Trading of S&P CNX Nifty futures on the Singapore stock exchange indicates a fall of 9.50 points at the opening bell. Asian shares dropped on Friday, 10 August 2012, after the latest data showed China's trade surplus unexpected narrowed in July as exports barely grew from the year-earlier month and imports increased at a smaller rate. China is the world's second biggest economy after the US.

Tech Mahindra's consolidated net profit rose 12% to Rs 338 crore on 9% growth in revenue to Rs 1543 crore in Q1 June 2012 over Q4 March 2012. Operating profit jumped 38% to Rs 330 crore in Q1 June 2012 over Q4 March 2012.

State Bank of India, Sun Pharmaceuticals Industries, Siemens and BPCL announce quarterly results on today, 10 August 2012.

GMR Infrastructure reported a consolidated net loss of Rs 94.30 crore in Q1 June 2012, higher than net loss of Rs 66.69 crore in Q1 June 2011. Total income rose 23.17% to Rs 2674.06 crore in Q1 june 2012 over Q1 june 2011.

HPCL after market hours on Thursday reported a net loss of Rs 9248.80 crore in Q1 June 2012, much higher than a net loss of Rs 3080.26 crore in Q1 June 2011. The company's total income rose 8.73% to Rs 44710.17 crore in Q1 June 2012 over Q1 June 2011.

Key benchmark indices edged lower in choppy trade on Thursday, 9 August 2012, 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. The BSE Sensex lost 39.69 points or 0.23% to settle at 17,560.87, its lowest closing level since 6 August 2012.

Foreign institutional investors (FIIs) bought shares worth Rs 337.14 crore on Thursday, 9 August 2012, as per provisional figures on the stock exchanges. Earlier, FIIs bought shares worth a net Rs 3387.30 crore from the secondary equity markets in six trading sessions from 1 to 8 August 2012 as per data from Securities & Exchange Board of India (Sebi). The inflow this month comes on the top of substantial purchases last month. FIIs bought shares worth net Rs 9691 crore from the secondary equity markets in July 2012.

Industrial production declined 1.8% in June 2012 compared to the level in the month of June 2011, data released by the Ministry of Statistics & Programme Implementation on Thursday, 9 August 2012, showed. 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.

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. Mr. Chidambaram on Thursday, 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.

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 expects rainfall during August-September to be 91% of the long-term average.

The monsoon has been less than average during the current year. Quantitatively, monsoon season rainfall for the country as a whole was deficient by 19% till 3 August 2012. Nineteen out of 35 states/union territories received less than the average rainfall till the end of July 2012. 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 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.

The Q1 June 2012 earnings season is drawing towards a close. ONGC announces Q1 results tomorrow, 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.

Asian shares dropped on Friday, 10 August 2012, after the latest data showed China's trade surplus unexpected narrowed in July as exports barely grew from the year-earlier month and imports increased at a smaller rate. China is the world's second biggest economy after the US. Key benchmark indices in China, Hong Kong, Singapore, Japan and Taiwan were down 0.04% to 0.76. Key benchmark indices in South Korea and Indonesia were up 0.02% each.

China's trade surplus dropped to $25.1 billion in July from $31.7 billion in June. Exports rose just 1% from the year-ago period, while imports expanded 4.7%. In June, China's exports rose 11.3%, while imports increased 6.3%.

The Reserve Bank of Australia Friday raised its 2012 gross domestic product forecast, citing stronger-than-expected growth in the first part of the year. The central bank now expects GDP to rise 3.5% in 2012, up from a prior forecast of 3% made in its May statement. The RBA said that first-half growth was led by continued strength in resource investment and a strong pick-up in household consumption volumes. However, it added that it's current assessment is that growth is likely to be at about trend pace in the second half of 2012, as strong growth in domestic demand moderates. The RBA said that, in 2013 and 2014, the economy is expected to grow at around 3%, little changed from its May forecast.

Singapore's economy shrank less than initially estimated last quarter as pharmaceutical output countered declining electronics manufacturing, even as the faltering outlook led the government to cut growth forecasts. Gross domestic product fell an annualized 0.7% in the second quarter from the previous three months, when it expanded a revised 9.5%, the Trade Ministry said in a statement today.

US shares put in a lackluster performance Thursday, although equity downside was limited by some better economic data.

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

European Central Bank (ECB) governing council member Christian Noyer reiterated on Thursday that the ECB is determined to bring down the excessive borrowing costs hurting Spain and Italy and should be ready to intervene decisively in bond markets very soon, adding that a Greek exit from the euro zone was not envisaged.

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.

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