Market will remain volatile - what to watch out for ?

The market may edge higher in early trade tracking gains in Asian stocks. Trading in S&P CNX Nifty index futures on the Singapore stock exchange indicated a flat opening on the domestic bourses.
In stock specific action, Hindalco Industries reportedly plans to borrow about Rs 14000 crore in the next couple of years to build two new plants that will treble its aluminium making capacity as increased production of cars and aircraft, fuel demand for the white metal.
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In global markets, Asian stock markets edged higher in volatile trade on Wednesday, tracking overnight gains on Wall Street. The key benchmark indices in China, South Korea, Indonesia, Hong Kong, Taiwan and Singapore rose by between 0.02% to 0.52%. But, Japan's Nikkei Average fell 0.98%.
US Stocks mostly rose in volatile trading on Tuesday 8 June 2010 led by materials and financial shares, but investors shied away from big-cap technology shares on concerns about their European exposure. The Dow Jones Industrial Average gained 123.49 points, or 1.26% to 9,939.98. The Standard & Poor's 500 Index rose 11.53 points, or 1.10% to 1,062.00. But, the Nasdaq Composite Index dropped 3.33 points, or 0.15% to 2,170.57.
Federal Reserve Chairman Ben Bernanke said the US economy seemed to have enough momentum to avoid a double-dip recession, giving support to domestic-oriented companies.
Back home, the Indian government on Monday deferred a decision on raising fuel prices, the second time in a year it has tripped on pushing politically-sensitive reform measures that could help trim a budget deficit. The Congress-led government held off the decision after two powerful ministers from coalition parties stayed away from a ministerial panel meeting, signalling opposition to the move on fears of voter backlash ahead of local polls over the next year.
The panel was to review the possibility of freeing up petrol prices and cutting subsidies on diesel, kerosene and cooking gas which could help reduce the fiscal deficit from the projected 5.5% of 2010/11 GDP and free up revenues for other programmes.
On the monsoon front, the southwest monsoon rains have revived after being stalled by a cyclone last week. According to the India Meteorological Department (IMD), the monsoon has advanced to some parts of the central Arabian Sea, most parts of coastal Karnataka and some parts of south interior Karnataka. It said conditions are favourable for further advance of southwest monsoon over some parts of Konkan & Goa and Madhya Maharashtra and some more parts of Karnataka and Andhra Pradesh during next 2-3 days.
The monsoon rains were 11% below normal in the week to 2 June 2010, the weather office said on Thursday, 3 June 2010. The June-September monsoon rains hit Kerala on 31 May 2010, a day ahead of schedule. The south-west monsoon usually covers the entire country by mid-July. The weather office late April 2010 said rainfall is likely to be 98% of the long-term average. Good monsoon rains would help raise farm output, boost rural incomes and lower food inflation.
Last month, Australia's weather bureau said the El Nino weather pattern was over. El Nino is caused by an abnormal warming of the eastern Pacific Ocean and can play havoc with weather patterns across the Asia-Pacific region.
The south west monsoon is important for India as about 60% of the country's farmlands are rain-fed and more than half of the workforce is employed in the agriculture sector. The quantum of rainfall in the crucial sowing month of July and distribution of rainfall during the monsoon season also holds key.
Data last week showed business activity remained strong for India's vast services sector in May 2010, with a key gauge growing for a 13th consecutive month even as some momentum was lost over the previous month. The HSBC-Markit Business Activity Index stood at 58.2 in May 2010 from a 21-month high of 62.1 in April 2010. A reading above 50 indicates expansion. Services make up about 55% of India's $1.2 trillion economy.
HSBC Markit Purchasing Managers' Index (PMI), based on a survey of 500 Indian firms, surged to a 27-month high of 59 in May 2010 from 57.2 in April 2010, bolstered by steady growth in output, new orders and employment. The rate of growth had slowed in March 2010 and April 2010.
On a flip side, another data showed that the food articles index rose 16.55% in the year to 22 May 2010, accelerating from previous week's rise of 16.23%. The primary articles index, which also includes food articles, rose 16.89%, higher than previous week's 15.90% rise. The fuel price index increased to 14.14 % versus 12.08% rise in the previous week.
India's economy grew at 8.6% in the March 2010 quarter driven by robust manufacturing sector on the back of government and consumer spending, data released by the government on Monday, 31 May 2010, showed. The growth was significantly higher than the revised 6.5% expansion in Q3 December 2009 and a 5.8% growth in Q4 March 2009. The manufacturing sector grew 16.3%, farm output rose 0.7%, mining sector expanded 14% and services increased by 8.4% in January-March 2010 quarter from a year earlier.
For the full year to March 2010, the economy expanded 7.4%, above a government forecast of 7.2%. Economic growth had slowed down to 6.7% in year ended March 2009.
Investors will eye the first installment of the corporate advance tax payment which will give some clue about Q1 June 2010 corporate results. The first installment of corporate advance tax falls due on 15 June. The combined net profit of a total of 3,610 companies rose 13.7% to Rs 87,214 crore on 24.70% rise in sales to Rs 9,27,583 crore in the quarter ended March 2010 over the quarter ended March 2009.
The key benchmark indices declined for the second straight day on Tuesday, 8 June 2010 as European shares faltered. The BSE 30-share Sensex fell 163.97 points or 0.98% to 16,617.10on Tuesday.
As per provisional figures on NSE, foreign funds sold shares worth Rs 242.91 crore and domestic funds bought shares worth Rs 41.09 crore on Tuesday.
Euro zone debt worries caused massive outflow of foreign funds from India recently as investors shunned risk. Foreign funds sold shares worth a net Rs 832.21 crore in the first six trading sessions this month, as per data from the stock exchanges. Foreign institutional investors (FIIs) had dumped shares worth a net Rs 12071.14 crore in May 2010.
Domestic funds have absorbed part of the selling by FIIs. Domestic funds bought stocks worth a net Rs 166.75 crore in the first six days this month. Domestic funds bought stocks worth a net Rs 6361.17 crore in May 2010.