Markets to make cautious start tailing weak global cues

The Indian markets edged lower in last session after Wholesale price inflation inched up to 0.11% in December, snapping a six-month easing trend as food costs jumped up year-on-year. Today, the start is likely to be cautious and markets may turn lower tailing weakness in global markets. Traders will be eying TCS Q3 earnings to be announced later in the day. The IT bellwether is expected to report 3.2 percent growth in its net profit number to Rs 5,462 crore for the third quarter for the fiscal year 2015, as compared to Rs 5,288.3 crore reported in the year-ago period. Traders will be getting some support after United Nations (UN) in its report said that the Indian economy is likely to expand by 6.4 per cent this year, driving the economic growth in South Asia. The progress in implementing much-needed structural reforms was likely to boost the country’s economic performance in 2015. Meanwhile, Finance Ministry’s Chief Economic Adviser Arvind Subramanian said that prospects for the Indian economy look ‘very bright’ with the remarkable turnaround witnessed in recent months on the back of lower current account deficit and the slew of reforms unleashed by the new government. The Gems and jewellery stocks may see some action as Gems and jewellery traders have asked the government to cut down the duty on gold to 2% from current 10%, to help check the smuggling of the precious metal, which is impacting the government coffers, now that the current account deficit (CAD) is under control.

There will lots of important result announcements too, to keep the markets buzzing. TCS, Bajaj Auto, Bajaj Holdings & Investment, Cyient, DB Corp, Federal Bank and HSIL are among many to announce their numbers today.

The US markets ended lower in last session following the release of a report from the Commerce Department showing a much steeper than expected drop in retail sales in the month of December. The Commerce Department said retail sales slumped by 0.9 percent in December, while economists had expected sales to edge down by just 0.1 percent. The Asian markets have made mostly a soft start following the weak cues overnight from Wall Street, while lower prices for copper and other metals weighed on mining stocks.

Wednesday turned out to be a disappointing session for the Indian equity indices with domestic gauges, extending previous session downfall, ending with a cut of over quarter a percent, though domestic gauges witnessed some recovery in last leg of trade but it was not enough to bring benchmarks back in green terrain. Sentiments remained dampened as traders remained concerned with the World Bank 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. Sentiments also remained down-beat after 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. Selling got intensified after Wholesale price inflation inched up to 0.11% in December, snapping a six-month easing trend as food costs jumped up year-on-year. Food articles inflation rose to 5.2% from 0.63% m-o-m while manufactured productions inflation went down to 1.57% compared to 2.04% m-o-m. Meanwhile, October WPI inflation was revised to 1.66% compared to 1.77% earlier. However, losses remained capped up to certain extent as some support came from reports that foreign institutional investors were net buyers in Indian equities worth Rs 235 crore on January 13, 2015, as per provisional stock exchange data. Global cues too remained sluggish with European markets making a somber start. Back home, depreciation in Indian rupee too dampened the sentiments. The rupee was at 62.18 per dollar at the time of equity markets closing as compared to 62.14 per dollar level on Tuesday. Meanwhile, the metal pack ended in red after copper futures dived 6.2 percent to $5,499 a tonne when major chart support cracked and triggered a host of stop-loss sales. Finally, the BSE Sensex plunged by 78.91 points or 0.29%, to 27346.82, while the CNX Nifty declined by 21.85 points or 0.26% to 8,277.55.