced 0.53%. Before trading hours on Friday, 20 January 2012, Wipro reported 12% growth in net profit to Rs 1456 crore in Q3 December 2011 over Q2 September 2011. The results are as per International Financial Reporting Standards. Wipro expects revenues from IT services business to grow 1% to 3% at $1.52 billion to $1.55 billion in Q4 March 2012 over Q3 December 2011.

India's largest software services exporter by revenue TCS was flat. After market hours on Tuesday, 17 January 2012, TCS reported 21.8% growth consolidated net profit to Rs 2803 crore on 13.5% growth in revenue to Rs 13204 crore in Q3 December 2011 over Q2 September 2011. The company's management at a post-result conference call said that out of a total of 130 discretionary projects that the company is pursuing, 50% are facing delays in decision making even as there are no project cancellations so far. The management also said that out of a total of 120 top clients surveyed, two-thirds have flat or marginally increased budgets and remaining one-thirds has reduced budgets. The company said the pipeline is intact but discretionary spend may lag ramp up in volumes in Q4 March 2012.

India's second largest software services exporter by revenue Infosys rose 0.63%. The company has given a muted guidance for Q4 March 2012. The company has projected a marginal 1.25% growth in non-annualised earnings per American Depositary Share at $0.81 in Q4 March 2012 over Q3 December 2011. The company has projected a flat to 0.22% growth in consolidated revenue in dollar terms at $1.806 billion to $1.81 billion in Q4 March 2012 over Q3 December 2011. The IT major issued its outlook for the quarter ending March 2012 at the time of announcing Q3 December 2011 results.

Metal stocks fell after LMEX, a gauge of six metals traded on the London Metal Exchange dropped 1.06% on Friday, 20 January 2012. Bhushan Steel, Tata Steel, Nalco, Hindustan Zinc and Hindalco Industries shed by between 0.4% to 4.29%.

Sterlite Industries (India) tumbled 5.36% and was the top loser from the Sensex pack. The stock tumbled after the company reported weak Q3 results at the fag end of the trading session. Consolidated net profit fell 17.03% to Rs 913.52 crore on 23.96% increase in total income to Rs 10921.11 crore in Q3 December 2011 over Q3 December 2010. Consequent to acquisition of zinc business at Namibia, South Africa and Ireland in the second half of the FY 2010-11, the results for the quarter and nine months ended 31 December 2011 are not strictly comparable with corresponding previous periods.

India's largest sponge iron steel maker by capacity Jindal Steel & Power (JSPL) rose 0.46%, with the stock extending recent gains. JSPL last week reported 7% growth in consolidated net profit to Rs 1015.88 crore on 37% growth in net sales to Rs 4357.69 crore in Q3 December 2011 over Q3 December 2010. The company's power generation arm -- Jindal Power reported net profit of Rs 481.32 crore on turnover of Rs 881.40 crore in Q3 December 2011. Jindal Power had plant load factor of 102.13% in Q3 December 2011.

JSPL has commissioned 2 units of 135 megawatts (MW) -- one unit at Dongamahua in Raigarh, Chhattisgarh and another unit at Angul in Odisha. With this total 6 units have been commissioned in series of total 10 units of 135 MW, JSPL said.

JSW Steel fell 2.38%, with the stock extending Friday's 2.89% losses triggered by poor Q3 results. During market hours on Friday, 20 January 2012, the company reported 55.99% fall in net profit to Rs 168.24 crore on 36.1% growth in net sales to Rs 7859.62 crore in Q3 December 2011 over Q3 December 2010.

Tata Metaliks fell 3.7% after the company reported consolidated net loss of Rs 40.35 crore in Q3 December 2011, higher than net loss of Rs 4.33 crore in Q3 December 2010. Net sales declined 7.9% to Rs 298.47 crore in Q3 December 2011 over Q3 December 2010.

