Markets to get a positive but cautious start lacking any major supportive cues

The Indian markets after showing a range bound trend, lost the momentum completely in the final hours and plunged by over one and half a percent in last session. Today the start is likely to be in green tailing the gains in the other global markets but the trade is likely to remain choppy lacking any major supportive cues. Traders will be concerned with exporters body FIEO’s observation after exports fell for the 14th month in a row, that the country may end up with outbound shipments of $260 billion in 2015-16, sharply lower than the $ 310.5 billion mark achieved in the previous fiscal. Traders may get some support with Union Commerce and Industry Minister Nirmala Sitharaman’s statement that that the FDI inflows in the country are improving day by day and more and more investments are coming from sectors other than IT and ITeS. The PSU banking stocks again will be in focus as the Standard & Poor's Ratings Services has said that Capital requirements of PSU banks for provisioning of bad loans are likely to shoot up exposing them to possible downgrades. It said that PSU lenders are in a weaker position on the capitalisation front than their private sector peers and may find it difficult to raise capital given their weak performance.

The US markets ended higher in last session, coming after a long weekend and the major averages further offset the steep drop seen throughout much of last week. Although the economic reports were weak but traders mainly went for bargain hunting. The Asian markets have made mostly a positive start, though there is some cautiousness in the region too after China weakened the yuan’s daily fixing by the most in more than a month.

Back home, Profit-booking, coupled with doubts over the central government's ability to push through key economic legislations during the upcoming parliament session, dragged the Indian equity markets lower and deposed over one and half percentage point on Tuesday. Sentiments remained subdued with the report that India’s merchandise exports fell for the 14th consecutive month with shipments in January, 2016 contracting 13.6 percent year-on-year to $21 billion due to a steep fall in shipment of petroleum products and engineering goods amid tepid global demand. Imports also fell during the month by 11 per cent to $28.7 billion that resulted in the trade deficit narrowing to an 11-month low of $7.6 billion. Besides, a weakness in rupee against the dollar also influenced the sentiment. Indian rupee was trading lower by 33 paise at 68.39 against the American currency at the time of equity markets closing as the dollar firmed up overseas. Market participants remained concerned with the report that foreign Institutional Investors (FIIs) continued their selling spree as they sold net Rs 1,311.59 crore on February 15, 2015. FIIs have been net sellers of Indian equities in 27 of 30 sessions this year, and have offloaded $2.14 billion worth of shares since the beginning of the year until Friday. On the global front, Asian markets ended mostly in green on Tuesday, European stocks too rose in early deals. Back home, the benchmark got off to a positive start in the morning trade as investors were largely influenced by the supportive leads from Asian markets. However, the indices dropped into the red terrain soon, lacking any significant upside cues. The key gauges traded on a lackluster note for most part of the morning trades. The selling pressure accentuated in the mid afternoon as investors took to across the board risk aversion. The indices barely managed to show signs of stabilizing in the second half of the session as the downward drift halted only with the session’s close after suffering gargantuan losses. Finally, the BSE Sensex declined by 362.15 points or 1.54% to 23191.97, while the CNX Nifty dropped 114.70 points or 1.60% to 7,048.25.