Indian markets likely to start the new week on a soft note

The Indian markets after a smart fight back on Friday lost their stem in a short trading session on Saturday. The special trading session proved good for the PSU and realty sector, while it proved detrimental for the banking and defensive sector FMCG. Today, the start is likely to be weak as the global cues are not good and the traders will be eyeing the developments on the global front. On the domestic side somberness is likely to persist as Prime Minister Manmohan Singh, while admitting that the country was going through difficult times has cut the nation's growth rate down to 7% in the current fiscal from 8.5% last year. However, Montek Singh Ahluwalia, deputy chairman of the planning commission, dismissing concerns about the current slowdown has said that India’s economy is likely to grow by an average of between 8 and 9 percent a year for the next 20 years. Marketmen will also be eyeing the money market, where there has been some stability after measures taken by the Reserve Bank of India. The local currency depreciated 17% in 2011, making it the worst-performing major currency in Asia. There will be some buzz in the telecom stocks as the telecom operators have filed an affidavit and termed government’s move to question TDSAT jurisdiction as “a desperate attempt to avoid adjudication of the present dispute” and requested the tribunal to dismiss DoT’s application moved last week.

The US markets closed mixed on Friday, though the domestic economic reports remained good but the European jitters once again weighed on the mood of the investors after ratings were cut for one of the country in the region and the borrowing cost increased in other. The Asian markets have mostly made a soft start, trading lower by one to one and half a percent. While, the Japanese markets are closed, the Chinese market is trading lower despite the news that lending and money supply growth exceeded the estimates in the country.

Back home, on Friday, after being down and out for most part of the day’s trade, Indian benchmark equity indices fiercely fought back in dying moments of trade to claw back into the green terrain and snap the trading session on a positive note. The frontline indices showed wild swings in late trade amid rumors that both Mukesh Ambani and Anil Ambani will jointly be addressing a press conference to make some significant announcements, however the sharp spike up evident in last leg of trade petered out and led to third straight session of consolidation for the markets. Investors also lacked conviction to open fresh positions amid a lot of uncertainties surrounding the European region. Investors overlooked reports that RBI, in its bid to help Indian corporate to access higher quantum of overseas funds, reduced the minimum maturity period for ECB up to $20 million to three years as against the previous five years while it also raised the annual limit of FCCBs for companies to $750 million as against $500 million in a fiscal year under the automatic route that does not require prior regulator’s approval. Earlier on Dalal Street, the benchmark got off to a negative opening following the Asian peers as renewed tensions over Spain and Italy triggered sharp sell-off across the region, overshadowing the strong batch of macroeconomic reports from the US. The frontline indices gyrated in a tight range till mid morning trades post which the key gauges plunged deeper into the red terrain to hit the lowest point in session. Thereafter, the bourses continued to show somber trends but the key indices got an unexpected shot in the arm in last leg of trade which underpinned them to the highest point in the day. On the BSE sectoral space, Oil & Gas index remained the top gainer in the space with over a percent gains followed by the defensive-FMCG and rate sensitive Bankex indices which ended with around half a percent gains. On the other hand, the Capital Goods index plunged by a percent followed by the high beta Realty and TECk counters which too settled with close to a percent losses. There was a short special trading session on Saturday due to  upgradation in NSE’s  Futures and Options (F&O) trading system, hardware and software to the next generation system. The special session remained lacklustre and after a positive start closed with marginal losses. As it was not a regular session traders were not very active lacking any FII participation. The PSU sector that had been buzzing in the week remained in limelight throughout the session along with realty but rest of the gauges lacked much buying interest. Finally BSE Sensex closed at 15,848, down by 18.93 points or 0.12%, while the S&P CNX Nifty closed at 4,746.90, down by 7.20 points or 0.15%.