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Last Updated : Mar 08, 2014 03:54 PM IST | Source: Moneycontrol.com

IIP, CPI nos, FII flows, voter polls to move mkt next week

With the parliamentary election polling schedule announced last week, the markets would be very sensitive to the slew of voter polls which would be aired on the various media platforms.


The first key macro data of the week will be declared on Wednesday i.e. IIP for January. The Bloomberg consensus estimate is -0.9 percent versus -0.6 percent for December ’13. An indication of this is also available from the growth numbers of eight core industries, which have a weightage of some 38 percent in IIP. In January, the eight core industries growth stood at 1.6 percent, a three month low.


Also on Wednesday, we have the February CPI numbers, the Bloomberg consensus estimates being 8.30 percent versus 8.79 percent for January. On Friday, WPI numbers for February will be declared, the Bloomberg consensus estimate being 4.90 percent versus 5.05 percent in January.


Also read: This rally has more legs; stick to defensives: Experts

I believe the CPI and WPI announcements will be non-event, unless they deviate sharply from the consensus as RBI has set very strict target for year-end CPI number, 8 percent by January ’15, before any steps towards rate cut are taken. I believe the target is achievable incase we have normal monsoon as on contrary there are already reports of this year being affected by El Nino, which may impact the monsoon and in-effect trigger droughts in parts of India.

Close

With the parliamentary election polling schedule announced last week, the markets would be very sensitive to the slew of voter polls which would be aired on the various media platforms.


FII flows would also be key monitorable, lending direction to the markets. As of last Thursday trading day, FIIs have put in USD 498.57 million net in Equities and USD 1.68 billion net in Debt, in the month of March. The net year to date figures stand at USD 852.10 million in Equities and USD 5.56 billion in Debt. As of last Thursday, it was also the 15th consecutive net buying session by the FIIs on the Indian bourses.


On sustained FII net inflows and much improved CAD situation, Rupee rose to nearly three month high on Friday, much to the discomfort to the exporters. However, a Reuters poll on Friday cast doubt about whether the rupee can sustain the gains, showing the currency trading at 62 to the dollar in a month, at 63.25 in six months and at 63.60 in a year.


Ukraine issue may continue to linger on as the latest is that Russia has warned the US not to take "hasty and reckless steps" as regards to proposed sanctions on Russia by US as they would harm US more. I believe the sanctions would hurt both the sides equally as West too has substantial investments in Russia especially in the oil and gas sector, not to ignore reliance of Europe on the Russian gas supplies. Meanwhile, Crimea's parliament announced on Thursday it would hold a referendum on 16th March on whether to join Russia or remain part of Ukraine. Russia's parliament has promised to support Crimea if it chooses to become part of Russia. The possible referendum on 16 March will likely bring a ‘yes’ vote for Russian integration given 59% of the region are Russian speaking.


US on Thursday will be announcing the key retail sales data. Approximately 70% of US GDP is driven by consumer spending, making this data a key monitorable. Otherwise, the rest of the week will be data light as far as Eurozone and China is concerned.

This article is written by Aviral Gupta, Investment Strategist, Mynte Advisors



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First Published on Mar 8, 2014 01:29 pm
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