Indian Markets Outlook for the week (14 -18.01.2013)

www.rupeedesk.in

Key stock indices are seen taking cues from overseas markets and companies' Oct-Dec earnings next week, adding inflation data for December will be keenly eyed on Monday. India's headline inflation rate, based on the Wholesale Price Index, is likely to remain unchanged from last month at 7.2% in December. The inflation figure is important for investors in the run-up to the Reserve Bank of India's monetary policy review, due on Jan 29. However, there are talks that this data may disappoint, thereby hurting chances of a rate cut from the country's central bank this month. We expect inflation to inch up in Dec '12 and past two months inflation data to be revised upwards. If the Infosys result yesterday is any indication, 4QCY12 (Oct-Dec) earnings might surprise on the upside. These factors might inhibit RBI from effecting a policy rate cut this time around.

Core inflation is the number that should be keenly eyed in the data for December. In November, the non-food manufactured products inflation, which is a proxy for core inflation, fell to a 32-month low of 4.5% from 5.2% a month ago. Those expecting core inflation to ease in December maintain their view that the RBI would cut the Repo Rate by 25 basis points on Jan 29. However, scepticism in the market regarding the same may keep bank shares under pressure, and in turn the National Stock Exchange's 50-share Nifty given that the sector has an over 21% weightage in the index. Yesterday, the NSE Nifty ended at 5951.30 points, down 17.35 points, or 0.3% from Thursday. The BSE's 30-share Sensex closed flat at 19663.64, up 0.09 points. Traders believe the Nifty has immediate support at 5920, slipping below which it can slide down further to 5880.

Oil and gas stocks may remain in focus on hopes of a quick decision on raising diesel prices. Yesterday, Minister of Petroleum and Natural Gas Veerappa Moily said a decision on revising prices of petroleum products like diesel and cooking gas was expected soon but declined to put any timeframe on the exercise. Information technology stocks may also remain buoyant after Infosys' better-than-expected Oct-Dec earnings and marginally higher revenue guidance for 2012-13 (Apr-Mar). After Infosys, investors will keenly eye numbers from Tata Consultancy Services, due on Monday. Seasonal weakness, foreign exchange losses, and lower growth in business volumes may lead TCS to post a 3% sequential decline in its net profit at 34.10 bln rupees.

Apart from TCS, NIIT Technologies, HCL Technologies, and Wipro will also detail their earnings next week. Jaiprakash Power Ventures and Petronet LNG will detail their Oct-Dec results over this weekend. Muthoot Finance, Axis Bank, Bajaj Finance, Development Credit Bank, Bajaj Auto, YES Bank, Hero MotoCorp, HDFC Bank, ITC, MindTree, Reliance Industries, and UltraTech Cement will post numbers next week.

Indian Markets Outlook for the week: 31.12.2012 - 04.01.2013

www.rupeedesk.in

Benchmark indices will track overseas markets next week, and investors will mainly eye impact of talks between US lawmakers on ways to reduce effects of automatic tax hikes and spending cuts that threaten to push the country into recession in the first half of 2013. US President Barack Obama will meet Congress leaders, including House Speaker John Boehner, at the White House yesterday to attempt reaching a deal to prevent the economy from slipping into a recession. The House of Representatives are also scheduled to meet on Sunday to resume deliberations on the same. The solution to the fiscal cliff issue may provide some short-term relief to the markets.

The National Stock Exchange's 50-share Nifty could surpass its resistance of 5960, if US lawmakers are able to hammer out a consensus on the fiscal cliff issue. There are a few market participants who are unsure whether a US budget deal will suffice in helping the Nifty break out of its 5820-5960 range and expect profit booking to sustain at higher levels. They see immediate support for the Nifty near 5800-5820, even in the event of a failure of the US budget talks. Yesterday, the Nifty ended at 5908.35 points, up 38.25 points or 0.65% from Thursday. The BSE's 30-share Sensex ended at 19444.84, up 121.04 points, or 0.6%. Year-end buying by mutual funds to prop up their net asset values may limit the downside in the Nifty. Among stocks, bank stocks may trade with a positive bias next week, in spite of intermittent profit booking, on hopes of a rate cut from the Reserve Bank of India in its third quarter review of monetary policy 2012-13 (Apr-Mar) on Jan 29.

