Friday’s Market Preview: Cautious opening likely, focus on Dec inflation data

The local market is likely to open on a cautious note on negative global cues. The wholesale price index-based inflation data for December and corporate earnings will also provide some direction to the market later in the day. Markets in the US closed lower overnight, weighted down by a rise in weekly jobless claims while the Asian pack was mostly in the red on weak US jobless claims data. The SGX Nifty was down 9.50 points at 5,752 against its Thursday’s close of 5,761.50.

The market opened in negative territory on Thursday on lower-than-expected quarterly earnings announced by IT bellwether Infosys Technologies. Some pull-back was noticed towards noon, but the weekly food inflation data added to the woes, dragging the indices further southwards. Nervousness ahead of the wholesale price index-based inflation data, due to be announced today, kept the indices range-bound in the post-noon trade. Another minor bout of selling in the last half-hour resulted in the market touching the day's low and closing marginally higher, albeit in the red.

On Wednesday we had said watch out whether the index trades on Thursday above the previous day's high, for indications of strength. The Sensex and Nifty traded below yesterday's high in the morning session and soon the bears took over. Eventually, the Sensex fell 351 points at 19,183 and the Nifty fell 111 points at 5,752 wiping off yesterday's gains completely.

US markets closed lower on Thursday on disappointing initial jobless claims data. The Labor Department reported that the number of workers filing initial jobless claims unexpectedly increased by 35,000 to 445,000 in the week ended 8th January, higher than analysts’ expectations. In other news, US producer prices rose in December, rising a seasonally adjusted 1.1% in December from November. However, cutting out volatile food and energy items, producer prices increased 0.2%.

Meanwhile, Intel forecast first-quarter sales that may beat analysts’ estimates, as companies spend on new computers. The stock ended regular trading slightly down at $21.29 a share.

The Dow declined 23.54 points (0.20%) to 11,731.90. The S&P 500 fell 2.20 points (0.17%) to 1,283.76 and the Nasdaq shed 2.04 points (0.07%) to 2,735.29.

Markets in Asia were seen with marginal cuts in early trade today on disappointing US jobless data. However, losses were limited by Intel’s strong fourth quarter earnings reports on higher demand from businesses and consumer PC markets.

The Shanghai Composite tanked 0.91%, the Jakarta Composite declined 0.22%, the KLSE Composite fell 0.14%, the Nikkei 225 was down 0.29%, the Straits Times declined 0.73% and the Taiwan Weighted lost 0.09%. On the other hand, the Hang Seng was up 0.10% and the Seoul Composite gained 0.07% in early trade.

Promising to crack down on black marketers and hoarders, the government on Thursday unveiled measures to check spiralling prices by deciding to continue ban on exports of edible oils, pulses and non-basmati rice and asked states to waive local taxes on essential commodities.

After two days of discussions at the highest level, chaired by prime minister Manmohan Singh—on a day weekly food inflation showed some moderation—the government constituted an inter-ministerial group under chief economic advisor Kaushik Basu to review the overall inflation with particular reference to primary food articles.

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