Markets to make a flat-to-soft start of the new week

The Indian markets, lost their way in the final hours of last session after a good bounce back and ended marginally in red. Today, the start is likely to be flat-to-negative on listless global cues, traders will be a bit cautious although the government, as part of its strategy to make it easier to do business in the country, has relaxed norms pertaining to related party transactions, accepting deposits and appointing auditors in private companies. There will be some concern in India Inc, as the industry body Assocham has said that India's exports are likely to remain flat at $310.5 billion-level or may even fall this financial year due to slow global demand for merchandise. The steel stocks will remain in somber mood with global ratings agency Moody's stating that steel prices in India are expected to remain under pressure in the current fiscal, but the demand is expected to pick up with an uptick in commercial vehicle sales. The banking stocks will be in action on reports that Finance Minister Arun Jaitley will meet the heads of public sector banks on June 12 to review the banks’ annual performance and bad loans situation as also to persuade them to pass on RBI’s rate cut benefit to borrowers for propping growth. Power stocks too will keep buzzing with some mega power project deals with Bangladesh during Prime Minister Narendra Modi’s visit to the country.

The US markets ended modestly in red in last session on fears of an early rate hike after a good monthly jobs data. Most of the Asian markets have made a soft start with some of them heading for their longest slump since 1990, as the upbeat US jobs data bolstered the case of interest-rate increase this year by US Fed. Though, Chinese market was trading higher on stimulus hopes after nation’s exports fell 2.8 percent from a year earlier in yuan value.

Back home, Friday’s trading session turned out to be a disappointing for the Indian equity markets as market participants booked all their initial gains hurt by selling in rate sensitive counters. It proved to be roller-coaster ride for Indian markets where frontline gauges after a negative opening gained momentum and entered into green terrain to recapture their crucial 27,000 (Sensex) and 8,150 (Nifty) bastions as sentiments turned up-beat after private forecasters bet on Indian Ocean to turnaround monsoon current. Some support also came with Finance Minister Arun Jaitley’s statement, who allaying concerns over the forecast of a rain deficient monsoon said that the effect won’t be as dire as the plummeting stock markets seemed to indicate. Later the Agriculture Minister Radha Mohan Singh said that the central government will give subsidy on power, diesel and seeds in case of deficient monsoon. However, sharp wave of selling, which emerged in last leg of trade, dragged the key gauges tad below their neutral lines to end markets lower for fourth straight session. Investors remained cautious ahead of a key meeting of the Organization of the Petroleum Exporting Countries (OPEC) cartel, which is expected to maintain its current production levels despite an oversupplied global market. Investors also awaiting slew of macro-economic data like industrial production (IIP) and consumer price index (CPI) due in the coming week. Global cues too remained sluggish with European markets making a start in red, while the Asian markets too ended mostly in the red. Back home, investors’ sentiments remained weak on report that Foreign Direct Investment (FDI) in India declined by sharp 40 per cent year-on-year to $2.11 billion in March 2015, compared to $3.53 billion in March 2014. Selling in rate sensitive counters like, Banking, realty and auto mainly played the spoil sport for the markets. Finally, the BSE Sensex dropped by 44.93 points or 0.17% to 26768.49, while the CNX Nifty declined by 15.95 points or 0.20% to 8,114.70.