Markets to make a flat-to-soft start on sluggish global cues; WPI data eyed

The Indian markets suffered sharp plunge in the last session, after the IT major Infosys disappointed the street with tepid revenue guidance. Today, the start of the new week is likely to remain cautious on sluggish global cues and traders will be eyeing other major result announcements during the holiday shortened week for direction. Marketmen will be closely watching the wholesale price inflation data, India’s key inflation measure for March, which will set the tone for the markets today. There is expectation that the Wholesale prices index, likely cooled a tad to 6.40 percent in March, lower than 6.84 percent registered in February. RBI governor Duvvuri Subbarao has said that further rate cuts will depend on inflation easing further. Traders will also be eyeing the political developments with the resurfacing of coal scam issue. IT stocks are likely to remain under pressure with new immigration rule being pushed by senators in the US. There is likely to be some respite for the ailing aviation sector, as the Aviation Minister Ajit Singh has said that the country is going to be the second largest air traffic market in the world. On the same time, the export oriented stocks are likely to remain under pressure, as the industry body Assocham has said that India's ambitious target of reaching $500 billion in exports by 2013-14 fiscal is unlikely to be met due to weak demand in global markets such as the US and Europe.

The US markets ended flat with a negative bias on Friday on getting a slew of disappointing economic reports, though some positive earnings announcements were able to hold the markets from slipping further. Most of the Asian markets have made a soft start on weak US data and as Chinese economic growth expanded less than estimated. Chinese Gross domestic product rose 7.7 percent from a year earlier and against 7.9 percent in fourth quarter.

Back home, distressed markets clobbered out of shape in Friday’s trade with benchmarks ending the session with a cut of over a percentage point, weighed down majorly by technology stocks after disappointing performance reported by IT bellwether Infosys. The combination of domestic as well as global factors led to the brutal butchery across the board and local bourses snapped the session below their crucial 5,550 (Nifty) and 18,250 (Sensex) levels. The IT major also remained top loser and pummeled nearly 22% due to disappointing fourth quarter earnings and lower growth guidance for FY14.The company, on consolidated basis, reported a rise of 3.37% in its net profit at Rs 2,394 crore in quarter under review as compared to Rs 2,316 crore in same period previous year. Total income of the company increased 17.09% to Rs 11,128 crore as against Rs 9,504 crore in a year ago period. Meanwhile, the company in its FY14 guidance has said that consolidated revenues are expected to grow between 6-10%, much below than Nasscom’s 12-14% industry growth expectations for the current fiscal. Bloodbath continued till the end as upset investors ignored the decent February index of industrial production (IIP) data and are eagerly waiting for inflation data (which will decide the RBI’s move in its quarterly monetary policy review on May 3) that is scheduled for April 15. India’s IIP grew by 0.6% at 176.2 for the month of February 2013 although lower than growth of 2.4%, higher than the street expectation of a negative figure. The cumulative growth for the period April-February 2012-13 over the corresponding period of the previous year stood at 0.9%. However, Mining and electricity sector, contracted by 8.1% and 3.2% respectively. Meanwhile, India’s annual consumer price inflation slowed to 10.39% in March from the previous month. Sluggish global cues too dampened the sentiments as European markets traded choppy in the early deal ahead of a meeting of European Union finance ministers in Dublin. Back home, the software and technology counters suffered brutal assault in the session amid expectations that the upcoming results season, which got kicked off by technology giant Infosys’ gloomy guidance, may not bring the much-needed cheer to the IT sector amid uncertainty in the business environment for Indian outsourcing companies. Finally, the BSE Sensex shaved off 299.64 points or 1.62% to settle at 18,242.56, while the CNX Nifty plunged by 65.45 points or 1.17% to end at 5,528.55.