The key benchmark indices moved in a narrow range in the negative zone in morning trade as Asian stocks fell after South Korea hiked interest rates. But, the market breadth was positive as buying was witnessed in select mid-cap and small-cap stocks. Telecom stocks rose after education minister Kapil Sibal was given additional charge of telecom ministry after A Raja was ousted from the ministry on alleged 2G scam. But, banking and capital goods stocks fell. Index heavyweight Reliance Industries (RIL) also edged lower. The BSE 30-share Sensex was down 64.99 points or 0.32%, off close to 135 points from the day's high and up close to 35 points from the day's low.

The market edged lower in early trade as most Asian stocks fell. The market moved in a narrow range in the negative zone in morning trade.

The stock market remains closed on Wednesday, 17 November 2010, on account of Bakri-Id.

NSE's volatility index, India VIX, a gauge of traders' perception of near-term risks in the market based on options prices, was down 3.7% at 19.50. The index had lost 6.38% to 20.25 on Monday, 15 November 2010, a day after Friday's (12 November 2010) sharp surge. India VIX is calculated based on the S&P CNX Nifty options prices. India VIX is a measure of the market's expectation of volatility over the next 30 calendar days.

Asian stocks were mostly lower Tuesday as an interest rate hike in South Korea added to speculation China will also tighten monetary policy to cool inflation. Any slowdown in the Chinese economy, the world's second-largest and fastest growing, would likely reduce its demand for oil, metals, grains and other imports and be felt around the world. The key benchmark indices in Singapore, China, Hong Kong and Japan fell by between 0.06% to 0.68%. But, the key benchmark indices Indonesia and Taiwan rose by between 0.55% to 0.91%.

South Korea's Kospi fell 0.73% after the Bank of Korea raised its key interest rate for the second time in four months to 2.5% from 2.25%.

Euro zone finance ministers will try to find a way to end Ireland's debt crisis on Tuesday, with Dublin resisting pressure to seek a state bailout by signalling that only its banks may need help.

New York stocks had a mixed finish Monday, 15 November 2010, as the dollar posted its second day of gains over concerns that Europe is on the edge of another bailout.

Sales at US retailers posted their strongest gain in seven months during October, adding to signs the economy was regaining strength after hitting a soft patch in the summer. The generally upbeat report was tempered somewhat by news that a manufacturing gauge in New York state fell this month to its lowest level since April 2009.

Trading in US index futures indicated that the Dow could fall 25 points at the opening bell on Tuesday, 16 November 2010.

Back home, India's exports in October 2010 rose an annual 21.3% to $18 billion, while imports for the month grew 6.8% on the year to $27.7 billion, Trade Secretary Rahul Khullar said on Monday, 15 November 2010. Khullar said exports could touch $200 billion in the fiscal year that ends in March 2011 (FY 2011). He also said that the trade deficit will not top $135 billion. The trade deficit had widened to a 23-month high of $13.06 billion in August 2010 and Khullar had said the deficit could touch $135 billion for FY 2011, higher than his earlier forecast of $120 billion. The government is targeting close to 15% export growth in the current fiscal.

The wholesale price index rose 8.58% in October 2010, a touch slower than 8.62% increase in September 2010, data released by the government Monday, 15 November 2010, showed. The annual reading for August 2010 was upwardly revised to 8.82% from 8.5%.

Industrial output in September 2010 rose at a much slower-than-expected 4.4% in September 2010 from 8.2% a year ago, government data released on Friday, 12 November 2010, showed. The September IIP data is the lowest in 15 months. Meanwhile, the index of industrial production for August was revised upwards from 5.6% to 6.9%.

The $1.7 billion follow-on public offer of state-run Power Grid Corporation received strong response. The issue was subscribed 14.88 times.

While global liquidity remains ample, a section of the market is worried that a strong equity issuance pipeline over the next six months will soak liquidity from the secondary equity markets. Indian companies are estimated to raise about Rs 80000 crore from equity and debt issue over the next three to six months. Steel Authority of India and Indian Oil Corp are some of the other state-run firms that are planning large share sales in coming months.

Meanwhile, share sales by the Indian government in state run firms Manganese Ore India (MOIL) and Shipping Corporation of India are likely to hit the market by end-November, while an offer by Hindustan Copper is likely in December, Disinvestment Secretary Sumit Bose said.

Foreign funds have made heavy purchases of Indian stocks this year. Net equity inflow in 2010 stands at $28.53 billion, above last year's $17.45 billion. The annual inflows are at record levels this year.

Chairman of the prime minister's Economic Advisory Council C. Rangarajan, last week, said that the Indian economy has the capacity to absorb capital inflows of up to $70 billion annually without government intervention. "The quantitative easing by the US Federal Reserve may have implications in terms of capital inflows, but as I had indicated earlier, India's current-account deficit will be around 3% of gross domestic product" this fiscal year, C. Rangarajan said.

On the corporate front, the Q2 September 2010 corporate results have been encouraging. The combined net profit of a total of 3203 firms surged 45.5% to Rs 104494 crore on 19.8% growth in sales to Rs 929073 crore in Q2 September 2010 over Q2 September 2009.

