Markets to make a flat start; may see some recovery in latter trade

The Indian markets suffered major disappointment in last session, when the major indices after surging to their day’s high were hit by profit taking on global worries and some disappointing earnings announcement. Today, the start is likely to remain cautious, though some recovery can be expected in latter part of the trade after suffering series of decline. Traders will be getting some support with an HSBC report that India's manufacturing and services sectors expanded at a faster pace than China in January. Among the four largest emerging economies, HSBC said that only India bucked the trend and recorded one of the fastest growth in January. There will be some buzz in the mining stocks, as the Mines Ministry has said that it will look into the issue of import duty on scrap, special additional duty and trade pacts with countries. There will be buzz in the power and coal companies too, as the government has called a meeting of companies that owned coal mines that were cancelled, on issues related to compensation to the previous mine-owners and disputes over the quality of some information in the bid documents. Also, the Centre may soon announce a special package for Goa iron ore miners by pruning duty on exports of the steel-making raw material from 30 per cent. There will be lots of result announcements too, to keep the markets in action.

The US markets bounced with a bang as energy shares recovered with oil prices, while news Pfizer would buy Hospira in a massive deal further boosted the market. The Asian markets have made a mixed start with the Japanese market taking the lead tracking the overnight gains on Wall Street.

Back home, extending their losing streak to fifth straight day, Indian equity benchmarks ended the Thursday’s session at two-week lows, as Greece concerns hit global markets. Key gauges, after trading in tight band for most part of the session, witnessed intense volatility in late trade where indices slipped into the red terrain after hitting their crucial 29,200 (Sensex) and 8,800 (Nifty) levels as traders squared off positions by close of trade. Sentiments remained dampened after the Minister of State for Finance, Jayant Sinha, expressed concern about the rupee’s appreciation against all major currencies, except the US dollar. Moreover, investors remain concerned with RBI Governor Raghuram Rajan’s statement that inflation is still a concern for the central bank and the monetary policy continues being “conventional”. He also clarified that the mid-policy action was also to assuage the concerns of some people, who were calling RBI as “tardy” in its policy formulating. Selling got intensified after European markets made a negative start, while Asian markets ended mostly in the red. Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. Meanwhile, shares of public sector banks declined after Allahabad Bank and Indian Overseas Bank (IOB) reported disappointing set of Q3 numbers. Allahabad Bank registered a fall of 49.56% in its net profit at Rs 164.11 crore for the quarter under review as compared to Rs 325.36 crore for the same quarter in the previous year, while IOB reported a net loss of Rs 516.03 crore for the quarter under review as compared to a net profit of Rs 75.07 crore for the same quarter in the previous year. On the flip side, shares of software and technology edged higher tracking better-than-expected numbers in the fourth quarter as well as the accounting year ended December 31 by IT Services Company Cognizant posted on Wednesday. It gave a robust growth forecast for the next year. Finally, the BSE Sensex declined by 32.14 points or 0.11% to 28850.97, while the CNX Nifty dropped 12.00 points or 0.14% to 8711.70.