Interest rate sensitive banking stocks were mixed ahead of Reserve Bank of India's (RBI) monetary policy review tomorrow, 24 January 2012.

Kotak Mahindra Bank fell 3.18% on profit taking after the private sector bank reported strong Q3 results. Consolidated net profit rose 20.61% to Rs 462.62 crore on 16.88% increase in total income to Rs 3123.30 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours today.

India's largest private sector bank by branch network ICICI Bank rose 1.8% after galloping 5.81% on Friday, 20 January 2012. The bank unveils Q3 results on 31 January 2012.

India's largest commercial bank by net profit and branch network State Bank of India (SBI) gained 0.46%. SBI has received Finance Ministry's approval for a capital infusion of Rs 6000 crore to Rs 8000 crore, a television channel reported early last week, citing the bank's chairman. The capital infusion will be made by 31 March 2012, Pratip Chaudhuri was reported as saying.

Axis Bank fell 1.12% on profit taking after Friday's 5.9% rally triggered by strong Q3 results. Net profit rose 23.66% to Rs 1102.27 crore on 44.54% increase in total income to Rs 7206.77 crore in Q3 December 2011 over Q3 December 2010. The result was announced during trading hours on Friday, 20 January 2012.

India's second largest bank by net profit HDFC Bank fell 0.98%. During market hours on Thursday, 19 January 2012, the bank reported 31.4% growth in net profit to Rs 1429.70 crore on 35.6% increase in total income to Rs 8622.64 crore in Q3 December 2011 over Q3 December 2010.

HDFC Bank said its core CASA deposit ratio, adjusted for one-off current account balance of about Rs 4000 crore, was at 47.7% of total deposits as on 31 December 2011. The private sector bank said its asset quality remains healthy. The bank's capital adequacy ratio (CAR) remained strong at 16.3% as on 31 December 2011, against the regulatory minimum of 9%. The bank's Tier-I CAR was 11.2% as on 31 December 2011.

Cals Refineries clocked highest volume of 1.78 crore shares on BSE. Suzlon Energy (1.17 crore shares), Mahan Industries (94.23 lakh shares), Dazzel Confindiv (47.05 lakh shares) and Resurgence Mines (45.65 lakh shares) were the other volume toppers in that order.

L&T clocked highest turnover of Rs 153.06 crore on BSE. RIL (Rs 84.42 crore), SBI (Rs 81.45 crore), Maruti Suzuki India (Rs 66.20 crore) and ICICI Bank (Rs 61.21 crore) were the other turnover toppers in that order.

Foreign institutional investors (FIIs) bought shares worth Rs 819.84 crore on Friday, 20 January 2012, as per provisional data from the stock exchanges. FII inflow totaled Rs 5261.21 crore in nine trading sessions from 10 to 20 January 2012, as per provisional data from the stock exchanges.

Investors' focus is currently on Q3 results. Analysts expect weak Q3 December 2011 results due to lower volume growth in a slowing economy, higher raw material costs and higher interest charges. The focus will be on guidance from the company managements on outlook for the remaining part of the year and for the next year.

Cairn India, Grasim and Biocon unveil Q3 results tomorrow, 24 January 2012. Bank of Baroda, Sesa Goa, Union Bank of India, Rural Electrification Corporation, Indian Hotels and Tata Communications unveil Q3 results on Wednesday, 25 January 2012. Bharat Heavy Electricals (Bhel), NTPC, Bank of India, Pfizer and Canara Bank unveil Q3 results on Friday, 27 January 2012. LIC Housing Finance, and Indian Bank unveil Q3 results on 30 January 2012.

ICICI Bank, Punjab National Bank, IDBI Bank, Dabur India, TVS Motor, NMDC and Siemens unveil quarterly results on 31 January 2012. Mahindra Satyam announces Q3 reusults on 1 February 2012. ONGC, Marico and Corporation Bank announce Q3 results on 2 February 2012. Dr. Reddy's Laboratories, Power Finance Corporation and HPCL report Q3 results on 3 February 2012. National Aluminium Company and India Cements announce Q3 results on 6 February 2012.

