Benchmarks turn choppy ahead of IIP and CPI data

Indian equity benchmarks have turned choppy after making a positive opening as investors remain wary ahead of 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. Sentiments also remained dampened on reports that foreign portfolio investors sold shares worth a net Rs 371.27 crore yesterday, as per provisional data. However, losses remained capped after global credit rating agency Moody’s Investors Service said the lower oil prices are expected to alleviate India’s high inflation and spur economic growth. Some support also came in 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.

Global cues remained sluggish with the US markets ending 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 were trading mostly in the red at this point of time, though the Japanese market has surged after a day of break.

Back home, on the sectoral front, realty, auto and power witnessed the maximum gain in trade, while banking, fast moving consumer goods and metal remained the top losers on the BSE sectoral space. The broader indices however, were outperforming benchmarks, while the market breadth on the BSE was positive; there were 1247 shares on the gaining side against 660 shares on the losing side while 78 shares remain unchanged.

The BSE Sensex is currently trading at 28516.29, down by 17.68 points or 0.06% after trading in a range of 28501.49 and 28685.88. There were 14 stocks advancing against 16 stocks declining on the index.

The broader indices were trading in green; the BSE Mid cap index was up by 0.79%, while Small cap index up by 0.91%.

The gaining sectoral indices on the BSE were Realty up by 1.48%, Auto up by 1.23%, Power up by 0.82%, Healthcare up by 0.56% and Capital Goods up by 0.37% while, Bankex down by 0.53%, FMCG down by 0.14% and Metal down by 0.01% were the losing indices on BSE.

The top gainers on the Sensex were Cipla up by 2.10%, Hero MotoCorp up by 1.95%, Wipro up by 1.82%, Dr. Reddys Lab up by 1.80% and Hindalco up by 1.77%. On the flip side, Bharti Airtel down by 1.40%, SBI down by 1.36%, ITC down by 0.77%, ICICI Bank down by 0.76% and Axis Bank down by 0.63% were the top losers.

Meanwhile, after India’s forex reserves hit a new high of $327.88 billion in the week ended January 30, RBI Deputy Governor H R Khan has said that though the country’s forex kitty was at an all-time high, there should be no complacency as no amount of reserves may be enough to fight extreme volatility, as the shift in the US Fed’s policies to tighten may result in withdrawal of money from emerging markets like India.

The deputy governor has said that “We are much better placed. In terms of fool-proofing our balance sheet we have done quite a few things,” but we can’t afford to be complacent and we should be prepared to face vulnerabilities.

The surging reserves come as foreign investors have continued to be hefty buyers of bonds and shares because of expectations for economic reforms from Prime Minister Narendra Modi's government.

Khan further stated that there might be views that RBI has been focusing on accumulating dollars to fight any external challenges in future, as the forex reserves had depleted to $280 billion and the RBI had to sell to arrest a single way slide in the rupee after the May 2013 announcement by the US Fed to taper its liquidity infusing programme, which resulted in fund outflows from India. It was the worst rupee turmoil since a balance of payment crisis a decade ago because of dwindling reserves and a high current account deficit.

The CNX Nifty is currently trading at 8634.00, up by 6.60 points or 0.08% after trading in a range of 8627.45 and 8681.40. There were 29 stocks advancing against 21 stocks declining on the index.

The top gainers on Nifty were Zee Entertainment up by 3.33%, Ambuja Cement up by 2.17%, Wipro up by 2.08%, Dr. Reddys Lab up by 1.99% and Maruti Suzuki up by 1.98%. On the flip side, Asian Paints down by 1.71%, Bharti Airtel down by 1.46%, SBI down by 1.42%, Cairn India down by 0.95% and BHEL down by 0.76% were the top losers.

Asian markets were trading mostly in the red; Straits Times declined 27.92 points or 0.81% to 3,416.65, Jakarta Composite slipped 14.34 points or 0.27% to 5,322.18, FTSE Bursa Malaysia KLCI shed 12.38 points or 0.69% to 1,786.57, KOSPI Index decreased 8.03 points or 0.41% to 1,937.67 and Shanghai Composite was down by 4.68 points or 0.15% to 3,153.02.

On the flip side, Taiwan Weighted rose 2.57 points or 0.03% to 9,464.79, Hang Seng increased 143.33 points or 0.59% to 24,458.35 and Nikkei 225 was up by 321.02 points or 1.82% to 17,973.70.