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Tuesday, June 19, 2012

Market surges on buying by FIIs


Key benchmark indices surged in choppy trade as European stocks rose after better-than-expected results for a Spanish debt auction and on rumours that the European Central Bank would prop up Spanish government bonds, after yields on 10-year Spanish government bonds closed above 7% on Monday, 18 June 2012. The barometer index, BSE Sensex, jumped 153.97 points or 0.92%, up close to 180 points from the day's low and off about 30 points from the day's high. A statement by Prime Minister Manmohan Singh at the G20 Plenary Session said that the Indian government is determined to create an environment that will boost investor sentiment and promote an atmosphere conducive to enterprise and creativity, boosted investor sentiment. Incidentally, there have been sustained purchases of Indian shares by foreign institutional investors (FIIs) over the past few days. FIIs bought shares worth a net Rs 2693.50 crore from secondary equity markets during 9 trading sessions from 6 June to 18 June 2012, as per data from Securities & Exchange Board of India (Sebi). The Sensex has risen 641.27 points or 3.95% so far in this month (till 19 June 2012). The barometer index has gained 1,404.88 points or 9.09% in calendar 2012 so far (till 19 June 2012). From a 52-week low of 15,135.86 on 20 December 2011, the Sensex has risen 1,723.94 points or 11.38%. From a 52-week high of 19,131.70 on 8 July 2011, the Sensex has lost 2,271.90 points or 11.87%. Coming back to today's trade, index heavyweight Reliance Industries (RIL) extended gains in late trade. Shares of public sector oil marketing companies rose for the second day in a row after Prime Minister Manmohan Singh said that the government is determined to take tough decisions, including on controlling subsidies. Interest rate sensitive banking stocks reversed intraday fall. Auto stocks were mixed. The market breadth turned positive from negative in late trade. Key benchmark indices moved into positive zone after a lower start triggered by weak Asian stocks. The market reversed initial gains in morning trade as euro-zone debt worries weighed on sentiment. The market regained positive zone in mid-morning trade. The market retained positive zone in early afternoon trade. The market surged to hit fresh intraday high in afternoon trade as European stocks rose in early trade there. A bout of volatility was witnessed as key benchmark indices regained strength after erasing entire intraday gains in mid-afternoon trade. The market surged to fresh intraday high in late trade. The BSE Sensex jumped 153.97 points or 0.92% to settle at 16,859.80, its highest closing level since 15 June 2012. The index jumped 184.17 points at the day's high of 16,890 in late trade. The index fell 23.94 points at the day's low of 16,681.89 in opening trade. The S&P CNX Nifty jumped 39.60 points or 0.78% to 5,103.85, its highest closing level since 15 June 2012. The index hit a high of 5,113.60 and low of 5,048.10 in intraday trade. The BSE Mid-Cap index rose 0.17% and underperformed the Sensex. The BSE Small-Cap index fell 0.01% and underperformed the Sensex. The total turnover on BSE amounted to Rs 1858 crore, lower than Rs 1942.50 crore clocked on Monday, 18 June 2012. The market breadth, indicating the overall health of the market, turned positive from negative in late trade. On BSE, 1,350 shares advanced and 1,321 shares declined. A total of 135 shares were unchanged. Among the 30-share Sensex pack, 23 rose while the rest declined. Index heavyweight Reliance Industries (RIL) rose 2.58% to Rs 737.25. The stock hit a high of Rs 738.90 and a low of Rs 717. Rating agency Fitch said on Monday that the downgrade of India's credit rating outlook to negative from stable would have no immediate impact on Reliance Industries' (RIL) Issuer Default Ratings (IDRs). This is because RIL's FC IDR is constrained by India's Country Ceiling ('BBB-') and will be lowered if India's country ceiling is revised down in future, Fitch said in a statement. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in Mumbai early this month that the company has cumulatively bought back a total of 2.7 crore shares under the share buyback programme, which is 22.5% of share buyback target. Ambani said the company's buyback programme represents 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. Ambani said RIL will invest about Rs 1 lakh crore over the five years in expanding its business in India. Ambani said RIL is targeting to double its operating profit in about five years. State-run Coal India (CIL) rose 1.39%. CIL has reportedly entered into fuel supply agreement (FSA) with 27 power units, including Adani's Mundra power plant in Gujarat. The signings come even as the Prime Minister's Office (PMO) is slated to convene a meeting on Friday, 22 June 2012, to iron out issues in the pact, mainly the penalty clause, which have kept power firms like NTPC from inking the fuel supply agreement (FSA) with CIL. The