Markets to remain cautious on the final day of the week

The Indian markets despite a good start could not keep its momentum going and ended flat after a choppy trade in last session. Today, the start is likely to remain cautious going for the weekend ahead of the big event next week. Also, traders sentiments are likely to get impacted with global ratings agency Moody’s saying that the Indian economy is unlikely to return to previous growth rates of around 7-8% in the near future even if the new government pursues a strong reform agenda. The agency also said that the country is also vulnerable to capital outflows given a history of sizeable current account deficits. Meanwhile, European Union has said that nothing damaged India's reputation more than the retrospective tax legislation but expressed confidence that the new government will spur the growth and investment in the country. There will be some consolation with Finance Minister P Chidambaram’s statement that India's economy has stabilised in past few weeks and the investment cycle must start again for high growth. There will be some buzz in the non banking financial companies, who were rejected for the new banking licenses, as the RBI has reportedly said that if an entity, whose application to become a bank has been rejected by the RBI, buys a strategic stake in a bank, then it does not amount to back-door entry into banking. There will be buzz from the primary market too, with the listing of Wonderla Holidays. The issue got over whelming response and was subscribed over 38 times on the final day of bidding.

Also, there will be lots of important result announcements to keep the markets ticking.  Andhra Bank, Blue Dart, Claris Lifesciences, Chambal Fertilizers, Corporation Bank, Glaxosmithkl Cons, SRF and Torrent Pharma are among many to announce their numbers today.

The US markets made a mixed closing and the trade remained lackluster despite the release of a report from the Labor Department showing that jobless claims pulled back by more than expected in the week ended May 3rd. The Asian markets have made mostly a positive start led by Japanese shares, while the Chinese shares fluctuated as inflation in Asia’s largest economy fell short of estimates.

Back home, Thursday, despite a good start could not much change the course of the Indian markets, as the indices after an intraday breakout slumped on profit booking making another dull day for the markets. Though, the benchmarks managed a green close but the day was marred by rounds of volatility and major indices slipped into red for couple of times as investors turned cautious ahead of election outcome next week. Also, as an HSBC survey said that Private sector activity among emerging market economies was broadly stagnant for the second successive month in April. However, there was a good news of Indian rupee strengthening past 60/dollar mark. The global cues were sanguine and, while the US markets ended mostly higher the Asian markets too made a green closing after Fed chief Yellen’s remark that a high degree of monetary accommodation remains warranted in light of the considerable degree of slack that remains in labor markets. Further, the European markets too made a positive start ahead of a European Central Bank monetary-policy decision. Back home, markets witnessed sudden selling in the late morning trade that not only dragged the bourses from the high points of the day, but by noon took them to the negative terrain. After that there was no major recovery attempt. Earlier, the benchmarks made a positive start and started moving higher with lower level buying after last session’s drubbing on good global cues and a report of the Europe India Chamber of Commerce (EICC) stating that there is huge potential to boost the investment flow of European companies who invested $198 billion in India between 2004 and 2013. However, after breaching the psychological levels of 22400 (Sensex) and 6680 (Nifty) selling appeared in the market on cautiousness related to the election outcome and traders opted to book profits, taking the benchmarks lower. There was buzz in the market with the arrest of Chairman and group CEO of Financial Technologies India (FTIL), Jignesh Shah and former MCX chairman Shreekant Javalgekar in NSEL fraud case. Also there was some concern on report that Economic Offences Wing (EOW) is taking a close look at the role played by brokers who sold the products. Back on street, while the broader markets made a mixed closing, realty, FMCG, healthcare and oil & gas ended in red, consumer durables, banking and auto supported the markets. Finally, the BSE Sensex gained 20.14 points or 0.09%, to 22344.04, while the CNX Nifty was up by 7.30 points or 0.11% to 6,659.85.