PSU OMCs slide as IOC's loss widens in Q1

Key benchmark indices edged lower in choppy trade as a surprise decline in India' industrial production in June 2012 and lower-than expected growth in China's retail sales and industrial production in July 2012 hurt investor sentiment adversely. China is the world's second biggest economy after the US. The market breadth was negative. The barometer index, BSE Sensex, was provisionally down 19.58 points or 0.11%, up about 65 points from the day's low and off close to 120 points from the day's high. Most bank shares were in red. Tata Motors recovered in choppy trade after good Q1 results.

Index heavyweight Reliance Industries (RIL) edged lower. Index heavyweight and cigarette major ITC hit a record high. FMCG giant Hindustan Lever also hit record high. Mahindra & Mahindra (M&M) extended Wednesday's rally triggered by strong Q1 results. Bharti Airtel extended Wednesday's losses triggered by weak Q1 results, with the stock hitting 52-week low. Airline stocks fell on recent surge in crude oil prices, with Kingfisher Airlines hitting a record low. Metal stocks were mixed. PSU OMCs fell after Indian Oil Corporation (IOC) reported a massive loss in Q1 June 2012. Ranbaxy Laboratories dropped on reporting reverse turnaround in Q2 June 2012.

The market edged higher in early trade on firm Asian stocks. The market trimmed gains in morning trade. Key benchmark indices once again pared gains after regaining strength in mid-morning trade after the latest data showed a surprise decline in industrial output in June 2012. The market retained positive zone in early afternoon trade. Key benchmark indices regained positive zone after slipping into the red in afternoon trade. A bout of volatility was witnessed as key benchmark indices hit fresh intraday low in mid-afternoon trade. High volatility was witnessed in late trade.

As per provisional figures, the BSE Sensex was down 19.58 points or 0.11% to 17,580.98. The index fell 83.57 points at the day's low of 17,516.99 in mid-afternoon trade, its lowest intraday level since 7 August 2012. The index rose 102.42 points at the day's high of 17,702.98 at the onset of the trading session.

The S&P CNX Nifty was down 7.10 points or 0.13% to 5,330.90, as per provisional figures. The Nifty hit a low of 5,312.10 in intraday trade, its lowest intraday level since 7 August 2012. The Nifty hit high of 5,368.20 in intraday trade.

BSE clocked turnover of Rs 2,103 crore, lower than Rs 2421 crore on Tuesday, 7 August 2012.

The market breadth, indicating the overall health of the market, was negative. On BSE, 1,582 shares declined and 1,187 shares rose. A total of 147 shares were unchanged.

From the 30-share Sensex pack, 17 stocks rose and rest of them fell.

Index heavyweight and cigarette maker ITC rose 1.28% to Rs 265.25. The stock hit a record high of Rs 266.75 in intraday trade today. The company's net profit jumped 20.21% 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) fell 0.98% to Rs 782.90. The stock hit a high of Rs 796.20 and a low of Rs 776.70. The oil ministry has reportedly agreed to conditionally approve the capital expenditure plans of RIL and its partners to make fresh investments for increasing production of natural gas at D6 oil and gas block in the eastern offshore Krishna-Godavari basin. Oil Minister Jaipal Reddy on Tuesday, 7 August 2012, said the D6 block is producing only 29 million standard cubic meters a day of gas compared with an expected 80 mmscmd in the current financial year through 31 March 2013.

According to production-sharing contracts for the oil and gas sector in India, the explorer invests in developing oil and gas blocks and later recovers the money through selling hydrocarbons. The investments made by the explorer need to be cleared by the government. RIL and its partners are struggling to raise production from their D6 block, India's largest gas find so far. The field produced 104.40 billion cubic feet of gas during April-June 2012, down 33% from a year earlier due to reservoir complexity and natural decline. While RIL holds a 60% stake in the block, UK's BP PLC owns 30% and Canada's Niko Resources the remaining 10%.

Indian Oil Corporation declined 1.62% after company during market hours today reported a net loss of Rs 22450.95 crore in Q1 June 2012, much higher than net loss of Rs 3718.70 crore in Q1 June 2011. The company's total income rose 5.25% to Rs 97514.44 crore in Q1 June 2012 over Q1 June 2011.

BPCL fell 3.13% ahead of its Q1 results tomorrow, 10 August 2012. HPCL declined 2.47%.

