 "Markets to edge higher; FMCG stocks in focus")
Markets are likely to edge higher with FMCG stocks in action after lower-than-expected March consumer price inflation while encouraging growth forecast by the World Bank is likely to boost sentiment.
At 8:35AM, the early indicator SGX Nifty was up 12 points at 8,840.
Seeing the overall stats, analysts believe that the markets could gain grounf further. "For the Nifty, 8900-8950 is the major resistance zone. One should not go aggressively long and those who are long should hold on to their longs," said analysts at Angel Broking in a morning note.
Foreign institutional investors were net buyers to the tune of Rs 417 crore on Monday. Markets were closed on Tuesday on account of Dr. B R Ambedkar Jayanti.
INFLATION PRINT
Consumer Price Index (CPI)-based inflation eased to 5.17 per cent in March, the lowest in three months, aided by lower food prices. For February, CPI inflation stood at 5.37 per cent, January 5.19 per cent and March 2014 8.25 percent.
Given the maco-economic data, analysts feel that the Reserve Bank of India (RBI) may cut rates in the June policy review. However, further rate cuts beyond June look difficult.
"We maintain our view of another 25 bps rate cut in the June monetary policy, with further rate cuts seemingly difficult. Price levels are likely to have stabilized and recent disinflationary impulses have possibly run their course. Lowering of inflation until July-August will be driven by base effect rather than sustained sequential decelerations," points out a report from Kotak Institutional Equities.
"Our CPI inflation trajectory, in line with the RBI’s estimates, hints at lower room for an aggressive rate-cutting cycle by the RBI, especially given the regulator’s preference to maintain real rate at 150-200 bps. Additionally, the existing negative output gap is likely to close as the economy starts to recover," it adds.
GLOBAL MARKETS
Asian markets were trading in narrow range after China's first quarter (January-March) GDP expanded by 7%. GDP growth in the previous quarter stood at 7.3%. Japan's benchmark Nikkei was trading flat while China's Shanghai Composite was trading 0.5% higher and Hang Seng was up 0.6%. Further, Singapore's Straits Times was up 0.3%.
US markets ended mixed on Tuesday with the Dow Jones and S&P 500 ending higher as rebound in crude oil prices led to a rally in energy stocks such as Exxon Mobil and Chevron.
Further, encouraging earnings from select corporates and higher March retail sales also boosted investment sentiment. The Dow Jones gained 60 points to end above 18,000 at 18,036.70, the broader S&P 500 ended marginally higher by 3 points at 2,095.84. However, the tech-laden Nasdaq Composite ended 11 points lower at 4,977.29.
STOCKS TO WATCH
ACC may gain after the cement major reported operating EBITDA at Rs 609 crore was much higher than a year ago’s Rs 425 crore despite weak demand that led to lower sales volumes during the quarter.
DCB Bank may gain after it posted a 61 per cent year-on-year (y-o-y) rise in net profit at Rs 63 crore for the fourth quarter (Q4) ended March 31, on the back of higher net interest income (NII). NII was up 30% for the quarter.
KNR Constructions may gain after the company said it has won three highway projects worth Rs 729.50 crore.
Deepak Fertilisers may see some action after the company on Monday sold over 12% stake in Mangalore Chemicals and Fertilisers (MCFL) for an estimated Rs 125.69 crore, through the open market route.
Ashoka Buildcon may be in focus on the back of its QIP issue which opened on April 13, 2015 with a floor price of Rs 185.05 per share.
Bosch may see some action after the company said following a conciliation meeting was held on April 13, 2015 between the Management and Labour Union supported by the Labour Secretary, the company will lift the Lockout with effect from first shift of April 15, 2015.
Alstom T&D India will be in focus after the company secured an order worth Rs 57 crore from BARC to provide a substation for its Challakare unit in Chitradurga, Karnataka.
At 8:35AM, the early indicator SGX Nifty was up 12 points at 8,840.
Seeing the overall stats, analysts believe that the markets could gain grounf further. "For the Nifty, 8900-8950 is the major resistance zone. One should not go aggressively long and those who are long should hold on to their longs," said analysts at Angel Broking in a morning note.
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Meanwhile, the World Bank has forecasted India's GDP growth rate at 8% by 2017 and said that a strong expansion in the country, coupled with favourable oil prices, would boost the economic growth in South Asia. Further, investors will also be awaiting March WPI data to be released later today.
Foreign institutional investors were net buyers to the tune of Rs 417 crore on Monday. Markets were closed on Tuesday on account of Dr. B R Ambedkar Jayanti.
INFLATION PRINT
Consumer Price Index (CPI)-based inflation eased to 5.17 per cent in March, the lowest in three months, aided by lower food prices. For February, CPI inflation stood at 5.37 per cent, January 5.19 per cent and March 2014 8.25 percent.
Given the maco-economic data, analysts feel that the Reserve Bank of India (RBI) may cut rates in the June policy review. However, further rate cuts beyond June look difficult.
"We maintain our view of another 25 bps rate cut in the June monetary policy, with further rate cuts seemingly difficult. Price levels are likely to have stabilized and recent disinflationary impulses have possibly run their course. Lowering of inflation until July-August will be driven by base effect rather than sustained sequential decelerations," points out a report from Kotak Institutional Equities.
"Our CPI inflation trajectory, in line with the RBI’s estimates, hints at lower room for an aggressive rate-cutting cycle by the RBI, especially given the regulator’s preference to maintain real rate at 150-200 bps. Additionally, the existing negative output gap is likely to close as the economy starts to recover," it adds.
GLOBAL MARKETS
Asian markets were trading in narrow range after China's first quarter (January-March) GDP expanded by 7%. GDP growth in the previous quarter stood at 7.3%. Japan's benchmark Nikkei was trading flat while China's Shanghai Composite was trading 0.5% higher and Hang Seng was up 0.6%. Further, Singapore's Straits Times was up 0.3%.
US markets ended mixed on Tuesday with the Dow Jones and S&P 500 ending higher as rebound in crude oil prices led to a rally in energy stocks such as Exxon Mobil and Chevron.
Further, encouraging earnings from select corporates and higher March retail sales also boosted investment sentiment. The Dow Jones gained 60 points to end above 18,000 at 18,036.70, the broader S&P 500 ended marginally higher by 3 points at 2,095.84. However, the tech-laden Nasdaq Composite ended 11 points lower at 4,977.29.
STOCKS TO WATCH
ACC may gain after the cement major reported operating EBITDA at Rs 609 crore was much higher than a year ago’s Rs 425 crore despite weak demand that led to lower sales volumes during the quarter.
DCB Bank may gain after it posted a 61 per cent year-on-year (y-o-y) rise in net profit at Rs 63 crore for the fourth quarter (Q4) ended March 31, on the back of higher net interest income (NII). NII was up 30% for the quarter.
KNR Constructions may gain after the company said it has won three highway projects worth Rs 729.50 crore.
Deepak Fertilisers may see some action after the company on Monday sold over 12% stake in Mangalore Chemicals and Fertilisers (MCFL) for an estimated Rs 125.69 crore, through the open market route.
Ashoka Buildcon may be in focus on the back of its QIP issue which opened on April 13, 2015 with a floor price of Rs 185.05 per share.
Bosch may see some action after the company said following a conciliation meeting was held on April 13, 2015 between the Management and Labour Union supported by the Labour Secretary, the company will lift the Lockout with effect from first shift of April 15, 2015.
Alstom T&D India will be in focus after the company secured an order worth Rs 57 crore from BARC to provide a substation for its Challakare unit in Chitradurga, Karnataka.