Markets cautious ahead of tomorrow's RBI policy

Mon, 16 Apr Closing

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The Indian stock markets had a lackluster outing on the bourses today, ahead of the central bank's monetary policy which is due tomorrow. After opening below the dotted line, markets remained in and around the dotted line for most of today's session. However, towards the end of today's session the indices moved upward moderately. While the BSE-Sensex closed higher by around 56 points (up 0.3%), the NSE-Nifty closed higher by around 19 points. The BSE Mid cap and BSE Small cap, fared slightly better. While the midcap index closed 0.8% higher, the smallcap indices closed higher by 0.6%. Interest rate sensitive stocks such as auto and banking led the gains. IT stocks continued to be beaten, post the disappointing full year FY12 financial results of sector bellwether Infosys.

As regards global markets, major Asian indices had a mixed outing today. European indices opened the day on a negative note. The rupee was trading at Rs 51.16 to the dollar at the time of writing.

Overall inflation in March eased to 6.89% on account of decline in prices of onions, fruits and protein-based items. Thus inflation reduced even as vegetables and pulses turned costlier. Wholesale Price Index (WPI) inflation was 6.95% in February. And at the same time last year WPI inflation was 9.68%. The inflation number for March has remained somewhat above the 6.5% level projections made by the Finance Ministry. All eyes are now on the Reserve Bank of India (RBI) governor tomorrow as he releases the first monetary policy of FY13.

Essel Group does not plan to further increase its stake in infrastructure company, IVRCL Ltd., from the current 12.27% it currently owns. The Subhash Chandra run Essel Group recently increased speculation of a takeover of IVRCL after buying a significant stake in the infra company from the open market. Currently, Essel's stake rivals that owned by the current promoters of IVRCL, E Sudhir Reddy and family own around 11.2% equity stake. Essel Group is now one of the largest shareholders in IVRCL and will contest any decision by the infrastructure company to sell assets on the grounds that it would reduce the asset base of IVRCL. It plans to closely watch the IVRCL's management and operating performance.

The Indian car major recently Maruti Suzuki has launched its first MUV (multi-utility vehicle) Ertiga. And the new launch is getting initial success. On the first day itself, it has crossed 400 number in terms of bookings. The company has plans to sell around 5,000 units of this vehicle every month. The Ertiga has been launched in the both diesel as well as petrol versions. By this launch, Maruti is targeting those customers who are looking for more space than a sedan at an affordable price. Maruti Suzuki has invested around Rs 4 bn to develop the Ertiga. The company is also targeting South-East Asian countries to export the vehicle in the form of completely knocked-down kits. Industry experts feel that this vehicle could put the company on a different growth track altogether.