The Indian markets recovering from the intraday lows, managed a close of modest gains in last session despite some weak earnings announcement. Today, the start is likely to be cautious tailing the mixed cues of the global markets. Traders will be reacting and analyzing the report of Urjit Patel committee, appointed to examine the current monetary policy framework of the Reserve Bank of India (RBI), which has suggested that inflation should be the nominal anchor as far as the policy framework is concerned. The committee has suggested that the RBI should adopt the new CPI (consumer price index) as the measure of the nominal anchor for policy communication and the target for inflation should be set at 4 percent with a band of +/- 2 percent around it. Traders will also be cautious with the International Monetary Fund’s (IMF) World Economic Outlook update, where it has said that India is likely to clock an economic growth rate of 4.6 percent this financial year and the expansion may improve to 5.4 percent in 2014-15. Markets will also be buzzing with Economic Affairs Secretary Arvind Mayaram committee’s report suggesting that all individual foreign investments of up to 10 percent of paid-up equity in a listed company be classified as foreign portfolio investment (FPI) and those above this limit be considered foreign direct investment (FDI).
There will be lots of result announcements too; Biocon, Dabur India, HDFC, L&T, KPIT Technologies, Mahindra & Mahindra Finance, Raymond and Zee Entertainment are among the many to announce their numbers.
The US markets coming out of a long weekend made a mixed closing on Tuesday and traders seemed reluctant to make any significant moves lacking any major economic data. The Asian markets have mostly made a positive start though some of the indices are marginally in red too. Meanwhile, the Chinese benchmark money-market rate fell for a second day and interest-rate swaps declined.
Back home, after showcasing a strong performance in last session, Indian equity benchmarks witnessed a bit of consolidation on Tuesday with frontline gauges cornering modest gains by the end of trade. The optimism that was evident in morning trade fizzled out completely during the mid and the session turned choppy, as after Monday’s rally, markets remained cautious and the key indices gyrated in a very tight range throughout the day’s trade. Nevertheless, markets which dipped into red terrain in afternoon deals managed to end positive, comfortably above their crucial 6,300 (Nifty) and 21,200 (Sensex) bastions, supported by rally in rate sensitive counters viz. Banking, Realty and Auto amid renewed expectations that the Reserve Bank of India (RBI) will maintain status quo on interest rates when it meets to review its monetary policy on January 28. Global cues too remained supportive with most of the Asian equity indices ending in the green, firm opening in European markets too supported the sentiments. Back home, sentiments remained upbeat on report that foreign institutional investors (FIIs) bought shares worth a net Rs 384.89 crore on January 20, 2014. Some support also came in after Indian rupee firmed up against the US dollar in early trades and was up at Rs 61.58 per dollar at the time of equity markets closing as compared with the previous close of Rs 61.62 per dollar. Additionally, stocks related to textile sector like, Arvind, Alok Industries, Vardhman Textile, Trident etc. edged higher, as the government is setting up a $60 billion target for the next financial year, up by over 30% from the current financial year. However, some disappointment came in from corporate earning front with private sector lender -- Kotak Mahindra Bank -- upsetting street with its third quarter earnings. The bank’s standalone net profit fell 6% year-on-year to Rs 340 crore and net interest income grew nearly 11 percent to Rs 912.7 crore, the stocks of the bank plunged by 3%. Finally, the BSE Sensex gained 46.07 points or 0.22%, to settle at 21251.12, while the CNX Nifty added 9.85 points or 0.16% to settle at 6,313.80.