government had issued a presidential directive to CIL in April to sign FSAs with the power producers assuring them of at least 80% of the committed coal delivery. The directive was given to the PSU, as it did not meet the deadline of March 31 set by PMO for CIL to enter into agreements with power producers which were facing fuel crunch. Shares of public sector oil marketing companies rose for the second day in a row after Prime Minister Manmohan Singh said that the government is determined to take tough decisions, including on controlling subsidies. HPCL (up 6.36%), BPCL (up 1.84%) and Indian Oil Corporation (up 3.46%), gained. Media reports suggest that the government will raise prices of diesel and cooking gas shortly as part of broader policy measures that the government is planning to unveil to attract capital inflows and boost investor confidence. These measures are reportedly aimed at averting a possible sovereign downgrade to junk status by rating agencies and reviving faltering growth. The three public sector oil marketing companies (PSU OMCs) -- BPCL, HPCL and IOC -- suffer revenue loss on domestic sale of diesel, LPG (cooking gas) and kerosene at a controlled price. The government decontrolled pricing of petrol in 2010. State-run oil exploration major ONGC rose 1.44% to Rs 267. ONGC and China's China National Petroleum Corp. have decided to jointly explore oil and gas assets in other countries, cementing their existing partnerships in Myanmar, Syria and Sudan. Interest rate sensitive banking stocks reversed intraday fall. India's largest commercial bank in terms of branch network State Bank of India (SBI) rose 0.74%, with the stock recovering from Monday's 4.36% slide. The bank has reportedly slashed interest rates on term loans, agriculture loans and loans to small and medium enterprises (SMEs) by 50-350 basis points (bps), or 0.5%-3.5% with effect from 1 June 2012. SBI has kept the base rate unchanged at 10%. India's largest private sector bank by net profit ICICI Bank rose 1.19%, with the stock recovering from Monday's 3.34% fall. India's second largest private sector bank by net profit HDFC Bank gained 0.77%, with the stock recovering from Monday's 2.71% slide. Auto stocks were mixed. India's largest utility vehicles maker Mahindra & Mahindra (M&M) rose 0.57%. The company early this month said it has received an overwhelming 7,200 plus bookings for its cheetah-inspired XUV500 from customers within just 2 days of opening all India bookings for the vehicle. All India bookings for the XUV500 were opened from 8 June 2012. Small-car major Maruti Suzuki India declined 0.06%. The company early this month said that the board of directors of the company has approved a proposal to merge Suzuki Powertrain India (SPIL) with the company. SPIL, which supplies diesel engines as well as transmissions for vehicles to Maruti Suzuki, is a subsidiary of Suzuki Motor Corporation (SMC), Japan. SMC holds 70% share in SPIL and remaining 30% is held by Maruti Suzuki. As per the terms of the proposed merger, SMC will receive one share of MSIL of Rs 5 each for every 70 shares of Rs 10 each it holds in SPIL. There will be no cash outflow from MSIL due to the merger. MSIL proposes to make a fresh issue of about 1.31 crore equity shares to SMC in lieu of SMC's 70% holding in SPIL. Consequent to the merger, SMC's holding in MSIL will go up from 54.2% to 56.2%. With the merger, MSIL will be able to bring its entire diesel engine capacity under a single management control. All key initiatives to strengthen the business, including sourcing, localization, production planning, manufacturing flexibility and cost reduction can be controlled, monitored and improved by the MSIL management, MSIL said in a statement. The proposed merger also promises benefits for the combined entity through synergies in areas like finance, capital structuring, and administration and consequent reduction of transaction costs, MSIL said. India's largest truck maker by sales Tata Motors rose 0.13%. Tata Motors on Friday, 15 June 2012, intimated to the Bombay Stock Exchange (BSE) that Chairman Ratan N Tata purchased additional 4.25 lakh equity shares of Tata Motors from open market purchases on Thursday, 14 June 2012, for about Rs 9.94 crore. After the latest acquisition, Ratan N Tata now holds a total of 13.61 lakh ordinary equity shares of Tata Motors and 1.09 lakh 'A' Ordinary shares of Tata Motors, aggregating to 0.05% of voting rights of Tata Motors. Tata Motors on Friday, 15 June 2012, said sales of its luxury vehicles -- Jaguar Land Rover -- jumped 35% to 30,094 in May 2012 over May 2011. Tata Motors derives almost two-third of its revenue from its British unit Jaguar Land Rover. Tata Motors' global vehicle sales rose 12% to 96,089 units in May 2012 over May 2011. The company's overall global passenger vehicles sales rose 21% to 51,064 units in May 2012 over May 2011. Commercial vehicle sales rose 3% to 45,025 in May 2012 over May 2011. Shares of two-wheeler makers were mixed. India's second largest motorcycle maker