Markets likely to get a flat-to-cautious start; WPI data eyed

The Indian markets rally mood remained intact on Friday and the benchmarks added another over a percent to their gains. Today, the start is likely to remain cautious in reaction to the macro data announced after the market hours on Friday. IIP and CPI data announced late in evening remained disappointing, index of industrial production for May fell 1.6 per cent, versus a growth of 2.3 per cent in April, while  consumer price index inched up to 9.87 per cent in June, against 9.31 per cent in May. Now traders will be watching wholesale inflation data for further cues, while the inline Chinese second quarter GDP numbers may soothe some nerves. Traders will also be eyeing the movement of rupee, which strengthened in last session and investment activity by foreign institutional investors. There is some good news too, that may help recovery in latter trade of the markets, foreign direct investment (FDI) into India increased 25 percent year-on-year to $ 2.32 billion in April, the highest level in the past six months, while a survey by industry body CII has said that economic growth in the country may rebound from the next fiscal if government expedites its reform process. The PSU oil marketing companies will be in action after hiking the price of petrol by a steep Rs 1.55 a litre, without taxes. Upstream oil companies too will be buzzing with oil ministry exempting small, isolated fields from its gas utilisation and pricing policy.

There will be lots of important earnings announcements; CMC, Exide Inds, TTK Prestige, Ashok Leyland, DCB, NIIT Tech, S Kumar Nation and Supreme Industries are among the many to announce their numbers today

The US markets remained in positive terrain on Friday taking cues from some better than expected earnings, though the gains were modest as the economic reports were not that encouraging. Most of the Asian markets are continuing their bull run and are trading higher with the start of new week after a report showed China’s economy grew 7.5 percent in the second quarter, much in line to the estimates.

Back home, extending the euphoria, boisterous benchmarks witnessed an enthusiastic performance on Friday by rallying over a percent and breaking many psychological levels in their northbound journey. The relentless across the board value picking ensured that the frontline indices settle comfortably above the psychological 6,000 (Nifty) and 19,950 (Sensex) levels. Sentiments remained up-beat since beginning after IT bellwether Infosys retained its US revenue guidance of 6-10% growth in dollar terms for FY14. Sentiments also remained buoyant on report that foreign institutional investors (FIIs) bought shares worth net Rs 638.26 crore on July 11, 2013. Markets, despite some sluggishness during noon deals, extended their rally in final hour of trade on the back of lower than expected trade deficit data aiding the sentiments. Trade deficit narrowed in June to $12.24 billion from a 7-month high, helped by a slowdown in gold imports, which should ease pressure on the current account balance and the beleaguered rupee. Moreover, supportive cues from US markets provided the much needed support. Positive opening in European markets too supported the sentiments. Back home, major support came in from buying in software counter which surged by over 6% after Infosys on the consolidated basis, registered a gain of 3.71% in its net profit at Rs 2374 crore for the quarter as compared to Rs 2289 crore for the same quarter in the previous year. Total income of the company has surged by 17.36% at Rs 11844 crore for quarter under review as compared to Rs 10092 crore for the quarter ended June 30, 2012.  However some selling was witnessed in auto sector on report that domestic passenger car sales declined by 9% to 1,39,632 units in June from 1,53,450 units sold in the same month last year, on account of decline in demand for the eighth straight month due to rising ownership costs and sluggish economic growth. Finally, the BSE Sensex surged 282.41 points or 1.44% to settle at 19,958.47, while the CNX Nifty climbed by 73.90 points or 1.25% to end at 6,009.00.