Mahindra & Mahindra and GMR Infrastructure unveil Q3 results on 7 February 2012. Hindalco unveils Q3 results on 9 February 2012. Tata Power and BPCL unveil Q3 results on 10 February 2012. Aditya Birla Nuvo and Ashok Leyland announce Q3 results on 11 February 2012. Shipping Corporation of India announces Q3 results on 14 February 2012.

Stronger-than-expected growth in industrial production in November 2011 has raised doubts about the timing and pace at which the Reserve Bank of India would likely ease its monetary policy. Industrial output rose 5.9% in November 2011, compared with a revised contraction of 4.74% in October 2011, data released by the government on 12 January 2012, showed. Manufacturing output, which constitutes about 76% of the industrial production, grew an annual 6.6% in November 2011. Industrial production had contracted in October 2011, snapping consistent growth for the preceding 29 months in a row.

The Reserve Bank of India (RBI) is widely expected to keep its key lending rate viz. the repo rate steady at the Third Quarter Review of Monetary Policy 2011-12 tomorrow, 24 January 2012, as headline inflation remains high. Data released early last week showed headline inflation eased to two-year low of 7.47% in December 2011 from 9.11% in November 2011. But prices of manufactured products -- a key gauge of core inflationary pressures -- remained elevated.

At its mid-quarterly monetary policy review meet on 16 December 2011, the RBI left its main lending rate unchanged in order to support faltering economic growth as inflation shows signs of cooling. While inflation remains on its projected trajectory, downside risks to growth have clearly increased, RBI had said in a statement on 16 December 2011. From this point on, monetary policy actions are likely to reverse the cycle, responding to the risks to growth, RBI had said.

RBI had said inflation risks remain high and inflation could quickly recur as a result of both supply and demand forces. RBI also said that the rupee remains under stress. The timing and magnitude of further actions will depend on a continuing assessment of how these factors shape up in the months ahead, RBI said. The RBI has raised rates 13 times since March 2010.

The budget for 2012/13 ending March will be presented after elections scheduled in five states, Finance Minister Pranab Mukherjee said on 2 January 2012. State elections are scheduled between the end of January and early March 2012. The annual budget is usually presented on the last working day of February. The Election Commission on 24 December 2011 announced the dates for the assembly polls in Uttar Pradesh, Punjab, Uttarakhand, Manipur and Goa. Uttar Pradesh will have polling on February 4, 8, 11, 15, 19, 23 and 28, while Uttarakhand and Punjab will go to polls on January 30. Manipur will have polls on January 28 and Goa on March 3.

European stocks rose in volatile trade on Monday, ahead of a meeting of euro-zone finance ministers later in the global day today. Key benchmark indices in France, UK and Germany rose by between 0.5% to 0.7%.

In Japan, the Nikkei Average was flat, with the index paring initial gains. The Chinese markets are closed for the whole of this week, while Hong Kong bourses are shut for three days starting today, 23 January 2012, for Lunar New Year holidays. The stock market in Taiwan which has been shut since 19 January 2012 for Lunar New Year holidays remains closed for the whole of this week. Stock markets in Indonesia, South Korea and Singapore were also closed for a holiday today.

Trading in US index futures indicated that the Dow could gain 6 points at the opening bell on Monday, 23 January 2012. US stocks ended mixed on Friday as investors were cautiously awaiting the result of Greece debt talk. On economic news front, the National Association of Realtors reported that the annual sales in December reached 4.6 million homes, up 5% from November and 3.6% from a year ago

The Federal Open Market Committee (FOMC) holds a meeting on US interest rates on 24-25 January 2012. FOMC has held its funds rate target inside a record-low range of 0% to 0.25% since December 2008. The committee at its past four policy meetings indicated it intends to hold the rate stable until at least the middle of 2013.