Markets to get a cautious start; CPI inflation data eyed

The Indian markets remained in jubilant mood and after closing at their year’s high on Friday, added strength in a short trading session on Saturday. Today, the start is likely to be flat-to-positive, though there will be some cautiousness too, ahead of the consumer price index (CPI) inflation data to be released later in the day. Traders will also be eyeing the FII trend, as well as the movement in the rupee, after it slipped to its lowest in last four months on Friday. Meanwhile, there will be some somberness in the manufacturing sector as an Assocham survey has stated that owing to demand slowdown, the contribution of the manufacturing sector in the country's Gross Domestic Product (GDP) may fall below 15 percent in 2013-14. There will be some buzz in the power sector too, as the Union Minister Jyotiraditya Scindia has suggested incentivising the discoms that cut down losses from theft and other transmission issues, while punishing the bad performers. The PSU oil marketing companies too are likely to be in a good mood after increasing the diesel prices by about a rupee per litre on Friday.

Also, there will be lots of important result announcements and reaction to the numbers announced during weekend. 3I Infotech, Aptech, BOB, Morepen Lab, Nestle India, Network18 Media, Praj Inds, Reliance Power, RCF and Tata Coffee are among the many to announce their numbers today.

The US markets closed higher on Friday supported by some good earnings, though the trade remained quiet and there was some cautiousness after the Fed chief’s statement about the shadow banking system. The Asian markets have made a mixed start, though the Japanese market has surged on the weakness of yen to its lowest since October 2008 after G7 finance ministers indicated that they will tolerate the currency’s decline.

Back home, Friday turned out to be a tremendous session of trade for the Indian equity markets with both the domestic bourses ending not only near their high point of day’s trade but also closed to their highest level in 2013. After a flat opening, key domestic benchmarks gained some strength after India’s annual industrial output growth measured by index of industrial production (IIP) grew by 2.5% for the month of March 2013, not only higher than the previous month’s figure of 0.6%, but also higher than street’s expectation, mainly on the back of manufacturing sector. Manufacturing, which constitutes about 75.53% of industrial production, grew 3.2% from a year earlier. Meanwhile, electricity sector too expanded 3.5% from a year earlier. However, mining sector, continuing to show contraction stood at 2.9% for the reporting month.  Capital goods production, an indicator for investments in the economy, also grew an annual 6.9% from a year earlier. Local markets extended their rally in second half supported by positive opening in European counters which hit fresh five-year highs on Friday. Back home, the up-move was also supported by stellar Q4 numbers reported by NTPC. The company reported a rise of 68.93% in its net profit at Rs 4381.16 crore in Q4FY13 as compared to net profit of Rs 2593.44 crore in the same quarter previous year. Total income of the company has increased by 6.03% to Rs 17349.09 crore as compared to Rs 16361.51 crore in corresponding quarter last year. Some support also came in from buying in software and technology counters after the rupee depreciated by 37 paise to 54.62 against the dollar on the Interbank Foreign Exchange market due to appreciation of the US currency against other currencies overseas. Meanwhile, shares of state owned oil marketing companies (OMC) viz. IOC, BPCL and HPCL too remained on the buyers’ radar on report that they may hike prices of diesel by Rs 0.90-1 per liter later in the day. Indian equity markets added strength to their weekly gains in a short special trading session. BSE held a special live two-hour trading session in the derivatives, cash and Securities Lending and Borrowing Scheme (SLB) segment from its disaster recovery site on Saturday. Finally Sensex closed at 20,122.32, up by 39.70 points or 0.20%, while closed higher by 12.50 points or 0.21% to 6,107.25.