Markets turn cautious ahead of CPI, IIP data; metal shares drag

Benchmark indices have turned weak in late morning trades as investors remain cautious ahead of the IIP and CPI numbers due to be released tomorrow. Also, weak macroeconomic data dampened market sentiment.

At 11.40 AM, the 30-share Sensex is down 47 points at 28,662 and the 50-share Nifty has lost 16 points at 8,696.

MACRO ECONOMIC DATA

India’s current-account deficit held near the widest since the quarter through June 2013 as falling oil prices were insufficient to offset a drop in exports. The October-December shortfall in the broadest measure of trade was $8.2 billion compared with $10.2 billion the previous quarter, the Reserve Bank of India said in a statement on Tuesday.

India’s trade deficit widened to $39.2 billion during the quarter from $38.6 billion in the September quarter as exports fell 7.3% while imports declined 4.5%. Gold shipments are seen surging after the government last month refrained from raising a record tariff.

Meanwhile, investors are trading with caution and are unwilling to take fresh positions ahead of the proceedings in the Parliament particularly with respect to the passage of key bills such as Land Acquisition Bill in Rajya Sabha.

Further, foreign institutional investors turned net sellers in equities worth Rs 748 crore on Tuesday, as per provisional stock exchange data. They were also net sellers in the F&O segment to the tune of Rs 475 crore.

RUPEE

The rupee fell by six paise to a fresh two-month low of 62.82 against the US dollar in early trade today at the Interbank Foreign Exchange due to rise in the Greenback's value against other global currencies.

KEY STOCKS

On the sectoral front, BSE Metal index is the top loser down over 1.4% followed by Realty, Healthcare, Auto, Capital Goods indices trading lower up to 1%. However, BSE IT, TEck indices are trading higher up to 1%.

Infosys is up 1.2%. The IT major on Tuesday said that its business process outsourcing services subsidiary Infosys BPO has opened a centre in Puerto Rico, South America. Among other IT majors, TCS and Wipro were up 0.2-2% each. 

In the FMCG pack, ITC and HUL are trading higher up to 1.4% ahead of the CPI numbers due to be released tomorrow.

Brent crude oil has slipped below $58 a barrel as the dollar hit multi-year highs and the oil market remained hobbled by oversupply and weak demand. Oil and Gas major ONGC is down 1.3%.

Chinese Producer Price Index(PPI) fell the most in more than five years and is quoting at  -4.8 percent, coming in lower than the expected -4.3 percent and its worse since December 2009, released on Tuesday. Also, the overall sentiment towards the performance of the Chinese economy has been lacklustre, with Premier Li cutting its annnual growth forecast to seven percent. Metal shares are trading under pressure with Hindalco, Sesa Sterlite and Tata Steel are trading down up to 4%.

The trial court’s order to summon former prime minister, Manmohan Singh along with Kumar Mangalam Birla, Chairman of Aditya Birla group as accused on April 8th in the allocation of Talabira II coal block allocation to Hindalco is all set to result in an unprecedented legal fight. The Birlas will now have to battle it out in the court to prove that no undue favour was given to the Birlas. Hindalco is down over 3.5%.

Faster growth and improved consumer sentiment should boost sales of passenger cars and utility vehicles in India by 6 to 8 percent in the year starting in April, the country's auto industry body said on Tuesday. M&M and Bajaj Auto are trading higher up to 1%.

In the capital goods space, BHEL, L&T are trading lower up to 1% on caution ahead of the IIP data due tomorrow.

In the broader market, the BSE Mid-cap and Small-cap indices are down 0.3% and 0.1% each.

Market breadth is weak with 1,035 gainers and 1,341 losers on the BSE.