Markets in positive, IT dims over weak dollar revenue outlook

The markets have extended last week’s positive gains and have ended for a second consecutive week in the green zone. This week’s gains were majorly led by positive developments on the domestic front and supported by an overall optimistic global scenario.

On Thursday the November IIP figures were announced which beat the market expectations and stayed in positive territory at 5.9 per cent vis-a-vis negative 4.74 in October. This is a very good sign for the economy which looked like losing its growth momentum after the RBI started tightening the monitory policy. All the nine sectors constituting the IIP data performed better in November as compared to October.

Due to the growth in food supply in winter, food inflation has stayed in the negative in the last week of December. The rate was seen at negative 2.9 per cent as compared to negative 3.36 per cent in the previous week in December. The RBI has taken stringent steps to curb inflation in the country which as of November stood at 9.11 per cent. Going forward, judging by the way the inflation numbers have eased off over the past few months, we expect headline inflation for December at 7.71 per cent.

On the global front, markets remained quite volatile for the week. However, they have also ended the week on a positive note. During the week all the indices reacted invariably over the news from the US and Europe. The markets gained momentum in the last two days after data showed that investors had gained business confidence. Investors also gained some respite while markets in Asia as well as Europe posted some good numbers over the news that Italy and Spain were able to auction their bonds at lower borrowing costs.