Markets to start on a cautious note; January inflation data eyed

Indian markets closed with marginal gains in last session as barring the Greek debt deal relief there were not much cues to take the markets higher. Today, the start is likely to be on a cautious note and investors will be keenly awaiting the announcement of WPI inflation numbers for the month of January which is broadly anticipated at 6.7 percent against 7.47 while core inflation is likely to slip to below 7 percent. Meanwhile, a latest consumer survey by RBI has showed that the number of people who felt that their financial circumstances have improved went up marginally to 57.1 percent in December, from 56 percent in September. Besides, reports suggest that petrol prices are expected to rise by about Rs 3 per litre early next month after the crucial assembly election in Uttar Pradesh, which would provide much needed respite to the PSU oil marketing companies. Apart from this there will be lots of scrip specific actions to keep the markets buzzing while investors will also be awaiting earnings announcement of auto heavyweight Tata Motors which is expected later in the session.

Apart from this there will be lots of scrip specific actions to keep the markets buzzing, Alok Industries, Amtek Auto, BPL, Deccan Chronical, Essar Oil, GVK Power, Great Offshore, HDIL, Max India, IVRCL, Shipping Corp, Sterling Bio, Tanla Solutions and Unitech are among the many to announce their numbers today.

The US markets finished Monday’s session on a positive note with gains of well over half a percent as investors cheered the Greek approval to austerity measures to secure rescue funds. The markets settled higher on improved investor sentiment, central-bank actions and on optimism that US economic data will beat estimates. The Asian markets have got off to a pessimistic opening and most major markets in the region are trading with around half a percent losses after global rating agency Moody’s announced a slew of credit rating downgrades of European nations. Investors at large took to risk aversion after the agency kept the coveted AAA credit rating for France and the UK on negative watch while it downgraded the ratings of Italy, Portugal, Spain, Slovakia, Slovenia and Malta.

Back home, Monday’s trading session turned out to be a day of consolidation as the Indian frontline equity indices appeared to be wandering on a directionless trajectory. The benchmarks managed to snap the session on a positive note but only with trivial gains as the optimism that emerged in mid noon trades petered out completely by the end. Though, the reports that Greek Parliament passed an austerity bill to cut government spending prevented the markets from drifting deeper into the red, but lack of significant upside triggers also made it difficult for the frontline indices to move higher. Hefty buying in Metal and rate sensitive Auto counters helped the markets stay in green while profit booking in Capital Goods and TECk stocks limited the upside chances for the bourses. The psychological 5,350 (Nifty) and 17,650 (Sensex) levels proved as strong supports because the frontline indices trended upwards after hitting those levels in early afternoon trades. Index heavyweight Reliance Industries too climbed over half a percent and gave the much needed support to the markets. On the earnings front, real estate major DLF, Tata Power along with Suzlon Energy, SAIL  and SBI got pounded heavily after announcing third quarter results which were below street’s expectations while Coal India on the other hand settled on a strong note as its quarterly performance got commended by investors. On the global front, Asian markets exhibited positive trends as Greek optimism overshadowed the worse than expected Japanese GDP growth numbers. The European stock counterparts too traded in the green territory after the Greek parliament approved a key austerity package over the weekend. Earlier on the Dalal Street, the benchmark got off to a quiet opening as investors largely remained influenced by the cautious sentiments prevailing in Asian markets. After the flat opening, the frontline indices continued to see-saw around the neutral line in a very tight band through the day’s trade as the bourses remained in the consolidation mode. Hefty bouts of selling pressure emerged in late morning trades, which dragged the key gauges to the lowest point in the day. However, some bottom fishing helped the gauges to cut losses and climb back into the green terrain. But profit booking in dying hours ensured that the benchmarks settle on a dull note. Moreover, the broader markets showed some resilience and finished the session on a positive note, outperforming their larger peers. Finally, the BSE Sensex gained 24.15 points or 0.14% to settle at 17,772.84, while the S&P CNX Nifty rose by 8.60 points or 0.16% to close at 5,390.20.

The US markets edged higher on Monday after Greece approved austerity measures to ensure that it will likely receive a second bailout and avert a March default. Euro-zone finance ministers will meet on Wednesday and are expected to approve the release of the second bailout package. An agreement between Greece and private creditors on write-downs on the value of privately-held Greek debt, which is seen wiping around 100 billion euro off the country’s debt pile, is expected to follow later in the week. In Washington, President Barack Obama sent Congress a $3.8 trillion budget proposal that includes tax hikes for the wealthiest Americans, setting the stage for his re-election campaign. The Dow Jones Industrial Average closed higher by 72.81 points, or 0.57 percent, at 12,874.00. The S&P 500 was up by 9.13 points, or 0.68 percent, at 1,351.77, while the Nasdaq closed up 27.51 points, or 0.95 percent, at 2,931.39.

Crude oil prices rallied sharply by over two percent on Monday as sentiments got a lift after Greek parliament voted to approve a package of harsh austerity measures to secure a second EU/IMF bailout and avoid bankruptcy. The fuel prices also got a lift from simmering concerns over supply disruptions as tensions between Israel and Iran invigorated. The crude prices also got underpinned as American greenback weakened against a basket of currencies, making the commodity cheaper for overseas investors. Benchmark crude for March delivery surged $2.24 or 2.3% to $100.91 a barrel on the New York Mercantile Exchange. In London, March delivery Brent crude climbed $0.62 or 0.5% to $117.93 a barrel, after trading as high as $118.61 a barrel.