Markets to remain in somber mood with a cautious start

The Indian markets continued their free fall in last session and lost another around a percent with nifty slipping below its 200-day moving average for the first time in nearly 15 months. There were some earnings disappointments that weighed heavily on the markets, taking them to over six months low. Today, the start is likely to remain somber on sluggish global cues and scrip specific actions will be seen with lots of important result announcements scheduled for the day. Though, some up moves too cannot be denied during the day with F&O expiry just two days away. Also, on the report that the foreign direct investment (FDI) in India jumped about 63 percent to $3.28 billion in February, 2015, compared to FDI of $ 2.01 billion in same period last year. Meanwhile, GST Empowered Committee Chairman K M Mani has said that the new indirect tax regime will boost India’s economy and the panel of state finance ministers needs to build a consensus among all states on the contentious matters before April 1, 2016. There will be some buzz in the PSU oil marketing companies with the government deciding to provide a fixed subsidy of Rs18 per kg of LPG or Rs 255.60 per 14.2 kg cylinder for 2015-16 with the rider that subsidy be calibrated by state-run oil marketing companies (OMCs) each month to keep the consumer price unchanged during the entire fiscal.

The US markets ended in red in last session, coming off the record highs scaled on Friday. Traders turned cautious ahead of the FOMC meet, while there was profit taking offsetting the strong gains posted last week. The Asian markets have made mostly a lower start and some of them have turned lower after starting in green, though the Japanese market was trading with good gains on back of weaker yen.

Back home, Indian barometer gauges witnessed bloodbath with both the major indices losing around a percentage point and ending below their crucial 8,250 (Nifty) and 27,200 (Sensex) levels. 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, healthcare, oil and gas and consumer durables. Sentiments remained down-beat since morning on continued worries over retrospective taxes and lower-than-expected January-March earnings so far. Further, investors are cautious ahead of the expiry of April derivatives contracts due on Thursday and the two-day meet of Federal Open Market Committee (FOMC) in which the Federal Reserve is likely to signal its stance on key policy rates. Sentiments also remained dampened on report that foreign portfolio investors sold shares worth a net Rs 775.46 crore on Friday, 24 April 2015. Moreover, investors failed to draw any sense of relief with Finance Minister Arun Jaitley’s statement in order to contain the adverse fall out of MAT levy on foreign investors that the Indian government will set up a high- level committee to sort out the taxations issues of the past and make the system predictable. Selling got intensified as European markets made an awful start, while Asian markets ended mixed. Back home, depreciation in Indian rupee against dollar too dampened the sentiments. The rupee was trading at 63.63 at the time of equity markets closing versus its previous close of 63.56 on the back of dollar demand from importers and weakness in equities. Selling in banking counters too weighed down sentiments after ICICI Bank declared Q4 numbers. ICICI Bank fell 2% after bank’s net profit rose 10.18% to Rs 2922 crore on 12.23% rise in total income to Rs 16234.73 crore for the quarter under review on Y-o-Y basis. Investors continued to sell-off holdings in software and technology counters led by fall in Infosys on the back of disappointing earnings while guidance was also lower than industry forecasts. Finally, the BSE Sensex plunged by 260.95 points or 0.95% to 27176.99, while the CNX Nifty dropped by 91.45 points or 1.10% to 8,213.80.