by sales Bajaj Auto slipped 0.29%. The company early this month said its total sales fell 2% to 3,52,219 units in May 2012 over May 2011, as exports to Sri Lanka were nil in May 2012 against a typical monthly average of 10,000 motorcycles and 3-wheelers each per month. The company expects recovery in Sri Lankan exports from July 2012 onwards. The company's exports rose 3% to 1,30,573 units in May 2012 over May 2011. Hero MotoCorp (HMCL) rose 0.77%. The board of directors of the company recently approved a proposal to merge Hero Investments (HIPL), the investment arm of the Hero Group, into HMCL. The shareholders of HIPL include the partnership firm Brijmohan Lall Om Prakash (BMOP) which holds 71.63%, and private equity (PE) investors BC India Private Investors (19.81%) and Lathe Investment (8.56%). BC India Private Investors is an affiliate of Bain Capital LLC, while Lathe Investment is a wholly-owned subsidiary of Government of Singapore Investment Corporation (GIC). Hero MotoCorp reported its best-ever monthly sales in May 2012, thus underlining the robust momentum the company has sustained since embarking on its solo journey. Marking its 10th consecutive month of over five lakh sales, Hero MotoCorp total sales rose 11.3% to 5,56,644 two-wheelers in May 2012 over May 2011. The company's sales in May this year surpassed its previous highest of 5,51,557, recorded only last month (April 2012). India's largest IT company by revenue Tata Consultancy Services (TCS) rose 1.32%. India's third largest software services exporter by revenue, Wipro, rose 0.97%. The company last week said that Wipro Technologies, the global information technology, consulting and outsourcing business of Wipro, has been chosen by Australia based MMG, a mid-tier global resources company as its strategic partner to define and deliver MMG's integrated business management program over a period of three years. India's second largest software services exporter by revenues Infosys slipped 1.29%. As per reports, the company may be forced to pare its already low revenue growth guidance in dollar terms for the year ending March 2013 due to the wild swings of global currencies, including pound sterling, Australian dollar and euro, against the US dollar. HCL Technologies rose 0.61% after the company clarified during market hours today that Mr. Vineet Nayar is and will continue to be the Vice- Chairman and CEO of the company. The company's clarification comes after media reports suggested that Nayar may be exiting the company because of a serious difference of opinion between him and the company's founder, Shiv Nadar. Speculation of Nayar's possible exit rose also after he sold his entire 0.39% stake in the company for nearly Rs 134 crore early this month. FMCG stocks rose reports monsoon rains have covered half of India after having briefly stalled last week. India's largest FMCG firm by sales Hindustan Unilever rose 0.68% to Rs 448.90. The stock had hit a record high of Rs 453.30 in intraday trade on Monday, 18 June 2012. Among other FMCG stocks, Dabur India, Nestle India and ITC rose by between 0.55% to 2.49%. FMCG firms derive substantial sales from rural India. Good monsoon may boost farm incomes and consumer spending. Metal shares were mixed. Jindal Steel & Power, Sterlite Industries, Sail and Sesa Goa shed by between 0.37% to 3.01%. Bhushan Steel, Tats Steel, Hindalco Industries and JSW Steel rose by between 0.17% to 1.19%. Tea stocks fell on report tea prices in India dropped at last week's auction after supplies rose significantly. Jay Shree Tea & Industries, Harrisons Malayalam, Goodricke Group, Assam Company, Asian Tea & Exports and Warren Tea shed by between 0.36% to 2.14%.. According to report, tea prices in India, the world's second biggest producer, dropped at last week's auction after supplies rose significantly, though demand was good from local and overseas buyers. The price of CTC (crush-tear-curl) tea declined 4.04% to Rs 164.43 per kilogram (kg), compared with Rs 171.36 a kg at the previous weekly auction. Dust tea price eased 6.2% to Rs 170.76 per kg. Many capital goods stocks edged higher on renewed buying. ABB, L&T, Siemens, BEML and ABB rose by between 0.01% to 2.8%. But, India's biggest power equipment maker by sales Bhel fell 1.33%. The Government has put up a list of 15 public sector units including Bhel for disinvestment for the fiscal year ended March 2013. The Government aims to mobilize Rs 30000 crore from disinvestment during the current fiscal year. Interest rate sensitive realty stocks fell for the second straight day after the Reserve Bank of India (RBI) kept its key policy rate viz. the repo rate unchanged after a mid-quarter policy review on Monday, 18 June 2012, contrary to market expectations of a 25 basis points reduction Purchases of both residential and commercial property are largely driven by finance. D B Realty, Unitech and Oberoi Realty shed by between 0.24% to 1.93%. But, real estate major DLF rose 0.43%, with the stock recovering from Monday's 4.57% slide. Reliance