Feb Inflation At 6.95%, Markets Volatile

After a positive opening, the Indian markets have turned volatile. Both the indices have lost most of their initial gains, but are still trading positive with intraday returns of 0.4%. Meanwhile, the inflation figure for Feb 2012 rose to 6.95% on a month on month basis. This number is very crucial for the credit policy that will be announced tomorrow by the RBI. The Railway Budget has proposed to set up an independent railway safety authority and a committee to examine safety standards.

The other Asian indices have also turned volatile. All 3 key indices gave up their morning gains, with Shanghai and Hang Seng closing in negatives and Nikkei shedding a few points but closing in the green.

The European markets have opened positive. All 3 key indices are up, with DAX showing gains of 0.5% in the early trade.

Of the sectoral indices, CG is leading with 1.97% gains. Bankex, Power, HC and PSU have advanced by over 1%. However, Oil & Gas, Teck, Realty and IT are in the red.

Among the Sensex stocks, L&T is up 3%. NTPC, ICICI Bank, M&M, Hindalco and Tata Power are all up by over 2%. BHEL, ITC, Tata Motors, Cipla, Coal India, GAIL India, Bharti Airtel and SBI are also up over 1%. TCS, Wipro, Bajaj Auto, HDFC, RIL and Jindal Steel are in the losers list.

With the Railway Budget going on, Zicom Security Systems, NELCO and Bharat Electronics are trading in the green, while Kernex Microsystems, Kalindee Rail, Texmaco, Stone India and Titagarh Wagons are in the red.

In other stocks, Apollo Hospitals is up 6.45%. Financial Tech is also holding its ground with 6.15% gains. Cadila Healthcare is up 5.58%. United Breweries is downplaying the market with negative 6.63% returns.

The market breadth, which indicates the overall health of the market, is still positive. Out of a total of 2861 stocks, 1365 stocks advanced, 1367 stocks declined and 129 stocks remained unchanged.

The markets have reacted to the marginal increase in inflation by showing volatility. We expect they will remain volatile for the day with a negative bias.