Intraday volatility continued as key benchmark indices trimmed losses after slipping into the red once again in early afternoon trade. The barometer index, BSE Sensex, was down 15.95 points or 0.09%, off about 60 points from the day's high and up close to 30 points from the day's low. The market breadth was strong. Provisional data showing that foreign funds remained buyers of Indian stocks on Tuesday, 31 July 2012, underpinned sentiment.
Index heavyweight Reliance Industries (RIL) edged higher in volatile trade. Another index heavyweight and cigarette maker ITC also edged higher in volatile trade. Shares of power finance companies rose after Power Minister Veerappa Moily said reforms in the power sector will continue. Automobile stocks were mixed after Reserve Bank of India's (RBI) kept repo rate unchanged after first quarter review of the Monetary Policy 2012-13 on Tuesday, 31 July 2012. Most cement shares rose as cement firms will start unveiling monthly sales data for July 2012 from today, 1 August 2012, with Ambuja Cements hitting a record high.
The Sensex reversed initial losses and hit its highest level in almost two weeks at the onset of the trading session after provisional data showed foreign funds remained buyers of Indian stocks on Tuesday, 31 July 2012. Volatility continued as key benchmark indices reversed initial gains and slipped into the red to hit fresh intraday lows in morning trade after the latest data showed that India's merchandise exports declined 5.45% in dollar terms in June 2012. Volatility continued as the Sensex recovered from intraday low and moved into the positive terrain in mid-morning trade. The market once again slipped into the red in early afternoon trade.
Foreign institutional investors (FIIs) bought shares worth Rs 879.97 crore on Tuesday, 31 July 2012, as per the provisional data from the stock exchanges. FIIs bought shares worth net Rs 10272.70 crore in July 2012 (till 30 July 2012), as per data from Securities & Exchange Board of India.
At 12:20 IST, the BSE Sensex was down 15.95 points or 0.09% to 17,220.20. The index rose 45.58 points at the day's high of 17,281.76 in early trade, its highest level since 19 July 2012. The index fell 47.02 points at the day's low of 17,189.16 in morning trade.
The S&P CNX Nifty was up 3.75 points or 0.07% to 5,232.55. The Nifty hit high of 5,240.45 in intraday trade, its highest level since 19 July 2012. The Nifty hit a low of 5,212.65 in intraday trade.
The market breadth, indicating the overall health of the market, was strong. On BSE, 1,466 shares rose and 927 shares fell. A total of 107 shares were unchanged.
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From the 30-share Sensex pack, 17 stocks fell and the rest of them rose. Coal India, Bharti Airtel and ONGC dropped by between 0.95% to 3.52%.
Index heavyweight and cigarette maker ITC rose 0.16% to Rs 258.10. The stock had hit a record high of Rs 260.90 in intraday trade on Tuesday, 31 July 2012. The company last week reported 20.21% growth in net profit to Rs 1602.14 crore on 15.34% growth in net sales to Rs 6652.21 crore in Q1 June 2012 over Q1 June 2011. Despite series of tax hikes, ITC's performance in cigarettes business remains robust and displays pricing power for the company.
Index heavyweight Reliance Industries (RIL) rose 0.33% to Rs 745.30. The stock hit a high of Rs 748.50 and a low of Rs 739 so far during the day. RIL has bought back 3.66 crore shares for about of Rs 2617.57 crore till 24 July 2012 under its ongoing share buyback program. RIL has set maximum buyback price of Rs 870 per share. 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. RIL chairman Mukesh Ambani said at the company's Annual General Meeting in June 2012 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.
Cipla jumped 3.9% to Rs 352 after company said after market hours on Tuesday its profit after tax jumped 58.2% to Rs 400.76 crore on 23.6% growth in income from operations to Rs 2012.44 crore in Q1 June 2012 over Q1 June 2011. The stock hit a 52-week high of Rs 363.60 in intraday trade today. Cipla said its domestic sales grew by more than 30% and export sales grew by about 18% in Q1 June 2012.
Shares of Cipla turned ex-dividend today, 1 August 2012, for dividend of Rs 2 per share for the year ending 31 March 2012.
