Markets to make a flat-to-positive start

The Indian markets slumped further in last session on global growth concern and some weak economic data from the domestic front. Today, the start is likely to be flat and some recovery can be expected in the latter part of the trade. Traders could draw some comfort with Reserve Bank of India Governor Raghuram Rajan statement that India is seeing a pick-up in economic growth although more could be done to support that on a sustainable basis, while noting inflation was also easing. He has also said that a growth of 7 percent is possible in short-term but major reforms will be needed to take it to higher levels. There will be some action in the whole IT pack after the nation’s largest software exporter Tata Consultancy Services (TCS) reported firm sequential growth across business verticals and geographies for the September 2014 quarter. There will be some buzz in oil companies as well, on reports that government could be considering substantial cut in diesel prices, as slump in international oil prices have helped nearly doubling of profit on India’s most consumed fuel.

There will be lots of important result announcements too, to keep the markets buzzing. Axis Bank, CRISIL, HCL Tech, HFCL, HT Media, Mahindra Life, Tanla Solutions will be announcing their numbers today.

The US markets ended almost flat in last session, recovering from their early declines after reports showed an unexpected drop in initial jobless claims and a bigger than expected increase in industrial production. The Asian markets are still showing mixed trend with many of the indices trading in red despite a Fed official saying that the central bank should consider delaying the end of bond purchases.

Back home, Thursday turned out to be a disappointing session for the Indian equity indices which got pounded by over a percentage point as investors sold stocks across sectors amid global growth concerns. The barometer gauges traded near their neutral lines till noon deals on hopes of a good show by the BJP in state polls and weakness in global crude oil prices but a sharp wave of selling, which emerged in last leg of trade, dragged the major indices below their crucial 7,750 (Nifty) and 26,000 (Sensex) levels. Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include consumer durables, power, metal and auto. Sentiments remained down-beat after government reported 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 year on year. Markets failed to draw any sense of relief from report that Indirect tax collections grew by 5.8 percent to Rs 2.42 lakh crore during April-September period of current fiscal as compared to Rs 2.29 lakh crore during the same period of previous financial year. Markets also failed to draw heart from Finance Secretary Arvind Mayaram’s statement 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. Selling got intensified as European markets, after a positive opening, slumped by around two percent in early deals, Asian markets too shut shop mostly in the red. Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. Sentiments also remained dampened on report that foreign portfolio investors sold shares worth a net Rs 694.67 crore on October 14, 2014, as per provisional data. Meanwhile, selling in metal counter too dampened the sentiments. Metal shares edged lower on worries that global economic growth slowdown would hurt demand. Finally, the BSE Sensex plunged by 349.99 points or 1.33%, to 25999.34, while the CNX Nifty dropped by 115.80 points or 1.47% to 7,748.20.