The Petroleum Planning and Analysis Cell (PPAC), under the Ministry of Petroleum and Natural Gas, announced 1 August 2012 that the under-recovery on HSD (High Speed Diesel) applicable for 1st fortnight of August effective 1 August 2012 increased substantially to Rs 12.13 per litre. This is higher than Rs 9.95/litre prevailing during previous fortnight. In case of PDS Kerosene also the under-recovery is higher at Rs 28.54/litre for the month of August 2012 than Rs 27.20/litre for July 2012. Under-recovery on Domestic LPG for August 2012 at Rs 231/cylinder continues to rule at high. OMCs are currently (effective 1 August 2012) incurring daily under-recovery of about Rs 402 crore on the sale of Diesel, PDS Kerosene and Domestic LPG.

Ranbaxy Laboratories dropped 2.77% after the company today, 9 August 2012, reported consolidated net loss of Rs 585.72 crore for Q2 June 2012, compared with net profit of Rs 243.23 crore in Q2 June 2011. Net sales jumped 54.49% to Rs 3174.06 crore in Q2 June 2012 over Q2 June 2011.

Infosys rose 0.04% after company today announced that it has been selected by the Department of Post, Ministry of Communications and Information Technology, Government of India for a mission-critical program that will enhance India Post's financial services across 1,50,000 post offices in the country. This is part of the 'India Post 2012' modernization program that aims at bringing transparency, agility, flexibility and scalability to India Post's operations.

Under the agreement, Infosys and India Post will embark on a transformational initiative, which encompasses Financial Services System Integration. This project, estimated at Rs 700 crore, aims to transform India Post into a technology-enabled and autonomous market leader, by revolutionizing its financial operations and end-user services. As Financial Services System Integrator, Infosys will implement and manage its flagship Finacle Core Banking and McCamish Insurance products to help India Post transform its banking and insurance operations - covering more than 200 million banking customers across urban and rural India; including a large base of insurance customers. Infosys will be installing 1,000 ATMs for India Post as part of this program to increase the effectiveness of its delivery channel and will also implement an electronic Content Management system to manage millions of documents generated as part of India Post's financial operations.

India's largest commercial vehicles maker by sales Tata Motors was flat at Rs 241.45, off the day's low of Rs 232, after company said today consolidated net profit rose 12.25% to Rs 2245 crore on 30% increase in net revenues to Rs 43324 crore in Q1 June 2012 over Q1 June 2011.

Tata Motors said revenues grew on the back of strong growth in volumes of new products and favorable market mix at Jaguar Land Rover (JLR).

The company said the consolidated profit for the quarter ended 30 June 2012 was impacted by exceptional items of Rs 441 crore (loss of Rs 57 crore in corresponding period last year) on account of exchange loss, including on revaluation of foreign exchange borrowings, deposits and loans arising from depreciation of Indan rupee.

Tata Motors' total sales (including exports) of commercial and passenger vehicles declined 3.6% to 1,90,483 units in Q1 June 2012 over Q1 June 2011.

In the domestic market, the company's commercial vehicles sales rose 1.3% to 1,14,710 units in Q1 June 2012 over Q1 June 2011. The company said that the growth was driven by small commercial vehicles and was supported by improved production through its facilities in Pantnagar and Dharwad. The company's market share in commercial vehicles was 56.2% for the quarter ended June 2012.

In the domestic market, the company's passenger vehicles, including Fiat and Jaguar and Land Rover vehicles distributed in India, fell 9.9% to 62,619 units in Q1 June 2012 over Q1 June 2011. The company said it continues focus on marketing initiatives and network actions and the sales and services process. The market share in passenger vehicles for quarter ended June 2012 stood at 9.8%.

Jaguar Land Rover (JLR) sales rose 34.4% to 83,452 units in Q1 June 2012 over Q1 June 2011. Of this, the Jaguar volumes for the period stood at 11,774 units and Land Rover volumes stood at 71,678 units. Growth in volumes was driven by sales of the new Range Rover Evoque and strong demand from China, which grew 91% year-on-year. Sales from the China region comprised 22.2% of total volumes for the quarter ended June 2012, as against 15.7% for the corresponding period last year.

