Markets to start the new series on a mildly soft note

The Indian markets snapped the January F&O series on a negative note, the trade remained choppy and traders avoided making any major fresh bets on global concerns, while some earnings disappointments too weighed on the sentiments. Today, the start of the new series is likely to be mildly in red on mixed global cues, traders will be cautious with RBI Governor Raghuram Rajan raising doubts over the new GDP growth rate methodology, stating that there is a need for better computation of numbers so as to avoid overlaps and capture the net gains to the economy. He said that there are problems with the way we count GDP which is why we need to be careful sometimes just talking about growth. However, there will be some support with Planning Commission's former deputy Chairman Montek Singh Ahluwalia stating that Indian economy, which expanded at 7.7 percent between 2003 and 2014 has the potential to clock 8 percent growth in the near future. The export oriented stocks will be in action, as the Commerce Ministry in order to boost waning exports has suggested that exporters be exempted from payment of service tax in the upcoming Budget. Infra stocks will continue to remain in action with the announcement of the name of 20 smart cities.

The US markets managed a positive close of volatile last session; with the major averages partly offsetting the steep drop seen in the previous session. The gains were partially in reaction to increase in crude prices and latest earnings news from some big-name companies. The Asian markets have made a mixed start, though some indices are gaining on crude rally, the Japanese market was in red, as the yen strengthened before a policy update from the Bank of Japan.

Back home, benchmark equity indices ended in the negative terrain on Thursday’s derivatives’ expiry session, on the back of a sudden bout of selling in late trades. Investors remained on the sidelines and refrained from any buying activity on the day of the expiry of January contracts. Further, traders remained cautious expecting the RBI might leave its key interest rate steady at 6.75 percent next week, given that the US Fed maintained its status quo on key lending rates. During its FOMC (Federal Open Market Committee) meet, the US Fed gave a bearish outlook on global markets and cautioned against future financial shocks. The upward movement was also restricted by low volumes and continuous selling by foreign investors. Depreciation in Indian rupee too dampened sentiments. Extending losses for the third session the rupee depreciated by 4 paise to 68.07 against the greenback following month-end demand from importers and banks. On the global front, Asian markets ended mostly in green on Thursday, while the European markets showed a choppy trade. Back home, the benchmark got off to a somber opening, as participants remained cautious,  besides, overnight weakness in the US equities and a mixed trend in other Asian peers after the US Federal Reserve kept the monetary policy unchanged citing weak economic growth, also dented the sentiment. Thereafter, the indices kept oscillating in a narrow range near neutral line throughout the morning trade. The bourses capitalized the momentum and spurted in afternoon trades on the back of broad based bottom fishing in undervalued stocks. But some final hour profit booking followed by mild short covering ensured that the key gauges extend the consolidation period for third straight session. Finally, the BSE Sensex declined 22.82 points or 0.09% to 24469.57, while the CNX Nifty ended down by 13.10 points or 0.18% to 7,424.65.