Markets to make a positive start reacting to good IIP data

The Indian markets had closed flat in last session ahead of key macro data of IIP. Today, the start of the holiday truncated week is likely to be in green and traders will be reacting positively to the data of industrial output for the month of February which came in at 5%, its fastest pace in nine months. However, there will be some cautiousness too with the CPI data for March slated to be announced after the market hours, though all eyes this week will be on corporate performance of big companies like TCS and Reliance Industries. Traders will also be getting some support with Prime Minister Narendra Modi wooing German investors said that opportunities in India are “seamless” and huge for a vibrant economic partnership. He also assured that ‘Invest India’ has been set up and country desks in it that will be networked to the states, he said that we will nurture innovation and protect intellectual property. There is likely to be buzz in the banking stocks with SBI announcing revised rates on its home loans, making them the cheapest in the market. This rate reduction follows the cut in its base rate on April 7. Aviation stocks too may see some action, as Civil Aviation Minister Ashok Gajapathi Raju, Pitching for lower taxes to boost civil aviation has said that said states which responded positively to the Centre's request in this regard have witnessed a spurt in the sector.

The US markets extended their gains in last session, though there was not much supporting factor but traders took cues from report of GE restructuring GE Capital, also there was report of pullback in US import prices in the month of March. The Asian markets have made a mixed start, though Chinese market on reports that imports slumped underscoring an economic slowdown.

Back home, Indian equity benchmarks witnessed consolidation on Friday after five days of continuous rally as traders remained on sidelines ahead of the key macro data of IIP. Index of Industrial Production (IIP) data for February slated to be released today is expected to inch higher to 3.5-3.6 percent due to favourable base impact. Earlier, markets after a positive start entered into red terrain as investors opted to book profits after five days winning streak and extended their downfall to touch intraday lows. The indices even went on to test important psychological 28,750 (Sensex) and 8,750 (Nifty) levels, but the key gauges got solid support around those intraday low levels and staged a smart recovery in last leg of trade to end the session mixed, pairing almost all of their early losses. Some support came in from report that Fitch retained India’s credit outlook at ‘stable’ saying although “dynamism” is back in the economy, translation of reforms into higher growth would depend upon actual implementation. It has also raised its forecasts for real GDP growth to 8 percent for current financial year and further to 8.3 percent in 2016-17. Meanwhile, with rating agencies Fitch and Moody’s affirming India’s credit outlook as “stable” and “positive” respectively, industry body Ficci has said that the move will uplift investor sentiment and help attract foreign investments. In other positive development, Paris-based think tank Organisation for Economic Cooperation and Development (OECD) has said that India’s economic expansion continues to firm up even as growth is easing in the neighbouring China. Global cues too supported the sentiments with European counters making a positive start and Asian markets end mostly in the green. Back home, sentiments also got some support from report that foreign portfolio investors (FPIs) bought shares worth a net Rs 193.81 crore and Domestic institutional investors (DIIs) bought shares worth a net Rs 492.79 crore on April 9, as per provisional data. Rally in auto stocks too aided the sentiments after Society of Indian Automobile Manufacturers (SIAM) said domestic passenger car sales grew 2.64% to 1,76,011 units in March, from 1,71,491 units in the same month of last year. Finally, the BSE Sensex lost 5.83 points or 0.02% to 28879.38, while the CNX Nifty added 2.05 points or 0.02% to 8,780.35.