JLR revenues rose 34.6% to GBP 3638 million in the quarter ended June 2012 over the quarter ended June 2011. Operating margins for the quarter ended June 2012 stood at 14.5% and an operating profit of GBP 527 million in the quarter, a growth of 45.6% over the quarter ended June 2011. Continued strong revenue and operating profit performance were supported by demand for new products, improved market mix, and favourable exchange rate environment. The profit after tax grew 7.27% to GBP 236 million in the quarter ended June 2012 over the quarter ended June 2011.

Tata Daewoo Commercial Vehicles registered net revenues of KEW 217 billion and recorded a net profit of KRW 3 billion in the quarter ended June 2012.

Tata Motors Finance, the company's captive financing subsidiary, registered net revenue from operation of Rs 623 crore and reported a profit after tax of Rs 73 crore in the quarter ended June 2012.

Mahindra & Mahindra (M&M) rose 2.95%, with the stock extending Wednesday's 3.92% gains triggered by strong Q1 results. The combined net profit of M&M and its 100% subsidiary -- Mahindra Vehicle Manufacturers (MVML) -- jumped 25.9% to Rs 778.50 crore on 35.2% growth in gross revenue to Rs 10003.90 crore in Q1 June 2012 over Q1 June 2011. MVML, located at Chakan near Pune in Maharashtra, has been set up as a 100% subsidiary of M&M with a view to source contemporary products for expanding the market offering of M&M.

M&M said the growth in first quarter net profit despite relentless increase in material costs was on the back of good volume performance of the company's automotive sector and also due to tight control on expenses.

M&M said some of the major group companies viz. Mahindra Finance, Mahindra Satyam, Mahindra Lifespace Developers and Mahindra Holidays & Resorts significantly improved their performance in Q1 June 2012.

M&M said the drought-like conditions prevailing in several states this year has added to the risks of domestic companies.

Bharti Airtel shed 6.34% to Rs 257, with the stock extending Wednesday's 6.6% losses triggered by weak Q1 results. The stock hit a 52-week low of Rs 254.50 in intraday trade today, 9 August 2012. Consolidated net profit as per international financial reporting standards (IFRS) fell 37.28% to Rs 762 crore on 14% increase in revenue to Rs 19350 crore in Q1 June 2012 over Q1 June 2011.

Bharti Airtel's weak Q1 results dragged other telecom stocks lower for the second straight day. Tata Teleservices (Maharashtra), Reliance Communications and Idea Celluar dropped by between 2.23% to 4.59%. But, MTNL gained 2.28%.

Adani Enterprises fell 2.1% after the company today, 9 August 2012, said its consolidated net profit declined 29% to Rs 403 crore on 15% growth in turnover to Rs 11036 crore in Q1 June 2012 over Q1 June 2011.

PSU bank stocks fell across the board. Canara Bank, Union Bank of India, Bank of India, Bank of Baroda and Punjab National Bank shed by between 1.14% to 4.06%.

State Bank of India (SBI) declined 4.27% ahead of its Q1 results tomorrow, 10 August 2012. SBI last week cut interest rates on home and car loans even as it left its base rate unchanged. SBI said on Monday, 6 August 2012, it has decided to revise downwards the interest rates on NRE/NRO deposits for tenors of 5 years and above to 8.50% per annum with effect from August 07, 2012. SBI said on 2 August 2012, it has decided to revise downwards the interest rate on domestic term deposits for tenors of 5 years and above to 8.5% from 7 August 2012.

India's second biggest private sector bank in terms of branch network HDFC Bank rose 1.42% to Rs 606. The stock hit a record high of Rs 606.85 in intraday trade today, 9 August 2012.

India's largest private sector bank by net profit ICICI Bank shed 0.42%. The bank's profit after tax jumped 36% to Rs 1815 crore on 32% growth in net interest income to Rs 3193 crore in Q1 June 2012 over Q1 June 2011. ICICI Bank's net interest margin (NIM) improved to 3.01% for Q1 June 2012, from 2.61% for Q1 June 2011. The bank announced the results on 27 July 2012.

India's largest dedicated housing finance firm by revenue HDFC dropped 3.76%.

Metal stocks were mixed after the latest data showed lower-than expected growth in China's retail sales and industrial production in July 2012. China is the world's largest consumer of copper and aluminum. Bhushan Steel, Tata Steel, and Jindal Steel & Power fell by between 0.27% to 0.91%. Sterlite Industries, JSW Steel, Hindustan Zinc and Hindalco Industries rose by between 0.21% to 3.31%.

