After a Black Monday, markets are expected to be cautious even as the SGX Nifty point to a gap-up opening on Tuesday. Weak economy data and rising number of Covid-19 cases will keep the market in a range, said analysts.

The Index for Industrial production (IIP) contracted 3.6 per cent in February while consumer price index or retail inflation rose to 5.52 per cent in March.

Also read: Asian markets cautious ahead of US earnings and inflation data

The SGX Nifty is currently ruling at 14,403 (8 am IST) against Nifty Futures’ close of 14,343.25, signalling a 60-point gap-up opening. While the US markets closed weak overnight, most Asian markets are up almost 1 per cent in early trade on Tuesday.

“IIP contracted further in February 2021 in line with the weakening of some other leading indicators in the last few months. The economic indicators of the last few months are being watched very carefully to see at what level India’s growth momentum is sustained, after the pent-up demand is taken care of. The second wave of Covid 19 could jeopardise India’s economic revival and the overall impact will have to be ascertained,” said Rajani Sinha, Chief Economist & National Director – Research, Knight Frank India.

Inflation surged expectedly in March 21 with the headline print coming in at 5.52 per cent after 5.03 per cent in February 21. The expected surge in inflation was due to an unfavourable base effect, albeit with a milder sequential increase, led by core inflation, said Emkay Global Research.

Mohit Ralhan, Managing Partner and Chief Investment Officer, TIW Private Equity, said: “The Indian equity market has been under pressure after hitting an all-time high in mid-February. The short-term sentiments have got dampened due to rise in Covid-19 cases and expectation of a further lockdown. This is the start of the earnings season and the market will take future direction from the earnings announcements. Most of the companies are likely to have a positive commentary FY22, which should help the market to bounce back.”

Deepak Jasani, Head of Retail Research, HDFC Securities, said while sentimentally there is little to expect in terms of bounces, some positive news on the Covid-19 or on its vaccination front could provide a respite, howsoever temporary.

Stocks to watch

Coforge has agreed to acquire a 60 per cent stake in SLK Global Solutions Private Limited (SLK Global) for ₹920 crore. Coforge will initially acquire a 60 per cent stake in SLK Global, with SLK Global's founders completely exiting the firm. Fifth Third Bank’s stake in the company will be reduced to 40 per cent and will remain at that level for the next two years. Coforge will acquire an additional 20 per cent stake from Fifth Third Bank after two years.

L&T Finance Holdings has announced a scheme of amalgamation by way of merger by absorption of L&T Housing Finance and L&T Infrastructure Finance Company with itself effective April 12. Pursuant to the merger of LTHFL and LTIFC with LTFL, L&T Infra Debt Fund, one of the subsidiaries of the company, may be required to undergo changes in the general character or nature of business / activities / shareholding structure which may include requirement of obtaining various approvals and making appropriate applications to the regulator, in this regard, it said in a notice to the stock exchanges.

NBCC (India) has been awarded a work order for engagement as a project management consultant (PMC) for construction of FCIL office building at Noida, Sector-1. The project value is ₹65.10 crore at a PMC fee of 7 per cent, the PSU company informed the exchanges.

YES Bank: Markets regulator SEBI has imposed a penalty of ₹25 crore on YES Bank for allegedly mis-selling its AT-1 bonds. YES Bank said it will move the Securities Appellate Tribunal against the SEBI order. According to the SEBI order, YES Bank and certain officials devised the ‘devious scheme to dump the AT-1 (Additional Tier-1) bonds on their hapless customers.’

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