Markets to get a cautious start tailing soft global cues

The Indian markets pounded over half a percent in last session as a continuing slide in crude oil prices dampened risk appetite. Today, the start is likely to be cautious and some pressure can appear taking cues from the global markets. Traders will be concerned with the World Bank on Tuesday lowering its global growth forecast for 2015 and next year due to disappointing economic prospects in the euro zone, Japan and some major emerging economies that offset the benefit of lower oil prices. The global development lender predicted the global economy would grow 3 per cent this year, below a forecast of 3.4 per cent made in June. Meanwhile, taxes on services, the biggest sector of India’s economy, declined by 5.2 per cent in December year-on-year, as a result of which overall indirect tax collections rose only 5.1 per cent in the month. Traders would also be eyeing December WPI data, which scheduled to be released later in the day. Wholesale price inflation, which was flat in November, is expected to have picked up to 0.6 percent last month. There will be some buzz in the oil companies, on report that Petrol and diesel could become cheaper this week as international oil prices have tumbled to about $45 per barrel, continuing their downward spiral since June last year as the market remains oversupplied.

There will lots of important result announcements too, to keep the markets buzzing. Yes bank, LIC Housing Finance, TV18 Broadcast, Network18, Bajaj Finance, Bajaj Finserv and Kajaria Ceramics are among many to announce their numbers today.

The US markets ended modestly lower in last session due to decreases in prices for crude oil and other commodities such as copper. The worries overshadowed the optimism about earnings that were seen earlier in the day after aluminum giant Alcoa (AA) kicked off the reporting season on an upbeat note. The Asian markets have made mostly a soft start as the yen gained a fourth day against the dollar and commodity prices slumped.

Tuesday turned out to be daunting session for the Indian equity indices which got pounded by over half a percentage point as a continuing slide in crude oil prices dampened risk appetite. Final hour of trade proved to be the curse for the markets and bourses settled below their crucial 27,500 (Sensex) and 8,300 (Nifty) bastions. After trading in tight band for most part of the day’s trade, domestic gauges crashed like house of card in the last leg of trade. Sentiments remained dampened with Brent crude and US WTI both falling to their lowest in almost six years, as a persistent global supply glut offset data showing record high imports by key consumer China. Traders also remained on sidelines ahead of December WPI data, which scheduled to be released on January 14, 2015. Wholesale price inflation, which was flat in November, is expected to have picked up to 0.6 percent last month. However, losses remained capped as sentiments got some support from reports that foreign institutional investors were net buyers in Indian equities worth Rs 245 crore on January 12, 2015, as per provisional stock exchange data. Some support also came after India’s industrial growth for the month of November came in at 3.8% versus -4.2% for October, supported by favorable base effect and a pick-up in manufacturing, higher working days on a month-on-month basis, while India’s CPI edged higher to 5% in December as compared 4.38% in November. However, the number was way lower than street's expected figure of 5.20%. On the global front, European markets made a positive opening and were trading in green as investors opted to buy beaten down but fundamentally strong stocks. Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. The rupee was trading at 62.18 at the time of equity markets closing versus its previous close of 62.16. Meanwhile, slump in share of oil exploration firms too played spoil sport for the Indian equity markets as global crude oil prices eased to near six year lows amid reports that global investment bank Goldman Sachs lowered its forecast. Finally, the BSE Sensex plunged by 159.54 points or 0.58%, to 27425.73, while the CNX Nifty declined by 23.60 points or 0.28% to 8,299.40.