Eye on manufacturing!

Winners make a habit of manufacturing their own positive expectations in advance of the event. - Brian Tracy.

An improvement in consumer confidence has come as a welcome relief for the US markets which have been struggling off late. In India, the indices may continue to remain lackluster amid thin volumes. A clear direction might emerge once the Nifty manages a decisive break out from the current range.



The opening is set to be slightly positive with market participants focusing more on the IIP for April. Reports say the Government will unveil a new IIP with change in base year and composition. The draft National Manufacturing Policy has received a green light from the PM.

What is moving right now is crude oil and it’s not good news for India. The US markets also managed to break a six-day losing streak, spurred by encouraging data. European stocks also rose after falling for six straight days.

The Bank of England and the ECB left key rates steady. The ECB is likely to hike rates in July. South Korea has increased policy rate by 25 bps. Talking of rates, the RBI could boost rates by 25 bps on June 16. Inflation continues to be sticky with food inflation back above 9%. Inflation data for May will be out on June 14.

A few of the Small-Cap and Mid-Cap shares have been buzzing lately and could continue to be in the spotlight. But, avoid taking a secular call and stick to quality names with sound fundamentals.

FII inflows, which were showing some signs of improvement last week, have tapered off this week. FIIs were net sellers of Rs 247.3mn in the cash segment on Thursday, according to the provisional NSE data. The domestic institutional institutions (DIIs) were net buyers of a measly Rs 89.7mn on the same day. In the F&O segment, the foreign funds were net sellers at Rs 540.7mn.

The foreign funds were net buyers of Rs 1.75bn in the cash segment on Wednesday, as per SEBI web site. Mutual funds were net buyers of Rs 215mn on the same day.

Oil traded near the highest point for this month in New York, heading for a weekly increase, after the US trade deficit unexpectedly narrowed and OPEC maintained status quo on output quotas.

Gold is set for the fourth weekly gain, as concern about Europe’s sovereign-debt crisis and slowing growth in the US spurs demand for safe haven assets like the precious metal.

The dollar fell from near a one-week high against the euro on speculation that a sluggish US economic recovery will force the Federal Reserve to keep interest rates low.

Brazil’s central bank has raised the benchmark lending rate for a fourth straight time and signaled it is prepared to increase borrowing costs further.

ECB President Jean-Claude Trichet said on Thursday that the central bank hadn’t raised next year’s inflation forecast from 1.7%, fueling speculation that it won’t increase rates as quickly as previously expected.