The market may open slightly higher as most Asian stocks gained. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 11 points at the opening bell. The Reserve Bank of India (RBI) announces Second Quarter Review of Monetary Policy 2013-14 today, 29 October 2013.
The market may remain volatile this week as traders roll over positions in the futures & options (F&O) segment from the near month October 2013 series to November 2013 series. The near month October 2013 derivatives contract expire on Thursday, 31 October 2013.
Among corporate news, NTPC unveils Q2 results today, 29 October 2013. Ranbaxy Laboratories also unveils its Q3 September 2013 result today, 29 October 2013.
Car major Maruti Suzuki India after trading hours on Monday, 28 October 2013, said its net profit jumped 194.7% to Rs 670.20 crore on 26.5% growth in net sales to Rs 10211.80 crore in Q2 September 2013 over Q2 September 2012. The company said that low base effect aided strong growth in bottomline in Q2 September 2013 -- the company's performance in Q2 September 2012 was adversely impacted by labour problems at its Manesar plant. Higher localization and cost reduction initiatives by the company also contributed significantly to bottomline growth in Q2 September 2013, Maruti said. The overall impact of foreign exchange was positive during the quarter, Maruti said.
Maruti said that the company's new diesel engine facility at Gurgaon and the third assembly facility at Manesar went on stream during Q2 September 2013. With this, the company's total capacity for vehicle assembly has risen to 1.5 million vehicles per annum.
On macro front, the Reserve Bank of India (RBI) announces Second Quarter Review of Monetary Policy 2013-14 today, 29 October 2013. Market men expect RBI to hike its main lending rate viz. the repo rate by 25 basis points to rein in inflation. The wholesale price (WPI) and consumer price inflation, both, accelerated in September 2013. WPI inflation accelerated to 6.46% in September 2013, from 6.1% in August 2013. The annual rate of inflation based on the combined consumer price index (CPI) for urban and rural India rose 9.84% in September 2013, from 9.52% in August 2013.
The Reserve Bank of India (RBI) after trading hours on Monday, 28 October 2013, said that the monetary policy faces an unenviable task of anchoring inflation expectations, amid tepid growth and weak business confidence. It is, therefore, important to craft policy responses so that growth concerns are addressed in an environment of stable prices, the central bank said a report titled -- Macroeconomic and Monetary Developments, Second Quarter Review 2013-14. The document serves as a backdrop to the Second Quarter Review of Monetary of Policy 2013-14 to be announced on Tuesday, 29 October 2013. With the normalisation of exceptional liquidity measures under way, incremental calibration of monetary policy will be shaped by changes in the growth-inflation balance, keeping overall macroeconomic stability in consideration, the RBI said. For supporting growth, complementary action aimed at productivity enhancement, structural reforms and quick project implementation will be needed, the central bank said in a statement.
The RBI said the WPI inflation is ruling above the RBI's comfort level and may remain range-bound around the current level during H2 of 2013-14. Moreover, the persistence of high CPI inflation remains a concern, the RBI said. The good monsoon should have a salutary effect on food inflation, but second-round effects from already high food and fuel inflation could impart upside pressures on prices of other commodities and services, the RBI said. External sector risks have reduced as CAD is likely to moderate since Q2 of 2013-14. The trade balance has responded to the policy measures taken -- exports have picked up and gold imports have declined.
Broad money growth is largely in line with the RBI's indicative trajectory and credit growth has accelerated with greater recourse to bank finance by corporates. While financial markets have rallied, near-term uncertainties on account of 'tapering' continue to be a concern, the RBI said.
Key benchmark indices edged lower on Monday, 28 October 2013 as the Reserve Bank of India (RBI) is expected to raise its main lending rate viz. the repo rate by 25 basis points after a monetary policy review on Tuesday, 29 October 2013, to rein in inflation. The S&P BSE Sensex shed 113.24 points or 0.55% to settle at 20,570.28 on that day, its lowest closing level since 17 October 2013.
Foreign institutional investors (FIIs) bought shares worth a net Rs 636.78 crore on Monday, 28 October 2013, as per provisional data from the stock exchanges.
Most Asian stocks edged higher on Tuesday after China injected cash into the money-market for the first time in two weeks. Key benchmark indices in China, Taiwan, Hong Kong, Singapore, and South Korea rose 0.04% to 0.78%. Key benchmark indices in Japan and Indonesia shed 0.15% to 0.57%. China's benchmark money-market rate eased after the People's Bank of China added 13 billion yuan ($2.13 billion) into the system via so-called reverse-repurchase operations.
US stocks were little changed on Monday as investors found few catalysts to push equities higher. Economic data showed pending home sales slumped 5.6% in September, a rate that was far steeper than expected and the biggest drop in more than three years.
The Federal Open Market Committee (FOMC) holds a two-day policy meeting today, 29 October and tomorrow, 30 October 2013. On 18 September 2013, the Fed surprised economists and investors with its decision to delay scaling back its stimulus amid concerns about the strength of the economic recovery.
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