Shares of power finance companies rose after Power Minister Veerappa Moily said reforms in the power sector will continue. Mr. Moily, who is corporate affairs minister, has been given additional charge of the power ministry as the former power minister, Sushilkumar Shinde, has been appointed as new home minister. Power Finance Corporation and Rural Electrification Corporation gained by between 3.95% to 5.08%.
Automobile stocks were mixed after Reserve Bank of India's (RBI) kept repo rate unchanged after first quarter review of the Monetary Policy 2012-13 on Tuesday, 31 July 2012. Purchases of automobiles, including that of cars, utility vehicles and commercial vehicles are substantially driven by financing. M&M declined 0.35%.
Car major Maruti Suzuki declined 0.75% after the company on Tuesday, 31 July 2012, said the management remains concerned about the safety and security of its employees and hence it is not in a position to take a decision on restarting operations as the Manesar plant in Haryana. The management will announce its decision to this effect only when it is assured of employee safety, Maruti said in a statement. The labour violence which rocked the plant on 18 July 2012 led to nearly 100 injured and one fatality. Maruti on 21 July 2012 declared lock-out at unit.
Maruti today, 1 August 2012, said it total sales rose 9.2% to 82,234 units in July 2012 over July 2011. Domestic sales rose 6.8% to 71,024 units and exports jumped 27.4% to 11,210 units in July 2012 over July 2011.
Maruti last week said its net profit declined 22.8% to Rs 423.80 crore on 27.5% growth in net sales to Rs 10529.20 crore in Q1 June 2012 over Q1 June 2011. The car major said adverse yen-rupee exchange rate movement impacted profits adversely in Q1 June 2012. The company attributed strong sales growth to higher volumes, favourable product mix and higher export realization. Maruti said demand continued to be skewed in favour of diesel cars while petrol cars suffered a sharp de-growth in Q1 June 2012.
Tata Motors rose 0.53%, with the stock extending recent rally.
Two wheeler makers were also mixed. Bajaj Auto rose 0.85%. The company at the time of Q1 June 2012 results last month that it has undertaken proactive measures like rationalizing the end-user cost of vehicles in Sri Lanka and with these measures the company expects normalcy in exports to resume by end of Q2 September 2012. Bajaj Auto lost exports of about 20,000 units in Sri Lanka in Q1 June 2012 due to introduction of import barriers by that country. The company also lost export of about 25,000 commercial vehicles in Q1 June 2012 due to restrictions by importing countries and due to political unrest in Egypt, Bajaj Auto said in a statement on Wednesday. Bajaj Auto has said that domestic demand for motorcycles remains subdued.
Hero MotoCorp shed 1.03%, with the stock extending recent losses triggered by the company's announcement at the time of Q1 June 2012 results last month that consumers in rural and upcountry markets could postpone buying of motorcycles if the monsoon remains weak. Hero MotoCorp's net profit rose 10.31% to Rs 615.46 crore on 9.95% growth in turnover to a record Rs 6247.28 crore in Q1 June 2012 over Q1 June 2011. Hero MotoCorp also said that currency volatility is a point of concern and the rupee depreciation is likely to impact the company's margins.
Sun TV Network rose 2.42%, with the stock gaining for the second straight day after the company concluded an agreement with the Tamil Nadu Arasu Cable TV Corporation. Sun TV Network early this week said it has concluded signing an agreement with Tamil Nadu Arasu Cable TV Corporation, an undertaking owned by the Government of Tamil Nadu engaged in the business of providing signals to cable operators in the state of Tamil Nadu. Sun TV Network said the agreement will enable the total availability of the company's channels on all cable TV distribution systems run by Arasu Cable across the state of Tamil Nadu with immediate effect. Sun TV already enjoys a dominant market share in terms of viewership ratings and the new arrangement will facilitate in further enhancing the competitive positioning of the company's extremely popular programming, the company added. Sun TV Network said it will also now start earning additional subscription revenues from Tamil Nadu.
Most cement shares rose as cement firms will start unveiling monthly sales data for July 2012 from today, 1 August 2012.
Jaiprakash Associates rose 1.98%. The company said after market hours on Tuesday its net profit fell 24.6% to Rs 138.84 crore on 2.1% growth in net sales to Rs 2963.57 crore in Q1 June 2012 over Q1 June 2011.
