Market Headstart: IIP, CPI data to drive market today; IRCTC eyed post bumper Q3

Indian market is likely to react to macro data which was released post market hours on February 13. The retail inflation surpassed RBI estimate of 6 percent (higher-end) to hit a 6-year high in January while the factory output data reversed trend which will put rate cut on hold for now.

India's retail inflation rate in January stood at 7.59 percent, according to data released by the Central Statistics Office (CSO) on February 12. India's industrial output contracted 0.3 percent in December against a growth of 1.8 percent in November.

“The sharp spike in food inflation has led India’s Jan CPI to breach a six-year high of 7.59% compared to 7.35% seen in Dec. It is the consecutive second month, that CPI has breached the upper band of RBI’s inflation target,” Rahul Gupta, Head of Research- Currency, Emkay Global Financial Services said.

“While unexpectedly IIP has contracted to 0.3% in Dec from 1.8% in Nov. Due to higher inflation, RBI has been maintaining a status quo since Dec 2019, if inflation continues to hover above 6%, we don’t expect RBI to cut interest rate or change its accommodative policy stance,” he said.

Indian market rallied for the second day in a row on February 12 which helped Nifty50 reclaim its crucial resistance level of 12,200 to close at a 3-week high. The S&P BSE Sensex rallied over 300 points.

Let’s look at the final tally on D-Street – the S&P BSE Sensex rose 349 points to 41,565 while the Nifty50 closed with gains of 93 points at 12,201.

Sectorally, action was seen in FMCG, Banks, Energy, IT, metals, and Auto index while profit-taking was seen in power, realty, consumer durables, and capital goods indices.

Trends on SGX Nifty indicate a flat opening for the broader index in India, with a 5 point loss or 0.04 percent. The Nifty futures were trading around 12,224-level on the Singaporean Exchange.

The rupee pared early gains to settle 6 paise down at 71.34 (provisional) against the US dollar on Wednesday ahead of the release of key domestic macroeconomic data.

On the institutional front, FPIs were net buyers in Indian markets for Rs 48 cr while the DIIs were also net buyers to the tune of Rs 339 cr, provisional data showed.

Big News:

As many as 600 companies on the BSE will declare their results for December quarter that include names like Nestle India, BPCL, Adani Transmission, Apollo Hospitals, GMR Infra, Godrej Industries etc. among others.

Nestle India: PAT likely to grow 33% YoY

BPCL: PAT likely to grow 124% YoY

Page Industries: PAT likely to grow 10% YoY

Vodafone Idea: Likely to report a loss of Rs 4171 cr

(All estimates are from Motilal Oswal)

Stocks in news:

State-owned Indian Railway Catering & Tourism Corporation (IRCTC) on February 12 registered a healthy 179.66 percent (or 2.8-fold) year-on-year growth in Q3FY20 profit, driven by all segments.

Ashok Leyland on February 12 has registered a massive 92.7 percent year-on-year fall in Q3FY20 standalone profit due to weak commercial vehicle demand.

Torrent Power on Wednesday said its consolidated net profit rose over 76 per cent to Rs 420.62 crore in December quarter 2019.

Technical View:

Nifty formed a bullish candle.

Supertrend indicator signals buy.

The last time when Supertrend indicator gave a buy signal was on 14 Jan and Nifty registered all-time high of 12430 on Jan 20.

The index also closed above the crucial short term moving average of 50-DMA placed at 12123

MACD also gave a bullish crossover back on 10 February

The index continues to remain vulnerable for a sell-off despite bulls succeeding in putting up a brave posture, suggest experts.

Hence, as long as this index sustains above 12144 levels then an initial target of 12266 can be expected and beyond that 12350 – 12400

If the index closes below 12,144 then a fresh leg of downswing shall unfold with initial targets of 11,990.

Shorting should be considered on a close below 12144 for an initial target of 11990

Three levels: 11990, 12144, 12350.

Max Call OI: 12500, 12400

Max Put OI: 12000, 11800

Technical Recommendations:

We spoke to Bonanza Portfolio and here’s what they have to recommend:

Bajaj Holding: Buy| LTP: Rs.3794 | Target: Rs 4,070|Stop Loss: Rs 3670|Upside 7%

HDFC AMC: Buy| LTP: Rs.3357| Target: Rs 3575|Stop Loss: Rs 3250|Upside 6.50%

LUX Industries: Buy| LTP: Rs.1596| Target: Rs 1,760|Stop Loss: Rs 1,518|Upside 10%

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