Markets are flat, rupee weak ahead of inflation data

It’s not a great start to Indian markets as both the BSE Sensex and NSE Nifty are marginally in red,tracking muted trend in other Asian markets.

Asian shares and US stock index futures fell and the safe-haven yen rose on Monday as a possible US debt default edged closer after the failure of weekend talks in Washington, though expectations are that a last-minute compromise will be reached.

While BSE Sensex opened up 15 points at 20544, the NSE Nifty was up 5 points at 6091.

Even the Indian rupee opened weaker at 61.15 against Friday’s close of 61.07

The inflation number for September will be closely watched while Reliance will be in focus as it announces its results mostly after market hours.

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[caption id=“attachment_1078137” align=“alignleft” width=“435”]  Reuters[/caption]

Inflation data for September, as measured by the wholesaleprice index (WPI) and the consumer price index (CPI), are dueto be released today. WPI inflation accelerated to asix-month high of 6.1 percent in August, driven by prices ofonions and other kitchen items.

According to a Reuters Poll of 24 analysts showed wholesale prices likely rose 6 percent last month, slightly below a six-month high of 6.1 percent in August. Consumer prices likely rose 9.60 percent from August’s 9.52 percent.

The Index of Industrial Production ( IIP) growth slowed to 0.6% in August from an upwardly revised 2.75% in July.

Finance Minister P Chidambaram has said the government would not hesitate to take difficult decisions to keep them under check.

“Inflation numbers will be eyed this week. Also,second-quarterly results, which have started on a good note,will be in focus and stock-specific movement will be likely,“said Rakesh Goyal, senior vice president at Bonanza Portfolio.

Reliance Industries is scheduled to report earnings today, HDFC Bank and TCS on October 15, Bajaj Auto(16th), HCL Technologies (17th) and Larsen and Toubro (18th).

Infosys on Friday posted a 1.6 percent increase inconsolidated profit at Rs 2,407 crore and boosted its dollarrevenue growth guidance to 9-10 per cent for the fiscal year.

The Reserve Bank of India, in its Mid-Quarter MonetaryPolicy Review on September 20, increased a key policy rate,saying inflation had to be brought down to more tolerablelevels. The RBI’s next policy review is on October 29.

Over the past week, the benchmark BSE S&P Sensex gained612.64 points, or 3.08 per cent, to 20,528.59.

“Sentiment was boosted by positive global markets, whichrecovered as investors hoped the US will soon reach someconclusion regarding government shutdown,” Goyal added.

Investors will look for clarity on US lawmakers extendingthe US debt ceiling before the October 17 deadline.

The US shutdown continues for over a dozen days with the Senate on Saturday defeating a procedural move by majority Democrats to bring up a clean debt limit bill. The vote was 53-45. It needed 60 votes to pass. Meanwhile, Senate Majority Harry Reid said he was engaged in negotiations with Republican Minority Leader Mitch McConnell and was ‘confident’ they could resolve the fiscal crisis. It must be noted that the US govt has just about three days until it risks running out of cash.