Markets End The Week With Marginal Losses

The Indian markets mostly remained listless for the week. Both the benchmark indices, Sensex and Nifty, closed the week with nominal losses of 0.50% and 0.33% respectively.

This week on the domestic front we have seen most of the important macro data coming out. The IIP, which shows the exact position of the manufacturing industry in the country, witnessed marginal improvement for the month of January 2014. The data announced by the central statistical office shows that the IIP for the month of January 2014 stood at 182.20 as compared to 179 in December 2013 and 182 in January 2013. This means the YoY growth in IIP is only 0.10.

On the CPI front, there was some respite for the investors as the CPI for the February 2014 stood at 8.10%. This was lower than the 8.90% in January 2014. While the overall CPI is lower, there are a few problem areas. The fruits and vegetable inflation is still high at 15.79% and 14.04% respectively. Even the milk and milk products witnessed a hike of more than 10%.

On the other hand, the WPI also eased to 4.68% for February 2014 as against 5.05% reported during January 2014, which is at a nine-month low. The easing of prices of kitchen staples like onion and potato has helped the inflation to come down.

The other positive thing that we have witnessed this week is the appreciation of the INR. If we consider the performance of emerging market currencies since September 3, 2013 (when the INR had hit an all-time low of Rs 68.62 per USD) till date, the INR has appreciated by 11.03 per cent. On the other hand, currencies of Brazil, Russia and even China have actually depreciated during this period. Here we would like to appreciate the RBI Governor for taking the right decisions and handling the issue with agility.

The FIIs, for the month of March 2014, have bought equities worth Rs 3532 crore. This is much higher than the net buying of Rs 1404 crore in February and Rs 714 crore in January this year.

Going forward, it is clear that the markets are looking out for future triggers, which seems to be distant at this point of time. Hence, volatility in the coming week cannot be ruled out. On behalf of DSIJ, we wish all our readers a very happy and colorful Holi.