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HUL resumes rally, metals melt; Nifty hovers around 8300

10:00

The News International Team

10:58am WPI inflation today

Inflation based on the Wholesale Price Index is estimated to come in at 0.3 percent in December as against zero in November, according to a CNBC-TV18 poll.

The range is expected to be between decline of 0.1 percent to a growth of 0.8 percent, which is extremely benign. Even core WPI estimate is around 2-2.2 percent which compares to 2.2 percent on month-on-month basis.

For WPI, as seen in case of CPI, too the base effect will begin wearing off as well. WPI in November 2013 was 7.5 percent, but it fell to 6.4 percent in December 2013, which signifies a favourable base effect.

The commodity impact also is more in case of WPI than CPI. Hence, WPI would see a softer stand on the fact that weightage of crude is 0.9 percent in total WPI, mineral oil is 9.3 percent which is crude derivative. So this will basically see a higher softening and because of crude oil price as oppose to what we saw in terms of CPI.

10:30am Oil dips further

Oil prices slipped further toward six-year lows in Asia after major crude producers stressed they will maintain output levels despite an oversupply.

US benchmark West Texas Intermediate (WTI) for February delivery was down 34 cents at USD 45.55 a barrel in late morning trade and Brent crude for February dropped 43 cents to USD 46.16.

Crude prices were already on the decline after peaking above USD 100 a barrel in June, but the fall accelerated from November 27 when the Organization of the Petroleum Exporting Countries decided to maintain output levels, reports PTI.

OPEC member United Arab Emirates yesterday underscored the cartel’s resolve not to slash output in the face of the price rout and waning demand and urged the United States to cut its production of shale oil, which has been largely credited for the supply glut. “We cannot continue to be protecting a certain price,” UAE Energy Minister Suhail al-Mazrouei said.

10:00am Market Check

The market remained in a consolidation mode in morning trade with the benchmark Nifty hovering around 8300 level while the broader markets marginally outperformed frontline indices.

The Sensex rose 3.31 points to 27429.04 and the Nifty advanced 1.75 points to 8301.15 while the BSE Midcap and Smallcap indices gained 0.4 percent each.

About two shares advanced for every share declining on the Bombay Stock Exchange.
 
According to Sandeep Shenoy of Pioneer Investcorp, new highs are not far away for the market but for the year, it could be flat or marginally negative as capital flow towards India is not seeing much improvement.

Hindustan Unilever, which snapped six-day rally in previous session, resumed rally again. The stock gained 2.4 percent followed by BHEL and Bajaj Auto with 1-2 percent gain. HDFC, Tata Motors, Infosys, HDFC Bank, TCS, L&T, M&M, SBI, Hero Motocorp and Maruti were up 0.4-0.9 percent.

However, ITC fell 2 percent on reports of likely ban on sale of loose cigarettes. Metals stocks lost shine with the Sesa Sterlite, Hindalco Industries and Tata Steel falling 2-3 percent.

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