Markets to make a cautious start; IIP and CPI data eyed

The Indian markets extended their gains in last session supported by some upbeat earnings announcements and value buying in beaten down sectors. Today, the start is likely to remain cautious and the traders will be eyeing the important macro data, Industrial production (IIP) data for December 2014 and data for inflation based on combined consumer price index (CPI) for January 2015 are slated to be announced later in the day. While the IIP data may come flat, the CPI data for the month of January is likely to rise. Meanwhile, global credit rating agency Moody’s Investors Service has said the lower oil prices is expected to alleviate India’s high inflation and spur economic growth. There will be some cheer in the markets with a private study of MasterCard consumer confidence index, which has said that India is the second most optimistic nation among the Asia Pacific Region after Myanmar, scoring 91.6 in the index which is calculated with zero as the most pessimistic and 100 as the most optimistic. There will be some buzz in the power, metals and mining stocks, as Union Minister Piyush Goyal said that the coal auction process would not be delayed after the Delhi High Court asked for removal of three coal blocks from the auction list, saying that while changing end-use of these blocks to power sector, the aspect of its adverse impact on steel sector has not been considered. Also there will be lots of result reactions to keep markets buzzing.

The US markets ended flat in last session, consolidating from the previous session gains on uncertainty about ongoing Greek debt negotiations as Greek Finance Minister Yanis Varoufakis met with the other European finance ministers in Brussels. The Asian markets have made mostly a lower start, though the Japanese market has surged after a day of break.

Back home, extending their previous session rally, Indian equity benchmarks ended the Wednesday’s session with a gain of over half a percent on value-buying amid optimism over the Union Budget. Markets traded firmly throughout the session and recaptured their crucial 28,500 (Sensex) and 8,600 (Nifty) levels. Sentiments remained up-beat with law minister Sadananda Gowda’s statement that India plans to amend its arbitration law, setting time limits for courts and easing judicial rules to decide corporate disputes, as it seeks to attract more foreign investment. Some support also came with industry body Nasscom forecasting that the industry growth in the coming financial year would be about the same as in the current one. The association has said that the growth would be 13% in 2014-15, and would be between 12% and 14% in the coming year. However, there were some concern about economists saying that the new methodology pushing up the GDP forecast to 7.4 percent for the current fiscal is not in sync with key parameters such as tax collections and credit growth. Based on the new series, the Central Statistics Office has projected an economic growth rate of 7.4 percent for 2014-15, up from 6.9 percent a year ago. Meanwhile, foreign portfolio investors continued to remain sellers in Indian shares with net sale of Rs 1261.19 crore on February 10, 2015, as per provisional data. On the global front, European markets made a negative opening, while the Asian markets, after trading cautiously, somehow managed to end slightly in the green. Back home, there was broad based buying witnessed in the markets and apart from the blue chips, the broader markets too equally participated in the rally. Meanwhile, banking stocks continued to remain on buyers’ radar for second straight day after the Government announced infusion of Rs 6,900 crore in nine public sector banks. This additional capital has been given on the basis of new criteria that comprise of efficiency parameters. Additionally, stocks related to sugar space witnessed some buzz after Food Minister Ram Vilas Paswan said his ministry is in favour of extending export subsidy to only 1.4 million tonnes of raw sugar in the ongoing 2014-15 marketing year, as the country would be left with surplus quantities even after meeting the domestic demand of 24.8 million tonnes during this year. Last year, the Centre had announced a subsidy for exports of raw sugar of up to 4 million tonnes. Finally, the BSE Sensex surged by 178.35 points or 0.63% to 28533.97, while the CNX Nifty gained 61.85 points or 0.72% to 8627.40.