Shaken but not stirred!

The market is like an earthquake- unpredictable, a little scary, but when the hard part is over you realize how lucky you truly are.

Thankfully, the threat of a devastating tsunami receded and the Indian market could well look at a day of recovery. A pull-back in global markets may lend support early on but the overall trend for the day will be set by the IIP data. Industrial production is expected to moderate in February from January’s 6.8% expansion. Infrastructure sector output, which accounts for ~38% of IIP, grew by 6.8% in February vs. January's 0.7% growth.

Friday will be another big day with Government scheduled to release inflation data and IT major Infosys declaring its Q4 earnings. WPI-based inflation is likely to have edged lower in March from February’s 6.95% print. Infosys has had tough time in recent quarters meeting market expectations. Its guidance for FY13 will be keenly watched.



China’s GDP data, and US economic statistics will drive sentiment globally. Also keep an eye on earnings reports of Google and JP Morgan. The key concern for India is the persistent selling by FIIs as the Government is yet to fully clarify on the controversial GAAR issue. The undercurrent will remain cautious as investors analyse India Inc.’s latest report card.

Trend in FII flows: The FIIs were net sellers of Rs 4.45bn in the cash segment on Wednesday while the domestic institutional investors (DIIs) were net sellers of ~Rs 822.4mn, as per the provisional figures released by the NSE.

The FIIs were net buyers of Rs 7.29bn in the F&O segment on Wednesday, according to the provisional NSE data.

The foreign funds were net sellers at Rs 10.39bn in the cash segment on Tuesday, according to the SEBI figures.

Global Data Watch today: Japan money supply, Australia unemployment rate, ECB monthly report, UK trade balance, Eurozone industrial production, US weekly jobless claims, US producer price index, US trade balance and Fed officials' speeches.

The dollar fell against the euro on Wednesday as US stocks recovered and Spanish debt yields fell. However, the greenback rose slightly after the Fed's Beige Book did not give any new clues on QE3. Crude-oil prices too bounced off multi-week lows on Wednesday.

Alcoa's better-than-expected results has lifted hopes for corporate earnings in the US.

Stocks in Europe rallied as investors welcomed declining yields on Spanish and Italian bonds.

Bond yields for Spain and Italy pulled back after a member of the ECB's executive board, reportedly said that the central bank still has the option of restarting its bond-buying program, given current market pressures.

The German government sold 3.87 billion euros ($5.07 billion) of 10-year government bunds in an auction that produced a record low yield of 1.77%.