Market may open higher ahead of RBI meet

The market may open higher ahead of the announcement of Reserve Bank of India's First Bi-monthly Monetary Policy Statement, 2014-15 at 11:00 IST today, 1 April 2014. Trading of CNX Nifty futures on the Singapore stock exchange indicates that the Nifty could gain 22 points at the opening bell.

Jindal Steel & Power (JSPL) after market hours on Monday, 31 March 2014, said that Jindal Power (JPL), a company promoted by the company has commissioned the second unit of 600 megawatts (MW) of the 4x600 MW expansion project at Tamnar in Raigarh district of Chattisgarh on Sunday, 30 March 2014. The Tamnar plant is the country's first mega power project in IPP (Independent Power Plant). The unit has been declared available for commercial operation (COD) within a time frame of 28 months from the Boiler Erection stage which is a record for a unit of this size - a new benchmark in the Power sector in India, Jindal Steel & Power said. The total capacity of Jindal Power has now reached 2,200 MW.

The company in a statement also informed that the third unit of 600 MW is completed and ready for synchronization, while the company plans to commission its fourth unit of 600MW by October 2014.

Speaking on the commissioning Mr. Ravi Uppal, MD & CEO, JSPL, said: "The company has achieved this impressive feat by adopting the best practices in project construction, IT enabled and web based project management tools and most innovative commissioning methods thereby achieving unprecedented operational efficiencies. On completion of the expansion project of (600X4) 2400 MW- JPL will have a total capacity of 3,400 MW in Tamnar. We intend to become a significant thermal power player in India over the next two years. We have a vision of having installed capacity of 10,000 MW by the year 2020 with a unique approach of amalgamating diverse forms of power including thermal, hydro, solar and wind energy".

PSU OMCs will be in focus as petrol prices were reduced by 75 paise a litre (excluding state levies) effective 1 April 2014. Diesel prices, however, remained untouched, as the Election Commission's approval was awaited.

PSU OMCs suffer under-recoveries on domestic sale of diesel, LPG and kerosene at government controlled prices. In January 2013, the government allowed PSU OMCs to raise diesel prices in small measures at regular intervals. The government has already freed pricing of petrol.

Shares of jewellery makers -- Titan Industries and Rajesh Exports -- will be in focus after Finance Minister P. Chidambaram on Monday, 31 March 2014, said that the government will consider easing curbs on gold imports in consultation with the Reserve Bank of India (RBI). India, which used to be the No. 1 buyer of gold before the government slapped a record 10% import tax and put in place other restrictions to cut ballooning trade deficit, recently allowed five private banks to import the metal.

Infrastructure sector output rose 4.5% year-on-year in February 2014, mainly driven by higher electricity generation, oil refining and steel production, data released by the government after trading hours on Monday, 31 March 2014, showed. The sector grew 1.6% year-on-year in January 2014. In the first 11 months of the current fiscal year, the output grew an annual 2.6%, the data showed. The infrastructure sector, which comprises coal, crude oil, oil refining, natural gas, steel, cement, electricity and fertilisers, accounts for 37.9% of India's industrial output.

The Reserve Bank of India will announce the First Bi-monthly Monetary Policy Statement, 2014-15 at 11:00 IST today, 1 April 2014. Citing price pressures, the Reserve Bank of India raised its key lending rates by 25 basis points after Third Quarter Review of Monetary Policy for 2013-14 on 28 January 2014.

Markit Economics will unveil HSBC India Manufacturing PMI, which gauges the business activity of India's factories, for March 2014 today, 1 April 2014. The manufacturing PMI ticked up to 52.5 in February 2014 from 51.4 in January 2014.

The next major trigger for the market is Q4 March 2014 and year ended 31 March 2014 (FY 2014) corporate earnings. Investors and analysts will closely watch the management commentary that would accompany the results to see if there is any revision in their future earnings forecast of the company for the year ending 31 March 2015 (FY 2015) and/or for the year ending 31 March 2016 (FY 2016). Indian companies will start reporting their Q4 and full year results from mid-April 2014. The result season will conclude in end-May 2014.