The Reserve Bank of India (RBI) at its second quarterly monetary policy review on 2 November 2010 hiked its lending and borrowing rates by a quarter point each, as expected, to tackle inflationary pressures. The central bank signaled a pause in its policy tightening drive that began in October 2009. Based purely on current growth and inflation trends, the Reserve Bank of India (RBI) believes that the likelihood of further rate actions in the immediate future is relatively low, RBI governor D Subbarao said in a monetary policy statement. "However, in an uncertain world, we need to be prepared to respond appropriately to shocks that may emanate from either the global or domestic environment," he added.

The RBI said it will continue to closely monitor both global and domestic macroeconomic conditions. "We will take action as warranted with a view to mitigating any potentially disruptive effects of lumpy and volatile capital flows and sharp movements in domestic liquidity conditions, consistent with the broad objectives of price and output stability", the policy statement said. The Reserve Bank of India (RBI) next reviews monetary policy on 16 December 2010.

At 10:20 IST, the BSE 30-share Sensex was down 64.99 points or 0.32%, to 20,244.70. The Sensex rose 70.41 points at the day's high of 20,380.10 in early trade. The Sensex lost 100.04 points at the day's low of 20,209.65 in early trade.

The S&P CNX Nifty was down 23.95 points or 0.39% to 6,098.55.

The BSE Mid-Cap index rose 0.54%. The BSE Small-Cap index rose 0.37%. Both these indices outperformed the Sensex.

The market breadth, indicating the health of the market was positive. On BSE, 1396 shares rose while 1025 shares fell. A total of 79 shares remained unchanged.

From 30 share Sensex pack, 22 fell and rest rose. DLF, Hindustan Unilever, Tata Steel, NTPC and Jaiprakash Associates rose by between 0.08% to 0.95%. Sterlite Industries, Wipro, HDFC Bank, Cipla and ONGC fell by between 1.01% to 1.51%.

Index heavyweight Reliance Industries (RIL) fell 0.13%, with the stock falling for the sixth straight day.

Telecom stocks rose after Kapil Sibal who now heads education ministry was given additional charge of telecom ministry after A Raja was stripped off from his ministry early this week. Bharti Airtel, Reliance Communications and Idea Cellular rose by between 1.22% to 2.76%.

Mr Raja had put in his papers on Sunday night after a report from the Comptroller and Auditor General blamed the former Minister for causing a loss of Rs 1.76-lakh crore to the National Exchequer by ignoring suggestion to auction 2G spectrum. It accused Mr Raja of having allocated spectrum to nine telecommunications companies in an irregular manner and at hugely discounted prices in 2008. The Central Bureau of Investigation, the Central Vigilance Commission and the Enforcement Directorate are also investigating allegations of corruption against the former Minister.

Bank stocks fell on profit taking. India's largest bank by branch network and net profit State Bank of India (SBI) fell 0.76%. The stock had jumped 4.41% on Monday, 15 November 2010, on reports the state-run bank is eyeing acquisition of a bank in Indonesia in an all cash deal not exceeding $100 million to expand its operations in Southeast Asia. Meanwhile, bank will start a road show next week for its planned euro bond issue, Chairman O.P. Bhatt said on Monday, 15 November 2010. Bhatt had said last week SBI was planning to launch a benchmark-size 5-year euro bond issue.

The bank reported lower than expected Q2 result last week. On a consolidated basis, SBI's net profit fell 22.52% to Rs 2363.95 crore on 14.57% increase in total income to Rs 37925.44 crore in Q2 September 2010 over Q2 September 2009. As State Bank of Indore was merged with SBI with effect from 26 August 2010, the Q2 September 2010 are not comparable with the corresponding period of the previous year. The bank announced Q2 result after market hours on 8 November 2010.

India's second largest private sector bank by net profit HDFC Bank fell 0.94%. But, India's largest private sector bank by net profit ICICI Bank rose 0.5%.

Capital goods stocks fell on profit taking. India's largest engineering and construction firm by sales Larsen & Toubro (L&T) fell 0.81%. A consortium led by L&T has bagged its largest overseas EPC order worth $764 million for the design and development of the New Salalah International Airport in Oman. The project is in consortium with Oman-based Galfar Engineering & Contracting SAOG. L&T's size of the order is pegged at $500 million, to be completed in 30 months. Upon completion, the airport will have a capacity to handle two million passengers per annum.

Among other capital goods stocks, BEML, SKF India, BHEL, Thermax and Siemens fell by between 0.2% to 1.06%.

Gravita India was trading at Rs 228.65 on BSE, a steep 82.92% premium over the initial public offer price of Rs 125. The stock debuted at Rs 218.75, a 75% premium over the initial public offer (IPO) price.

ABG Shipyard jumped 2.81%, after net profit rose 22.70% to Rs 56.27 crore on 38.30% rise in net sales to Rs 555.48 crore in Q2 September 2010 over Q2 September 2009

Ansal Housing & Construction surged 7.1%, after net profit jumped 107.53% to Rs 12.95 crore on 44.64% rise in net sales to Rs 58.84 crore in Q2 September 2010 over Q2 September 2009.

BS Transcomm rose 1.81% after the company secured an order worth Rs 53 crore from Simplex Infrastructures for supply of 400 kilovolt transmission line towers for the inter-state link between West Bengal and Assam.