Markets show choppy trend, Jan IIP at 6.8%

After the positive start in the morning, the Indian markets have slid down. The BSE Sensex and the 50-share Nifty are both currently trading with nearly 0.50% gains from last week's closing. The indices have lost more than 1% each from the positive seen in the beginning of trade today.

Meanwhile, the Jan 2012 IIP numbers were announced today. The output of the industry grew by 6.8% as compared to 1.8% in the earlier month. Growth in manufacturing and electricity sectors was in positives, while that in mining was in the negative due to mining bans in several states. While the IIP numbers look good, the two key events that will unfold this week are the RBI’s review and the Union Budget.

The scenario in the Asian indices has worsened further. Both Shanghai and Nikkei traded in negatives, while Hang Seng held marginal gains.

European markets have opened in the negative. FTSE and CAC are down by over 0.3% each, while DAX is down by more than 0.2%.

Among the sectoral indices, CG is leading with 2.45% gains. Oil & Gas, CD and Bankex are all up with over 1% gains. HC, Teck and IT, which were seen trailing on the charts in the morning, have slipped into the negatives now. Metals and FMCG, on the other hand, are trading flat.

15 of the 30 Sensex stocks have advanced. SBI is top gainer, with 3.81% intraday gains. L&T has extended its gains and is up by 3.66%. Bajaj Auto is up by over 3%. RIL has also extended its gains, and is trading firmly up by 23 points. BHEL, ICICI Bank, Sun Pharma and Hero MotoCorp are also up by more than 1% each.

The shares of United Breweries have surged by 11.41%. Wockhardt has also rallied by 7.52 %. Jaypee Infratech is still up by over 7%.

The market breadth, which indicates the overall health of the market, is still positive. Out of a total of 2766 stocks, 1482 stocks advanced, 1164 stocks declined and 120 stocks remained unchanged.

We expect that the markets will continue to remain volatile, with a negative bias.