The Indian markets after trading choppy, posted loss of over half a percent in last session. Today, the start is likely to remain cautious and the consolidation started in last session may linger, with benchmarks trading in a range in early deals, tailing the weakness in other Asian markets after ECB chairman Mario Draghi said the bank would consider further rate cuts only in extreme cases. Traders may get some support with IMF's financial counselor Jose Vinals statement that India needs to address the stress emanating from leveraged corporate balance sheets and asset quality woes of state-run banks to sustain the recovery process, even as the country is best placed among emerging markets. The oil & gas stocks will be in action, with the Hydrocarbon Exploration and Licensing Policy (HELP) announced yesterday companies will require to acquire just one licence to manage all kinds of hydrocarbon reserves such as oil, gas, shale and coal bed methane. The realty sector stocks too will keep buzzing with Rajya Sabha passing the much-awaited real estate bill. According to the bill, builders will have to deposit a minimum of 70% collections from buyers in a separate escrow account to cover cost of construction and land. State-level Real Estate Regulatory Authorities will be established to regulate transactions related to both residential and commercial projects and ensure their timely completion and handover. The banking stocks too will be in action, as the Credit rating agency Crisil downgraded eight PSBs including Bank of India and Canara Bank, following deterioration in their asset quality and also revised the outlook on five of them to negative.
The US markets made a flat closing last day after a volatile session, as traders digested the European Central Bank's announcement of a package of stimulus measures designed to boost the struggling economy. Most of the Asian markets have made a weak start, heading for their first weekly drop in a month. The Japanese market was leading the losers, as yen strengthened and on concerns global policy makers have lost their potency.
Back home, a session after showcasing a vivacious rally, Indian equity indices faltered and failed to extend the winning momentum on Thursday due to profit booking in frontline blue chip stocks amid mixed global cues. Sentiments got undermined after International Monetary Fund (IMF) stated that the government must prioritize clean-up of its banks balance sheets and tackle corporate debt overhang, additionally cautioning against the risk of potential capital outflows, IMF warned of further downward revision to global growth estimates at upcoming spring meetings, calling for policymakers to adopt a more comprehensive plan to strengthen growth prospects. However, buying in metal stocks after cabinet cleared an amendment in the new mining law pulled the benchmark indices from day’s low. Some buying was also witnessed in oil exploration majors after the government announced a new Hydrocarbon Exploration & Licencing Policy, in an effort to boost production and also to streamline several hurdles faced by oil exploration companies. Meanwhile, market participants got some comfort with Prime Minister Narendra Modi making a fresh pitch for passage of GST and other legislations in the Rajya Sabha, considering the 'conducive atmosphere' that has been prevailing in Parliament this session with cooperation from the opposition. On the global front, Asian markets ended mostly in green on Thursday, while European stocks edged lower in early deals. Bach home, after getting positive start, Indian benchmarks immediately slipped into negative territory and enlarged their losses in late morning session as investors booked profits ahead of Index of Industrial Production (IIP) data for January slated to be released tomorrow. Markets remained under pressure for most part of the session weighed down by selling pressure in Capital Goods and technology stocks. Finally, the BSE Sensex plunged by 170.62 points or 0.69% to 24623.34, while the CNX Nifty dropped 45.65 points or 0.61% to 7,486.15.
