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Nifty likely to open in red on low core sector growth

The Indian market is expected to open in red on the back of lower-than-expected core sector data and weak global markets. The SGX Nifty, an indicator of pre-market opening, was trading around 8524, down 15 points around 7:40 hrs.

The market saw profit booking in last couple of hours of trade on Tuesday after rising more than 200 points intraday today and 517 points in previous session on the Sensex. However, the broader markets outperformed benchmarks.

Core sector grew by just 1.4 percent in February , the slowest pace in the last four months, output from steel, fertiliser and refinery products contract.

Among global markets, in the US equities closed lower, giving up most of Monday’s gains, as investors eyed mixed economic data and the end of the first quarter.

In Europe, euro zone unemployment data ticked down to 11.3 percent in February, from 11.4 percent in January. This was its lowest rate since May 2012. A flash figure for euro zone inflation came in at – 0.1 percent in March, up from February’s number.

And in Asia, cautious sentiment also prevailed after a weaker-than-expected reading of sentiment among Japanese corporates.

According to Bank of Japan’s Tankan survey the headline big manufacturers index remained unchanged from the previous quarter at +12, below expectations for a reading of +14.

China’s official March manufacturing purchasing manager’s index (PMI) unexpectedly edged up to 50.1 in March from February’s 49.9.

In the currency space, the euro falls to a 10-day low against the dollar as investors renewed bets that US Federal Reserve would raise rates later this year while the European Central Bank moves to boost the euro zone economy.

Among commodities, crude prices fall as Iran and world powers negotiate over a nuclear deal that could add to a global crude glut. Brent crude slips below USD 55 per barrel.

From precious metals space, gold holds steady above USD 1180 an ounce but firm dollar weighs.

Back home, the government met the 4.1 percent fiscal deficit target backed by telecom companies. Answering government’s cry for help, telecom companies made upfront payments worth Rs 8,000 to 9,000 crore, expenditure curbs and dividends from PSUs also help plug the Rs 45,000 crore fiscal gap.

HCL Tech will be in focus today after the company issued an earnings warning for the quarter ending March 31. The company says that due to a negative impact of cross currency, dollar revenues will be hit by a fat 280 basis points.

March auto sales numbers will be released today. Sales trend look mixed this month. Dealers suggest growth in MHCVs and passenger vehicles will continue but rural focused segments like two-wheelers and tractors could remain weak.

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