Steel Authority of India (Sail) declined 1.04% as the stock turned ex-dividend today, 9 August 2012, for final dividend of 80 paise per share for the year ended 31 March 2012.

Airline stocks fell on recent surge in crude oil prices. Kingfisher Airlines fell 4.52% to Rs 8.24. The stock hit a record low of Rs 8.21 in intraday trade today.

Jet Airways and SpiceJet shed by between 1.65% to 1.72%.

Aviation turbine fuel, or jet fuel constitutes more than 50% of operating cost for airliners. Prices of jet fuel are directly linked to crude oil prices. State-run oil marketing companies--Indian Oil Corporation, Bharat Petroleum Corporation and Hindustan Petroleum Corporation revise jet fuel prices on the 1st and 16th of every month based on the average international crude price in the preceding fortnight.

Industrial production declined 1.8% in June 2012 compared to the level in the month of June 2011, as per the latest data released by the Ministry of Statistics & Programme Implementation. Manufacturing output, which has a 75.5% weight in the index of industrial production, fell 3.2% in June 2012 compared to the level in the month of June 2011. Capital-goods production shrank 27.9% in June 2012 compared to the level in the month of June 2011. In terms of industries, fourteen (14) out of the twenty two (22) industry groups (as per 2-digit NIC-2004) in the manufacturing sector have shown non-negative growth during the month of June 2012 as compared to the corresponding month of the previous year, the Ministry of Statistics & Programme Implementation said.

Some of the important items showing high negative growth during the current month over the same month in previous year include Cable, Rubber Insulated (-82%), Sugar (-66.1%), Sponge Iron (-17.2%), Fruit Pulp (-22.4%), Three-Wheelers (-29.4%), Di Ammonium Phosphate (-54.1%), Cement Machinery (-40.0%) and Colour TV Picture tubes (-79.7%). Some of the important items showing high positive growth include Aerated Waters & Soft Drinks (58.3%), Biaxially Oriented Polypropylene (BOPP) Film (35.1%), Petroleum Coke (70.8%) and Woollen Carpets (61.5%).

Union Finance Minister P. Chidambaram early this week said that a path of financial consolidation will be unveiled shortly. Government finances are under pressure as expenses exceed revenue, mainly because of subsidies doled out for cheaper supplies of food, fuel and fertilizer. The subsidy expense was 2.4% of GDP in the last fiscal year. The government aims to bring it down to 2% of GDP this year, and reduce fiscal deficit to 5.1% from 5.75%. The oil ministry has already sought Rs 32800 crore in cash subsidy from the finance ministry to compensate retailers who sell diesel and cooking fuel at government-set discounted rates.

Mr. Chidambaram today, 9 August 2012, said that the fiscal-deficit target for the current financial year will be reassessed after a mid-year review later this financial year depending on the pace of expenditure and the resource position of the government. The government is aiming to restrict spending on subsidies, the finance minister said. The government has already taken some steps to reduce expenditure. In late May, the finance ministry asked government departments to reduce their non-plan spending -- expenditure that won't create long-term assets -- by 10% this fiscal year as part of its efforts to keep the fiscal deficit under check.

The government intends to fine tune policies and procedures that will facilitate capital flows into India, Mr. Chidambaram said early this week. Clarity in tax laws, a stable tax regime, a non-adversarial tax administration, a fair mechanism for dispute resolution, and an independent judiciary will provide great assurance to investors, Mr. Chidambaram said. The government has recently appointed two committees -- one to examine anti-avoidance tax proposal viz. the General Anti-Avoidance Rules (GAAR) legal provisions and guidelines and the other to review taxation of the IT sector and Development Centres. Mr. Chidambaram said he has also directed a review of tax provisions that have a retrospective effect in order to find fair and reasonable solutions to pending as well as likely disputes between the Tax Departments and the Assessees concerned.

Mr. Chidambaram on Wednesday, 8 August 2012, said that the government has received requests to put off plans to implement the General Anti-Avoidance Rules (GAAR) which aim to check tax avoidance. The implementation of GAAR was postponed by one year in order to provide an opportunity of wider consultation before such a legislation is implemented, Mr. Chidambaram said in the lower house of parliament while replying to lawmakers' questions. The provisions of GAAR are directed toward preventing tax avoidance by way of aggressive tax planning, he added.