Another major trigger for the stock market is the outcome of the upcoming Lok Sabha elections. Lok Sabha elections will be held between 7 April 2014 and 12 May 2014 in nine phases. The counting of votes will take place on 16 May 2014. The term of the current Lok Sabha expires on June 1 and the new House has to be constituted by May 31. Along with the Lok Sabha election, Andhra Pradesh (AP), including the regions comprising Telangana, Odisha and Sikkim will go to polls to elect new assemblies. AP, Odisha and Sikkim assemblies come to end on June 2, June 7 and May 7 respectively.

Key benchmark indices edged higher on last trading session of Q4 March 2014 and the fiscal year ended 31 March 2014 (FY 2014) on Monday, 31 March 2014, with the market sentiment boosted by data showing that foreign institutional investors (FIIs) made substantial purchases of Indian stocks on Friday, 28 March 2014. With small gains, the barometer index, the S&P BSE Sensex, and the 50-unit CNX Nifty, both, attained record closing high. The S&P BSE Sensex garnered 46.30 points or 0.21% to settle at 22,386.27 on that day, a record closing high for the barometer index.

Foreign institutional investors (FIIs) bought shares worth a net Rs 942.86 crore on Monday, 31 March 2014, as per provisional data from the stock exchanges.

Asian stocks gained on Tuesday as investors weighed reports on China's manufacturing that underscored weakness in the world's second-biggest economy. Key benchmark indices in Hong Kong, China, Singapore, South Korea, Japan and Taiwan were up 0.13% to 1.72%. Japan's Nikkei Average fell 0.28%.

Chinese manufacturing indexes pointed to weakness in the world's second-biggest economy as leaders contemplate whether to add stimulus. A Purchasing Managers' Index fell to 48.0 in March, the lowest reading since July, from 48.5, HSBC Holdings Plc and Markit Economics said today. A separate PMI from the government, with a larger sample size, was at 50.3 after 50.2 in February.

Developing Asia is poised to sustain its current growth momentum and is well positioned to manage risks coming from a slightly slower Chinese economy and possible uneven demand from major industrialised nations, the Asian Development Bank said. India is forecast to accelerate to 5.5% this year, much faster than the 4.7% forecast in December, although the South Asian nation was still operating below potential which can be solved by clearing investment bottlenecks, the bank said. Asian nations can undertake preemptive measures to protect the region's growing economy from unpredictable capital inflows, said the Manila-based lender as it unveiled its forecasts for the region for 2014 and 2015. The bank said it expects the region, grouping 45 counties in Asia-Pacific, to grow 6.2% this year, slightly faster than its most recent estimate of 6% in December, before accelerating further to 6.4% in 2015.

"Most regional economies have strengthened their economic fundamentals. Looking ahead, strengthening macroprudential measures before the boom can help avert sudden capital reversals that accompany the bust," the ADB said in its Asian Development Outlook 2014.

US stocks rallied broadly on the final trading day of the quarter on Monday, capping a lackluster three months with a strong gain led by the beaten-down biotechnology sector.

The influential US non-farms payroll data for March 2014 will be released this Friday, 4 April 2014.

Federal Reserve Chair Janet Yellen, easing investor concern that interest rates may rise earlier than previously forecast, said the world's biggest economy will need Fed stimulus for "some time." Yellen said on Monday the Fed hasn't done enough to combat unemployment even after holding interest rates near zero for more than five years and pumping up its balance sheet to $4.23 trillion with bond purchases. "This extraordinary commitment is still needed and will be for some time, and I believe that view is widely shared by my fellow policy makers," Yellen said at a community development conference in Chicago. "The scars from the Great Recession remain, and reaching our goals will take time."

The Federal Open Market Committee (FOMC) next undertakes monetary policy review at a two-day meeting on 29-30 April 2014. The Federal Reserve on 19 March 2014 said after the conclusion of a monetary policy review that it will trim its monthly bond purchases by $10 billion to $55 billion. The Federal Reserve will end its bond-buying program before the end of the year with an interest-rate increase likely to follow in "around six months," Chair Janet Yellen said on 19 March 2014. Quarterly Fed forecasts on 19 March 2014 showed more officials predicting that the benchmark interest rate, now close to zero, will rise to at least 1% by the end of 2015 and 2.25% a year later.

In Europe, a policy meeting of the Governing Council of the European Central Bank (ECB) will be held on Thursday, 3 April 2014, in Frankfurt to decide euro zone interest rates. ECB President Mario Draghi has consistently reassured listeners that the euro zone isn't heading for deflation, but that the central bank stands ready to act if needed.

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