5% Growth Estimate To Call For A Dull Start

The mood for the day is quite negative considering domestic and global factors. The opening for the day is thus, following these cues that have panned over yesterday and today, expected to be dull.

Domestically, the GDP growth expectation remained in focus through the day. Data released by the Central Statistics Office (CSO) yesterday showed that the economy is expected to grow at 5% in 2012-13. Having looked at previous estimates by different parties, this figure seems extremely low and comes about as a shocker to the markets. The Finance Ministry and RBI’s expectations of growth range between 5.5% and 5.9%, thus providing for an unpleasant day for the Indian markets. With this, the markets closed the day lower by 59.40 points at 19580.32, down by 0.30%.

Internationally there have been a host of mixed cues. European Central Bank President Mario Draghi during his monthly news conference said that the euro-zone economy should start to recover later this year partly due to the bank’s “accommodative” monetary policy, said a leading financial website. While this should ideally be spreading a positive sentiment across the markets, worries over Spain and Italy continued to linger over the street, capping gains.

Asia has been trading in a jittery manner ahead of key data to be announced today in China. Data on Chinese CPI (Consumer Price Index) and PPI (Producer Price Index) are scheduled to be released later during the day. These have been keeping Asian stocks mild today.

Domestically, the host of result announcements also took significant attention yesterday. The tons of results announced yesterday brought about a lot of individual stock movement. Tyre stocks did particularly well and saw massive boost in margins. These stocks are expected to perform well in the markets today.

Today is similar in terms of the number of companies announcing their Q3FY13 numbers. BEML, BGR Energy Systems, Bharat Forge, Cadila Healthcare, Canara Bank, GVK Power, Hindalco, M&M and tata Chemicals, among others. These are likely to see significant movement today depending on the results they announce.

Overall, the opening is expected to be soft considering subdued domestic cues, mixed global cues and a range-bound trading seen on the bourses in the previous few trading sessions. The SGX Nifty was also seen trading flat earlier this morning. The trend is expected to be the same for the Indian markets.