Markets to get a green start on improving macro data

The Indian markets despite losing some strength in final hours managed a close of modest gains in last session. Traders turned cautious ahead of major macro data announcements, and today the start is likely to be in green with traders reacting positively to the improving macro. Consumer price index (CPI) inflation in October fell sharply to 5.52 percent from 6.46 percent in September. On the same time the Index of Industrial Production for the month of September grew by 2.5 percent on the back of strong performance by the manufacturing sector that expanded after two months of contraction. Marketmen will also be getting some support with Paris based Organisation for Economic Cooperation and Development (OECD) statement that India is the "only major economy" that is projected to see a pickup in growth momentum whereas mixed trends are predicted for the developed world. Today there is likely to be buzz in the coal and mining sector stocks on a report that the government is planning to complete coal block allocation through auction by February next year. The PSU oil marketing companies too may remain in action, as ahead of a possible reduction this weekend in prices of both decontrolled products, secretaries of finance and petroleum met to consider raising the excise duty matching the proposed cut so as to leave the consumers unaffected while benefitting the national exchequer.

The US markets made a mixed closing in last session after recovering from their initial dips as news of major fines levied against several big-name banks for currency market manipulation weighed on the markets. The Asian markets have made a cautious start and most of the indices were trading lower ahead of data on Chinese industrial output and retail sales.

Back home, Indian equity benchmarks ended Wednesday’s trade with a gain of over one third of a percent with Senses topping 28,000 mark while Nifty ending tab below its crucial 8,400 mark. Though, markets came off their fresh record highs to end the session with marginal gains as investors turned cautious ahead of October consumer price inflation and September Index of Industrial Production (IIP) data due later today. The CPI inflation is likely ease to 5.8 per cent in the month of October as compared to 6.3 per cent reported in the month of August, while IIP data is expected to expand marginally to 0.8 per cent in September. Overall sentiments remained buoyed after Prime Minister Narendra Modi invited Malaysian companies to come to India in a big way, saying there are a ‘lot of opportunities’ for them since he is giving high importance to the ambitious 'Make in India' campaign. Some support also came from reports that foreign portfolio investors (FPIs) bought shares worth a net Rs 458.04 crore on November 11, 2014. Meanwhile, the empowered committee of state finance ministers on goods & services tax (GST) at its meeting held yesterday, November 11, 2014, reportedly agreed on the 'place of supply' rules that form the backbone of proposed GST. On the global front, European counters made an awful start with all the major counters trading with a cut of around a percent, while Asian markets ended mostly in green. Back home, domestic sentiment remained upbeat on continued buying by foreign funds and retail investors amid a series of economic reforms undertaken by the Narendra Modi-led government and strong earnings by blue-chip companies. Meanwhile, rate sensitive pockets rallied on hopes of lower interest rates in upcoming monetary policy on expectation of yet another record low inflation figures later in the day. Moreover, stocks related to auto sector edged higher on hopes further fuel price cut may trigger pick-up in demand after reports PSU OMCs are likely to reduce price of petrol and diesel by about Rs 1 per litre on November 16, 2014. Additionally, tyre stocks remained on buyers’ radar as price of key raw material declined near five-year low. Finally, the BSE Sensex surged by 98.84 points or 0.35%, to 28008.90, while the CNX Nifty gained 20.65 points or 0.25% to 8,383.30.