Ambuja Cements rose 2.36% to Rs 184.50. The stock hit a record high of Rs 184.90 in intraday trade today. The company last month said its net profit jumped 34.9% to Rs 469 crore on 17.9% growth in net sales to Rs 2566 crore in Q2 June 2012 over Q2 June 2011. Ambuja Cements said increase in realization was barely sufficient to make up for cost increase. The profit margin still improved due to higher sales volumes and improved operational efficiencies, the company said.
With regard to future business outlook, Ambuja Cements warned that the company's profit margins are expected to be under pressure due steep increase in costs. The company said it will continue its thrust on improving productivity and operational efficiency to partly mitigate cost pressures. Cement demand is expected to remain low during the ongoing monsoon season, the company said.
UltraTech Cement and India Cements rose by between 0.19% to 1.74%.
ACC declined 0.42% as the stock turned ex-dividend today, 1 August 2012, for interim dividend of Rs 11 per share for the year ending 31 December 2012.
IT pivotal fell across the board. Wipro (down 0.71%), Infosys (down 0.75%) and TCS (down 0.9%), edged lower. The Reserve Bank of India on Tuesday, 31 July 2012 withdrew, subject to certain conditions, a previous order that made it compulsory for exporters to convert half of their foreign exchange earnings kept in local banks into rupees. It may be recalled that the central bank had issued a directive in May 2012 that required foreign exchange earners to convert 50% of their foreign exchange earnings into the local currency in a bid to put a floor under the rupee, which was witnessing a free fall at the time.
RBI, on Tuesday, 31 July 2012, said it has now decided to restore 100% credit in foreign currencies to provide operational flexibility to foreign-exchange earners. However, the total of the accruals in the exporter account should be converted into rupees on or before the last day of every month. This should be done after adjusting for utilization of the balances for approved purposes or forward commitments, the RBI said. The central bank also allowed exporters to cancel and rebook forward contracts up to 25% of their total contracts for hedging.
Shrinking export orders and sluggish output dragged Indian manufacturing growth in July down to its weakest pace since last November, a business survey showed on Wednesday. The HSBC manufacturing Purchasing Managers' Index (PMI), which gauges business activity at India's factories but not utilities, fell to 52.9 in July, from 55 in June -- its biggest one-month drop since September last year. Still, the index has remained above the 50 mark that divides growth and contraction for more than three years. The new export orders sub-index fell to 49.7 from 52.3 in June, highlighting the global effect of the current downturn caused by the euro zone's 2-1/2 year old sovereign debt crisis.
India's merchandise exports during June 2012 were valued at $25067.20 million (Rs 140452.05 crore) which was 5.45% lower in dollar terms (18.11% higher in rupee terms) than the level of $26511.62 million (Rs 118914.17 crore) during June 2011, the Ministry of Commerce & Industry said in a statement today, 1 August 2012. Cumulative value of exports for the period April-June 2012-13 was $75203.96 million (Rs 407055.99 crore) as against $76507.51 million (Rs 342163.55 crore), registering a negative growth of 1.7% in dollar terms and growth of 18.97% in rupee terms over the same period last year.
India's imports during June 2012 were valued at $35370.57 million (Rs 198182.00 crore) representing a negative growth of 13.46% in dollar terms (growth of 8.11% in rupee terms) over the level of imports valued at $40870.18 million (Rs 183317.46 crore) in June 2011. Cumulative value of imports for the period April-June, 2012-13 was $115259.41 million (Rs 623266.64 crore) as against $122741.45 million (Rs 549000.58 crore) registering a negative growth of 6.1% in dollar terms and growth of 13.53 per cent in rupee terms over the same period last year.
Oil imports during June 2012 were valued at $12688.6 million which was 4.43 per cent lower than oil imports valued at $ 13276.9 million in the corresponding period last year. Oil imports during April-June, 2012-13 were valued at $41585 million which was 5.48 per cent higher than the oil imports of $ 39425 million in the corresponding period last year. Non-oil imports during June 2012 were estimated at $22681.9 million which was 17.80 per cent lower than non-oil imports of $27593.2 million in June, 2011. Non-oil imports during April-June, 2012-13 were valued at $73674.4 million which was 11.57 per cent lower than the level of such imports valued at $ 83316.4 million in April-June, 2011-12.
