Markets to see a cautious start; Infosys numbers to give direction

The Indian markets firmed up in last session, adding up to its last session gains. IT along with rate sensitive realty and banking moved higher boosting the markets. Today is a crucial data heavy day for the markets and indices may see a flat-to-cautious start. While, Infosys will kick start the earnings season with its fourth quarter results, there will be announcement of monthly industrial production (IIP) and CPI numbers later in the day. Whole IT sector will be in focus, though Infosys is expected to meet forecast in final quarters and its revenue is seen increasing by 3 percent in rupee term and 4 percent in dollar term. Traders will be eyeing the guidance of the IT bellwether. However, there is also a chance that the company may not guide this time, on account of market volatility. Investors will also track monthly inflation numbers for March along with IIP data for the month of February which probably see a contraction. Also, starting today with Fitch, the Finance Ministry will pitch for a ratings upgrade at series of meetings with the global agencies over the next few weeks. There will be lots of stock specific actions, as the Bombay Stock Exchange will shift as many as 104 stocks, while NSE will shift 51 stocks to the restricted trade category from today, as a measure to ensure market safety.

The US markets extended their gains on Thursday, though the tech-heavy Nasdaq underperformed its counterparts but overall sentiment was boosted by the report of Labor Department, showing that initial jobless claims fell by more than expected in the week ended April 6th. The Asian markets have made a mixed start and some of the indices are trading lower including the Japanese market as the yen strengthened against the dollar.

Back home, domestic benchmarks, building on previous session’s gains, concluded the day’s trade with a gain of over half a percent buoyed by strong global cues. Though, markets in the noon deals appeared to be exhausted with their run up rally, the lost momentum was soon restored as both the frontline indices were back on track thanks to significant buying in software and technology stocks ahead of fourth quarter results. The IT bellwether is likely to report a net profit of Rs 2,297 crore, down 3 per cent, as compared to Rs 2,369 crore, quarter-on-quarter. Revenues are likely to be at Rs 10,746 crore, up 3.08 per cent, as compared to Rs 10,424 crore in the same period. Sentiments also remained sanguine as the Finance Ministry is preparing itself to convince international rating agencies - Fitch, Standard & Poor’s and Moody’s - that the Indian economy is on a strong recovery path. Last year, the three agencies were a bit liberal in their criticism of India’s macro-economic fundamentals and precarious public finances. Domestic markets after losing steam in noon deal regained their strength supported by firm opening in European counters while, rally in Asian markets too aided the sentiments. Back home, sentiments remained jubilant for most part of the day’s trade as foreign institutional investors (FII) bought shares worth Rs 40.22 crore while domestic institutional investors bought equities worth Rs 197.29 crore on April 10. Some support also came in after shares of private banking majors HDFC Bank and ICICI Bank edged higher during the trade on tracking gains of their respective American Depository Receipts listed on the New York Stock Exchange. Additionally, auto space too gained by about a percentage point in today’s trade led by about four percent gains in Tata Motors on hopes that unit Jaguar Land Rover (JLR) will report solid global wholesales for March, which are due later in the day. Finally, the BSE Sensex gained 127.75 points or 0.69% to settle at 18,542.20, while the CNX Nifty rose by 35.30 points or 0.64% to end at 5,594.00.