Markets to get a cautious start; IIP and CPI inflation data eyed

The Indian markets consolidated in the last session, putting a halt to their three day rally. There was mild profit booking but today the start is likely to remain cautious and traders will be watching the important macro data of consumer price index and industrial production, to be released later in the day. Though, not very fast, but the Indian factory output is expected to rise for a third consecutive month in March, boosted by improving exports and investment. Meanwhile, the metals and mining stocks are likely to see some action, as the Prime Minister Manmohan Singh has referred the Mines Act matter to a Group of Ministers on differences regarding a clause in the Act to make certain top officials of a mine responsible in case of an accident. Amendments to the Mines Act, 1952 provides for heavy fines and long term imprisonment of managers of the mines for violation of safety norms.

There will be lots of result announcements too, to keep the markets buzzing for the day. Apollo Tyres, Ashok Leyland, Central Bank, Cummins India, Essar Oil, NTPC, Punj Lloyd, Sobha Developers are among the many to announce their numbers today.

The US markets gave up some of their last session gains and all the major indices closed marginally in red, though the selling pressure remained subdued and also due to the initial jobless claims unexpectedly falling to a new five-year low, the major downside for the markets was restricted. The Asian markets have made a mixed start and some of the indices were trading marginally in red, however the Japanese market has surged on the back of weakness in the value of the Japanese yen, with the US dollar climbing above 100 yen for the first time in over four years.

Back home, after three consecutive sessions of rally, Indian equity markets snapped the choppy day of trade slightly in red as investors opted to book their profits ahead of the consumer price index and industrial production data due on May 10, 2013, followed by wholesale inflation data on May 13. Markets, throughout the session, see-sawed in and out of green zone but slipped towards south in the last leg of trade on the back of disappointing Q4 numbers reported by Asian Paints and Jubilant FoodWorks. Shares of Asian Paints plunged close to 4% after the company reported a 3.5% drop in net profit for the fourth quarter ending March, 2013, while Jubilant FoodWorks’ stocks tumbled close to 7.50% after the firm reported a lower-than-expected 14% year-on-year rise in fourth quarter net profit at Rs 33 crore. However, the losses remain capped as some support came in from PSU banking counters after banks like, Punjab National Bank (PNB) and Union Bank of India (UBI) reported better-than-expected Q4 numbers. Global cues too remained unsupportive with European counters trading lower as investors remained on sidelines ahead of a Spanish bond auction and a UK central bank rate decision. Back home, sentiments remain dampened after rupee depreciated by 10 paise to 54.26 per dollar following demand for the US currency from importers despite its weakness overseas. The downside was also supported by selling in banking counter after Cobrapost exposed 10 more banks in money laundering case namely IndusInd Bank, Bank of Baroda, ING Vysya Bank, Allahabad Bank, Bank of India, Central Bank of India, Bank of Maharashtra, HDFC Bank, ICICI Bank and Axis Bank. However, the losses remain capped as buying in software and technology counters supported the sentiments. Stocks like Infosys, TCS, Wipro and HCL Technologies edged higher on the back of better-than-expected earnings by select US companies indicating that the world's largest economy is on the path of revival. Additionally, state-run PSU OMC’s, viz. BPCL, HPCL and IOC all settled higher on expectation of major hike in diesel price. Further, with the Karnataka assembly polls coming to an end, investors’ are widely expecting a hike in diesel prices, this time may be even double of the otherwise monthly increase of 50 paise a litre. Finally, the BSE Sensex lost 51.14 points or 0.26% to settle at 19,939.04, while the CNX Nifty declined by 19.15 points or 0.32% to end at 6,050.15.