Monday 13 January 2014

Markets to get a positive start of the new week

The Indian markets managed a close with modest gains in last session as traders remaining concerned about the economic condition. Today, the start is likely to be cautious but positive; traders will be reacting to the surprisingly weak industrial production data announced after the market hours. India’s annual industrial output growth, measured by index of industrial production (IIP), contracted by 2.1% in November. However, the weak US jobs data is likely to ease some concern and the CPI inflation data will be watched, which is likely to cool down for the month of December. Power stocks will be in action today, as the Prime Minister Manmohan Singh has said that adequate energy supply at affordable price is critical for economic growth. He also said that India needs to increase its energy supply by 3 to 4 times over the next two decades. The PSU oil marketing companies too will be buzzing with Petroleum Minister M Veerappa Moily saying that the government is considering increasing the yearly quota of subsidised LPG cylinders from nine to 12 per household even as he indicated a one-time hike in diesel and LPG rates. The retail related stocks too may see some action  after government refused to accept the US retail giant Walmart’s demand of reducing the 30% local sourcing to 15% in the immediate future.

There will be some inmmportant result announcements too, to keep the markets buzzing. CMC, Exide Inds, Jay Bharat Maruti and Reliance Indl Infra will be announcing their numbers today.

The US markets made a mixed closing on getting disappointing jobs data, though the wholesale inventories rose, but traders remained concerned about Fed’s further course of action. The Asian markets have mostly made a good start, as lower growth in US payrolls eased concern the Federal Reserve may not go for aggressive stimulus cuts.

Back home, Indian equity benchmarks ended Friday’s session on a flat note due to profit booking at higher levels in late trades after the Sensex and Nifty hit their intraday high near 20,950 and 6,250 levels. Investors also remained on sidelines ahead of the November month’s index of industrial production data scheduled to be released after market hours. Earlier, markets after flat opening gained traction and traded jubilantly for most part of the day after Infosys’ third quarter earnings beat street’s expectation for the third consecutive quarter. The IT bellwether, on the consolidated basis, registered a growth of 21.36% in net profit at Rs 2875 crore as compared to Rs 2369 crore in the same quarter previous year. Total income of the company rose 25.90% to Rs 13757 crore for quarter under review as against Rs 10927 crore in corresponding quarter previous year. The up-move got extended after India’s trade deficit narrowed to $10.14 billion in December from $17.59 billion a year earlier. Exports registered growth of 3.49% to $26.35 billion for the month of December, while imports during the same month contracted by 15.25 percent over at $ 36.49 billion as compared to $43.05 billion in December, 2012. Some support also came in after Economic Affairs Secretary Arvind Mayaram underscored that inflation is expected to come down in the coming months, but added that country would need to bridge the demand-supply gap of essential food items to keep prices under check in the long run. Firm opening in European counters too supported the sentiments, however Asian equity benchmarks exhibited mixed trend. Back home, frontline gauges pared most of their intra-day gains on sell-off in banking shares after IndusInd bank reported a rise in its net performing assets (NPAs) for the third quarter ended December 31. The bank’s gross NPAs for the quarter under review stood at 1.18%, as compared to 0.99% in the same quarter of the previous year. Besides, bank’s Net NPA stood at 0.31% during the quarter as compared to 0.30% in the corresponding quarter last year. Some concern also came in on report that global rating agency Moody’s cautioning that low growth and high inflation could weaken the country’s debt profile and raise financing cost. Finally, the BSE Sensex gained 45.12 points or 0.22%, to settle at 20758.49, while the CNX Nifty added 3.10 points or 0.05% to settle at 6,171.45.

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