DOLLAR INDEX ON THE VERGE OF HITTING A CENTURY; CPI AND IIP IN FOCUS AT HOME

DOLLAR INDEX ON THE VERGE OF HITTING A CENTURY; CPI AND IIP IN FOCUS AT HOME

WORLD MARKETS

US indices lost 0.2% each yesterday amid continued concern over dollar gains and the timing of a Fed interest rate hike.

Dollar index gained more than a percent to 99.71, a fresh 12-year high. Euro fell below $1.06 as the ECB's QE program kicked off this week.

Nymex crude fell 12 cents to $48.2 a barrel after government data showed US commercial crude inventories rose by 4.5 mn barrels last week. Gold fell 0.8% to $1151 an ounce, the lowest since November.

US weekly mortgage applications dropped as rates jumped.

In Europe, Germany, France and Italy gained between 2.2%-2.7% while FTSE gained 0.3%. The rebound came after heavy losses seen in the previous session, with stocks of exporting companies boosted by the falling euro.

Greece however closed more than 2% lower, as the battle between Greece's new left-wing government and its "troika" of bailout supervisors over the terms of its international bailout continue. The cash-strapped government has requested a four-month extension to its bailout, but rejects the troika's demands for austerity and structural reforms.

                                                             

AT HOME

Benchmark indices ended modestly lower after a choppy trade, extending the losing streak to third straight day. Sensex lost 51 points to settle at 28659 while Nifty finished at 8700, down 12 points. BSE mid-cap and small-cap indices lost 0.4% and 0.3% respectively. BSE Realty and Teck indices gained 0.4% each, becoming top gainers among the sectoral indices while Metal and Healthcare indices were the top losers, giving away 1.6% and 0.8% respectively.

Hindalco plunged 5% after Kumar Mangalam Birla was summoned in the coal blocks allocation case. Cairn fell nearly 3% after  Income Tax Department slapped a Rs 10,247 crore ($1.6 billion) tax demand on Cairn Energy Plc.

Bharti Airtel soared 6% as bidding intensity in the ongoing spectrum auction has reduced drastically.

FIIs net sold stocks and stock futures worth Rs 445 cr and 297 cr respectively but net bought index futures worth Rs 337 cr. DIIs were net sellers to the tune of Rs 339 cr.

Rupee depreciated 2 paise to end at 62.78/$.

Rajya Sabha yesterday sent the mines and minerals bill and Coal bill to a select committee against the wishes of the government. The report by select committees is likely to come by 18^th March, leaving for government a window to seek passage of the two bills before Parliament goes into a month-long recess two days later.

The Rajya Sabha passed the Motor Vehicles (Amendment) Bill, 2015 which will pave the way for plying of e-rickshaws.

OUTLOOK

Today morning, Nikkei is up nearly a percent on weaker yen, Shanghai is up about half a percent, other Asian markets are little changed and SGX Nifty is suggesting a marginally higher start for our market.

After Nifty nearly achieved the downside target of 8670 on Tuesday, we had said that traders should book profit in short positions and initiate fresh short only after the benchmark breaks 8670 on closing basis. That continues to be the view.

On the way up, immediate resistance on the hourly chart is placed around 8850, a crossover of which should be awaited before taking fresh longs.

CPI for January would be released today and is expected to inch up to 5.26% from 5.11% in January. IIP for January would also come out today and is expected to show a growth of 0.5%, down from 1.7% in December.