Markets to remain in somber mood tailing weak global cues

The Indian markets after showing some early signs of recovery, lost the way in second half of the last session and suffered cut of another about half a percent. Today, the mood is likely to remain somber tailing the weakness in the other global markets; however some recovery can be expected in latter trade after two consecutive days of drubbing. Traders will be getting some support with the report that India's current account deficit (CAD) narrowed considerably to $8.2 billion or 1.6% of gross domestic product (GDP) for the quarter ended December 2014 down from $10.1 billion or 2% of GDP on end-September 2014. Auto stocks will keep buzzing with the Society of Indian Automobile Manufacturers (SIAM) reporting that domestic car sales grew 7% to 1,71,727 units in February, however there was 9% drop in rural motorcycle sales last month. Telecom stocks too are likely to remain in action with aggressive bidding by mobile phone operators in auction of mobile airwaves, which led the government accumulate Rs 94,000 crore by the end of auctioning after five days of bidding.

The US markets after a day of recovery, once again suffered sharp sell-off in last session on concerns about the outlook for interest rates and strength in dollar, which jumped to a twelve-year high versus the euro. The Asian markets have mostly made a weak start on worries about an earlier US interest rate hike that led the dollar to a record high against the euro.

Back home, extending their southward journey, Indian equity benchmarks ended the session choppy day of trade with a cut of around half a percent as investors remained on sidelines ahead of data on industrial production for January and consumer price index for February scheduled to be announced on Thursday. Moreover, factory growth probably lost more momentum in January while inflation remained below the Reserve Bank of India's target last month, bolstering chances of further interest rate cuts. However, losses remained capped as some support came in 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, foreign direct investment (FDI) inflows into the services sector grew by 44 per cent to $ 2.29 billion in the April-December period of the current fiscal, as compared to $ 1.59 billion during April-December, 2013-14. Global cues remained sluggish with European markets trading in red in early deals, while Asian markets ended mostly lower. Back home, investors failed to draw any sense of relief from report that foreign portfolio investors (FPIs) bought shares worth a net Rs 838.30 crore yesterday, as per provisional data released by the stock exchanges. Depreciation in Indian rupee too dampened the sentiments. Rupee was trading at 62.67 per dollar at the time of equity markets closing compared with its previous close of 62.55. Meanwhile, realty stocks witnessed sharp drubbing after Minister of Parliamentary Affairs M.Venkaiah Naidu said in the Lok Sabha yesterday, March 9, 2015, that the government is willing to consider some further amendments to ensure minimum land acquisition based on the views and suggestion of the opposition parties. However, telecom stocks rang loud on the buzz that auction of telecom spectrum has reached the final stage. Finally, the BSE Sensex plunged by 134.91 points or 0.47% to 28709.87, while the CNX Nifty declined by 44.70 points or 0.51% to 8,712.05.