Markets likely to get a cautious start on sluggish global cues

The Indian markets suffered sharp profit booking in the final hours of trade in last session that dragged the benchmarks lower by around a percent. Today, the start is likely to remain cautious on sluggish global cues, but markets may gain some traction as the trade proceeds. Traders are likely to get some support with President Pranab Mukherjee’s statement while addressing the joint session of parliament that the latest estimates of India`s gross domestic product (GDP) growth making it the fastest growing large economy in the world, is the Narendra Modi-led government`s most significant achievement till date. There will be some action in telecom stocks as the telecom regulator TRAI removed charges that a landline service provider has to pay to the other service providers for transmitting its customers’ phone calls, the move is likely to lead to lower tariffs and boost fixed line phone connections in the country. There is likely to be some buzz in the power stocks too, as the Power and Coal Ministry Piyush Goyal has said that after the auction of 19 coal blocks, power consumers in the country stand to gain over Rs 30,000 crore over a period of time by way of a cut in electricity tariff.

The US markets made a mixed closing in last session after a lackluster session of trade. Investors preferred to stay on the sidelines ahead of Federal Reserve Chair Janet Yellen's testimony before the House and Senate, while there was some cautiousness with National Association of Realtors releasing a report showing a bigger than expected drop in existing home sales. The Asian markets have made mostly a positive but cautious start, while the China markets remained shut for the New Year holiday, the Japanese market was modestly in green.

Back home, Extending their previous session’s southward journey, Indian barometer gauges witnessed blood bath on Monday with both the major indices losing around a percent and ending below their crucial 8,800 (Nifty) and 29,000 (Sensex) levels. Selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include consumer durables, oil & gas, realty and fast moving consumer goods. After trading in tight band for most part of the day, domestic gauges crashed like house of card in the last leg of trade as investors remained cautious ahead of the ahead of key events including Economic Survey, Railway Budget and Union Budget, along with the expiry of February series due later during the week. Markets made a positive start and traded in the green for most part of the day. Sentiments turned down-beat and selling got intensified in last leg of trade after Global rating agency Standard & Poor’s said India’s low income levels and weak fiscal and debt indicators constrain the country’s credit profile. Meanwhile, in his annual speech to mark the beginning of the Budget session of parliament, President of India Pranab Mukherjee, addressing the members of both the Houses of Parliament said that the fundamental tenet of this government is ‘sabka saath, sabka vikas’ which means taking everyone along and development for all. On the global front, European markets traded mostly in the green in early deals, while most of the Asian counters ended in the green. Back home, sentiments remained dampened with report that, foreign portfolio investors (FPIs) sold shares worth a net Rs 89.41 crore on Friday. Meanwhile, Reliance Industries, Cairn India and shares of Reliance ADA and Jubilant Group companies dropped after one official each of Cairn India, Reliance Industries, Reliance Power, Jubilant Energy and Essar group was arrested by Delhi police, as part of investigations of an alleged scam to steal documents from the oil ministry to sell to consultants and private companies. The Infra stocks edged lower despite the Union Minister Nitin Gadkari unveiling plans for Rs 10 lakh crore investments in highways and shipping sectors by 2019. He has said that government is working on an ambitious plan to build one smart city each at the country's 12 major ports. Finally, the BSE Sensex declined by 256.30 points or 0.88% to 28975.11, while the CNX Nifty dropped 78.65 points or 0.89% to 8754.95.