Markets to get a flat start ahead of IIP and CPI data

The Indian markets suffered sharp cuts in last session despite a smart intraday recovery on getting good trade deficit data. Today, the start is likely to remain flat-to-cautious with some major macro data scheduled to be announced later in the day, however the decline too is likely to remain restricted as there is no such bad news either. Traders will be eyeing the index of industrial production (IIP) data and CPI inflation data, while the CPI is placed on the higher side at around 10%, there might be some improvement in the overall IIP data for the month of September, given the strong growth in core sector. Export oriented stocks are likely to remain buzzing with the report that exports rose by 13.47 percent to $ 27.27 billion in October. Meanwhile, cheering the rise in exports, India Inc has said that the turnaround was on account of rebound in US and European economies and urged the Government to restore duty drawback rates to bring down the trade deficit. There will be some action in iron and steel sector too, as the Supreme Court today allowed e-auctioning of nearly 11.48 million tonnes of extracted iron ore lying unused in Goa for over a year.

Also, there will be lots of result reactions to keep the markets buzzing. Apollo Hospital, Bajaj Hindusthan, Bosch, Canara Bank, Care, CESC, Fortis Healthcare are among many to announce their numbers today.

The US markets after a good run in last session managed a flat closing amid a choppy session of trade, though Dow still reached a new record closing high. Traders remained on sidelines ahead of many important economic data. The Asian markets have mostly made a positive start as the crude prices have fallen in international market. Though, some indices are still marginally in red, but Japanese market has taken the lead as yen continued its decline against the dollar.

Back home, Indian markets remained in the somber mood starting the data heavy week on Monday and making it a five day losing streak. Though, there were bouts of volatility after the trade data for the month of October took the markets and the local currency higher but were equally countered by selling at higher levels that took the markets back to their pre-data levels. There was sluggishness since beginning after data showed that US employers added more jobs than expected, boosting speculation the Federal Reserve will begin scaling back stimulus. The global markets remained mixed, with some of the Asian markets recouping their losses by the end after the good US jobs data fuelled concern that Fed will go for tapering sooner than expected. The European markets though made a flat-to-positive start taking cues from the unexpected growth in China’s industrial output, but were unable to make much impact on the domestic markets. Back home, markets after making a soft start, once momentarily entered the green but were dragged down on profit booking. Rupee too remained weak since morning weighing further, though the Finance Minister P Chidambaram tried to allay worries over the weakness in rupee, saying the domestic currency will settle down soon. The finance minister attributed the rupee's recent weakness to the partial return of India's state-run oil marketing companies (OMCs) to the currency market. There was some recovery in the markets towards noon when the trade deficit data were announced, though the deficit increased month-on-month, but were much in line to the expectations and fell sharply to $10.56 billion in October, from $20.21 billion a year ago. The rupee too stabilized and helped the markets to almost enter the green. The recovery was mainly led by PSU banks that showed a greater turnaround after the trade data. However, profit booking soon emerged at the higher levels and prohibited markets to remain in green for long. The final moments of trade turned catastrophic when suddenly selling intensified, dragging the markets lower on getting some weak earnings announcement.PSU lender Central Bank of India reported net loss of Rs 1508.74 crore for the second quarter as compared to a net profit of Rs 329.92 crore for the Q2FY13. Tata Chemical’s net too declined by 48%. Volume remained on higher side of over 1.3 lakh crore, while the broader markets were inflicted with similar magnitude of fall as to the benchmarks. Finally, the BSE Sensex lost 175.19 points or 0.85%, to settle at 20490.96, while the CNX Nifty plunged by 61.95 points or 1.01% to settle at 6,078.80.