Markets to make a weak start on sluggish global cues

The Indian markets had closed modestly lower before going for a holiday in last trading session, and today the start is likely to remain weak tailing the sluggishness in the global markets. Trade is likely to remain under pressure with the government reporting that India’s trade deficit widened to $14.25 billion in September following a jump in oil and gold imports. While the merchandise imports surged nearly 26 percent last month, Exports were up by marginal 2.73 percent on year only. There will be some buzz in the PSU oil marketing companies, as the oil prices have reached new multi-year low owing to a supply glut and weak global demand. Meanwhile, Finance Secretary Arvind Mayaram has said that declining crude oil prices will have favourable implications for the country; however he cautioned that there is no need to be overly optimistic about it. There will be some reaction in telecom sector, as the telecom regulator TRAI has recommended a hike of around 10 per cent in the price of 2G spectrum in the 1800 MHz band, in 20 circles, at Rs 2,138 crore per MHz, during the next round of auctions.

There will be lots of result reactions with many important companies announcing their numbers. Bajaj Corp, CMC, Crompton Greaves, DB Corp, Delta Corp, Federal Bank, Rallis and TCS etc will report their numbers.

The US markets ended lower in last session, though the major averages recovered a lot from their lows of the day, still the Dow and the S&P 500 ended the day at a new six-month closing lows on an ongoing concerns about global economic growth. The Asian markets have made a weak start, led by the Japanese market which has lost over two percent as the bigger-than-expected drop in US retail sales ignited concern over the impact of the global slowdown.

Back home, Indian equity benchmarks ended the volatile day of trade slightly in the red on the back of global growth concerns. Investors also remained cautious ahead of state elections in Maharashtra and Haryana on October 15. After opening with a huge gap on the up-side, frontline gauges entered into negative territory as traders turned cautious with RBI governor Raghuram Rajan stating that Indian economic recovery is still uneven, although he has exuded optimism that the country will be ‘solidly’ in the 5 percent growth bracket during the course of this fiscal and accelerate further in the next financial year. Sentiments also remained dampened on report that foreign investors were net sellers in equities to the tune of Rs 671 crore on October 13, 2014. However, losses remained capped after India’s main inflation gauge, based on monthly Wholesale Price Index (WPI), easing at 33 month low, stood at 2.78% for the month of September as compared to 3.74% in the previous month and 7.05% during the corresponding month of the previous year. Meanwhile, September retail inflation declined to 6.46 percent, lowest since the new series of Consumer Price Index was released in January 2012 and much below the RBI target of 8 percent by January 2015. Global markets continued to struggle on account of weak data from Japan and Europe with lingering growth concerns about China. Back home, depreciation in Indian rupee too dampened the sentiments. The rupee has hit a high of 60.90 in early trades against Dollar, its highest since September 23, 2014 on the back of low retail inflation. However, it later reversed direction and was trading at 61.38 against Dollar. Selling in realty counter too dampened the sentiments led by 28% fall in DLF after market regulator Sebi barred real estate major and six of its top executives, including Chairman K P Singh, from accessing the capital market for three years. Besides, Auto stocks ran out of steam after latest data released by the Society of Indian Automobile Manufacturers (SIAM), passenger car sales declined to 1,54,882 units in September from 1,56,494 units in September 2013. On the flip side, banking stocks edged higher, extending their previous session’s gain after the WPI-based inflation declined to its lowest level in five years. Finally, the BSE Sensex declined by 34.74 points or 0.13%, to 26349.33, while the CNX Nifty lost 20.25 points or 0.26% to 7,864.00.Indian markets remained closed on Wednesday on account of a local holiday.