Communications (RCom) lost 2.46% to Rs 63.55 after sliding to a record low of Rs 60 in intraday trade today, 19 June 2012. Cement stocks reversed initial losses in choppy trade. ACC, India Cements, Ambuja Cements, Jaiprakash Associates and UltraTech Cements rose by between 0.11% to 2.83%. The Competition Commission of India (CCI) is likely to soon come out a ruling on alleged cartelisation by cement firms. Cairn India fell 1.16% as crude oil futures traded near the lowest level in three days as rising bad loans in Spain fueled speculation that Europe's debt crisis will spread and threaten global economic growth. Crude oil futures for July 2012 delivery were down 15 cents at $83.12 a barrel in European electronic trading today, 19 June 2012. The contract had lost 76 cents or 0.9% to settle at $83.27 a barrel on the New York Mercantile Exchange on Monday, 18 June 2012, its lowest closing level since 13 June 2012. Lower crude oil prices will result in lower realization from crude sales for oil exploration firms such as Cairn India. IDFC clocked highest volume of 87.10 lakh shares on BSE. Reliance Communications (81.95 lakh shares), GVK Power & Infra (42.12 lakh shares), Cals Refineries (41.38 lakh shares) and Sybly Industries (38.20 lakh shares) were the other volume toppers in that order. SBI clocked highest turnover of Rs 182.27 crore on BSE. IDFC (Rs 113.01 crore), L&T (Rs 61.67 crore), Reliance Communications (Rs 52.08 crore) and ICICI Bank (Rs 39.05 crore) were the other turnover toppers in that order. Prime Minister Manmohan Singh at the G20 Plenary Session said that like other emerging economies, Indian economy, too, has slowed down. "The global downturn and especially the impact on capital flows have played their part. Internal constraints have also affected performance and we are working to correct them. Our growth rate in 2011-12 declined to 6.5% from the level of 8.4% in the previous year. This may look like a reasonable figure, given growth rates being experienced in the rest of the world, but our public is impatient for a return to high growth and faster jobs creation. The fundamentals of the Indian economy remain strong and we are confident of bringing back the rhythm of high growth of 8-9% per annum", Singh said. "Investment has been affected by the adverse global climate which impacts both foreign and domestic investors. We are taking steps to revive investor sentiment. We are determined to create an environment that would boost investor sentiment and promote an atmosphere conducive to enterprise and creativity. Our policies will be transparent, stable and designed to provide a level playing field to both domestic and foreign investors", Singh added. "We are focusing heavily on infrastructure investment and in this context we have set ambitious targets to keep infrastructure investment on track and also put in place a problem resolution mechanism to overcome implementation bottlenecks. Like other countries, we too allowed the fiscal deficit to expand after 2008 to impart a stimulus. We are now focussing on reversing the expansion. This will require tough decisions, including on controlling subsidies, which we are determined to take. In this context, I would like to mention a landmark effort underway in India to provide unique identity numbers for all residents with capture of biometric data. This massive database covering over a billion people will facilitate delivery of a whole range of financial and other services, through effective targeting and reduced leakages in subsidy schemes", Singh said. Fitch Ratings on Monday, 18 June 2012, cut its ratings outlook on India's sovereign debt rating to negative from stable, saying the country's growth potential gradually will deteriorate if efforts to create a more positive operational environment for business and private investments aren't hastened. The announcement was made after trading hours on Monday, 18 June 2012. The ratings company said the revision also reflects India's slow progress on its fiscal consolidation, specifically in the reduction of its central government's debt despite overall financial improvement in the state governments. The ratings company pointed to inflation pressures and weak public finances, underscoring the need for government reforms and policies that can assist long-term growth of the economy. Fitch said India faces an awkward combination of slowing growth and still-elevated inflation. Fitch said India's general elections, which are due in 2014, could result in pressure to further loosen fiscal policy and could weaken its public finances even more. Fitch said such a loosening of fiscal policy, which leads to an increase in the government debt compared to the country's output, would result in a downgrade of India's sovereign debt ratings. An improvement in the country's investment climate as well as fiscal consolidation and budget reform would be positive for its ratings. Fitch backed its triple-B-minus rating on India, which is one notch above junk level. The Reserve Bank of India (RBI) on