Markets to make a weak start on feeble global cues

The Indian markets managed a flat closing with a negative bias in last session after showing a choppy trade. Today, the start is likely to be soft tailing feeble global cues and Nifty may slip beyond 8350 in opening trade. However, there is good news for India Inc, with a view to improve the ease of doing business, the government has aligned the foreign direct investment policy with the upgraded National Industrial Classification (NIC) Code. The code will classify business activities and help the industry in seeking policy approvals for specific activities. There will be some buzz in the metal stocks, as the Union Cabinet has cleared mines ordinance that would pave the way for auction of iron ore and other minerals as proposed in the Mines and Minerals (Development and Regulation) Bill. Traders would also be eyeing the release of HSBC Service PMI data, which is scheduled to be released later in the day. Telecom stocks are likely to be in action, as the cabinet cleared the much-anticipated sale of spectrum that will see airwaves being sold in the GSM bands of 900 MHz, 1,800 MHz and 2,100 MHz (3G) and also in the CDMA frequency of 800 MHz. There will be some buzz in the PSU oil marketing stocks as international crude prices have declined to new historic low. 

The US markets plunged in last session on concern from Europe and were dragged down by energy stocks, strength in the dollar also put more pressure on dollar-denominated commodities and S&P 500 had its worst day in almost three months. Asian shares have made a weak start taking cues from the US markets and were weighed down by sliding oil prices and political uncertainty in Greece. Japanese market was leading the losers’ pack, as the yen advanced with bonds in the region.

Back home, snapping their six-day winning streak, Indian equity benchmarks ended the choppy day of trade slightly in the red as investors opted to book profit amid feeble global cues. Investors will get cues from the earnings with Infosys kicking off the December-quarter result season on Friday. Bourses, after making a good start scaled their highest in nearly a month in intra-day session of trade but, turned flattish in noon deals as investors opted to book some profit off the table at high point of day. However, profit booking emerged in last leg of trade, mainly dragged the markets into negative territory. Losses remained capped as some support came from reports that foreign portfolio investors bought shares worth a net Rs 259.82 crore on January 2, 2015, as per provisional data. Meanwhile, it has been reported that to boost manufacturing growth under ‘Make in India’ programme, industry leaders and top government officials have suggested duty cuts, easier land acquisition norms and fiscal incentives for research and development especially in sectors like defence. On the global front, European markets made choppy start, while Asian stocks ended the session mostly in the negative terrain. Back home, depreciation in Indian rupee against dollar dampened the sentiments. Meanwhile, banking stocks fell after a two-day meeting of public sector banks convened by Prime Minister Narendra Modi ended with an announcement that state-owned lenders needed more autonomy but without any details of proposed reforms. On the flip side, Capital Goods stocks gained on robust PMI data for the month of December which was at its highest since end-2012. Shares of three public sector oil marketing companies remained on buyers’ radar as Brent crude futures dropped to fresh 5-1/2-year lows. Additionally, Shares of two state-run upstream oil exploration companies edged higher on hopes of lower subsidy burden as crude oil prices declined. Finally BSE Sensex closed at 27,842.32, down by 45.58 points or 0.16%, while the CNX Nifty declined by17.05 points or 0.20% to 8,378.40.