IIP could play spoilsport!

There exist limitless opportunities in every industry. Where there is an open mind, there will always be a frontier. - Charles F. Kettering.

Markets in the US and Europe rallied on Friday following the end of the much-hyped EU Summit in Brussels. All but four EU nations have agreed to tighter budget rules. New bailout fund will be in place by the middle of 2012. The IMF is likely to be given €200bn in additional bilateral aid to support the debt-laden region. Whether the new pact will resolve the long-running debt crisis in the euro area only time will tell.



Stock benchmarks across Asia are mostly up this morning. The Chinese market is a bit soft though. The opening looks to be a positive one, buoyed by encouraging overseas cues. However, the early gains will be at a risk amid speculation of downbeat IIP data for October. Most economists predict a negative number.

Overall, India’s macro-economic picture has deteriorated rapidly. The excruciating policy inertia and parliamentary logjam are only adding to the frustration. Inflation for November will also be in focus on Dec. 14. The RBI will review its policy on Dec. 16. Although it has already signaled a pause, the markets will take further cues from the central bank’s statement.

The FOMC policy meet, advance tax numbers and parliament proceedings (or the lack of it) are the other important events to keep an eye on.

Indian stocks succumbed to selling pressure in the previous session amid mounting concerns about the worsening health of the economy and on some scepticism over the EU Summit announcements. The outlook remain cautious as long as the Nifty trades below 4950 levels.

FIIs were net sellers of Rs 2.48bn (provisional) in the cash segment on Friday, according to NSE data. The domestic institutional institutions (DIIs) were net buyers of Rs 1.15bn on the same day.

The foreign funds were net sellers of Rs 24.76bn (provisional) in the F&O segment on Friday, NSE data shows.

FIIs were net buyers at Rs 1.95bn in the cash segment on Thursday (Dec. 8), according to SEBI web site. Mutual funds were net sellers at Rs 2.2bn on the same day.