Monday, 18 June 2012, kept its policy rate viz. the repo rate unchanged at 8% after a mid-quarter monetary policy review, contrary to market expectations of a 25 basis points reduction. The RBI said the role of interest rates in the current slowdown is relatively small, and that a rate cut at this stage could exacerbate inflationary expectations. The RBI said that the evolving growth-inflation dynamic will continue to influence its stance on interest rates. Recognizing that the global situation is turbulent, the Reserve Bank of India stands ready to use all available instruments and measures to respond rapidly and appropriately to any adverse developments, the RBI said in a statement. The rate pause follows a half percentage point cut in April 2012, the first step toward unwinding the 3.75% rate increases that the RBI carried out between March 2010 and October 2011. The RBI said that the core inflation has moderated, reflecting demand conditions and lower pricing power. However, both headline and retail inflation rates are rising, which have a bearing on inflation expectations, RBI said in a statement. Future actions will depend on a continuing assessment of external and domestic developments that contribute to lowering inflation risks, RBI said. Management of liquidity remains a priority of the central bank, RBI said. Even as the liquidity situation converges to the comfort zone, the Reserve Bank of India will continue to use open market operations (OMOs) as and when warranted to contain liquidity pressures, RBI said. The RBI left the cash reserve ratio, or the percentage of deposits that banks must park with the RBI, unchanged at 4.75%. The central bank said that domestic producers have gained competitiveness over foreign producers as a result of the depreciation of rupee against the dollar over the past several months. Over time, this should result in expanding exports and contracting imports, thus acting as a demand stimulus, RBI said in a statement. The annual consumer price inflation remained unchanged in May 2012 at 10.36%, government said in a statement on Monday, 18 June 2012. In April 2012, consumer prices provisionally rose 10.36%. Consumer price-based food inflation, however, accelerated to 10.66% in May 2012 from 10.18% in April 2012. The RBI on Monday, 18 June 2012, said that with a view to enhancing the credit flow to the export sector, it has been decided to enhance the eligible limit of the Export Credit Refinance (ECR) facility for scheduled banks (excluding RRBs) from 15% of the outstanding export credit eligible for refinance to 50%, effective fortnight beginning 30 June 2012. This will provide additional liquidity support to banks of over Rs 30000 crore, RBI said. The rate of interest charged on the ECR facility will continue to be the prevailing repo rate under the Liquidity Adjustment Facility (LAF), which is currently 8%. Meanwhile, Indian companies have reported an average increase of about 10% in advance tax outgo in the April-June quarter. The increase in advance tax mop-up, which is a measure of companies' performance, comes at a time the economy is faced with sluggish growth and currency depreciation. Corporate entities pay 15% of their annual estimated tax liability in April-June, 30% in July-September and October-December each, and the rest by March 15. The Congress-led United Progressive Alliance (UPA) coalition on Friday, 15 June 2012, named Finance Minister Pranab Mukherjee as its nominee for the post of president in the upcoming presidential poll. Mukherjee is expected to step down as the country's finance minister later this month. Prime Minister Manmohan Singh is widely expected to handle the finance portfolio himself. Singh early this month laid out ambitious infrastructure development plans for the current fiscal year, in an effort to counter criticism over a perceived policy paralysis that has led India into its worst slowdown in nearly a decade. Monsoon rains have reportedly covered half of India after having briefly stalled last week, bringing relief to farmlands and giving some reason to cheer to the country's embattled economy. The pickup in rains will erase concerns over the monsoon's impact on summer crops, as it had stalled for four to five days after reaching parts of Maharashtra. It will also bring some cheer to India's slowing economy because plentiful rains lead to better crop output, increasing farmers' income and driving up rural spending on goods. The sowing of summer crops such as rice, oilseeds, sugar cane and cotton begins with the arrival of the rains. The timing, distribution and quantity of the rains are vital to India's agricultural sector and economy, as more than 60% of the country's farmland is rain-fed. Monsoon rains in India were 36% below the 50-year average between June 1-17, according to the India Meteorological Department (IMD). About 81% of India's total area has received deficient or scant rains so far, with the remainder receiving normal or excess rain. The monsoon normally reaches the central regions by