Markets to make a cautious start on mixed global cues

Indian markets continued their downfall for a fifth consecutive session, on concerns over quarterly earnings after a disappointing results of HCL Tech and on renewed weakness in the rupee coupled with worries over the impact of retrospective taxation on foreign investors. Today, the start is likely to remain cautious, however traders will be getting some support with reports that Finance Minister Arun Jaitley will meet his state counterparts to discuss the roadmap for rolling out Goods and Services Tax (GST) from April 2016. The state ministers will discuss amongst themselves various issues relating to the implementation of the new indirect regime. The IT sector will again be in focus with India’s third largest software services firm Wipro posting a net profit of Rs 2,286.5 crore in January-March 2015, modestly higher by 2.1 per cent than Rs 2,239.1 crore a year-ago, helped by robust momentum in infrastructure and healthcare services. Steel stocks too will keep buzzing with World Steel Association reporting that India retained its position as the world's third-largest steel producer with a production of 14.6 million tonnes (MT) in the first quarter of 2015.

The US markets made a mixed closing in last session, while the tech heavy Nasdaq ended in green, the Dow and the S&P 500 both spent much of the day in the red, reflecting uncertainty about the near-term outlook for the markets. The Asian markets too have made a mixed start, though the Japanese market was surging over a percent, extending a seven-year high in early deals on weak yen.

Back home, prolonging their southward journey for fifth straight session, Indian equity benchmarks ended the session with a cut of around three fourth of a percent. The barometer gauges traded near their neutral lines till noon deals but a sharp wave of selling, which emerged in last leg of trade, dragged the major indices below their crucial 8,400 (Nifty) and 27,700 (Sensex) levels. Selling was both brutal and wide-based as none of sectoral indices, barring consumer durables and metal, on BSE were spared. Counters, which featured in the list of worst performers, include healthcare, auto, fast moving consumer goods and oil and gas. Sentiments remained dampened on account of 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. Sentiments also weighed down on report that foreign portfolio investors sold shares worth a net Rs 1506.86 crore yesterday. Traders were also eyeing proceedings in parliament during the final part of the ongoing Budget session which began on Monday as the government hopes to pass the Goods and Services Tax (GST) and the Land Acquisition Bill. On the global front, while European markets traded mostly in the green in early deals, Asian markets too ended mostly in the green. Back home, selling in healthcare space mainly dampened the sentiments, led by around 9% fall in Sun Pharmaceuticals after Japanese pharma major Daiichi Sankyo sold its 8.9% stake in Sun Pharma through multiple block deals on the stock exchanges. Stocks related to FMCG counter too edged lower on concerns that unseasonal rains that have damaged crops in parts of the country could reduce rural demand thereby hurting volumes also weighed on sentiment. Additionally, telecom stocks which were ringing loud in early trade on renewed buying activities, edged lower by close of trade. On the flip side, encouraging data from China, world’s largest metal consumer and producer lifted the entire Metal pack higher. Finally, the BSE Sensex plunged by 210.17 points or 0.75% to 27676.04, while the CNX Nifty dropped by 70.35 points or 0.83% to 8,377.75.