Markets to remain volatile; FOMC meet eyed

FMCG stocks could remain under pressure after Nov CPI hit 5-month high of 5.4%

Markets are likely to remain volatile as investors are likely to adopt wait-and-watch stance ahead of the outcome of the US Fed two-day meet which begins later today.

At 8:30am, the early indicator SGX Nifty was down 51 points at 7,570.

"Markets are likely to open marginally negative today and likely to remain under selling pressure during the day. Supports for the Nifty are seen at 7,530 and 7,600 while resistance levels are seen at 7,715 and 7,765," Nirmal Bang Securities said in a note

Inflation measured by the Consumer Price Index (CPI) rose to 5.41% in November 2015 compared to 5% in October 2015.

Meanwhile, the Indian rupee is likely to remain weak ahead of the outcome of the US Fed meet. On Monday, the rupee crossed 67 a dollar, following cues from its Asian peers, as emerging market investors braced for an imminent rate rise by the US Federal Reserve for the first time since June 2006.

GLOBAL MARKETS

Asian stocks were trading mixed as investors turned cautious ahead of the outcome of the US Fed meet while volatility in global crude oil prices also weighed on sentiment. Shares in Japan lost the most with the benchmark Nikkei down 0.7% while Shanghai Composite was down 0.1%. Howeverm Straits Times and Hang Seng was up 0.1%-0.4% each.

US stocks recouped intra-day losses to end higher on Monday amid a recovery in global crude oil prices even as investors are keenly awaiting the outcome of the US Fed meet which is expected to announce hike in interest rate.

STOCKS IN FOCUS

Mahindra & Mahindra and Tech Mahindra will firm up after they agreed to buy Italian car designer Pininfarina SpA in a deal worth about euro 168 million ($185 million), underscoring the Indian vehicle maker’s international ambitions.

Infosys may extend gains after the IT t had made an investment of $3 million (around Rs 20 crore) in US-based sports technology and wearable devices start-up, WHOOP, to take a minority stake, not exceeding 20 per cent.

Hotel Leela may gain after the company said it has completed the sale of its Goa property for Rs 725 crore. The proceeds from the sale would be used to pare debt which stands roughly about Rs 4,900 crore.

FMCG and consumer durables stocks may be under pressure after consumer price inflation which hit a 5-month high of 5.41% in November 2015.

Jet Airways could see some activity after the airline announced Amsterdam as its new European gateway and said it is ending its service to Belgian capital Brussels.

Tata Motors is likely to firm up after the auto major decided to increase prices of its passenger vehicles by upto Rs 20,000 on select models from January.

IL&FS Engineering and Construction may gain after the company bagged Rs 374.64 crore project from Metro-Link Express for Gandhinagar and Ahmedabad (MEGA) for construction of viaduct corridor.

Natco Pharma may gain after it has emerged as the first company in country to receive approval for generic Daclatasvir Dihydrochloride (Daclatasvir) tablets, 30mg & 60mg, from the Drugs Controller General (India). Daclatasvir is used for treatment of patients with chronic hepatitis C.