Markets to attempt recovery on positive global cues

The Indian markets extending their declining streak fell to the lowest level in five weeks in last session. All the attempts of recovery were sold out, overlooking the report that the country’s Wholesale Price Index (WPI)-based inflation fell for the fourth consecutive month in February. Today, the start is likely to be in green tailing the positive global cues. Also, traders will be getting some encouragement with IMF chief Christine Lagarde’s statement that Indian economy is poised to overtake the combined GDP of Japan and Germany in the next four years on the back of recent policy reforms and improved business confidence in the country. The iron and steel stocks will be in action, as the government has informed that there is no dearth of iron ore in the country with 152 million tonne production against consumption of 111 MT in 2013-14. The telecom stocks too will keep buzzing with bids for airwaves rising marginally to Rs 103,046 crore at the end of the 11th day of spectrum auction, with operators focusing mainly on the 800 Mhz band for its potential to support 4G services.

The US markets rallied in last session offsetting the weakness that was seen last week, on decline in dollar and shrugging off a batch of disappointing economic data. The Asian markets have made a green start and some indices are up by around a percent in early deals as weak economic data from US eased speculation the Federal Reserve will bring forward plans to raise interest rates.

Back home, the start of the new week remained the same old story for the Indian markets with major indices slipping further. The selling pressure continued unabated despite WPI inflation coming at an all time low and IMF chief just ahead of her two days visit to India calling the country a bright spot in the global economy. It was profit taking mainly in the blue-chips that kept the benchmarks in a tight band throughout the session. Though, there were minor attempts to enter into green but they failed to sustain and bourses remained in red for almost all of the session. The global cues though remained mostly supportive with most of the Asian markets snapping the session in green, while the European markets too made a good start, as the European Central Bank started buying sovereign debt. Back home, Indian markets extended their southbound journey on Monday, albeit with marginal cuts. Major indices despite getting a positive start never looked confident and trade remained choppy till last. The early cautiousness remained even though inflation measured on wholesale price index (WPI) came at a record (-) 2.06 per cent in February - keeping inflation in the negative zone for the fourth straight month - on account of cheaper food, fuel and manufacturing products. Strength in rupee too was unable to support the markets, rupee moved higher on fresh selling of the American currency by exporters. The metals and mining stocks were under pressure after it was reported that the government has decided to re-examine the bids of 5 blocks awarded in the Phase 2 of coal auctions which were held for Schedule III coal mines. There were lots of scrip specific movements that kept the markets buzzing despite a rangebound trade, beleaguered realty major DLF surged over 4% after the Securities Appellate Tribunal (SAT) quashed the market regulator SEBI’s order banning DLF, its promoters and key executives from raising money in the capital market. DLF can now raise funds through CMBS. On the other hand the engineering, construction major L&T slumped after reports of it paying considerably lower Q4FY15 advance tax of Rs 170 crore compared to Rs 290 crore in same quarter last fiscal. However, advanced tax payments took ICICI Bank in green after it reportedly paid higher advance tax of Rs 1295 crore compared to Rs 980 crore in same quarter last year. Finally, the BSE Sensex declined by 65.59 points or 0.23% to 28437.71, while the CNX Nifty lost 14.60 points or 0.17% to 8,633.15.