The Indian markets lost their momentum in the second half but still managed to post gain of around half a percent in the last session, traders were a bit cautious ahead of two central bank’s monetary policy announcements and largely overlooked the WPI inflation remaining in deflation zone for 16th consecutive month. Today, the start is likely to be cautious and the markets may open flat-to-soft tailing the weakness in the global markets, after oil declined again. Traders will also be reacting to CPI inflation dipping to four months low of 5.18% in February 2016, bolstering rate cut hopes. However, there will be some concern too with hailstorms in key farming belts of the country that may lead to the fourth successive crop failure and RBI too may wait to see the actual impact on food and overall retail inflation. There will be action in the oil & gas sector, as the global rating agency Standard & Poor's has said that the new price formula and calibrated marketing freedom for gas produced from fields in difficult terrain could help attract investments in India's oil and gas sector . On the other hand, the gold and jewellary stocks are likely to remain under pressure, as the Finance Minister Arun Jaitley has refused to roll back a 1 per cent excise duty on non-silver ornaments proposed in the Budget.
The US markets despite recovering from their early lows remained choppy and made a flat closing in the last session, as traders were looking ahead to the Federal Reserve's monetary policy decision scheduled to be announced Wednesday. Most of the Asian markets have made weak start, though the cuts are marginal. Japanese market too was cautious ahead of the Bank of Japan’s monetary policy review.
Back home, Monday’s trading session was of consolidation as the Indian frontline indices appeared a bit fatigued and remained in tight band for most part of the day. However, the benchmarks managed to extend the winning momentum for the second consecutive day of trade, as local sentiments continued to show signs of improvement. Investors took some encouragement with Finance Minister Arun Jaitley’s statement that the government hopes to pass the landmark Constitution Amendment Bill for national Goods and Services Tax (GST) as well as the bankruptcy and insolvency bill in the second half of the Budget session beginning April 20. Some support also came with the report that overseas investors have bought a net $1.41 billion worth of shares so far in March, paring this year’s outflows to $1.48 billion. However, caution prevailed in view of muted factory output data, which was released on Friday and retail inflation data, slated to be announced later in the day. India’s industrial production declined for a third month in a row, contracting by 1.5 per cent in January due to poor performance of manufacturing sector and lower offtake of capital goods. Meanwhile, buying in banking counter mainly aided sentiments after RBI governor Raghuram Rajan commented that the headline fiscal deficit target for the next financial year (at 3.5 per cent) year is a comfort for the central bank. It has already hiked hopes of a rate cut while shares of oil & gas producers such as ONGC, Reliance Industries and GAIL India also rose on the back of stability in the crude oil prices. On the flip side, metal pack remained under pressure owing to weaker-than-expected Chinese economic data. On the global front, shares throughout Asia rallied on Monday, while European markets rose in early trade. Back home, the benchmark started the day on an optimistic note tracking the Asian peers which traded mostly in the green following the upbeat overnight cues from the Wall Street. Though investors did not show any knee-jerk reaction to the WPI inflation, which remained in the negative zone for 16 months in a row, but the indices came off the day’s high as investors gradually squared some positions in the afternoon trade. Finally, the BSE Sensex gained 86.29 points or 0.35% to 24804.28, while the CNX Nifty rose 28.55 points or 0.38% to 7,538.75.
