Pre Open Thoughts: Depression sets in!!!

Pre Open Thoughts: Depression sets in!!!

Ø Concern should drive us into action, not into a depression. There are rumours of Sovereign debt concerns been escalated; Concerns also persist over economic growth in key regions like the US, China and the eurozone. European markets on Friday slipped amid worries about the precarious financial health of debt laden Spain and Italy.

Ø Back home too, the macroeconomic conditions are not conducive. Data quality and reliability are also in doubt following the IIP fiasco. The RBI could help by cutting the repo rate by at least 25 bps. But, given the high fiscal deficit, elevated crude oil prices and sticky inflation it will be a tough call for Governor D. Subbarao.

Ø A sharp downward revision in January IIP data and lower-than-estimated February industrial production have raised the odds of a repo rate cut at the April 17 policy meeting of the RBI.

Ø India’s (March WPI) inflation rate is likely to have slowed marginally as easing price pressures from non-food items offset persistently high food and fuel costs data to be released today.

Ø Whether the central bank obliges the markets only time will tell.

Ø Nifty closed at around 5200 which happen to be the strike at which maximum Put open interest is for April. Volatility is likely to increase in the short term. Be watchful and cautiously take chances as a lot of frontline counters have been at the receiving end for no real fault of theirs.

Ø In other news sugar stocks will be in focus as Centre for Monitoring Indian Economy (CMIE) has said the production of sugar will fall by 9.8% in the current fiscal due to lower availability of sugarcane. They also said that it has maintained its GDP growth forecast for FY13 at 7.6%, against the estimated 6.8% in FY12.

Ø The FIIs were net buyers of Rs 1.37bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of ~Rs 4.79bn, as per the provisional figures released by the NSE.

Results Today:

Castrol India, CRISIL and Mindtree.

Global Data Watch today:

China FDI, UK Rightmove house price index, Eurozone trade balance, New York empire state manufacturing index, US retail sales, US business inventories, US NAHB housing market index and Federal Reserve official Bullard's speech.