Markets likely to make a positive start; IIP data eyed

The Indian markets took a breather in last session, after four successive days of gains. Traders ignored the better than expected trade data and waited for more important ones to be announced later in the week. Today, the start is likely to be in green and markets are again likely to move north, however traders will be eyeing the IIP data for the month of January to be announced later in the day. Though, there is not much expectation and the industrial production is likely to have grown to 1 per cent as compared to 0.6 per cent registered in the month of December 2012 but any upside can support the markets. There will be some cautiousness too, as the Organisation for Economic Co-operation and Development (OECD), the Paris-based agency has said that growth is slowing down in India. In its long-term trend of economic activity, which is put at 100, the Indian economy had a score of 97.2, the lowest level seen in the last five months. However, World Bank has said the Indian economy will soon get back to high growth path of 6% next year and more thereafter. The Auto stocks are likely to remain in somber mood after India’s car sales in February fell 26 per cent from a year earlier. On the same time sugar stocks are likely to be in upbeat mood, as the government is likely to consider this week a proposal on sugar decontrol.

The US markets extended their gaining momentum in the new week, though there was not much on the economic front and traders preferred to remain on sidelines, but the downside too was capped with some recently announced upbeat economic news. Most of the Asian markets have made a positive start with Japanese market taking the lead after Bank of Japan’s deputy- governor nominee Kikuo Iwata saying that decisive monetary easing is needed, boosting the morale of Japanese exporters.

Back home, Indian equity indices, snapping their four days gaining streak, ended the volatile session slightly in the red as investors opted to stay away of piling up positions in risky assets ahead slew of macroeconomic data including IIP and inflation numbers, slated to be released this week. Markets may also react to the final installment of advance tax payment for the current fiscal. Sentiments got boosted on the back of improved trade data for February 2013. Meanwhile, the country’s February exports rose by 4.25 percent from a year earlier to $26.3 billion, while imports rose 2.6 percent to $41.2 billion, leaving a trade deficit of $14.9 billion. Supportive cues from US markets too provided the much needed support to local markets initially. Investors’ morale got buttressed on the back of better than expected jobs data. Back home, some pressure also came in from selling in auto counters which declined by about half a percent after domestic passenger car sales declined by 25.71 percent to 158,513 units in February, the biggest fall in more than 12 years and the fourth consecutive monthly slide. This was due to sluggish economic growth, which continues to weigh on demand in the once-booming market. However, the losses remain capped as Realty Index continued to lead gains on hopes of revival of new home sales post the Budget proposal for additional tax deduction for new home loan borrowers up to Rs 25 lakh. Further, hopes of a rate-cut by the central bank at its policy meet next week also boosted sentiment. There was buzz in the shares of telecom companies like Reliance Communications, Idea Cellular and Tata Teleservices (Maharashtra) gained during the trade. The government has so far received bids worth Rs 3,639 crore from lone bidder Sistema Shyam Teleservices (SSTL) till the second round of the 2G spectrum auction for CDMA services. Additionally, aviation stocks like Spicejet, Global Vectra and Jet Air India all edged higher after the Cabinet Committee on Security on March 8, 2013, cleared Flexible Use of Airspace by civil and military users. Finally, the BSE Sensex lost 37.02 points or 0.19% to settle at 19,646.21, while the CNX Nifty declined by 3.35 points or 0.06% to end at 5,942.35.