The Indian markets were butchered in last session as foreign institutional investors stepped up sale of Indian stocks, dragging down key indices to eight-month lows. Today, the start of the data heavy day is likely to be soft-to-cautious. Traders will keep a close eye on the macro data of CPI and IIP slated to be announced after the market hours. CPI inflation rose marginally to 5 per cent in May 2015 from 4.87 per cent recorded in the month of April, while IIP increased to 2.9 per cent in April 2015 compared with the 2.1 per cent recorded in the month of March, 2015. Marketmen will however be getting some support with an OECD report that Indian economy saw the “strongest growth” in the first quarter of 2015 among large economies, including China, the US, Germany and Canada. Also, as the India's financial market regulatory framework received the top-most ratings from the global bodies of banking and capital market regulators. Meanwhile, Minister of State for Finance Jayant Sinha has said that India can double its economy over the next decade from a $2 trillion economy to $4 trillion. The telecom stocks will keep buzzing, as the telecom department has given its final clearance to long-awaited rules on sharing and trading of airwaves.
The US markets extending their rally mood, ended higher in last session despite giving up some of their early gains, reacting to a Commerce Department showing a notable increase in retail sales in the month of May. The Asian markets have made mostly a positive start, although the gains are modest on signs of strength in the US economy, while a weaker yen sent Japanese shares higher.
Back home, Thursday turned out to be a disappointing session for the Indian equity indices which got pounded by around two percentage points, as selling by foreign investors continued amid worries that a likely weak monsoon may delay key reforms and further cuts in borrowing costs. Domestic gauges, soon after a positive start, entered into red terrain and traded dreadfully throughout the session to end at their lowest closing levels since October 2014, breaching their crucial support levels of 26,400 (Sensex) and 8,000 (Nifty). Selling was both brutal and wide-based as none of sectoral indices on BSE could manage a green close. Counters which featured in the list of worst performers included auto, banking and power. Sentiments remained down-beat as investors remained on sidelines ahead of Index of Industrial Production (IIP) data for April and Consumer Price Index (CPI) data for May scheduled to be released tomorrow. Traders failed to draw any sense of relief from report that indirect tax collection surged by 37.3 per cent in May, while the collections during the first two months (April-May) of the current financial year increased to Rs 96,128 crore, from Rs 69,069 crore during the same period in 2014-15, up by 39.2 per cent. Market men also overlooked the positive economic data of CAD narrowing to $1.3 billion or 0.2% of the GDP in the March quarter, as the Reserve Bank of India (RBI) showed that the CAD was actually a shade higher than $1.2 billion that was recorded in the fourth quarter of 2013-14, on year-on-year basis. On the global front, European counters traded in green, while Asian markets ended mostly in the green. Back home, sentiments remained dampened on reports that foreign portfolio investors (FPIs) sold shares worth a net Rs 482.11 crore on June 10, 2015, as per provisional data by the stock exchanges. Selling in banking sector mainly played the spoil sport for the Indian equity markets on the back of profit booking after the Reserve Bank of India (RBI) allowed banks to take control of debt-laden companies by converting loans into equity. Finally, the BSE Sensex plunged by 469.52 points or 1.75% to 26370.98, while the CNX Nifty dropped by 159.10 points or 1.96% to 7,965.35.