The trade deficit for April-June, 2012-13 was estimated at $40055.45 million which was lower than the deficit of $46233.94 million during April-June, 2011-12.
The Indian government on Tuesday, 31 July 2012, announced a key cabinet reshuffle with Home Minister P. Chidambaram named as the new Finance Minister. Power minister Sushilkumar Shinde was named as the new Home Minister. Minister of Corporate Affairs M. Veerappa Moily has been assigned the additional charge of the Ministry of Power.
The post of the Finance Minister was left empty after Pranab Mukherjee resigned from the post to contest Presidential election. Prime Minister Dr. Manmohan Singh handled the Finance Ministry portfolio for a brief period after Pranab Mukherjee's resignation as Finance Minister on 26 June 2012. This is the third time that Chidambaram is holding the Finance Ministry portfolio.
An panel of ministers on Tuesday, 31 July 2012, approved steps to contain the impact of a near-drought situation. The steps include providing diesel-price subsidies to farmers, increasing the subsidy on seed supplies, and removal of the import tax on oil meals, Farm Minister Sharad Pawar told reporters on Tuesday. He said there is a major decline in planting areas of rice, coarse cereals and lentils due to weak monsoon rains. The diesel-price subsidy announced by the government will be 50% on the sale price for drought-hit farmers and total expenditure would be around Rs 1260 crore, which would be shared equally by the central government and respective state governments.
The monsoon rainfall until July 31 was 19% below the long-term average, with some areas getting little or no rain and some others seeing excessive rain and flooding. There will be an impact on foodgrain output, but it is too early to give any estimate, Mr. Pawar said. The worst affected states due to scanty rains are Punjab, Haryana, Karnataka, and parts of Maharashtra and Gujarat, he added. Punjab and Haryana are major rice producers. Maharashtra and Gujarat are major producers of oilseeds and cotton.
With the monsoon season almost halfway through, India is facing the prospect of a full-blown drought in some of its provinces. Mr. Pawar said the government will raise subsidies for the supply of various seeds for alternate crops in affected areas.
Minister of State for Agriculture Harish Rawat early this week said rainfall in August, a critical month for summer crops, is likely to be 84%-85% of the long-term average, below the previous forecast of 96%. 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 four-month southwest monsoon season that starts from June accounts for almost 70% of total annual moisture that Indian soil receives in a year.
The All India Consumer Price Index Number for Industrial Workers (CPI-IW) for the month of June 2012 increased by 2 points and stood at 208. The point to point rate of inflation based on CPI-IW (General) declined to 10.05% in June 2012 from 10.16% in May, 2012. Inflation based on Food Index declined to 10.45% in June 2012 from 10.61% in May 2012, the Ministry of Labour & Employment said in a statement on Tuesday, 31 July 2012.
The Reserve Bank of India (RBI) on Tuesday, 31 July 2012, kept its key policy rate viz. the repo rate unchanged at 8% after first quarter review of Monetary Policy 2012-13 in an effort to keep a lid on inflation and inflation expectations. The RBI, however, lowered banks' statutory liquidity ratio, or the part of deposits that must be invested mainly in government bonds, by a percentage point to 23% to ensure that liquidity pressures do not constrain the flow of credit to productive sectors of the economy. The cash reserve ratio (CRR) of scheduled banks has been retained at 4.75% of their net demand and time liabilities.
RBI said the current economic slowdown has to be seen in reference to the trend rate of growth in order to assess its inflationary implications. In this context, investment activity has remained subdued over the last two years, RBI said. External demand has also remained weak due to the slowdown in global growth. Consequently, the post crisis trend rate of growth, which was earlier estimated at 8% has dropped to 7.5%. While the current rate of growth is clearly lower than trend, the output gap will remain relatively small. Under these conditions, demand pressures on inflation can re-emerge quite quickly, exacerbating the existing supply pressures, RBI said.
RBI said the conduct of monetary policy will continue to condition and contain perception of inflation in the range of 4% to 4.5%. This is in line with the medium-term objective of 3% inflation consistent with India's broader integration into the global economy, RBI said.
