Markets to get a cautious start of the new week

The Indian markets suffered bloodbath in final hour of the last session, taking the benchmarks down by around a percent and below their crucial psychological levels. Today, the start of the new week is likely to be flat-to-cautious, reacting to the global developments. Though, traders will be getting some support with Finance Minister Arun Jaitley’s statement that Indian economy is now clearly on a recovery path with a 7.4 per cent growth in the first three quarters and the new government is committed to maintain overall macroeconomic conditions on a sustained basis. Also, a survey conducted by global accounting consultancy firm EY and research agency Delphi has stated that though India has a better investment climate among BRICS nations, its regulatory and tax system-related challenges are impacting immediate investment plans. Foreign investors too are likely to get some support with Finance Minister ruling out the use of retrospective taxation by the present administration. Steel stocks are likely to be in action with WSA saying that India will lead the world steel out put growth, which is expected to touch 2,000 million tonnes by the turn of 2030 clipping at 25 per cent from 2014.

The US markets suffered selloff in last session on getting some mixed economic data and worries over trade regulation change inChina. The Asian markets have made mostly a lower start with some indices witnessing cuts of over half a percent, though the markets in mainland China are trading in green after the country stepped up monetary stimulus and tightened rules around buying shares with borrowed money.

 Back home, extending their southward journey to third straight session, Indian equity benchmarks ended the Friday’s trade with a cut of over a percent as global rating agency Standard and Poor's stated that a policy logjam and “red tape” have hindered investments in India. Sentiments remained down beat since morning as the domestic bourses never looked in recovery mood and ended the trade near intraday lows, breaching their crucial support levels of 28,500(Sensex) and 8,650 (Nifty). Selling was both brutal and wide-based as barring metal; none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included healthcare, software and technology. Sentiments also remained dampened on reports that foreign institutional investors were net sellers in equities to the tune of Rs 214crore on April 16, as per provisional stock exchange data. Moreover, investors failed to draw and sense of relief with Reserve Bank of India Governor Raghuram Rajan’s statement that on some issues the government and the central bank were “trying to persuade one another” but on many others the two sides are on thesame page. Traders have even over looked the report of Moody’s analytics, a group company of global rating agency Moody’s stating that Indian economy is expected to grow marginally higher at 7.3% during the year compared with 7.2% in 2014and interest rate cuts will buttress private sector spending. Selling got intensified after European counters made a sluggish start, while Asian markets ended mostly in the red. Back home, depreciation in Indian rupee too dampened the sentiments. Meanwhile selling in software stocks too dampened thesentiments on concerns over fourth-quarter earnings after bellwether Tata Consultancy Services' results failed to cheer investors. Tata Consultancy Services posted a 30.7 per cent fall in net profit for the fourth quarter due to a one-off bonus paid to employees. The company reported a net profit of Rs 3,858crore for the March quarter, excluding cumulative bonus payout of Rs 2,628crore to employees. Finally, the BSE Sensex dropped by 223.94 points or 0.78%to 28442.10, while the CNX Nifty plunged by 100.70 points or 1.16% to 8,606.00.