Markets to continue the subdued mood with a weak start

The Indian markets unable to get any respite continued their plunge, ending near their 21 months low in last session. Today, the start is likely to remain cautious and another soft start is expected for the markets lacking any supportive cues. US Fed chief may have acknowledged weakness in global economies, but showed faith in the US economy, sounding that there will be further rate hikes during the rest of the year. There will be some buzz in the power sector stocks on report that Australia is willing to look at a regulatory framework for facilitating supply of gas at lower prices for India's gas-fired power stations, which may hold the key to the success of government's 100 GW (giga watt) solar dream envisaging round-the-clock clean and affordable power to all. Meanwhile, India and Australia agreed on enhancing cooperation in clean coal technology, renewable power and LNG in a bid to meet the burgeoning demand for cheap and environment-friendly energy. PSU banking stocks will again be in focus with largest PSU lender SBI, announcing its Q3 numbers later in the day. There will be lots of major auto companies too, announcing their numbers along with many others today.

The US markets made a mixed closing in last session after another day of volatility, as the price of crude oil once again showed wild swings during the day, with traders keeping an eye on Federal Reserve Chair Janet Yellen’s semi-annual monetary policy report to the House Financial Services Committee. The Asian markets have made a weak start as crude oil extended its rout. Japanese markets are closed but traders are not getting any support with Janet Yellen’s statement that Federal Reserve may delay policy tightening.

Back home, following decline in the global stock exchanges, Indian benchmark indices extended cuts for the third straight session and ended at their lowest level since May 2014 on the back of broad-based selling pressure. Sentiments remained down-beat with the report Indian economy is expected to grow at 7.9% in the fiscal starting April, lower than earlier forecast of 8.1%, due to intensifying global headwinds.  Also, the weak earnings of PSU banking stocks kept weighing on the sentiments, state-run lenders - Central Bank of India, Dena Bank, Allahabad Bank and IOB - reported massive losses and the spillover effects were seen on the other banking stocks too. Furthermore, foreign Institutional Investors (FIIs) continued their selling spree as they sold net Rs. 681 crore on February 09, 2015. Deprecating rupee against the dollar also influenced the sentiment. Indian rupee depreciated 6 paise to 67.96 against the US dollar due to increased demand for the American unit from importers and banks. Investors failed to draw any solace with Economic Affairs Secretary Shaktikanta Das underscoring the importance of reforms, stating that the 7.6 per cent GDP growth is ‘significant’ amid the global turmoil and there is no need to be ‘skeptical’. On the global front, Asian markets ended in red, however, European shares rebounded on Wednesday from two-year lows reached in the previous session. Back home, the benchmark got off to a somber opening, extending the downtrend for the third straight session as pessimistic sentiments prevailed across Asian markets. Thereafter, the key indices failed to show any kind of fervor due to lack of encouraging leads. The selling pressure accentuated in the mid afternoon trades as investors took to across the board risk aversion. However, late short covering in blue-chip stocks and supportive leads from European markets ensured that local bourses go home with relatively less losses. Finally, the BSE Sensex declined by 262.08 points or 1.09% to 23758.90, while the CNX Nifty dropped 82.50 points or 1.13% to 7,215.70.