Markets Indifferent To RBI Rate Cut

The markets closed on a positive note for two weeks at a stretch. The Sensex and the Nifty closed the week with gains of 1.50% and 1.24% respectively. During the week, the Nifty crossed the psychological levels of 6000, but was unable to sustain that level.

On the other hand, the sales volume figures of automobile manufacturers for the month of April 2013 was announced on May 1, 2013. Maruti Suzuki (MSIL) had its total sales decline by 3.10% in April 2013 on a yearly basis. Tata Motors witnessed tremendous weakness in its passenger vehicle sales. The sales volume of passenger cars and utility vehicles/vans declined by 52.08% and 34.49% respectively in April 2013. Mahindra & Mahindra's sales volumes grew by 1.76% in April 2013. The performance of two-wheelers too remained subdued. Sales volumes of Hero MotoCorp and Bajaj Auto declined by 10% each in April 2013, as compared to the corresponding month of the previous year. Sales of TVS Motors declined for yet another month by 5.30%, which is however lesser than the decline seen in the previous months.

On the global front, the US GDP growth has once again disappointed the street as it came at 2.5% for the first quarter of CY13. While growth has continued, the pace is slower than what was expected by many economists. The GDP growth estimates of experts were between 2.8% to more than 3%, but at 2.5%, the growth has come in lower than expected. The US economy in Q4CY12 grew merely by 0.4% and hence 2.5% still looks better. The euro-area economy will shrink more than what was previously estimated in 2013 as part of a two-year slump that has pushed up unemployment, the European Commission said in revised forecasts. Gross domestic product in the 17-nation region will fall 0.4% this year, compared to the February prediction of a 0.3%.

Money inflows from FIIs remained strong through the week. They bought equities worth Rs 1957 crore in the week. The DIIs ended the week in red selling equities worth Rs 252 crore. Going forward, the Q4 results of India Inc. will be the main trigger that will decide the future course of the markets. Therefore, some volatility in trade can be witnessed next week.