Market likely to open lower tracking weak global cues

Indian equities indices rallied on Thursday after the upper house of Parliament passed a new bankruptcy code to address corporate debts and improve the ease of doing business. The Sensex advanced 193 points or 0.75% to close at 25,790; and the broader Nifty advanced 52 points or 0.66% to close at 7,900.40. The broader markets also attracted fresh buying interest with the BSE Mid-cap rising 0.69%; and Small cap index falling by a marginal 0.93%. Among the sectoral indices realty rose 1.47%, followed by Nifty PSU Bank (1.23%), Energy (1.11%), IT (1.10%), Nifty Bank (1.01%), Metal (0.80%), Pharma (0.70%), Auto (0.51%), Infra (0.29%) and FMCG (0.11%).

On domestic economic data front, Growth in industrial production plunged to 0.1% in March versus 2% in February due to poor performance of manufacturing and mining sectors, coupled with a sharp decline in output of capital goods. For the entire 2015-16 fiscal, the factory output grew at 2.4%, down from 2.8% in the previous fiscal. Despite the Make in India focus of the government, the ground reality is different and there is no visible turnaround in the industry.

Retail inflation, as measured by the consumer price index (CPI) for April, has come in at 5.39%, showing a trend of rising prices of fruits, vegetables and pulses. Therefore experts believe that a rise in CPI inflation has diminished the hopes of a rate cut in the upcoming RBI’s monetary policy meeting scheduled for June 7.

U.S. stocks steadied Thursday after two days of sharp moves. The Dow Jones industrial average closed up 9.38 points, or 0.05% at 17,720.50. The S&P 500 closed down 0.35 points, or 0.02% at 2,064.11; and the Nasdaq composite closed down 23.35 points, or 0.49% at 4,737.33.

European stock markets closed in red, as investors wrestled with a crop of lackluster financial results, but a swing in oil prices towards the higher end, pushed the market's benchmark off their session lows. The Stoxx Europe 600 was off 0.1% at 334.48. Indexes: France's CAC 40 turned up, rising 0.1% at 4,320.60. Germany's DAX 30 moved slightly out of the red, up 5 points at 9,980.51. The U.K's FTSE 100 shed 0.1% to 6,154.19.

Markets in Asia were lower in early trade on Friday, following modest finish in US stock market overnight. In Japan, the Nikkei 225 index erased initial gains and lowered by 1.06% in early trading. The Kospi index in Seoul was down 0.50%. In Australia, the S&P/ASX 200 Index was down 0.5%, poised for a fourth weekly drop. New Zealand’s S&P/NZX 50 Index traded flatly.

On the domestic front, A SGX Nifty 50 index future for May series is trading down by 43 points at 7,879. Indian markets are likely to open in negative due to weak global cues and poor domestic economic data. Investors will be keeping an eye on Bank of Baroda and La Opala results, due for release today.