12-12-12: Good start, eye on IIP

"Production is not the application of tools to materials, but logic to work" - Peter F. Drucker The date 12.12.12 may not enthuse many as it marks Chaudas Amavasya, considered an inauspicious day. Thankfully, the stockmarkets have a mind of their own and looks like the global tailwinds may propel the Indian indices to a better start. The Index of Industrial Production data for October will be keenly watched given the contraction in September. Headwinds of course continue with the Standard & Poor's again warning that India still faced a downgrade possibility in its sovereign rating to junk grade. On the other hand Moody’s felt the country's growth prospects for 2013 have improved. Meanwhile, given the dismal volumes in the market, the Finance Ministry has reportedly sought suggestions from market participants on possible changes in the capital gains tax and securities transaction tax (STT) structure. On Tuesday profit booking saw the Nifty technically forming a ‘spinning top’ pattern on candlestick. This indicates caution at higher levels and long positions should be added only above 5965 levels. Asian markets are trading strong. Economic sentiment has improved in Germany. The US Federal Reserve's policy meeting is being seen with some optimism. The Fed may announce new buying and replace the Operation Twist, which ends this month. The US markets managed some gains with the Dow rising for 5 days in a row, adding 0.60% overnight. S&P 500 too similar gains while the Nasdaq rose over a percent to close above the 3000 mark. North Korea launched a long-range rocket even as it recently suggested that the launch would be delayed. Reports indicate the government may announce some fresh trade-related incentives soon after exports showed a contraction in November. The trade deficit stood at $19.3bn. The IPO flows saw the rupee ending at 54.26 a dollar, against 54.49 on Monday. Trends in FII flows: The FIIs were net buyers of Rs13.09bn in the cash segment on Tuesday, while the domestic institutional investors (DIIs) were net sellers of Rs10.28bn, as per the provisional figures released by the NSE. The foreign funds were net buyers of Rs10.80bn in the cash segment on Monday, according to the SEBI figures. Global Data Watch: OPEC meeting, RBA's Governor Glenn Stevens Speech AUD, Consumer Price Index (YoY) (Dec) EUR, Consumer Price Index (MoM) (Dec) EUR, Harmonised Index of Consumer Prices (MoM) (Nov) EUR, Harmonised Index of Consumer Prices (YoY) (Nov) EUR, Consumer Price Index (EU norm) final (YoY) (Nov) EUR, Consumer Price Index (EU norm) final (MoM) (Nov) EUR, Current Account (Oct) EUR, Inflation ex-tobacco (MoM) (Nov) EUR, Consumer Price Index (YoY) (Nov) EUR, Consumer Price Index (MoM) (Nov) EUR, ILO Unemployment Rate (3M) (Oct) GBP, Average Earnings excluding Bonus (3Mo/Yr) (Oct) GBP, Average Earnings including Bonus (3Mo/Yr) (Oct) GBP, Claimant Count Change (Nov) GBP, Claimant Count Rate (Nov) GBP, 10-y Obligaciones Auction EUR, Industrial Production w.d.a. (YoY) (Oct) EUR, Industrial Production s.a. (MoM) (Nov) EUR, ZEW Survey - Expectations (Dec) CHF, MPC Member Dale Speech GBP, MBA Mortgage Applications (Dec 7) USD, Import Price Index (YoY) (Nov) USD, Export Price Index (MoM) (Nov) USD, Export Price Index (YoY) (Nov) USD, Import Price Index (MoM) (Nov) USD, EIA Crude Oil Stocks change (Dec 7) USD, Fed Interest Rate Decision (Dec 12) USD, 10-Year Note Auction USD, FOMC Economic Projections USD, Monthly Budget Statement (Nov) USD, Fed's Monetary Policy Statement and press conference USD, Business NZ PMI (Nov) NZD, Food Price Index (MoM) (Nov) NZD, Foreign bond investment (Dec 7) JPY, Foreign investment in Japan stocks (Dec 7) JPY In other news in the media: Mahindra & Mahindra will increase prices of its vehicles by over 1% across various models in January to offset rising input costs. (BL) ITC is willing to invest nearly Rs30bn in Bengal over the next four years. (BBL) Videocon Industries announced a new discovery of light hydrocarbons in a well, which is a part of a concession area of Sergipe Alagoas ultra deep water basin in Brazil. (BL) Neyveli Lignite Corporation has expanded its search area for the right pelletisation technology from Germany to Australia and Japan, as it seeks to increase the use of lignite for power production. (BL) IndusInd Bank closed its qualified institutional placement issue by raising Rs20bn. (BS) ICICI Bank has raised foreign exchange resources worth Swiss francs 100mn through seven year bond. The bond is priced at a coupon and re-offer yield of 2.75%. (BS) India’s exports in November contracted 4.17% year-on-year for the seventh month in a row, to US$22.2bn, due to a slowdown in demand in the US and European markets. However imports grew by 6.35% to US$41.5bn in November, leaving a trade deficit of US$19.28bn. (BL) The government will raise the cap on supply of subsidised cylinders to households to nine from six, oil minister announced. (ET) Gross direct tax collection rose by 7.14% in the April-November period of the current fiscal, as against an annual target of 15%, on account of slower corporate activity. (ET)