India's economic growth is likely to be weaker than the central bank's revised projection, but India remains better placed than similarly rated countries and doesn't face an immediate threat of a sovereign rating downgrade, Moody's said on Tuesday, 31 July 2012. India's current Baa3 rating already incorporates fluctuations in growth due to high interest rates, a global slowdown and a weak monsoon, Moody's said. Moody's expects 6% growth in India's GDP in the fiscal year through March 2013.
Even given the additional downward risks stemming from a poor monsoon, India's growth compares favorably to that of similarly rated countries, Monday's said. RBI's decision to cut banks' statutory liquidity ratio by 100 basis points may not help boost credit to the private sector immediately because Indian banks are already holding more securities than mandated, Moody's said.
The Indian central bank's decision to slash the country's economic growth outlook doesn't raise the risk of a downgrade in its sovereign rating, Fitch Ratings said Tuesday, 31 July 2012. Also, the Reserve Bank of India's decision to hold interest rates steady appears to be reasonable, given the persistent inflationary pressures in Asia's third-largest economy, Fitch Ratings said. In June, Fitch cut its outlook on India's sovereign debt rating to negative from stable, reflecting the limited progress made by the government in improving its finances. Fitch has a triple-B-minus rating on India's sovereign debt.
Principal adviser to the Planning Commission Pronab Sen last week said slowing investment due to weak confidence in the economy is hurting growth. Mr. Sen said Indian companies aren't facing any shortage of funds. Many of them are sitting on piles of cash and aren't even repatriating overseas borrowings, he added.
The government should take steps to meet the fiscal deficit target set out in the budget and that would improve sentiment and revive investments, Mr. Sen said. He said the government should scale back its spending and slash subsidies on fuels, food and fertilizers to help check its budget deficit.
Slowing growth in investment remains a cause for concern for India. Investment makes up 35% of India's economic activity.
The services purchasing managers' index for July 2012 is expected to be released on Friday, 3 August 2012. HSBC's services purchasing managers' index, which gauges the activity of around 400 firms in India, dropped to 54.3 in June from 54.7 in May. However, it has kept above the 50 mark that signifies growth since November.
Prime Minister Dr. Manmohan Singh has decided to refer the issue of implications on FIIs and portfolio investors of the amendment made to the Income Tax Act relating to the taxation of non-resident transfer of assets where the underlying asset is in India to the Expert Committee on anti-avoidance tax proposal viz. the General Anti-Avoidance Rules (GAAR). "It is necessary to have clarity on the tax liability of portfolio investors and foreign institutional investors as a result of this amendment particularly when the investment is made through a registered stock exchange in accordance with SEBI guidelines and purely in the form of portfolio investment", the Prime Minister's Office (PMO) said in a statement issued Monday, 30 July 2012. Any clarification needs to be harmonised with the GAAR guidelines and will have to address any residual concerns outside of GAAR, the PMO said.
Dr. Singh last month constituted an expert committee on anti-avoidance tax proposal viz. the General Anti-Avoidance Rules (GAAR) to undertake stakeholder consultations and finalise the guidelines for GAAR by 30 September 2012.
An India-Mauritius joint panel will discuss a series of proposals to review the double taxation avoidance treaty between the two nations on 22-24 August in Mauritius. 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. 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 for implementing the controversial anti-avoidance tax proposal viz. the 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.
Voting for the country's new vice president takes places on 7 August 2012 -- a day before the monsoon session of parliament kicks off.
The monsoon session of the parliament will begin on 8 August 2012 and the session will conclude on 7 September 2012, Parliamentary Affairs Minister Pawan Kumar Bansal said on Wednesday, 18 July 2012. The government hasn't yet finalized the agenda for the session, but the expectation is that Prime Minister Dr. Manmohan Singh -- who took charge of the finance ministry after Mr. Pranab Mukherjee resigned to contest the presidential elections -- will try and push through long-pending legislations. These could include the Direct Tax Code and the insurance, pension and banking bills. The government would also place before lawmakers the first demand for additional spending for this fiscal year which began April 1.
Corporate affairs minister Veerappa Moily said in a newspaper interview published on 11 July 2012 that the government is hopeful of the passage of the pension bill in the monsoon session of parliament.
