On the macro front, industrial production is seen remaining in contraction mode in March 2014. Industrial production is expected to shrink 1.4% in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. Industrial production declined 1.9% in February 2014. The government unveils data on industrial production for March 2014 after trading hours today, 12 May 2014.
The rate of inflation based on the combined consumer price index (CPI) for urban India and rural India is seen accelerating to 8.6% in April 2014, from 8.3% in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government unveils CPI data for April 2014 after trading hours today, 12 May 2014.
The rate of inflation based on the wholesale price index is expected to remain at 5.7% in April 2014, at the same level it was in March 2014, as per the median estimate of a poll of economists carried out by Capital Market. The government will unveil data on inflation based on the wholesale price index (WPI) for April 2014 at about 12:00 noon on Thursday, 15 May 2014.
India’s merchandise exports rose 5.26% to $25.63 billion in April 2014 over April 2013, data released by the government after trading hours on Friday, 9 May 2014, showed. Imports dropped 15% at $35.72 billion in April 2014 over April 2013. Oil imports declined 0.6% at $12.98 billion in April 2014 over April 2013. Non-oil imports dropped 21.5% at $22.74 billion in April 2014 over April 2013. The trade deficit for April 2014 was estimated at $10.09 billion, which was sharply lower than the trade deficit of $17.67 billion during April 2013.
The Reserve Bank of India (RBI) next undertakes monetary policy review on 3 June 2014. The RBI left its main lending rate viz. the repo rate unchanged at 8% after a monetary policy review on 1 April 2014, as consumer-price inflation eased to a two-year low and as the rupee firmed up against the dollar.
A major near term trigger for the stock market is the outcome of the ongoing Lok Sabha elections. The 36 days long voting process began on 7 April 2014 and will conclude today, 12 May 2014. Results of exit polls predicting the outcome of the election will likely start coming in from today evening. The counting of votes will take place on 16 May 2014 and the results are expected on the same day. The term of the current Lok Sabha expires on 1 June and the new House has to be constituted by 31 May.
Investors are hoping that a stable government which will complete its full term of five years in office comes to power after the elections. A party or a pre-poll alliance will need 272 MPs to form government at the Centre, which is a simple majority in 543-member Lok Sabha. Investors are expecting measures for revival of the economy, business-friendly policies and good governance from the new government that comes to power after the elections. Investors expect policy measures from the new government to put India on a high-growth path on a sustainable basis.
Most Asian stocks rose on Monday after Chinese President Xi Jinping said the nation needs to adapt to a “new normal” in the pace of economic growth. Key benchmark indices in Indonesia, South Korea, Hong Kong, China and Indonesia were up 0.35% to 1.9%. Key benchmark indices in Taiwan, Singapore and Japan were down 0.15% to 0.59%.
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Shyam Advisory (Sbaasl.com) Daily Stock Alert 