The implementation of GAAR proposal introduced in the Union Budget 2012-13 in March 2012 by then-finance minister Pranab Mukherjee has been deferred to 1 April 2013. This came after heavy criticism from foreign investors who fear that GAAR would give the authorities arbitrary powers to examine any deal that they feel is designed to avoid tax. Prime Minister Dr. Manmohan 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.

Dr. Singh last month also 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 on 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.

In the next few weeks, the government will announce a number of decisions to attract more people to invest in mutual funds, insurance policies and other well-designed instruments, Mr. Chidambaram said early this week.

On the macro front, inflation based on the monthly wholesale price index (WPI) is seen inching up to 7.4% in July 2012 from 7.25% (provisional) for the month of June 2012, as per the median estimate of a poll of economists carried out by Capital Market. The data is due for release at 11:30 IST on 14 August 2012.

Finance Minister P. Chidambaram on Wednesday, 8 August 2012, said that it will be difficult to achieve a 9% annual growth target set for the five years to March 31, 2017. He added that the Planning Commission would cut the target later this year.

The India Meteorological Department (IMD) last week said the El Nino weather pattern is likely to reduce rains again in the second half of the June to September monsoon season. The IMD said rains over the entire June to September season are now expected to be less than 90% of long-term average. This is lower than IMD's previous forecast of 96%. Monsoon rains are considered deficient -- a drought in layman's terms -- if they fall below 90% of a 50-year average. Between June 1 and August 1, rainfall was about 19% below normal. The IMD expects normal rains in August -- a critical month for summer crops. It expects rainfall to be 5-6% below average in September due to the possibility of El Nino. The weather office said rainfall during August-September is expected to be 91% of the long-term average.

The rainfall distribution has been erratic this year as major crop- growing regions such as Maharashtra, Karnataka, Gujarat, Punjab and Haryana have received scanty showers threatening the prospects of summer crops. A panel of Indian ministers last week approved steps to contain the impact of a near-drought situation. The steps include providing a diesel-price subsidy to farmers, increasing the subsidy on seed supplies and removal of the import tax on oilmeals.

Insufficient rainfall could lead to higher food inflation. There will be an impact on foodgrain output, but it is too early to give any estimate, Farm Minister Sharad Pawar last week. Mr. Pawar said the government will raise subsidies for the supply of various seeds for alternate crops in affected areas.

Rice sowing has picked up according to the latest data released by the Ministry of Agriculture. Rice was sown in 264.39 lakh hectares (lh) till Thursday, 9 August 2012, compared with 233.68 lh until 3 August 2012. Rice sowing so far has been below the normal area of 272.58 lh for the summer sown crop by this time of the year. Cumulative sowing of coarse cereals totaled 140.89 lh till 9 August 2012, compared with 135.75 lh until 3 August 2012. Sowing of coarse cereals remains much lower than 181.24 lh of normal area for the crop this time of the year.

Sowing of pulses totaled 74.48 lh till 9 August 2012, compared with 72.79 lh until 3 August 2012. Sowing of pulses remains lower than 92.81 lh of normal area for this time of the year. Sowing of oilseeds totaled 151.82 lh till 9 August 2012, compared with 145.17 lh until 3 August 2012. It is slightly lower than the normal area of 153.39 lh for oilseeds by this time of the year. Sowing of cotton totaled 109.23 lh till 9 August 2012, compared with 100.14 lh until 3 August 2012. The normal cotton sowing area of 99.9 lh by this time of the year has already been surpassed. Sowing of jute and mesta totaled 8.41 lh as on 9 August 2012, exceeding the normal area of 8.23 lk for the crop by this time of the year.

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.

A comprehensive Land Acquisition, Rehabilitation and Resettlement Bill is among the 31 Bills the government has lined up for consideration and passing during the monsoon session of Parliament, which began on Wednesday, 8 August 2012. Among the other bills include those on Forward Contracts, Banking laws, whistle-blowers and women's reservation as also the Prevention of Bribery of Foreign Public Officials bill. The monsoon session of Parliament will conclude on September 7.

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.

