Markets Likely To Be Jerky Today

The markets may see choppy trading today. Strong corporate earnings, sector/company specific news flow and hopes of a rate cut by the RBI led to the Sensex touching 20000. However, some amount of consolidation can be expected today. To add to downward pressure were comments from RBI Governor Duvvuri Subbarao who said prices of consumer products and manufactured items are still rising. He said that although the rate of increase in prices has slowed, it still remains elevated.

Gains yesterday had been brought about my upside in individual groups of stocks. Telecom stocks saw massive upward movement as speculation of raising voice call tariffs by Indian carriers spread on the street. Cement stocks appreciated because of news on them drawing up plans to question the legality of the cartelisation case when it comes up for the scheduled hearing on January 29, 2013 before the Competition Appellate Tribunal. Axis Bank too added significant support to the upward movement with a better than expected results announcement for Q3FY13.

Global cues have been mixed. Europe traded lower as comments from US Treasury Secretary Timothy Geithner weighed in. He said that the US could hit the debt ceiling between mid-February and early March. On the same lines, ratings agency Fitch issued a warning to the US saying its AAA rating was at stake if an agreement on raising the ceiling for debt was not reached at. At the same time, data on US retail sales managed to cheer investors, leading to a mostly positive closing.

Asian stocks have moved lower after a positive opening. Hong Kong has been weighed down ahead of an annual policy speech of the city’s leader and Japanese stocks because of a strengthening yen.

A cumulative of Subbarao’s comments, lack of earnings announcements, absence of major movement inducing domestic macroeconomic cues and mild consolidation are likely to drag the markets lower today. The SGX Nifty was seen trading lower by 19 points at 8:00 AM today.