June 15 and covers the entire country by July 15. The IMD is scheduled to release its updated monsoon forecast for the current monsoon season season on 25 June 2012. Global rating agency Standard & Poor's early last week warned that India could become the first BRIC nation to lose its investment-grade rating if the South Asian country doesn't revive its growth and push the pedal on reforms. Setbacks or reversals in India's path toward a more liberal economy could hurt its long-term growth prospects and therefore its credit quality, Joydeep Mukherji, S&P's credit analyst, stated in a report titled 'Will India Be the first BRIC Fallen Angel. S&P currently rates India BBB-minus, just one notch above junk. The other three BRIC group of emerging nations--Brazil, Russia and China--are also rated investment-grade. S&P had in April this year cut the outlook on India's long-term credit rating to negative from stable and warned that the country could lose its investment-grade status if the government fails to bring its fiscal house in order. Data released on 31 May 2012 showed India's economic growth slowed to its weakest pace in nine years in the January-March quarter, when it expanded 5.3% from a year earlier. For the fiscal year ended March 31, the economy grew 6.5%, below the 6.9% expansion the government had projected. US Treasury Secretary Timothy Geithner will meet India's finance minister in Delhi in June to strengthen economic and financial ties between the two countries, the US Treasury Department said early last week. European stocks edged higher on Tuesday as pressure eased a bit on Spanish bonds. Key benchmark indices in France, Germany and UK were up 0.26% and 0.82%. The yield on Spain's 10-year government bond eased 8 basis points to 7.04% on Tuesday after surging above the psychologically important 7% level the prior day amid mounting worries that the country could need a full-scale bailout, not just a bank-stabilization intervention. The market was helped in part by an auction of 12- and 18-month treasury bills, in which the government paid a higher yield but sold more than was expected. The Spanish government holds a critical bond auction on Thursday, 21 June 2012. At its bond auction Thursday, Spain will offer euro 1 billion to euro 2 billion of three bonds, maturing in 2014, 2015 and 2017. German investor confidence plummeted in June, sustaining its steepest fall in nearly 14 years, amid increased concerns over the health of Spain's banking system, a new survey showed on Tuesday. The ZEW think tank's economic expectations index plunged 27.7 points to minus 16.9 points, "the steepest fall since October 1998," the organisation said in a statement. Germany is the biggest economy in Europe. European stocks had edged higher on Monday, 18 June 2012, after pro-bailout party New Democracy won parliamentary elections in Greece. Europe's financial crisis is likely to dominate leaders' discussions at two-day the Group of 20 summit which began in Mexico on Monday, 18 June 2012. The G-20 communique was set to promise all necessary measures to help resolve the European debt crisis, according to reports citing a draft version of the document. Ahead of the formal talks, US President Barack Obama and German Chancellor Angela Merkel on Monday, 18 June 2012, agreed to work together to stabilize the region. Several major emerging-market countries on Monday detailed their plans to lift the International Monetary Fund's bailout fund by more than euro 90 billion ($114 billion) to euro 456 billion to help contain the European sovereign-debt crisis. A key summit of the European Union is scheduled on 28 and 29 June 2012 to discuss the ongoing European debt crisis. Tighter European banking supervision and measures to strengthen the monetary union are largely expected to be among top proposals at an EU summit. Most Asian markets declined on Tuesday as Spain's financial problems cast fresh shadows over Europe's economic outlook, and investors eyed outcomes from a global leaders' summit expected to tackle the crisis. Key benchmark indices in Japan, China, Taiwan and Hong Kong were down by 0.06% to 0.75%. Key benchmark indices in Indonesia and Singapore rose 0.54% and 0.64% respectively. South Korea's KOSPI Composite Index was unchanged. Trading in US index futures indicated that the Dow could gain 18 points at opening bell on Tuesday, 19 June 2012. US markets were mixed on Monday amid fears over worsening Europe's debt crisis. The Dow Jones Industrial Average fell 25.28 points, or 0.20%, at 12,741.89. The Standard & Poor's 500 index rose 1.94 points, or 0.14%, at 1,344.78. The Nasdaq Composite index rose 22.53 points, or 0.78%, at 2,895.33. The Federal Open Market Committee begins a two-day policy meeting on US interest rates today, 19 June 2012. The Fed is likely to extend its $400 billion Operation Twist program at the end of the two-day meeting. The Fed launched Operation Twist in September 2011 to lower long-term borrowing costs. Operation Twist is officially scheduled to end on 30 June 2012.