Markets Have A Positive Day

The Indian markets had a positive day, as they traded higher in the green zone for the entire trading day. Among the sectoral indices, Bankex, Metals, FMCG and Auto moved higher. Teck and IT were the only indices that closed in the negative territory.

The Index of Industrial Production (IIP) numbers for Feb 2012 came in at 4.1%. Further, the revised IIP data for Jan 2012 came in much lower at 1.1% versus the earlier figure of 6.8%. Now, all eyes would be on the Wholesale Price Inflation (WPI) number for Mar 2012, which will be released on Apr 16, 2012 (Monday) and the RBI monetary policy meet on Apr 17, 2012, (Tuesday). If the WPI figure shows signs of moderation, the RBI might take a rate cut, which will fuel growth in the economy.

The peer Asian markets also closed higher, with the 3 major indices, viz. Hang Seng, Nikkei and Shanghai, closing the day in the positive zone. To boost the economy, the Chinese government made a move of cutting the banks' reserve requirement and will help smaller business to get financing.

The European markets are trading in a mixed bag, with FTSE and CAC trading lower, while DAX is marginally in the green zone. The markets are looking nervous after Royal Dutch Shell Plc reported an oil spill. Portugal's banks were also under pressure after the heavily discounted rights issue from Banco Espirito, which affected the markets.

Dow Jones Futures is currently trading 50 points or 0.39% up at 12794, indicating a positive sentiment in the US markets.

Back home, the Metals stocks shone as buying was seen in some of the major scrips that had tumbled in the past couple of trading session. Jindal Steel, Sterlite Industries and Hindalco closed higher by as much as 3%-5%. The Auto and Banking stocks, which are interest rate-sensitive, moved higher on the back of expectations that the RBI may cut the rates in its forthcoming monetary policy meet. Maruti Suzuki, Hero MotoCorp, Tata Motors, etc. closed higher in the range of 1%-3%. Banking heavyweights SBI and ICICI Bank closed higher by 2.95% and 1.53% respectively. Other stocks like Bharti Airtel, Coal India, Cipla, HDFC, etc. closed marginally in the green.

On the other hand, IT stocks were among the major losers. Infosys was the major index loser, down 1.87% to Rs 2750.05. The scrip moved southwards on the back of speculations that there might be something negative in the company's March 2012 quarter results that are due tomorrow. Other IT stocks too traded weak, with Wipro and TCS closing lower. ONGC, DLF, NTPC, etc. also closed lower in today’s trading session.

Mangalore Refinery and Petrochemicals closed 2.38% higher at Rs 66.60 despite news that it has had an emergency shutdown due to the stoppage of water supply from the Nethravathi river. ABB closed 1.72% up to Rs 837 after the company won a Rs 75 crore order in India to power Metro services for the 'Pink City'.

The market breadth, which indicates the overall health of the market, was positive. Out of the total of 3277 stocks traded on the BSE, 1955 advanced, 1185 declined, and 137 remained unchanged.

We expect the markets to remain volatile and do not see any major overhaul likely in the investor sentiment in these market conditions.