Markets to recover on supportive global cues

The Indian markets suffered severe blood bath in last session, the fear of earlier than expected rate hike from US Fed gave an opportunity of profit booking back at home too, with Nifty and Sensex posting biggest single day decline in two months. Today, some recovery is expected with revival in the global markets, traders will be getting some support with OECD’s latest report, which has said that India’s economic growth is firming up, while projecting stable growth momentum for most major economies. Meanwhile, the government has said that proceeds from the ongoing coal block auctions are likely to cross Rs 2 lakh crore, surpassing CAG’s estimate of Rs 1.86 lakh crore loss . The telecom stocks will keep buzzing with spectrum auctions bids topping Rs 94,000 crore at the end of the fifth day of sale of the coveted mobile airwaves across four bands. Meanwhile, Bharti group’s Sunil Mittal has indicated that the auction could result in marginal increase in tariffs. Infra stocks will be in action as the government plans to lay 30 kms of roads per day in the next two years, up from the current level of 11 kms a day.

The US markets made some recovery and ended higher in last session mainly on the back of bargain buying after last week’s pullback. However, the trading remained somewhat subdued lacking any of major US economic data announcements. The Asian markets have made mostly a positive start, rebounding from their three week lows. Japanese market too has moved higher as the yen weakened to its lowest level since early December.

Back home, Indian barometer gauges witnessed bloodbath on Monday with both the major indices losing over two percentage points, their biggest single-day drop in two months, on increased expectation of a rate hike by US Federal Reserve following stronger-than-expected jobs data.  Selling was both brutal and wide-based as none of sectoral indices, barring healthcare, on BSE were spared and key gauges ending below their crucial 8,800 (Nifty) and 28,900 (Sensex) levels. Counters, which featured in the list of worst performers, include banking, power, capital goods and realty. Sentiments remained down-beat since start of the trade as  marketmen remained cautious with an Assocham’s post-Budget survey of CEOs and CFOs, where majority of them have said that they find revised GDP data of over 7 percent growth as “too good to be realistic” and too optimistic since the underlying situation is not all that upbeat. Traders also failed to draw any sense of relief from reports that the current fiscal Direct tax collection increased by 10.67 per cent to Rs 6.12 lakh crore during April-February FY15, compared to Rs 5.53 lakh crore in the same period last fiscal (FY14). Corporate tax collection grew by 9.99 per cent at Rs 3.79 lakh crore, compared to Rs 3.45 lakh crore during the corresponding period of last fiscal. Selling got intensified as European markets made an awful start, Asian markets too ended lower. Back home, sentiments remained down-beat on the back of depreciation in Indian rupee against dollar. Meanwhile, slump in banking counter too played spoil sport for the Indian equity markets. Private lenders witnessed profit taking after sharp gains post the Budget proposal of fungibility of FDI and FPI which would allow private sector lenders to raise additional foreign capital. Shares of software and technology counters also witnessed profit taking despite the weakening rupee after TCS flagged that growth in the March quarter would remain in-line with last year trend adding that cross currency headwinds would impact rupee revenue by 275 basis points and dollar revenue by 200 basis points. Shares related to metal space too edged lower on fears that higher rates paid to acquire coal mines would hurt margins going forward. Finally, the BSE Sensex dropped by 604.17 points or 2.05% to 28844.78, while the CNX Nifty plunged by 181.00 points or 2.03% to 8,756.75.