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Views on markets today
· Indian markets fell for the seventh day in eight sessions and closed at 7week low on disappointing results from Infosys Technologies and rising food and fuel price which reinforce expectations of an interest rate rise this month’s monetary policy. Except real estate, all sectoral indices closed negative with banks, IT, consumer durable and metal stocks were major loser. Infosys Technologies fell 4.8% after it missed estimates for profit and future sales growth and warned of sluggish global economic growth.
· Market breadth was weak strong at ~0.65x as investors sold large cap stocks. FIIs sold equities worth `2.49bn while domestic institutions bought equities of `2.42bn.
· Asian markets are mostly down today following the weak US markets overnight. Japanese stocks slipped on profit-taking, spurred by news Thursday that U.S. initial unemployment claims increased by 35,000 to 445,000 last week, compared with economists' expectations for a decline. Hong Kong shares struggled to find direction early Friday, with Chinese insurers and coal producers losing ground after recent gains, while many banks advanced as sharp overnight gains in the euro supported risk appetite.
· We expect Indian markets to open weak today following the weak Asian cues and pressure from the food prices that reflected in yesterday's inflation data. We may see markets to remain volatile today ahead of the monthly inflation data.
Key events today
· Announcement of monthly inflation data for the month of December 2010
Economic and Corporate Developments
· Food price index rose 16.91% and the fuel price index climbed 11.53% for the week ended 1 January 2011 against the prior week’s annual food and fuel inflation, which stood at 18.32% and 11.63%, respectively. The primary articles price index was up 17.58% in the latest week, compared with an annual rise of 20.20% a week earlier.
· Government may limit FDI in pharma sector at 49%.
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