Markets to start on a weak note following dismal global cues

The Indian markets staged a stupendous rally in last session and surpassed important psychological levels to settle at six month highs on supportive global cues and consistent foreign fund inflows. Rate sensitive counters buzzed through the session on speculations that the better than expected January inflation numbers will increase the pressure on RBI to employ monetary easing measures to prop up the country's economy growth momentum. Today, the markets are likely to start on a weak note as investors would look to take some profits off the table following the bleak cues from Asian counterparts. Telecom stocks would remain on investors radar in the session as the government opined that mergers of up to 35 percent market share of the resultant entity would be through the automatic route, a move that would pave the way for liberal M&As in the sector. Meanwhile, an empowered group of ministers has approved the auction route for selling 5 percent stake in state-run oil major ONGC before the end of the current fiscal. The proposed disinvestment of government stake in BHEL has, however, been postponed to the next fiscal. Airline stocks too may be under spot light as reports suggest state-owned oil companies have cut jet fuel prices by a marginal Rs 350 per kiloliter, the second reduction in this month.

Apart from this there will be some scrip specific actions to keep the markets buzzing, while investors would also keep a close eye on the earnings announcement of stocks like Glaxosmithkl Pharma, REC and Thomas Cook which are scheduled to report their third quarter result later in the day .

The US markets slipped lower on Wednesday as sentiments got dampened as there still emerged no permanent solution to Greece debt trouble while the disappointing earnings from Apple along with surprisingly soft January manufacturing growth too made investors nervous. The Asian markets have commenced the session on a dismal note with most of the indices declining over half a percent in morning trades. Sentiments in the region got dampened after reports indicated that the second bailout package to Greece will be delayed until after the country holds elections in April 2012, reigniting worries that Europe will struggle to avert its debt debacle.

Back home, Indian stock markets showcased a gung ho performance this Wednesday galloping over two percentage points in the session as fervent bulls relentlessly piled up hefty positions not only in heavyweight stocks but across the broader markets. The vivacious rally in equities helped the benchmarks to re-conquer the psychological 5,500 (Nifty) and 18,200 (Sensex) levels on their northbound journey and scale the highest levels not seen since August 1, 2011. The benchmarks extended their upmove for the third straight day on large volumes as sentiments got fortified owing to persistent foreign fund inflows, an appreciating rupee and moderating inflationary pressures on the economy. Tentative improvement in investors’ risk taking ability was also  evident as reports showed that the Greek conservative party leader would deliver a letter of commitment to lenders, indicating that the debt laden country is willing to commit to spending cuts demanded by lenders in exchange for a bailout. Investors showed hefty buying interests in the rate sensitive counters on speculations that the better than expected January inflation numbers will increase the pressure on RBI to employ monetary easing measures to prop up the country's economy growth momentum. Stocks from the power counter traded on a jubilant note after the Prime Minister cleared coal supply to private sector power producers. However, heavyweight Reliance failed to sway with the sanguine momentum amid expectations that gas output from its D6 block is expected to fall. On the European front, markets traded in the green zone after Chinese Premier vowed that his country will continue to invest in European government debt to help resolve the debt crisis. Earlier on the Dalal Street, the benchmark got off to a positive opening as investors largely remained influenced by the sanguine sentiments prevailing in Asian markets. The frontline indices seldom showed signs of weakness in their northbound journey. Some profit booking in the dying hours only resulted in stronger recovery eventually, helping the key indices to snap the session around the highest point of the day. Finally, the BSE Sensex climbed 353.84 points or 1.98% to settle at 18,202.41, while the S&P CNX Nifty mounted by 115.90 points or 2.14% to close at 5,531.95.

US stocks declined on Wednesday for the third session in four, with market direction largely dictated by the swings in shares of Apple, the largest company in the world. Moreover, worries from Greece kept investors nervous through the session. It is trying to secure a second international bailout so it won’t default on its debt next month and rattle the global financial system. On the US economy front, industrial production for January was unexpectedly soft owing to weakness in mining and utilities. Within manufacturing, the index for motor vehicles and parts jumped 6.8 percent and the index for other manufacturing industries increased 0.3 percent. The output of utilities fell 2.5 percent, as demand for heating was held down by temperatures that moved further above seasonal norms; the output of mines declined 1.8 percent. On the housing front, the data for February showed improvement as the pace of activity rose by 4 points month on month.

The Dow Jones Industrial Average closed lower by 97.33 points, or 0.76 percent, at 12,780.95. The S&P 500 declined by 7.27 points, or 0.54 percent, at 1,343.23, while the Nasdaq was down by 16 points, or 0.55 percent, at 2,915.83.

Crude oil prices rallied around a percent on Wednesday as investors piled up positions in the commodity as supply side concerns surfaced after unconfirmed reports indicated that Iran may cut oil exports to six European countries. The oil prices also got buttressed by US crude inventory data which showed stockpiles declined by 171,000 barrels in the week to February 10 amid expectation of increase in crude oil supplies.

Benchmark crude for March delivery surged $1.06 or 1% to settle at $101.80 a barrel after trading as high as $102.54 a barrel on the New York Mercantile Exchange. In London, March delivery Brent crude rose $1.58 or 1.5% to close at $118.93 a barrel after trading as high as $119.99.