Markets to get a flat-to-green start of the data heavy week

The Indian markets extended their decline in last session and today the start of the data heavy week is likely to be flat-to-green. There will be some buzz from the political circle, as the government will move ahead with setting up of a new institution in place of the Planning Commission despite resistance from Congress-ruled states, as a majority of states are on board. Emphasizing the need Prime Minister Narendra Modi has said that there is a great deal of economic activity that happens outside the Government setup, and there is a need to design policies for them as well. Banks are likely to see some action, as it has been reported that they are now mulling revising their base rates downward after having slashed deposit rates recently. There will be lots of scrip specific movements on report that the Government will consider 31 foreign investment proposals, including that of Novartis Healthcare and HDFC Bank, on December 16. However, there will be some somberness in engineering stocks, as country’s engineering exports to China dropped by nearly 50 percent to $310 million in October due to slowdown in the economy of that country.

The US markets ended higher in last session on getting upbeat jobs data and traders went for value buying, overlooking some other weak macro data. The Asian markets have mostly made a positive start led by the Chinese market as the country’s trade surplus climbed to a record in November after an unexpected decline in imports underscored weakness in the world’s second-largest economy. Though, China’s securities regulator has warned that Investors must consider risks while putting money into stocks.

Back home, trade continued to remain choppy for the Indian markets on Friday and major bourses despite following a tight range kept moving in and out of the red throughout the day, finally closing lower. Earlier the start was in green despite mixed global cues but benchmark indices soon turned lower lacking any major supportive factor. Traders even overlooked a HSBC survey, stating that manufacturing and services sectors in India expanded at a faster pace than China in November, even as emerging market output slipped for the second consecutive month to a six-month low. According to the survey, the four largest emerging economies showed contrasting activity trends in November. China registered growth for the seventh month running, while India posted the fastest growth since June, on the same time Russia and Brazil witnessed sharp decline. The global cues were not very supportive initially, as Asian markets remained cautious ahead of a monthly US jobs report. However, European markets surged on Friday, erasing a weekly decline. Back home, markets remained in consolidation mood and lost some ground on the last trading session of the week. Profit booking appeared ahead of the weekend. Broader indices once again looked in comparatively better position than the benchmarks. Selling intensified in the last leg of the trade dragging the markets lower by about half a percent for the day. Sectoral indices made a mixed closing, however the biggest laggards that dragged the markets lower were healthcare along with IT and tech stocks, down by over a percent each, after the rupee strengthened against the dollar. The PSU sector too lost its steam despite the government starting its Rs 58,000-crore disinvestment programme for 2014-15 with dilution of a 5% stake in Steel Authority of India (SAIL). The Centre plans to divest its holdings in over half a dozen firms this fiscal including a 5 per cent stake sale in ONGC, 10 per cent in Coal India, 11.36 per cent in NHPC and also in RINL and Hindustan Aeronautics. Finally, the BSE Sensex dropped 104.72 points or 0.37%, to 28458.10, while the CNX Nifty declined by 26.10 points or 0.30% to 8,538.30.