Market Can Lower Open On Weak Asian Stocks

Market may extend losses on Monday, a weak Asian shares. Trading in the S & P CNX Nifty futures in Singapore Stock Exchange shows a 9-point decrease in the bell opening. Auto and cement stocks of oil, how companies can focus on these two areas to start the presentation of sales figures in October 2011 begins today, November 1, 2011.

Asian stocks traded mostly lower Tuesday to start the new month with a relatively pessimistic note, with commodity companies and steel makers suffered significant losses.

Two closely watched measures of manufacturing in China released on Tuesday showed that the growth of the sector in October, but at a slow pace. China’s official purchasing managers index of manufacturing (PMI) fell to 50.4 in October, the slowdown in the previous month’s reading of 51.2, but still above the 50 level that separates expansion and contraction. However, the result was well below market expectations. A compiled version of the private PMI, released by HSBC, printed in 51 years, from 49.9 reading in September slightly restrictive. Both PMI surveys showed a decrease in input prices, easing concerns about inflation in China.

New concerns about the debt crisis in Europe resurfaced Monday when the Greek prime minister said the referendum would be held in recent proposals to help the country.

The Group of 20 leaders will meet 3 to 4 November in Cannes, France, a week after authorities in the euro area have committed to expand the capacity of its bailout fund of 1 billion euros (1.4 trillion dollars) and look beyond their borders to help combat debt crisis represents the greatest threat to world economic growth. Europe has the capacity to overcome its difficulties, the Chinese President Hu Jintao said at a conference in Vienna yesterday.

World stocks rose last month, with the agreement of Europe in Greece has strengthened the confidence of the sovereign debt crisis in the region would be contained, economic growth accelerated and the U.S. China refers to relax its monetary policy.

Closer to home, the RBI has announced a 25 basis point rate policy is the key. the interest rate to 8.5% after mid-year monetary policy review October 25, 2011. The central bank has cut its GDP growth forecast for the fiscal year through March 2012 to 7.6% vs. 8% previously. However, it maintained its forecast for March to the end of inflation of 7%. RBI said that the inflation forecast trajectory indicates that inflation will start to decline in December 2011 (January 2012 version), then continue on a stable path of 7% in March 2012. It is expected to fall further in the first half of 2012-13. This reflects a combination of movements in prices of raw materials and the cumulative impact of monetary tightening. Furthermore, the rate of inflation is likely to moderate the impact of positive expectations.

RBI said that economic growth is slowing due to the cumulative effects of past monetary policy actions and other factors. The central bank said that the probability of a share of the rate in mid-December quarter review is relatively low. Apart from this, that if the path of inflation consistent with the projected rate increases not justified even the central bank said in a statement. But as always, actions depend on the evolution of the macroeconomic environment, he added.

Although the impact of past monetary policy actions are still ongoing, it is necessary to continue the anti-inflation, RBI said. The position of monetary policy is to maintain a clean environment in order to contain inflation expectations and inflation anchor. The position of monetary policy also aims to stimulate investment activity to support raising the trend growth. The position of monetary policy also seeks to manage liquidity to ensure that it remains in moderate deficit in line with the policy of effective monetary transmission mechanism.

The RBI has said that a number of factors – structural imbalances in agriculture, infrastructure, capacity bottlenecks, and distorted in administered prices of many key and pace of fiscal consolidation – have helped to keep the medium term risks of high inflation in the economy. These risks can be mitigated by common political action on several fronts, RBI said. Since the move, in the medium term, monetary policy stance of the RBI should be taken into account the risks of rising inflation in response to even moderate recovery of growth.

Food price inflation accelerated to a maximum of six months, buoyed by soaring crop prices and to highlight the limits of the Reserve Bank of India monetary interventions after raising its rates for the 13th time in 19 recent months. Data published by the Government last week showed that food inflation increased to 11.43% year on year for the week of Oct. 15, compared with 10.6% the previous week, reflecting up 25% of vegetables, while food prices increased by 0.25%.


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