Markets to get a flat-to-positive start on supportive global cues

The Indian markets made a good bounce back in the last session and despite the disappointing IIP numbers and rise in CPI inflation, moved higher on hopes that the weak industrial growth will prompt RBI to go for more rate cuts. Today, the start is likely to be flat-to-positive and markets may add some more gains, however the trade is likely to remain cautious ahead of the WPI numbers which decides the RBI’s course of action. Also, Prime Minister Manmohan Singh has cautioned that investment climate is getting affected by law and order situation along with land acquisition process, which are the responsibility of states and the Central Government level efforts are being made to streamline the clearance of investment proposals. However, the PM has said that government is committed to containing the fiscal deficit to 5.3 percent of GDP this fiscal and various steps are being taken to revive economy.There will be some buzz in the retail sector, as the Finance Ministry will consider four FDI proposals in single brand retailing, including that of Decathlon and Fossil Inc, worth Rs 750 crore.

There will be some important result announcements too, to keep the markets buzzing. ABG Shipyard, Aditya Birla Chemicals, Alok Inds, BPCL, Coal India, Core Projects, Eveready Inds, Gitanjali Gems,  Indian Oil Corp, J Kumar Infra, JSW Steel, Mcnally Bharat, MMTC, NMDC and Rajesh Exports are among many to announce their numbers today.

The US markets made a mixed closing on Tuesday, as traders seemed reluctant to make any significant moves ahead of President Barack Obama's State of the Union address. However, the Dow and S&P 500 gained to finish at five-year highs on a positive news from the economic front where small business sentiment edged up in January to 88.9 last month. Some of the Asian markets are still shut but those who are trading, have made a positive start, except the Japanese market which was marginally in red after a good rally in the last session.

Back home, shrugging off negative macro-economic reports, Indian equity benchmarks ended the session with a gain of over half a percent, snapping their eight days losing streak. Both the frontline indices ended the session above their crucial 5,900 (Nifty) and 19,550 (Sensex) levels mainly supported by buying in oil and gas and public sector undertaking counters. Though, the markets traded with volatility near their pre-close levels in the first half as industrial output contracted to a three-month low of 0.6 per cent in December due to poor performance of manufacturing and mining sectors and decline in production of capital as well as consumer goods. Industrial production growth stood at 0.7 per cent during the April-December period of this fiscal, down from 3.7 per cent in the same period of 2011-12. Meanwhile, the decline in industrial output for November 2012 has been revised downwards to 0.84 per cent from a contraction of 0.1 per cent in the month as per the provisional estimates released last month. Extending a period of gloom in Asia’s-third largest economy, provisional annual inflation rate based on all India general consumer prices index (CPI) (Combined) for January 2013 on point to point basis stood at 10.79 per cent as compared to 10.56 per cent for the previous month of December 2012. Global cues too remained unsupportive as European counters traded mostly in the red in early session. However, domestic markets witnessed traction in second half and started moving northward as continued buying in oil and gas sector was seen after Finance Ministry stated that Rs 25,000 crore additional cash subsidy for the fiscal will be given for selling diesel, domestic LPG and PDS kerosene at controlled prices. Sentiments also got some support after Nasscom reported that export growth from India’s IT outsourcing sector is set to accelerate in the fiscal year starting in April as hopes rise that an improving global economy will drive demand. The sector’s exports are expected to grow between 12 and 14 percent in 2013/14 to as much as $87 billion. Finally, the BSE Sensex gained 100.47 points or 0.52% to settle at 19,561.04, while the S&P CNX Nifty rose by 24.65 points or 0.42% to end at 5,922.50.