9 things that could move the market today

• Asian stocks fell for a second day as companies in Japan reported earnings.The stocks fell further by the slump in power companies that were hit by the March 11 earthquake. Both Nikkei and Hang Seng opened in the negative and are trading low, down 0.27% and 0.25%, respectively.

• Overnight US stocks advanced as the dollar index retreated. Commodities rebounded from an earlier slump and erased losses that were triggered by China’s move to curb lending. This revival of commodities has bolstered the appeal of energy and raw-materials as alternative investments.

• Oil fell for a second day on Thursday, while silver was set for its worst two-week slide in nearly 25 years, after a rising dollar and concern about slowing demand for raw materials pummeled the commodity complex. Evidence of cooling industrial output in China sent copper to five-month lows, while palladium, used in catalytic converters for autos, neared its lowest in two months. High volatility across commodity prices, which has affected currencies and stocks alike, along with Europe’s deepening debt crisis have helped lift the dollar to a three-week high against a basket of major currencies, making non-US investors even more prone to selling raw materials. Oil futures dropped on Wednesday after US inventory data showed a surprise rise in gasoline stocks. The subsequent slide in gasoline futures unleashed a wave of selling across base and precious metals, including silver, which dropped 3 percent on Thursday nearing 2-1/2 month lows. Losses in silver undermined gold, which eased 0.4 percent to $1,493.94.

[caption id=“attachment_9103” align=“alignleft” width=“380” caption=“Centre has approved an addition cash subsidy of Rs 20,000 cr to oil marketing companies in India. Reuters”] [/caption]

• In India the government approved an additional cash subsidy of Rs 20,000 crore to oil marketing companies for the losses they suffered in 2010-11 due to retailing petro products at government-capped prices. This will enable the state-owned companies- Indian Oil, Hindustan Petroleum and Bharat Petroleum- to declare profits for the quarter ended March 31. However, with this move, the government has now used up its entire budgetary provision of Rs 20,000 crore for petroleum subsidy, within less than six weeks of the current financial year. During the first three quarters of 2010-11, the government had released Rs 21,000 crore to oil marketing companies (OMCs) for subsidised sale of diesel, kerosene and domestic LPG. The additional amount of Rs 20,000 crore would be registered in the government’s accounts for 2011-12, leaving nothing for the burgeoning losses of the current financial year. Currently, OMCs lose Rs 18.19 on every litre of diesel sold, Rs 29.69 on every litre of kerosene and Rs 330 for every LPG cylinder. The diesel price has not been raised since June 26, 2010. At this rate, OMCs could end the current financial year with a loss of Rs 180,000 crore.

• Exports data released showed an impressive 34.4 percent year-on-year growth in April at $23.9 billion. Imports reached $32.8 billion, up 14.1 percent compared to the year-ago period. In April, the balance of trade - the difference between a country’s exports and its imports - stood at (-) $8.9 billion. Commerce ministry official said that exports might end up with a growth rate of 20-25 percent in the present financial year. He, however, said uncertainties in the global economy were not over yet. Exporters, on the other hand, are concerned with the unabated rise in interest rates, which is making their products uncompetitive compared to other countries. The sectors that performed well are engineering, gems and jewellery, electronic goods, petroleum products, plastics and linoleum. Destination markets have seen a shift, with the US and EU seeing a declining share and West Asia and rest of Asia now comprising a growing share in total exports. Share of the US and EU has come down to 11.8 percent and 22.2 percent in 2009-10 from 24.4 percent and 27.9 percent in 1999-2000, respectively.

• State Bank of India will borrow $3-4 billion from foreign sources this year and plans a slew of initiatives to reinforce its dominant market position, including entering local bond underwriting. The bank intends to build the bank’s market share by one percent a year but expects surging interest rates to cripple loan growth this year to 17-19 percent, from a January target of 20-22 percent. It also wants to build on its leading position in funding big-ticket projects like steel and power plants in a fast-growing economy that is ramping-up its infrastructure and industrial base. Of the bank’s planned overseas fund-raising for the current fiscal year, the first tranche of $1 billion to $1.5 billion is expected around July. SBI’s overseas lending stands at $32 billion to $34 billion and is likely to grow another $5 billion to $6 billion in the year ending March 2012.

• Maharatna PSU Coal India reported its results after trading hours on Thursday. It reported 24.2 percent rise in standalone net profit at Rs 4,696 crore for 2010-11 on account of increase in sales and dividend from subsidiary companies.The public sector firm reported a net profit of Rs 3,779 crore in 2009-10 against the expected Rs 3,734 crore.Total Income has increased to Rs 5,498 crore for the year ended March 31, 2011 from Rs 4,593.4 crore in the year-ago period.Among other factors the company also did well in controlling cost by reducing manpower and by not increasing wages. Coal India closed the day at Rs 381.30.

• Inter-city and intra-city buses that were expected to be launched by Mahindra & Mahindra might be delayed by a year. Instead the company through its 51:49 joint venture company Mahindra Navistar Automotives (MNAL) will start selling chassis to bus body makers, through its facility in Pune. MNAL had earlier planned to launch a 15-18 seater as well as a 42-seater bus in the 3.5-7 tonne category in a couple of months. The sectoris at present dominated by Tata Motors, Eicher Motors and Ashok Leyland. The joint venture company sells trucks in the medium and heavy category under the joint venture brand. It manufactures these trucks at the Chakan Plant near Pune.

• In a post market development, China’s central bank increased the reserve requirement ratio for its commercial banks by another 50 basis points, extending its campaign to calm prices despite initial signs of slowing in the economy.This is the eighth increase since October which will raise the reserve requirement ratio to a record 21 percent.The central bank sold 40 billion yuan ($6.2 billion) of three-year bills in regular open market operations on Thursday as a part of its efforts to mop up excessive cash in the economy.A wall of cash from foreign direct investment, China’s gaping trade surplus, and maturing central bank bills and repos, is set to pour into China in the coming weeks and months.Analysts expected China to raise the reserve requirement ratio to 21.5 percent by December.