Markets to get a cautious start; Infosys guidance eyed

The Indian markets managed to hold the early gains throughout the last session despite the sluggish industrial production numbers, though the number goof-up made the data look better than the previous month but still it was way beyond expectation. Today, the start is likely to be cautious as the earnings session will kick start with the announcements of the Infosys numbers, all eyes will be on the annual guidance of the IT bellwether, though the growth is being expected to remain muted for the company but worldwide IT spending is forecast to increase by 2.5 per cent in 2012 from a year ago amid improving macro-economic stability in the US and European. The traders will also wait for the monthly inflation numbers to be announced tomorrow to take any cue of RBI’s further action. Finance Minister Pranab Mukherjee has said that the decline in India's industrial output growth in February and the sharp downward revision in January would have a bearing on the monetary policy review next week. There will be few other result announcements too, to keep the market buzzing. Meanwhile, the National Stock Exchange today announced that it has received regulatory approval to start trading in futures and options contracts based on FTSE 100 or Financial Times Stock Exchange index.

The US markets went for a rally on Thursday on optimism from the Euro zone as Lower Italian bond yields eased some concerns about the region. However, the claims for unemployment benefits rose unexpectedly last week to their highest level since January but investors took cues from the rumor that China is going to report strong GDP growth. The Asian markets have made a jubilant start and most of the indices are trading higher by half to over a percent. It was reported by South Korea and Japan that North Korea’s rocket launch may have failed that raised investors' appetite for risk. However, the Chinese market is trading flat after country's economy grew at its weakest pace in nearly three years in the first quarter, with the annual rate of expansion slowing more than expected to 8.1 percent from 8.9 percent in the previous quarter.

Back home, after two straight sessions of consolidation, stock markets in India went on to stage a smart performance as market participants even shrugged the disappointing industrial production numbers. The psychological 5,250 (Nifty) and 17,300 (Sensex) levels proved as strong supports as the benchmarks kept getting technical bounces from those levels. The key gauges snapped Thursday’s session with around a percent gains as hopes of an imminent interest rate cut by India’s central bank heightened after the February IIP numbers came to the fore. The benchmark equity indices held steady despite government data indicating India's industrial output rose at a much slower than expected 4.1% in February from a year earlier. After few moments of status quo post the IIP data release, the benchmark gauges moved northwards as markets factored in expectations of start of a monetary easing cycle after Reserve Bank of India (RBI)’s Annual Monetary and Credit Policy meet on April 17. Investors also awaited WPI Inflation data for March in order to get further cues on RBI’s stance in its monetary policy review. The Metal sector jumped over two percent in the session being the top gainer in the BSE sectoral space while the interest rate sensitive banking counter too led the rally from the front with hefty gains of over one and half a percent amid hopes of liquidity easing by RBI. While investors were also seen piling up positions in the Automobile and defensive-FMCG pockets which surged around one and half a percent. Though there appeared across the board buying interest, however, the Technology pockets remained chinks in the armor with around a percent cut due to fall in bellwether Infosys ahead of its fourth quarter earnings, which is schedule to be announced on April 13. Investors chose to take profits off the table from the IT counters amid expectations that companies would announce weaker growth quarter on quarter and give muted EPS guidance for FY13 due to high uncertainty. Meanwhile, stocks from the Aviation sector like Kingfisher, SpiceJet and Jet Airways after an early rally got thrashed after reports showed that the Cabinet did not take up the issue of FDI in Aviation sector in their meeting. Finally, the BSE Sensex gained 133.22 points or 0.77% to settle at 17,332.62, while the S&P CNX Nifty rose by 50.00 points or 0.96% to close at 5,276.85.