Investors' focus is currently on Q1 June 2012 earnings. DLF and Steel Authority of India unveil Q1 results on 6 August 2012. Mahindra & Mahindra and Bharti Airtel unveil Q1 results on 8 August 2012. Tata Motors and Ranbaxy Laboratories unveil quarterly results on 9 August 2012. State Bank of India, Sun Pharmaceuticals Industries, Siemens and BPCL announce quarterly results on 10 August 2012. ONGC announces Q1 results on 11 August 2012. Coal India announces Q1 results on 13 August 2012. Hindalco Industries and IDFC will unveil Q1 results on 14 August 2012.
Asian stocks moved mostly lower Wednesday, the first day of the new month, as investors fretted that central bankers wouldn't introduce major stimulus measures when the US Federal Reserve wraps up its two-day meeting later in the global trading day and the European Central Bank and the Bank of England meet Thursday. Optimism for central-bank monetary measures rose last week when ECB President Mario Draghi said that the bank would do whatever was needed to save the euro. Key benchmark indices in Indonesia, South Korea, Japan, and Taiwan fell by between 0.03% to 0.63%. Key benchmark indices in China, Singapore and Hong Kong rose by between 0.14% to 0.65%.
Manufacturing conditions in China offered glimpses of improvement in July as recent interest-rate cuts appeared to support the economy in a weak external climate, but the data suggested further monetary easing may be needed to sustain the recovery. China manufacturing activity weakened at a slower rate in July, as an increase in factory output helped offset a sharp drop in employment, according to data released by HSBC on Wednesday. HSBC's final reading of its manufacturing Purchasing Managers' Index came in at 49.3 for July, up from June's print at 48.2, but still below the 50-point threshold that divides expansion from contraction. The final result fell short of the survey's preliminary reading, released late last month, which had come in at 49.5.
Data released earlier on Wednesday showed an official gauge of China's manufacturing PMI based on a survey compiled by the China Federation of Logistics & Purchasing dropped to 50.1 in June from 50.2 in the previous month.
The Governing Council of the European Central Bank (ECB) holds a monthly monetary policy review on interest rates for the euro area on Thursday, 2 August 2012. ECB is widely expected to leave interest rates unchanged after it cut the benchmark one-week lending rate to a fresh record low earlier this month. ECB President Mario Draghi last week said that the bank would do whatever was needed to save the euro.
The Monetary Policy Committee of Bank of England holds a monthly policy meeting on interest rates in the United Kingdom (UK) on the same day.
Germany's Federal Constitutional Court will announce a decision on lawsuits challenging the country's participation in the permanent euro-zone rescue fund, the European Stability Mechanism, and the fiscal pact on 12 September 2012. The court held a public hearing earlier this month to examine complaints that participation in the fund and the fiscal pact violated German law by taking some authority over the national budget away from parliament.
Trading in US index futures indicated that the Dow could gain 19 points at the opening bell on Wednesday, 1 August 2012. US shares ended with mild losses on Tuesday, as investors fretted that central bankers wouldn't introduce major stimulus measures when the US Federal Reserve wraps up its two-day meeting later in the global trading day and the European Central Bank and the Bank of England meet Thursday.
The Federal Open Market Committee's (FOMC) two-day policy meeting on US interest rates ends today, 1 August 2012. The FOMC is expected to reiterate its pledge to keep US interest rates low for longer period. It remains to be seen if the FOMC announces or at least gives indication of another round of asset purchases, known as quantitative easing, to give the US stalling economy a jolt. US gross domestic product which is the value of all goods and services produced in the country, rose at a sluggish 1.5% clip in Q2 June 2012 as consumers pared spending and businesses invested at a slower pace, the Commerce Department reported on 27 July 2012.
A report from Automatic Data Processing, Inc. (ADP) on private-sector employment in the United States in July 2012 is due on Wednesday, 1 August 2012. On the same day, a manufacturing survey for July 2012 from the Institute for Supply Management is also due for release. Data on weekly jobless claims in the US and data on factory orders are due for release on Thursday, 2 August 2012. On the same day, US retailers will unveil monthly same-store sales data.
The influential US government data on non-farm payroll for July 2012 is due on Friday, 3 August 2012. In June, the United States created 80,000 jobs, the third straight month of job growth of under 100,000.
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