The Indian markets remained in consolidation mood in the last trading session. Today, benchmarks are likely to get a good start after a day of break, as traders are bullish about corporate India’s improvement in new orders and sales growth on a slew of project clearances undertaken by the government in recent months and the possibility of a stable government at the centre post the Lok Sabha elections. Marketmen will also be taking cues from the International Monetary Fund’s (IMF) latest edition of the World Economic Outlook, stating that India's growth is expected to recover from 4.4 percent in 2013 to 5.4 percent in 2014 supported by slightly stronger global growth, improving export competitiveness and implementation of recently approved investment projects. Though, there will be some somberness in the steel stocks on report of a Joint Plant Committee (JPC) that India’s steel consumption grew by just 0.6 percent in 2013-14 fiscal, its lowest in four years, to 73.93 million tonnes (MT), mainly impacted by a slower expansion of the domestic economy and lower imports.
The US markets made some recovery from the notable weakness seen over the past few sessions and ended modestly higher on an IMF report saying that Stronger US growth this year and next will help the world economy withstand weaker recoveries in emerging markets. The Asian markets outside Japan have made a good start, the Japanese Nikkei fell over one and half a percent after the yen rose the most since August.
Back home, Indian equity benchmarks staged a smart recovery in last leg of trade on Monday and ended the session flat, pairing almost all of their early losses, supported by short-covering in beaten down but fundamentally strong stocks. Earlier, markets after a positive start entered into red terrain on the back of feeble global cues and extended their downfall to touch intraday lows. Sentiments also remained down-beat on report that foreign direct investment (FDI) in the services sector, which accounts for over 60 per cent to India’s GDP, declined by about 61 per cent year-on-year to $1.8 billion during April-January. Sentiments were also weighed down with HSBC survey report saying that private sector activity in emerging market economies fell for the fourth consecutive month in March. As per the report, while China posted a marginal decline for the second month running, India slipped back into contraction. The indices even went on to test important psychological 22,200 (Sensex) and 6,650 (Nifty) levels, but the key gauges got solid support around those intraday low levels as they convalesced from thereon. Global cues remained sluggish with European markets opening mostly in the red and most of the Asian markets ended in the red, with some of the indices snapping their nine-day gaining streak, led by Japanese market. Back home, buying which emerged in late trade mainly acted as saving grace for domestic equity markets and helped Sensex to re-conquer its crucial 22,300 level. Rally in pharma space too aided the sentiments, led by over three percent rise in Sun Pharmaceutical Industries on report that the company has entered into definitive agreements to acquire 100% of Ranbaxy in a $4 billion all-stock transaction. The merger between the two companies will create India’s largest pharmaceutical company and the world’s fifth largest generics company. Shares of cement manufacturers too remained on buyers’ radar on expectations of higher profit growth for the quarter ended March 2014, on a sequential basis, due to pick-up in cement prices and demand. Finally, the BSE Sensex lost 16.05 points or 0.07%, to settle at 22343.45, while the CNX Nifty was up by 0.70 points or 0.01% to settle at 6,695.05.
