Markets to get a cautious start eyeing Infosys numbers

The Indian markets turned cautious before going for a long weekend and ended marginally in red in last session. Today, the start is likely to be cautious as the traders will be eying the official start of the Q4 earnings season with IT bellwether Infosys announcing its numbers. Street is expecting the company to report a flattish revenue growth with improvement in margins due to cost optimization measures. The whole IT pack will be in focus, as Infosys numbers guide the whole block and their performance is more or less in line to it. Traders will also be reacting to different macro data, starting with the IIP numbers announced late Friday, which slipped to its 9-month low, showing de-growth of 1.9% in February as compared to marginal expansion of 0.1% in January. Traders will also be watching the WPI and CPI data to be announced later in the day. Traders may take some support with the World Trade Organisation’s statement that global commerce is set to grow by 4.7 per cent this year, with recovery in rich economies expected to mitigate risks in developing nations. Also, amid the election euphoria there has been report that several US companies committed themselves to increasing investment after the ongoing general elections in the country. There will be some buzz in the oil & gas stocks on reports that Petroleum Ministry is looking to simplify exploration norms. The US markets managed a positive close in last session despite some late hour volatility on the back of upbeat retail sales data, the largest jump since 2012. Traders also reacted positively to quarterly earnings news from Citigroup. The Asian markets have made a green start tailing US cues though some of the indices have given up their gains and the Chinese market were trading weak on expectation of lower economic momentum. Back home, Friday’s trading session turned out to be a disappointing day of trade for the Indian equity markets, as market participants booked profits ahead of February Index of Industrial Production (IIP) data due for release later in the day. Domestic gauges traded in the red throughout the session, amid weak global cues but pared some losses in late trades following a rebound in software counter ahead of fourth quarter earnings from Infosys next week. Meanwhile, foreign institutional investors continued investing in Indian equities for the past few weeks and remained net buyers to the tune of Rs 343 crore on April 10, as per the provisional data released on the stock exchanges. Overall, sentiments remained dampened after Reserve Bank of India (RBI) Governor Raghuram Rajan said that if the spillover effect of monetary easing in the US was not controlled; emerging markets like India would be forced to build large foreign exchange reserves through aggressive intervention in the foreign exchange markets. He also said that a very accommodative monetary policy could lead to more problems for an economy rather than help sustain growth. Some disappointment also came after India’s trade deficit widened to $10.51 billion in the month of March as compared to $8.13 billion in February and $10.41 billion reported in the corresponding month of the previous year. The increase in trade deficit was mainly attributed to lower exports, which declined by 3.15% to $29.58 billion in the reported month from $30.54 reported in March 2013. Furthermore, Indian imports contracted marginally by 2.11% to $40.09 billion in March from a year earlier, the first single digit decline in imports after sixth consecutive month of double digit contraction. Global cues too remained sluggish and Asian equity indices shut shop mostly in the red, while the European markets too made a weak. Back home, stocks related to banking sector remained under pressure after a committee set up by the Reserve Bank of India (RBI) on credit pricing framework submitted a draft report on April 10, 2014. Selling in oil and gas space too weighed down sentiments, led by decline in Reliance Industries which succumbed to selling pressure after Oil ministry shunned the plan to form an inter-ministerial committee to determine gas prices every quarter based on the C Rangarajan committee formula and decided to utilize its own expertise to compute new rates. Finally, the BSE Sensex declined by 86.37 points or 0.38%, to settle at 22628.96, while the CNX Nifty lost 20.10 points or 0.30% to settle at 6,776.30. Indian markets remained closed on Monday on account of a public holiday.