Markets to make a cautious start on sluggish global cues

The Indian markets despite a good start could not retain the gains and ended flat with a negative bias in last session. Today, the start is likely to remain cautious on sluggish global cues. Traders will also be concerned with the core sector growth dipping to a 17-month low in February at 1.4 per cent compared to 1.8 per cent in January, pulled down by contraction in the production of steel, fertilisers and refinery products. Meanwhile, the government is believed to have met the fiscal deficit target of 4.1 percent of GDP for 2014-15, helped by last minute payment of Rs 10,808 crore by telecom companies for spectrum and tax receipts in March. There will be buzz in the fertilizer sector, as the government in its bid to revive some defunct manufacturing units in eastern India and boost local output, has approved a policy to supply natural gas at a uniform price to all urea plants. The infra stocks will be in action today, as the government has approved amendments to the Public Private Partnerships (PPP) guidelines to enhance financial support to projects in infrastructure sector.

The US markets went for some profit booking and ended lower in last session, partly offsetting the strong upward move that was seen in the previous session. Though there were mixed set of economic data but traders were worried about the outlook for interest rates. The Asian markets have made mostly a negative start after some of them posted steepest quarterly advance since 2013 in last session. The Chinese market was trading in green after the nation’s factory activity surprisingly expanded in March to 50.1 from February’s 49.9.

Back home, Tuesday’s trading session turned out to be a disappointing for the Indian equity markets as market participants booked all their initial gains hurt by selling pressure in banking, IT, realty and capital goods counters. The domestic benchmarks traded jubilantly for most part of the trades on report that the credit rating agency Moody’s has said that Indian government's efforts to revive the stranded gas-based power projects will benefit the banks as they have significant exposure to such plants but a sharp wave of selling, which emerged in last leg of trade, dragged the key gauges below their neutral lines. Sentiments turned down-beat as traders seemed to be worried of budget proposals which will come into effect from April 1, 2015. Market-men also remained concerned about the brewing development in the Middle East and domestic stock valuations amid a more gradual economic growth than anticipated earlier. There was lots of banking related developments but the gauge after making good gains in first half gave up all the gains to be the biggest laggard. Selling got intensified as European markets pared their initial gains, though Asian markets ended mostly in the green. Back home, sentiments remained dampened on report that foreign portfolio investors (FPIs) sold shares worth a net Rs 240.34 crore on Monday, as per provisional data. Meanwhile, select stocks from metal and mining advanced after China unleashed new policy moves to rejuvenate a wobbly property market. Auto stocks too remained on buyers’ radar ahead of the release of monthly sales volume data for March 2015. Additionally, shares of public sector oil marketing companies (OMCs) i.e. BPCL, HPCL and IOC edged higher after IOC reportedly said to post good profit in the final quarter. Though, non-banking financial companies (NBFCs) remained mixed after the Reserve Bank of India proposed new norms for regulation of non-banking financial companies. Finally, the BSE Sensex declined by 18.37 points or 0.07% to 27957.49, while the CNX Nifty lost 1.30 points or 0.02% to 8,491.00.