Some major Indian firms will announcing their first quarter results over the next few days. State Bank of India, Sun Pharmaceuticals Industries, Siemens and BPCL announce quarterly results on tomorrow, 10 August 2012. ONGC announces Q1 results on Saturday, 11 August 2012. Tata Steel and Coal India unveil Q1 results on 13 August 2012. Hindalco Industries, Reliance Infrastructure and IDFC will unveil Q1 results on 14 August 2012.

European stocks were mixed amid volatility on Thursday after the latest data showed lower-than expected growth in China's retail sales and industrial production in July 2012. Key benchmark indices in Germany and France were down by between 0.06% to 0.07%. UK's FTSE 100 rose 0.1% in volatile trade.

The U.K. trade deficit widened to a record in the second quarter as cooling global growth sapped demand for British exports. The goods-trade gap increased to 28.3 billion pounds ($44.3 billion pounds) from 25 billion pounds in the previous quarter, the Office for National Statistics said today in London. Exports fell 4.9%, while imports slipped 0.5%

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.

Asian shares rose on Thursday, 9 August 2012, after a clutch of Chinese economic data pointed in the direction of more monetary-policy easing from the world's second biggest economy. Key benchmark indices in China, Indonesia, Taiwan, Hong Kong, Japan and South Korea rose by between 0.61% to 1.96%. Singapore's stock market was closed for a holiday.

Kicking off a busy day for Chinese data, inflation data showed consumer prices increased 1.8% from the year-ago period, just ahead of forecasts for a 1.7% increase, but slowing from the 2.2% increase recorded in June. Data released by the National Bureau of Statistics Thursday also showed a drop in producer prices. July retail sales rose 13.1% which was lower than 13.7% growth in June 2012. Industrial output advanced 9.2% in July 2012 which was lower than 9.5% expansion in June 2012. The latest data showed that fixed asset investments in non-rural China climbed 20.4% in the first seven months of 2012.

Sales of passenger cars in China, the world's largest automobile market, rose 11% from a year earlier to 1.12 million units in July, the China Association of Automobile Manufacturers (CAAM) said on Thursday. The data represented a 13% drop from June, when China sold 1.28 million passenger cars. July is one of the low seasons for car sales because auto makers usually carry out equipment maintenance in the summer.

The Bank of Japan (BoJ) today, 9 August 2012, left its interest rates and policy stance unchanged after a monetary policy review, with the Japanese central bank reiterating its commitment to powerful monetary easing, but taking no further action to achieve its goal to spur a 1% increase in consumer prices. The BoJ's policy interest rate was kept in the range of 0% to 0.1%, with the size of the asset purchase program also maintained at 70 trillion yen ($89.3 billion), as widely expected. The BoJ said it will proceed with monetary easing "in a continuous manner by steadily increasing the amount outstanding" of the asset purchase program that is currently in force. The inflation rate is likely to remain around zero for the time being, it added.

The BoJ said that while fixed investments by businesses and private consumption continued to improve moderately, exports had moderated, and recent readings on production were weak. On the external front, the BoJ said particular attention must be paid to developments concerning the European debt problem.

The Bank of Korea left its key policy interest rate at 3.0% on Thursday, after a surprise cut last month -- its first in more than three years.

Standard & Poor's Ratings Services affirmed its 'AA-' long-term and 'A-1+' short-term unsolicited issuer credit ratings on Taiwan. The outlook is stable. The transfer and convertibility assessment remains 'AA+'. At the same time, it affirmed the 'cnAAA/cnA-1+' Greater China scale ratings on Taiwan. Taiwan's extremely strong external position, sound monetary management, and dynamic information technology (IT) companies in the private sector support the ratings. Tempering these strengths are a moderately high government debt and a small, open economy that is vulnerable to global economic conditions.

Australia's seasonally adjusted unemployment rate totaled 5.2% in July, down from 5.3% in June, the Australian Bureau of Statistics said Thursday. The number of employed increased 14,000 to 11.5 million while the number of unemployed decreased 2,500 to 635,100. The labor force participation rate reached 65.2%, from 65.3% seasonally-adjusted in June.

Trading in US index futures indicated that the Dow could gain 32 points at the opening bell on Thursday, 9 August 2012. US stocks dipped on Wednesday following three days of gains as traders awaited more signals about central bank action in support of a stalling global economy.

Election for a new president in the United States, the world's biggest economy, is scheduled on 6 November 2012.

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