News flow from euro-zone to dictate near term trend

News flow from euro-zone will continue to dictate near term trend on the domestic bourses as risk aversion arising from euro-zone debt worries rattled global markets in the month just gone by. The barometer index, BSE Sensex, lost 6.35% in May 2012 on euro-zone debt worries. Concerns about Greece's possible exit from the European Union rattled global equity markets after the splintered results of a parliamentary election on 6 May 2012 left no party able to put together a government. That led the country to call another election on 17 June 2012. Automobile and hotel stocks may slide after the government on Thursday, 31 May 2012, announced a series of austerity measures in the context of the current fiscal situation where there is a tremendous pressure on government's resources. The finance ministry has banned purchase of new vehicles until further orders, including against condemned vehicles. The finance ministry also announced a ban on holding meeting and conferences at five-star hotels. Shares of exporters will be in focus as Commerce Minister Anand Sharma unveils the foreign trade policy for 2012-13 on Tuesday, 5 June 2012. The economic crisis in the US and Europe is hitting India's exports. Both these markets account for about one-third of country's total shipments. The expansion in the country's merchandise exports, which grew by as much as 82% in July 2011, came down to 3.2% in April 2012 due to the demand slowdown in western markets. Infrastructure and cement stocks will be in focus after Prime Minister Manmohan Singh on Friday, 1 June 2012, approved the setting up of a mechanism that will track the progress of all major infrastructure projects to avoid delays in their completion. The government will periodically review the progress of projects under the Investment Tracking System to ensure that issues are quickly identified and resolved. All public-sector projects with an investment of Rs 1000 crore or more will be monitored by the National Manufacturing Competitive Council. The Department of Financial Services will monitor similar-sized projects of private companies, and the two bodies will report the progress of projects to the prime minister every quarter. Investors will continue to watch the progress of the monsoon rains which could have impact on inflation and rural consumption. Around 60% of summer crops are rain-fed, and if monsoon rainfall is more or less on schedule and in sufficient amounts, crops that benefit from the rains account for around half of India's total agricultural output.