Bank Nifty is seen in the range of 12800-12900 in the near term. The Bank Nifty ended flat from Thursday at 12458.15 yesterday. Auto and cement stocks will take cues from their December sales numbers next week. Suzlon Energy's stocks may remain in the spotlight, as investors await the outcome of a reported meeting between the company and its lenders yesterday to discuss the company's debt-restructuring plan. Stocks of Bharti Infratel are likely to slip further, as they are viewed as expensive. The stock, which debuted on the bourses yesterday and ended well below its issue price of 220 rupees at 191.65 rupees, may further slide towards 175-180 rupees in the near term.

Indian Markets Outlook for the week (03-07.12.2012)

www.rupeedesk.in

Having risen over 4.5% this week, the Nifty and the Sensex are seen rallying next week as well, though the Parliament's upcoming vote on 51% foreign direct investment in multi-brand retail will be eyed by investors for more cues. The Lok Sabha will discuss the FDI issue on Tuesday and Wednesday, and the Rajya Sabha after that. Yesterday, the Nifty and Sensex ended up 0.9% each at 5879.85 and 19339.90, respectively. The indices have posted a rise of over 4.5% each for the month
as well.

US President Barack Obama's confidence on striking a deal with the US Congress to avert the US fiscal cliff has supported equities. On Monday, overseas markets will continue to lend cues to investors. US index futures were trading mostly flat today before the release of consumer- spending data for October. For the next week, We may see resistance for the Nifty at 5900 and next resistance at 5950. Support for the index is seen at 5800. Among sectors, investors in automobile and cement companies will track sales data for November, due on Saturday. The bias for banking, metal, and capital goods companies is also likely to remain positive as their futures contracts saw a high rollover of mostly long positions into the December series, reflecting investors' view on the sectors.

Indian Markets Outlook for the week (19-23.11.2012)

www.rupeedesk.in

The outcome of US President Barack Obama's meeting yesterday with congressional leaders to discuss ways the country can avoid the so-called fiscal cliff will set the tone for trading in domestic equities next week. The fiscal cliff refers to tax hikes and spending cuts the US government will have to undertake from January to increase its revenues and lower its debt. US index futures slipped yesterday before Obama's meeting with the Republican and Democratic leaders of the Congress. Caution due to the looming fiscal cliff led to a sell off in Indian equities yesterday, with the benchmark Nifty index ending below its key support of 5600 for the first time in 12 days. On a week-on-week basis, the two indices were down nearly 2% each. A Close below Nifty's support level could put further pressure on the broader market in the next one-two sessions. However, they see a recovery from 5530-5550 on the Nifty. Stiff resistance for the index is seen at 5650.

Apart from overseas woes, profit booking post a weak-to-uneventful Jul-Sep earnings season could weigh on Indian equities in the coming sessions. 2QFY13 (Jul-Sep) results raised several uncomfortable questions about (1) PSU (public sector undertaking) banks' NPLs, (non-performing loans) (2) high multiples of certain consumer stocks in light of middling quality of earnings, (3) disclosures and (4) the market's expectations of earnings upgrades. As can be seen, our earnings forecast has declined moderately for FY2013 and we now forecast 5.8% growth in net profits of the BSE-30 index (full-float basis) versus 7.5% at the start of the 2QFY13 results season. Among stocks, Siemens, Geodesic, and Mudra Lifestyle will be in focus next week as the companies will release their Jul-Sep results.

Bharti Airtel's stocks, which have risen 9% in the past four sessions, could see profit booking next week. The stock ended up 3.8% at 301.40 rupees yesterday that a lack of participation by companies in the 2G-spectrum auction for the 1,800 MHz band may could force the government to keep a lower reserve price for future auctions.