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The snake-and-ladder game will continue in the domestic equity markets on Tuesday too, as analysts are assessing the IIP and inflation data. Globally, ending days of weakness, the US stocks on Tuesday closed higher on expectations of soft inflation data.
Mixed signals
The CPI data print is a pleasant surprise. At 5.88 per cent, it has slipped below the RBI’s mandated range after 10 months, said Nish Bhatt, Founder & CEO, Millwood Kane International.
However, IIP, on the other hand, was a disappointment as the industrial output contracted in October despite it being a festive season. The contraction in the consumer durable and non-durables segments is a cause of worry, he added.
According analysts, the consolidation phase to continue for domestic markets amid lack of clear triggers.
Siddhartha Khemka, Head - Retail Research, Motilal Oswal Financial Services, said that market has been consolidating since last few sessions as investors remain cautious ahead of CPI data (both India & US) and the key event of FOMC monetary policy on Wednesday. It will be further followed by monetary policies of ECB and BoE on Thursday.
SGX Nifty
SGX Nifty at 18,632 indicates a marginal gain for domestic benchmarks, as Nifty futures on Monday closed at 18,605.20. Asian stocks are up moderately in the 0.15-0.75 per cent range.
“We are witnessing buying on a consistent basis; though follow up is missing. We expect market to remain side-ways for next few days until the key events overhang is done away with,” Khemka said adding that action might be seen in banking stocks ahead of various central bank meetings lined up this week. Also sectors like defence, tyre, FMCG and paints will remain in focus on the back of falling commodity prices and news flow.
India VIX, the Nifty volatility index, settled at 13.31, which according to brokerage Choice International, points to a consolidation for Nifty.
“The Put-Call ratio of Nifty is currently at 0.85 levels. Open Interest data, on the call side, indicates the highest accumulation observed at 18600 and 18700 strike prices and at 18400, 18300 strike prices on the put side,” it added.
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