Uncertainty keeps up the pressure!

The minute one utters a certainty, the opposite comes to mind. - May Sarton.

There is no certainty on what the RBI governor will do even as the shocking IIP numbers have increased hopes of a repo rate cut on Tuesday. IIP data spooked the markets and more or less vindicated the RBI governor who has dubbed it "analytically bewildering". D. Subbarao may choose not to go with the popular sentiment in light of a string of macro-economic headwinds. The markets will of course rejoice if the RBI does lower its key lending rate. That decision in part will hinge on how the WPI data for March turns out today.

The opening today is likely to be lower due to continued selloff across global markets. US stocks notched their worst week of the year so far after consumer sentiment weakened while European indices slumped on worries about Spain's deteriorating fiscal health. Spanish stocks plunged to a three-year low. Disappointing Q1 GDP data from China added to the pain.



With the key Indian stock indices trading close to the 200-DMA levels, it would be prudent to remain cautious. On the daily charts, support of bearish triangle is placed at 5180 for the Nifty and any opening below it could aggravate the selling pressure. Therefore, we would advise caution for the time being.

India's deficits and short-term debt levels are disturbing, but it is not facing a repeat of a 1991 balance of payments crisis, the RBI governor Duvvuri Subbarao said on Saturday.

The Indian economy was far more resilient now and that the probability of an implosion was low, Subbarao said at a panel discussion attended by Prime Minister Dr. Manmohan Singh.

"There are serious concerns about the macroeconomy, about our policy environment, and about our governance," Subbarao said.

Raghuram G Rajan called on the Government to quickly reduce subsidies on domestic fuels to restore confidence in the economy.

The prime minister accepted that there were economic difficulties, but said they could be resolved with determination.

Meanwhile, the ministry of petroleum and natural gas has opposed a proposal of Reliance Industries Ltd for an increase in the price of gas.

Maruti Suzuki plans to invest Rs 20bn in diesel engine manufacturing facility at Gurgaon plant to meet the growing demand for Swift and Desire models.

Oriental Bank of Commerce has slashed fixed deposit rates by up to 0.5%.

The Centre for Monitoring Indian Economy (CMIE) has maintained its GDP growth forecast for FY13 at 7.6%, against the estimated 6.8% in FY12.

The CMIE has also said that the production of sugar will fall by 9.8% in FY13 due to lower availability of sugarcane.

State-owned oil companies have announced a reduction in jet fuel prices.

Key Results Today: Castrol India, CRISIL and Mindtree.

Trend in FII flows: The FIIs were net buyers of Rs 1.37bn in the cash segment on Friday while the domestic institutional investors (DIIs) were net sellers of ~Rs 4.79bn, as per the provisional figures released by the NSE.

The FIIs were net buyers of Rs 11.58bn in the F&O segment on Friday, according to the provisional NSE data.

The foreign funds were net buyers at Rs 1.84bn in the cash segment on Thursday, according to the SEBI figures. Mutual funds were net buyers at Rs 2.62bn on the same day.

Global Data Watch today: China FDI, UK Rightmove house price index, Eurozone trade balance, New York empire state manufacturing index, US retail sales, US business inventories, US NAHB housing market index and Federal Reserve official Bullard's speech.