Markets to get a flat-to-positive start of the new truncated week

The Indian markets closed marginally higher on Friday, before going for a long weekend, though the start was good but traders opted to book profit in late trade owing to extended weekend. Today, the start is likely to be in green and the traders will be eyeing the CPI inflation data to be announced later in the day. The traders will be eyeing the data as a rate cut trigger for RBI, after the wholesale price inflation, or WPI, figures surprised last week by coming below 7 per cent. Traders will also be eyeing the global data in the truncated week of trade to take further direction. Oil marketing companies are likely to be buzzing after the statement of Prime Minister's economic advisory council (PMEAC) chairman C Rangarajan that a hike in diesel prices is expected in the next two months. In other stock specific movements, Maruti will be watched, which will resume partial operations in its Manesar unit, currently the company will operate single-shift till the time the management decides to ramp up output from the plant. Also, Infosys won a harassment case filed by its employee Jack Palmer, after a US Judge dismissed his claims on Monday.

The US markets made a flat closing on Monday, the trade remained rangebound and traders opted for a cautious approach after ECB sought to quash speculation about the shape of its planned bond-buying program, saying that it would be misleading to talk about decisions which are yet to be taken. The Asian markets have made a positive start and most of the indices are trading in green, though marginally. The indices in the region have advanced on expectations that China will ease monetary policy and amid signs the US economy is strengthening.

Back home, the key Indian equity indices, after trading jubilantly in the first half, erased almost their day’s gains, snapping the session nearly unchanged. Though, the markets traded in the green terrain for most part of the day’s trade and touched their intraday high near their crucial 5,400 (Nifty) and 17,800 (Sensex) levels backed by firm global cues. But, the sentiments got bashed in the noon after the government tabled the controversial CAG reports on coal blocks, Delhi airport and UMPPs in the parliament. CAG report cited that the coal scam is bigger than 2G case. The report pointed out that the presumptive loss to government stands at Rs 1.86 lakh crore in scam, which is quite higher than the notional loss of Rs 1.75 lakh crore due to 2G scam. Consequent to the CAG report, Power sector, after trading in the green, ended negative with a cut of over one and half a percent and private power producers like Tata Power, RPower, Adani Power, GMR Infra and Reliance Infrastructure topped the selling list with fall of over 3 percent on CAG report stating that the loss was due to allocation of coal mines to private players. Meanwhile, Aviation sector stocks like Spicejet, Jet Air India and Kingfisher Airlines all edged lower in the session after the CAG report. The sentiments also got hammered after Prime Minister Manmohan Singh’s Economic Advisory Council forecasted that India’s economy will grow at 6.7 percent in the current fiscal year, less than an earlier estimate of 7.5-8.0 percent. However, this forecast is marginally better than the 6.5 percent pace at which India grew in 2011-12. The advisory council also raised inflation forecast to about 6.5-7 percent at the end of 2012/13, from earlier estimate of about 5-6 percent. Meanwhile, C Rangarajan, chairman of the PM’s economic advisory council said it has lowered the GDP forecast because taming inflation, containing fiscal deficit and current account deficit are policy challenges for the government. some strength also came in from the PSU oil marketing companies as stocks like BPCL, HPCL and IOC all edged higher on the buzz that government is likely to increase diesel prices by Rs 5 per litre shortly after the Parliament session ends. Also, retail stocks like Pantaloon Retail, Brandhouse Retail and Trent provided positive sentiments to the markets after the Commerce and Industry Minister Anand Sharma indicated that the government may announce some decisions on FDI in multi-brand retail. Finally, the BSE Sensex gained 33.87 points or 0.19% to settle at 17,691.08, while the S&P CNX Nifty rose by 3.35 points or 0.06% to close at 5,366.30. Markets remained closed on Monday on account of Ramzan Id.