IIP could moderate market

Industry, perseverance, and frugality make fortune yield. - Benjamin Franklin.

The trend of sideways consolidation for the large caps may continue even as side counters continue to hog the limelight. The start is expected to be subdued with global markets trading mixed to lower. After a surprisingly strong show in July, IIP growth is likely to moderate in August and may slip below 10%. The IIP figures will be announced at 11:00 am today.



It may be recalled that the current bull-run was kicked off post the July IIP report. We have to see what the latest IIP data holds in store for the markets. Also, watch out for any revision in the July IIP growth.

Globally, the markets are awaiting the FOMC minutes of the Sept. 21 meeting later today. It was in that meeting that the Fed had declared its willingness to add more monetary stimulus to give a fillip to a sluggish US economy. The next Fed meet is scheduled for Nov 3, a day after Congressional elections.

The pullback from support levels of 6070 fizzled out on Monday, as the NSE Nifty failed to sustain above 6185 despite positive cues from Asian markets. This has led to formation of a variation shooting star which shows the inability of the bulls to sustain gains. We expect the Nifty to trade in a range of 6070-6240 in the near term.

One should be careful with the key indices trading close to all-time highs. Avoid chasing high returns in the Small-Caps and Mid-Caps as it is fraught with risks. There could be more selling as the market is still looking slightly overbought, especially the index components. The key indices might consolidate this month after a spectacular September. But, the medium- to long-term outlook remains promising.

Shares of Cantabil Retail India and Tecpro Systems will get listed today.

Castrol India, Exide Industries, Goa Carbon and Kajaria Ceramics will announce their results today.

The IPO of Prestige Estate opens today.

Inflation for September and Infosys results will be announced on Friday.

The FIIs were net buyers of Rs8.1bn in the cash segment on Monday (provisionally), according to the NSE web site. Local funds were net sellers of Rs5.74bn. In the F&O segment, the foreign funds were net sellers at Rs10.50bn. The FIIs were net buyers of Rs8.07bn in the cash segment on Friday, as per the SEBI web site. Mutual Funds were net sellers at Rs5.43bn on the same day.