Markets to make some recovery on positive global cues

The Indian markets were butchered in last session led by the global worries and lacking any supportive cues amid weak trade data. Today, the start is likely to be in green and some recovery can be expected after the massive fall of last session. Traders will be getting some comfort with the progress in the GST implementation on reports that the Centre and the states are working on a new revenue neutral rate, which is currently pegged at 27 percent. Though, there will be some cautiousness too with the disappointing set of earnings announcement by the IT bellwether HCL Tech. The company’s third quarter net profit fell by 12 percent sequentially, though was up 3.6 percent year-on-year to Rs 1,683 crore, impacted by adverse cross currency. The whole IT sector will be in focus with upcoming earnings of other IT major Wipro. There will be some buzz in the metals, mining and power sector stocks on reports that third round of coal block auction may get off the ground next month. The government may come out with a notice inviting application for the mines for the next round of auction next week.

The US markets made a bounce back on some better than expected earnings announcements and after China’s central bank went for biggest cut to reserve requirements since 2008. The Asian markets have made a mixed start, though some of the indices have bounced back tailing the overnight gains in the US markets. Nikkei has gained with the yen weakening against dollar.

Back home, extending their southward journey for fourth straight day, Indian barometer gauges witnessed bloodbath on Monday with both the major indices losing around two percentage points and ending below their crucial 8,450 (Nifty) and 27,900 (Sensex) levels. Sentiments remained dampened on reports that India’s exports contracted by 21.06 percent to $23.95 billion, while imports fell by 13.44 percent to $ 35.74 billion in March that led to trade deficit to its highest level in four months at $11.79 billion, as exports continued to fall, underscoring risks for growth prospects in Asia’s third largest economy. Sentiments also weighed down on reports that foreign institutional investors were net sellers in equities to the tune of Rs 676 crore on Friday. Further, concerns that unseasonal rains that have damaged crops in parts of the country could reduce rural demand thereby hurting volumes also weighed on sentiment. Moreover, traders failed to get any sense of relief from 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. Investors also shrugged off a survey conducted by global accounting consultancy firm EY and research agency Delphi, where it stated that though India has a better investment climate among BRICS nations, its regulatory and tax system-related challenges are impacting immediate investment plans. On the global front, Asian markets ended the Monday’s trade mostly in the red terrain, however, European counters traded in fine fettle in early deals. Back home, selling was both brutal and wide-based as none of sectoral indices on BSE were spared. Counters, which featured in the list of worst performers, include realty, FMCG, capital goods, software, technology and power. Depreciation in Indian rupee too dampened the sentiments. Finally, the BSE Sensex plunged by 555.89 points or 1.95% to 27886.21, while the CNX Nifty dropped by 157.90 points or 1.83% to 8,448.10.